The 2021-2027 European budget, the driving force behind the post-Covid-19 recovery

The 2021-2027 European budget, the driving force behind the post-Covid-19 recovery
The 2021-2027 European budget, the driving force behind the post-Covid-19 recovery

The Union now has a budget of € 1.8 trillion for the next seven years (2021-2027), including both the MFF and the Next Generation EU recovery plan. This CFP differs from the previous ones.

For the implementation of the Next Generation EU stimulus instrument, the EU decision on raising own resources had to be approved by all Member States in accordance with their constitutional rules. Under these conditions alone, the Commission is now authorized, on an exceptional basis, to borrow up to 750 billion euros (at 2018 prices) on the capital markets to face the consequences of the crisis caused by the Covid pandemic -19. The 27 Member States have therefore decided to take on debt jointly.

  • The “ease for recovery and resilience” (FRR)

By 582 votes in favor, 40 against and 69 abstentions, the European Parliament approved, on February 10, 2021, one of the major elements of the EU recovery plan: it sets up a “facility for recovery and resilience “(FRR). Most of the funds will be channeled through it to states. These funds are called upon to financially support public investments and reforms in order to support not only the economic recovery of European countries. after the pandemic but also to respond to the challenges posed by ecological and digital transitions for make EU a more resilient, greener and more digital Union.

To be eligible for these funds, the governments of the member states had to submit their stimulus plans to the European Commission. The recovery plan for France has been approved on June 23, 2021.

  • The Union’s budget is, for the first time, protected against violations of the rule of law.

The agreement introduces a cross-compliance regime which allows the EU budget to be protected when it is established that violations of the principles of the rule of law in a member state undermine or risk undermining sound financial management the EU budget or the protection of the EU’s financial interests.

The long-term budget will cover seven areas of expenditure. It serves as a framework for funding nearly 40 European programs over the next seven-year period.

  • More than 50% of the amount will support modernization including:

Research and innovation

  • Horizon Europe is a European Union framework program for research and innovation. Its total budget amounts to around 95 billion euros.

Fair climate and digital transitions

  • The Just Transition Fund (30% of EU funds, both under Next Generation EU and the MFF, will be devoted to the fight against climate change) and the program for a digital Europe (set up to promote the large-scale deployment of key digital technologies such as artificial intelligence applications and advanced cybersecurity tools).

Preparation, recovery and resilience

  • The ease of recovery and resilience; rescEU; “EU for health” (EU4Health), a new program in the field of health.

Cohesion policy and the Common Agricultural Policy are modernized and continue to benefit from significant EU budgetary funds in order to support ecological and digital transitions.

A budget line dedicated to defense

Starting from a budget of almost zero (which was the case during the previous budget period), the European Commission succeeded, in the talks, in justifying both the relevance of having a defense budget line and its usefulness for the intended objective:strategic autonomy. It was a victory. However, the negotiated budget cuts were made within this envelope. But between possible cuts in the Erasmus + program and in the Common Agricultural Policy on the one hand or in the defense budget on the other, the choice was clear. Especially since the European Commission has not made this envelope a red line, nor France.

Ten programs benefiting from additional resources compared to the agreement at the European Council of 21 July 2020

Horizon Europe : + € 4 billion – InvestEU Fund : + € 1 billion – EU for health : + € 3.4 billion – Erasmus+ : 2.2 billion euros – Creative Europe : + € 0.6 billion – Rights and values : 0.6 billion euros – Integrated border management fund : 1 billion euros – European Border and Coast Guard : 0.5 billion euros – Neighborhood, Development Cooperation and International Cooperation Instrument : 1 billion euros – Humanitarian aid : 0.5 billion euros.

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