Multiannual financial framework 2028-2034 - Related Opinions

The debate on new own resources should evolve beyond technical adjustments and become a strategic reflection on how to strengthen the EU’s financial autonomy, cohesion and competitiveness. The EESC encourages the European Commission to further refine the overall design of the proposed own-resources package to make it ambitious, balanced and future-oriented.

Given the significance of the provision of public goods for the well-being of the citizens, the EESC believes that particular attention should be paid to providing these European public goods (EPGs) and identifying them in the next multiannual financial framework (MFF) post-2027.

Special attention must be given to ‘functional EPGs’ – those linked to Article 3 TEU – that can ensure the normal functioning of the EU: the completion of the single market; the completion of the economic and monetary union; economic, social and territorial cohesion; EU open strategic autonomy (e.g. the joint EU health policy, food security, the EU energy union); defence and security; EU research and development; and the rule of law.

Climate change is a matter of urgency and demands a green shift in our economies. To achieve the EU's climate targets, a profound modernisation of the capital stock is needed. This entails a massive expansion of public investments. The need for an EU-level investment fund to finance the green transition is also a matter of economic strength and sustainable competitiveness. One central element of closing the financing gap is an investment friendly reform of the EU fiscal rules. While the reform process is still ongoing and is supposed to be finished by the end of this legislature, it is already clear that the fiscal space for public investments at national level will not significantly increase with the reform.

As committed during the negotiations on the long-term EU budget 2021-2027, the European Commission has on 20 June 2023 completed its proposal for a next generation of own resources. The package includes a new temporary statistical own resource based on company profits. The Commission  also proposes to adjust the own resources proposals based on the Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM) compared to the original proposals from December 2021.  

The EESC has issued key recommendations for the mid-term revision of the Multiannual Financial Framework (MFF) 2021-2027. The Committee calls for a prompt agreement on the MFF revision still this year, to guarantee continued financial backing of Ukraine and financing the EU´s evolving political priorities. However, the EESC criticizes the proposed changes as being too limited and lacking ambition, resembling mere patches. It advocates for long-term strategies centred on fiscal sustainability, efficient resource allocation, and measures to guard against unexpected events. Civil society should be engaged for effective planning and monitoring of MFF programmes.

The EESC emphasises that the designing of proposals for new sources of own revenues should be done in context of the budgetary pressures faced by Member States following the pandemic and the ongoing international tensions. This has become all the more important in the current higher interest rate environment. The EESC also emphasises that the second set of own resources measures should be in line with the proportionality and social fairness principles. An EU-wide tax on digital transactions could be potentially considered to increase own resources in case the agreed rules of the OECD/G20 Inclusive Framework are not respected by other major trading partners.

The EESC strongly supports the Commission's proposal – Next Generation EU – as a specific tool for a quick and effective recovery.

The EESC takes a very positive view of the Commission's two main decisions:

1. to introduce an extraordinary financial recovery instrument as part of the multiannual financial framework
2. to raise common debt, which will be repaid over a long period of time, and prevent the extraordinary financial burden from falling directly on the Member States in the short run.

The EESC strongly welcomes the fact that the newly proposed instrument should be closely coordinated with the European Semester process, and furthermore welcomes the Commission's proposal to introduce additional genuine own resources based on different taxes (revenues from the EU Emissions Trading System, digital taxation, large companies' revenues).

Europeans need more (and better) Europe. The powers and financial resources currently allocated to the EU have been increasingly misaligned with the concerns and expectations of Europeans. The EESC, in accordance with the European Parliament's position, therefore proposes that the expenditure and revenue figure reach 1.3% of GNI. The proposed level of commitments of 1.11% of the EU's GNI is too modest to credibly deliver on the political agenda of the EU.

The EESC recognises the high European added value of the programmes where the MFF 2021-2027 concentrates the main increases in expenditure. However, the Committee questions the fact that these increases are made at the cost of strong cuts in cohesion policy (-10%) and the Common Agricultural Policy – CAP (-15%).