Multiannual Financial Framework and Agriculture & Rural Development
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1 Multiannual Financial Framework and Agriculture & Rural Development David CHMELIK Unit R1 Information & Communication DG BUDGET EUROPEAN COMMISSION Multifunctional Landscapes Warsaw 13 May 2013
2 Outline A. The Europe 2020 strategy and the Multiannual financial framework: The link B. The Commission proposal C. State of play of negotiations following the European Council of 7 and 8 February 2013
3 Europe 2020 Strategy and EU budget The new MFF will coincide with the time horizon of Europe 2020 and rely on a considerable reinforcement of the Union's economic and budgetary governance ( Lisbon Agenda): New mechanism of the European Semester: helps drawing and discussing country reports and recommendations on budgetary and fiscal policies, structural reforms for growth and employment - ahead of annual budgetary procedures. Commission proposals for multiannual programmes presented in 2011 incorporate the priorities and objectives of the Europe 2020 strategy endorsed by the June 2010 European Council).
4 Europe 2020 Strategy and EU budget This improved alignment of policies and budgetary instruments allows for providing competitiveness and cohesion programmes as well as the CAP with appropriate tools: "Thematic concentration" of investments on priorities of the Europe 2020 Strategy; definition and monitoring of the specific targets; conditionalities; performance reserve.
5 Improved coordination and potential for synergies Comprehensive investment strategy aligned on Europe 2020 Coherence with National Reform Programmes Coordination: cohesion policy, rural development, maritime and fisheries funds; coordination with the other European programmes (especially Horizon 2020 and CEF) Objectives and indicators to measure progress towards Europe 2020 targets Effectiveness: introduction of a performance framework Efficiency: reinforced administrative capacity, simplification
6 EUROPE 2020 What's in it
7 The MFF timetable (Lisbon Treaty): 1.The European Commission publishes its proposal for the overall MFF (29 June 2011) and the underlying Sectorial Proposals (Autumn & Winter 2011) for , 2.On this basis, the Council of the European Union (Member States) publishes its agreement on its vision for the future MFF, 3.The European Parliament has to give its consent to the Council agreement this consent is prepared in the framework of Trilogues between EP, Council and EC, 4.The final vote at the European Council on the agreed MFF compromise creates the necessary legal basis for the overall Financial Framework, 5.In parallel, the Sectorial Proposals are adapted within the Co-decision procedure between the EP and the Council respecting the overall MFF ceilings. 7
8 Outline A. The Europe 2020 strategy and the Multiannual financial framework: The link B. The Commission proposal C. State of play of negotiations following the European Council of 7 and 8 February 2013
9 MFF Commission proposal approach and means Contribute to achieving the objectives of Europe 2020 and implementing the Lisbon Treaty by means of a modernised budget: targeted at specific objectives aimed at the Europe 2020 strategy, made conditional upon structural reforms and other criteria ensuring effectiveness and efficiency, with a simplified delivery system and increased leverage for investments a redesigned budget: savings in some areas to the advantage of key areas (new challenges); priority to EU added value an integrated approach enabling multi-purpose expenditure new legitimacy of traditional policies budgetary rigour, savings in administrative expenditure a budget financed in a more balanced way: new own resources
10 The Commission proposal (EUR bn, 2011 prices) Total commitments MFF Commission proposal - July 2012 Difference in % of GNI Total payments in % of GNI
11 A new programme architecture 1. Common Strategic Framework forcohesion, Rural development, Common maritime and fisheries policy, 2. "Horizon 2020" Connecting Europe Facility "Erasmus for all" "Creative Europe", increases the coherence and synergies between activities directed towards the achievement of common objectives ; avoids redundancies and fragmentation of European funding. which facilitates simplification and standardisation - A unique set of rules applicable to all funding schemes and concerning: participation in projects, support structures, dissemination of results, procedures for reimbursement and audit. as well as the mobilization of innovative financial instruments and public-private partnerships (leverage effect).
12 A reform of the own resources system Commission proposal: - End of the current statisticalvat own resource as of Introduction of two new own resources: A Financial transaction tax New VAT resource based on actual collections - Involve the Parliament in the regulations of implementation - Radically simplify the system of corrections => A simpler, fairer and more transparent system
13 System of financial corrections proposed by the Commission
14 Outline A. The Europe 2020 strategy and the Multiannual financial framework: The link B. The Commission proposal C. State of play of negotiations following the European Council of 7 and 8 February 2013
15 Commitment appropriations In million euros (2011 prices) Results of the European Council MFF Commission proposal June 2012 MFF Council Conclusions 08/02 Comparison vs Comparison vs in % 1. Sustainable Growth ,0% 1a. Competitiveness for Growth and Employment ,3% of which: Connecting Europe Facility ,0% of which: Galileo, ITER and GMES ,0% 1b. Cohesion for Growth and Employment ,4% of which: Investment for growth and jobs ,5% of which: European territorial cooperation ,8% of which Contribution to CEF Preservation and Management of Natural Resources ,3% of which: market related expenditure and direct payments ,5% of which: rural development ,3% 3. Citizenship, freedom, security and justice ,8% 4. EU as a global player ,3% 5. Administration ,0% of which: Administrative expenditure ,7% 6. Compensations Total commitment appropriations ,4% as a percentage of GNI 1,12% 1,09% 1,00%
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20 Overview Council Conclusions 08/02/2013 in comparison to MFF
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22 Rural development Total : 84,9 billion =>16 Member States receive special allocation: Austria (EUR 700 million), France (EUR 1000 million), Ireland (EUR 100 million), Italy (EUR million), Luxembourg (EUR 20 million), Malta (EUR 32 million), Lithuania (EUR100 million), Latvia (EUR 67 million), Estonia (EUR 50 million), Sweden (EUR 150 million), Portugal (EUR 500 million), Cyprus (EUR 7 million), Spain (EUR 500 million), Belgium (EUR 80 million), Slovenia (EUR 150 million) and Finland (EUR 600 million)
23 Rural development Total special allocation: 5,6 billion Rest: 79,3 billion to be distributed to Rural development EU projects New: 1) Modulation between Pillars I + II increase up to 15%: From Pillar I => Pillar II up to 10% (From Pillar II to I limitation to 5%!) 23
24 Rural development 2) Co-financing rates for Member States increase in specific domains of activity: a) Environmental projects b) Alternative Energy projects c) Climate projects => Problem: - Too general - Less projects 24
25 The Commission says: Capping: We regret that EU leaders have not only reduced the budget, but also diluted the capping instrument that the Commission proposed in order to limit the level of payments to the largest, most efficient farmers. I am sure that we have not heard the last word on this because the European Parliament Agriculture Committee has already given a signal of support for the Commission proposal for a compulsory mechanism Greening: We welcome the fact that EU leaders have confirmed that 30% of Direct Payments should be "Greening" payments. This seems to have struck a chord with taxpayers. We must now work with the Council and the EP to ensure that the final agreement provides a genuine improvement in the baseline across the EU, and not a form of "greenwashing" with only cosmetic measures. Given that 30% of Direct Payments are for Greening, and Member States must dedicate at least 25% of their RD spending for environmental/climate change issues, last week's decision means that at least 100bn ( 80bn from Greening in the 1 st Pillar and 20bn in the 2 nd pillar) will be linked to the delivery of environmental benefits for society.
26 The Commission says: Flexibility between pillars: One of the main elements in the reform is to provide a fairer distribution of CAP funding and so the proposal for additional flexibility seems at first glance to go in the opposite direction, especially for Direct Payments. We hope that Member States will not seek to shift funds in a way that puts their farmers at a particular competitive disadvantage. Distribution of rural development: The Commission had made clear its intention to allocate RD funds taking into account historical allocations, but also taking into account more objective criteria. EU leaders have now decided on indicative figures including specific amounts for specific Member States based on less objective criteria. Crisis Reserve: We are disappointed that EU leaders have asked to continue funding measures for market crises from the 1 st Pillar, rather than establishing a separate Crisis Reserve. This will mean that Direct Payments will have to be reduced in order to establish the Reserve.
27 Despite the cuts in important areas, positive aspects remain (1) + EUR 34 bn (+37 %) for expenditure on competitiveness, notably with a focus on research and development, education and mobility (Erasmus) and the Connecting Europe Facility; Youth Employment Initiative; Focus on innovative financial instruments and simplification of management; Result-orientation and conditionality: a reinforced link between the Europe 2020 Strategy and structural reforms; Reduction of collection costs for traditional own resources, possibility to use the revenues of the future financial transaction tax as an own resource.
28 Despite the cuts in important areas, positive aspects remain (2) Climate: objective to commit 20% of spending to climate; Maintaining commitments on external action; Stabilisation of the Union's administrative expenditure in spite of increased tasks and responsibilities; Important new elements of flexibility allowing for a more efficient use of the MFF's ceilings and improving its capacity to accommodate unforeseen circumstances.
29 Negotiations (1): EP Position The European Parliament has to give its consent to the final MFF compromise (Lisbon Treaty) European Parliament Resolution from 13 March 2013 reacting on the 8 February Council Conclusions asking for: - More Flexibility of the MFF, - Introduction of a compulsory Mid-term Review, - Introduction of New Own Resources. Contact group Strong involvement of the EP president
30 Negotiations (2): Trilogues On 6 May 2013, the Presidents of the European Commission (Barroso), the European Parliament (Schulz) and the Irish Presidency (Kenny) agreed on a Road Map to get a final agreement on the MFF : 1.The official negotiations between these 3 institutions will start with a 1 st Trilogue on 13 May 2013, 2.The 4 main negotiation points will be: I. Flexibility II. A revision clause III.Own resources IV. Unity of the budget
31 Negotiations (2): Trilogues I. Flexibility Today's world is faster and smaller than yesterday's; the EU budget must adapt to it. We will need faster procedures to react to natural disasters rather than expect natural disasters to adapt to the slow pace of current EU rules. Similarly, we will need to be able to "recycle" unused funds. 31
32 Negotiations (2): Trilogues II. Revision Clause The concept of a revision clause has to be discussed as we cannot be sure that all our forecasts and priorities for the next seven years will still be valid in four or five years' time. 32
33 Negotiations (2): Trilogues III. Own Resources Finally, the negotiations will include the financial resources of the budget. Debates on the EU budget should be about how best serve the interests of the whole of Europe in future. To be avoided in the future: Due to the current resources structure, budget negotiations unfortunately tend to focus to the rather narrow "What's in it for my country?" argument. 33
34 Negotiations (2): Trilogues IV. Unity of the Budget In a nutshell: There should be full transparency on all financial instruments of the EU including loan operations falling outside the scope of the budget. 34
35 Negotiations (2): Trilogues => What's out of the agenda: Overall volume of the MFF : EUR 960 billion are accepted by all institutions in the meantime. No internal reshuffle between individual policy areas including Agriculture and Rural Development: The amounts from 8 February 2013 presented above are now fixed! 35
36 Negotiations (3): Final Agreement After a certain number of Trilogues (3-4 according to the needs) during the months of May and June 2013, the Irish Presidency would ideally endorse the final agreement on the MFF in the framework of the European Summit end-june 2013, The Framework would enter officially into force on 1 st January
37 Negotiations Timetable Commission Updated proposal for MFF July Council and European Council 2014 European Parliament 2014
38 Further information Dedicated website on MFF :
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