Commission welcomes the provisional agreement to reinforce the EU long-term budget and to boost Europe’s competitiveness and sovereignty

February 8, 2024 by European Union 1 Comment

This article is brought to you in association with the European Commission.

The European Commission welcomes the provisional agreement between the European Parliament and the Council on the revision of the Multiannual Financial Framework (MFF) for 2021-2027 and the launch of the Strategic Technologies for Europe Platform (STEP).

Once adopted, the revised budget will enable the Union to continue delivering on our common priorities and address the challenges that Europe is facing, for the benefit of European citizens and beyond. In particular, the revision of the MFF will enable a €50 billion multiannual support package for Ukraine. It will provide additional resources to address migration challenges and to support partners in the Western Balkans, Southern Neighbourhood and beyond. Thanks to the revision, the EU budget will be better equipped to help Member States affected by natural disasters and countries facing humanitarian crises.

Furthermore, STEP will be set up to support key industries and critical technologies in the EU to strengthen European competitiveness and sovereignty for an estimated investment potential of up to €50 billion across the EU. STEP will pool resources from existing EU funding programmes and foster synergies among them, including the Cohesion Policy funds and the Recovery and Resilience Facility (RRF).

These agreements conclude the negotiations on the Mid-Term Revision of the long-term EU budget, after Monday’s provisional agreement on the Ukraine Facility.

Key elements of the revision of the Multiannual Financial Framework 2021-2027

The provisional agreement on the revision of the MFF Regulation will make possible:

Establishing the Ukraine Reserve to support Ukraine with grants for up to €17 billion, complemented by a budgetary cover for loans for up to €33 billion. With a total capacity of €50 billion over 2024-2027, the Ukraine Facility will cater for Ukraine’s immediate needs, recovery and modernisation on its path towards the EU.
A reinforcement for migration and external challenges of €9.6 billion will support the internal and external dimensions of migration, and help partners in the Western Balkans, southern neighbourhood and beyond.
Stronger response to unforeseen challenges: the EU budget was mobilised to address repeated crises since 2021. To make sure that the EU budget can continue to respond to unforeseen circumstances, the Flexibility Instrument will be reinforced by €2 billion. The Solidarity and Emergency Aid Reserve is strengthened by €1.5 billion to give the EU budget the firepower to react swiftly to humanitarian crises and to support Member States affected by natural disasters.
Establishing a new instrument to provide a sustainable solution for the financing of the NextGenerationEU related costs.

To lessen the impact of the revision of the MFF on national budgets, the European Parliament and Council agreed on adjustments within the EU budget. These will be combined with measures to minimise the effects on the implementation of EU programmes. These include the possibility to reuse past decommitments for Horizon Europe, and a balanced annual adjustment for the EU4Health programme. The Commission will now work to operationalise these redeployments in the best possible way to ensure that all funds are used to create a maximum added value for European citizens, businesses, regions and beyond.

The Commission will present an amending budget for 2024 to implement the revised MFF and update its financial programming until 2027 in due time.

Launch of the Strategic Technologies for Europe Platform

The Commission is now tasked with making STEP operational to boost the competitiveness of the EU industry.

This initiative focuses on investments in the development and manufacturing of critical technologies within three strategic sectors: digital and deep tech, bio tech and clean tech.
STEP will pool resources from various existing EU investment programmes and foster synergies among them: InvestEU, Innovation Fund, Horizon Europe, EU4Health, Digital Europe and European Defence Fund.
The European Defence Fund will benefit from a reinforcement of €1.5 billion.
Member States will play a major role in making STEP a success across the EU: Member States will be able to redirect their respective EU-funded programmes under Cohesion Policy and under the RRF towards investments in STEP.
The Commission will establish a new online Sovereignty Portal, which will be operational in the coming months. This Portal will consolidate information on EU funding and assist project promoters in the three strategic sectors in identifying EU funding opportunities to meet their business needs in development and manufacturing.
Projects being awarded the ‘Sovereignty Seal’ will have easier access to funding and will be showcased on this new Portal.

Next steps

The provisional agreements on the regulations amending the MFF, setting up the Ukraine Facility, and setting up STEP will be finalised after a vote by the European Parliament at its Plenary session, followed by a vote in the Council.

Background

The EU has faced a series of unprecedented and unexpected challenges since the adoption of the 2021-2027 long-term EU budget in 2020 – from Russia’s brutal invasion of Ukraine and its consequences, through the migration pick-up after the pandemic, and the acceleration in inflation and interest rates.

The EU budget has been instrumental in powering the EU response. Addressing these multiple challenges has pushed its resources to the point of exhaustion, hindering its capacity to address even the most urgent challenges.

To ensure the EU budget can continue to deliver on the most essential objectives, the European Commission proposed in June 2023 to reinforce the EU’s long-term budget.

On 1 February 2024, EU leaders confirmed all priorities of the Commission’s proposal and agreed on the first-ever revision of the EU’s long-term budget, the creation of the Ukraine Facility and STEP.

For More Information

First time ever revision of the EU long-term budget will help address the EU’s main challenges

European Council’s conclusions of 1 February 2024

Commission proposes to reinforce long-term EU budget to face most urgent challenges

Strategic Technologies for Europe Platform

Commission welcomes agreement on Ukraine Facility

EU assistance to Ukraine

Multiannual Financial Framework 2021-2027

EU budget in motion

Quote(s)

I welcome the rapid conclusion of negotiations between the European Parliament and the Council. The final agreement on a revised long-term budget is good news for Europe. With this agreement, we can now provide much-needed financing to our partners in Ukraine and address the many other pressing challenges before the Union, such as migration, and provide funding to unforeseen circumstances such as humanitarian crises and natural disasters. STEP will in turn strengthen Europe’s competitiveness in clean tech, bio tech and digital and deep tech for years to come and ensure that EU funding is used to its full potential.

Johannes Hahn, Commissioner for Budget and Administration

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