The European Court of Auditors has published a report today on the flexibility of the EU’s long-term budget, criticizing the European Commission for not adequately identifying and analyzing the needs and risks the Union’s budget should address within the current Multiannual Financial Framework (MFF) 2021-2027.
While the EU budget’s flexibility mechanisms have generally responded to emerging challenges and priorities, certain flexibility instruments have been exhausted every year during the first part of the MFF, the report notes.
The court highlights emergencies such as humanitarian crises, natural disasters, and other unexpected situations (e.g., the energy crisis caused by the war in Ukraine or the sharp rise in inflation).
A call for a “simpler and smarter budget” is made by the auditors, as current procedures for mobilizing funds for unforeseen circumstances and emergencies are considered overly complex.
The instruments overlap at times, and their order of use is unclear, the court adds, suggesting that the European Commission should simplify the budgetary flexibility framework and consider alternative financing methods.
The current long-term EU budget (2021-2027) amounts to 1.21 trillion euros, including around 800 billion euros at current prices from the Recovery and Resilience Facility, involving national contributions of 1.1%.
The existing flexibility in the EU budget is equivalent to 2.6% of total expenditure (approximately 28 billion euros).
In mid-July, the European Commission proposed a new long-term EU budget for 2028-2034 of two trillion euros, up from the current 1.2 trillion framework, involving more national contributions and three new taxes.
The proposal presents a total envelope of two trillion euros in commitments (at current prices), based on national contributions (gross national income) of 1.26%.
New revenues (own resources) include a special tobacco consumption tax, a business resource for Europe, and taxes on electronic waste and e-commerce, along with existing ones on carbon imports and emission purchases.
The proposed budget aims for simplification by including 16 programs instead of 52, dividing into 865 billion euros in national and regional partnership plans (agricultural and cohesion structural funds) and 410 billion euros for the new European Competitiveness Fund (including Horizon Europe and the Innovation Fund).
An additional 131 billion euros is proposed for defense, security, and space investments, five times the current funding, within the new long-term EU budget.
