Brussels, 24 June 2023 (TDI): The European Commission has unveiled proposals to strengthen the long-term budget of the European Union (EU) in order to address the most pressing challenges facing the bloc.
The EU has encountered a series of unexpected and unparalleled difficulties since the adoption of the Multiannual Financial Framework in 2020, including Russia’s invasion of Ukraine and the subsequent humanitarian, economic, and budgetary consequences.
Additionally, the pandemic-induced migration surge has strained the reception and integration capacities of member states, necessitating additional costs under the New Pact on Migration and Asylum.
The surge in inflation and interest rates has also impacted the EU budget, leading to increased funding costs for the NextGenerationEU program. To enhance the EU’s open strategic autonomy and ensure long-term competitiveness in crucial technological sectors, substantial investments are required.
The existing EU budget has been stretched to its limits in responding to these multiple challenges, hindering its ability to address even the most urgent issues.
The proposed measures aim to provide targeted reinforcements in specific priority areas, ensuring the EU budget’s ability to fulfill its essential objectives.
The key elements of the proposal include the establishment of a Ukraine facility, with a capacity of €50 billion over the period 2024-2027, to support Ukraine’s immediate needs, recovery, and modernization.
Our budget is key to respond to the challenges we face.
This week, we proposed to reinforce the EU’s long-term budget to face the most urgent challenges:
🔹A targeted change to our long-term budget
🔹A new Ukraine facility
🔹The Strategic Technologies for Europe Platform (STEP)— European Commission (@EU_Commission) June 24, 2023
Another reinforcement involves allocating €15 billion to address migration challenges, the global consequences of Russia’s aggression in Ukraine, and strengthening partnerships with key third countries.
Furthermore, the Strategic Technologies for Europe Platform (STEP) will be introduced to promote the EU’s long-term competitiveness in critical areas such as digital technology, clean technology, and biotechnology. This platform will build upon existing instruments and introduce new flexibilities and incentives to facilitate cohesion funding and the Recovery and Resilience Facility.
In response to the unprecedented surge in interest rates, an efficient mechanism called the “EURI Instrument” will be established to cover the additional costs of the NextGenerationEU program.
Additionally, the EU administrative capacity will be adjusted to accommodate new tasks assigned since 2020 and meet contractual obligations adjusted for inflation.
Ursula von der Leyen, President of the European Commission, emphasized the importance of the budget as a policy tool to address collective challenges. She expressed the need for a targeted increase in EU spending to provide stable financial support to Ukraine, address migration issues, and support investments in strategic industries.
Also Read: EU pledges €50 billion for Ukraine for 2024-2027
The proposed revisions will now be presented to the European Parliament and the Council of the EU for further deliberation. A timely agreement on the package is crucial to ensure the EU has the necessary resources to tackle present and future challenges.
The negotiations, including the Parliament’s consent, are expected to conclude by the end of the year, with urgent budgetary constraints already anticipated in 2024.
The EU’s long-term budget, adopted in 2020, along with the NextGenerationEU recovery instrument, amounts to €2.018 trillion, constituting the largest stimulus package ever financed by the EU.
It has played a vital role in repairing the economic and social damage caused by the COVID-19 pandemic and facilitating Europe’s transition to a more modern and sustainable future.
