Concord Danmark

EU’s Multiannual Financial Framework 2014-2020

Sarah Kristine Johansen,

Policy Officer

Agenda What is the Multiannual Financial Framework (MFF)?

How does the current financial framework work?

What is the Commision’s proposal?

The negotiations

CONCORD recommendations

What Baltic CONCORD members can do

What is the Multiannual Financial Framework (MFF)?

What is the MFF

• The Multiannual Financial Framework (MFF) will define the EU

budget from 2014 to 2020.

• This exercise is of particular importance as it will lock-in the EU main

policy priorities from 2014 for 7 years. All aspects of the EU budget are

up for negotiation.

• It is not only the EU budget and the instruments to implement it that

are at stake but more broadly the EU’s ambitions and the future role of

EU in a variety of policy areas including foreign policy, development

and climate change the MFF will shape the future of EU

development assistance!

The three big discussions

1) How much funding is there overall for the EU budget? It relates to EU ‘own resources’ ceiling, or transfers made by MS to the EU budget to cover EU expenditure. The EU budget is financed mainly through a uniform % rate applied to the total GNI of all MS - presently 1.24% of GNI maximum and 1.07% in reality.

2) What should it be spent on?

It relates to the EU political priorities and how to distribute resources among the different budget headings. How much will go for external action, how much for development?

3) How should it be managed and implemented? It relates to the financial instruments under each heading and the regulations that govern the spending of the instruments.

The three big discussions

•

Own resources ceiling

Budget Headings

Financial Instruments

and Regulations

Level 1

Level 2

Level 3

How much?

What for?

How managed?

How does the current financial framework work?

1) How much: The size of the total budget

• Around 1,00 percent of member states’ BNI (925,576 mia. euro) (2011-prises) for the periode of 2007-13)

• Most of these money come from member states’ national budgets.

2) What for: How is the money spent?

EU Budget for 2010

Heading 1

Heading 5

Heading 4

Heading 2

Heading 2

Heading 3

3) How it is managed and implemented

The Commission’s proposal for the MFF 2014-2020

The Commission’s proposal: How much

• The Commission’s proposal was launched 29th of June 2011

• The Commission’s proposal for the overall size of the MFF:

Totalt EU-budget = 1,0 % af BNI (925,576 billions euro (2011 prises) in the periode of 2014-20) This is an increase of app. 5,3 % in real terms (the amount of money) but is the same percentens of member states’ BNI (due to growth in member states BNI).

The Commission’s proposal: How is the money spent

Total external action budget (heading 4) = € 70 billions increase of 5,7% to 6,8% of the total EU-budget.

Heading 2 (CAP – Common Agricultural Policy)= € 382 billions decrease from 42% to 37% of the total EU-budget.

Funds outside the EU-budget: Some funds are not inside the total EU-budget e.g. the European Development Fund (€ 30 billions for the periode of 2014-20)

The Commission’s proposal: How is the money spent

The Commission’s proposal: How is the money spent

The Commission’s focus in the external action budget (heading 4):

• Clear commitment to reach the EU-target of 0,7% ODA/BNI and UN’s 2015 Development Millenium Goals.

• Clear commitment on poverty reduction.

• Clear commitment on basing the EU’s development aid on human rights, democracy and UN conventions.

The Commission’s proposal: How to manage and implement

The Commission’s proposal for external action instruments:

No greater changes in numbers of external action instruments or how they look like.

The Development Cooperation Instrument (DCI) = € 20,6 billions, 29% of heading 4 (27,7% in 2007-13) small increase

The European Neigbourhood Instrument (ENPI) = € 16,1 billions (€11,3 billions i 2007-13), now 23% of heading 4 big increase

The Commission’s proposal: How to manage and implement

The Commission’s proposal: How to manage and implement

Budget distribution for 2007-2013

The Commission’s proposal: How to manage and implement in the current MFF:

The Commission’s proposal: How to manage and implement in the next MFF:

The Commission’s proposal: How to manage and implement in the next MFF:

The biggest change: Differentiation • The EU will focus it’s development aid on Least Developed

Countries (LDCs).

• The EU stops it’s geografic aid to 19 countries: 17 UMICs (Argentina, Malaysia, Brazil, theMaldivs, Chile, Mexico, China, Panama, Colombia, Peru, Costa Rica, Thailand, Ecuador, Kasakhstan, Iran, Venezuela, Uruguay) og 2 LMICs with and BNI bigger than 1 % of the world’s global BNI (middelindkomstlande, hvis BNP er større end 1 % af det globale BNP (India og Indonesia).

• Great difference between these countries and great inequality

and poverty in several of the countries.

The negotiations

What to expect

• Positions from some of the strong Member States (UK, Germany ect.) on the total MFF: No increase in the budget. « Do more with less »

• General trend for external action = projecting EU values and interests with a focus on growth, neighboring countries, crisis and emergency management, security and regulating migration flows Using development as a tool to boost economic and foreign affairs objectives is not taboo anymore

• Member States general message is « Value for Money »

Timeline for negotatiotions

2011 2012 2013 2014

1 July: Polish

Presidency

1 July: Cypriot

Presidency

1 Jan: Irish

Presidency

1 July: Lithuanian

Presidency

1 Jan: Greek

Presidency

1 Jan: Danish

Presidency

29 June: EC proposal for

next MFF 2014-2020

(overall budget,

headings and priorities)

Nov-Dec: EC legislation

proposal for new financial

instruments and regulations

Co-decision (EP and

Council) on regulations

for delivery instruments

1 Jan: Entry into

force of the MFF

(2014-2020) Unanimity vote by the

Council and subsequent

assent by the Parliament

Outcome of the Danish presidency

• Council: ‘Negotiation box’ approved at GAC meeting on June 26 and on the European Council meeting on June 28-29 agreement on how to use the MFF but only a short text on heading 4 (The reinforcement on EU’s external actions in the Lisbon Treaty, long term prosperity and stability in EU’s Neighbourhood, commitment to 0,7 % ODA/BNI).

• Council: Partial general agreements on financial instruments.

Key dates during Cyprus’ presidency 10 July EP AFET vote on ENI

17 september EP DEVE vote on DCI

24 september Council GAC meeting

30 september EC + EEAS Deadline for EU delegation for programming and sector priorities.

15 oktober Council FAC meeting

16 oktober Council GAC

18-19 oktober Council Extraordinary European Council meeting on MFF

26 november Council GAC meeting

11 december Council Gac meeting

13-14 december Council European Council

CONCORD recommendations

Concord recommendations to DCI

On the size: CONCORD welcomes the EC proposal to increase the budget of the DCI by 17% in constant prices. The share of the DCI in Heading 4 (30%) and in the total EU Budget (2%) must be secured and maintained.

On focus: It is positive and crucial that the DCI maintains poverty reduction and eradication as the primary and overarching objective and promotes the “principles of democracy, the rule of law and respect for human rights and fundamental freedoms” under its general principles.

On PCD: The principle and specific mention of Policy Coherence for Development (PCD), with reference to the Lisbon Treaty, is reinforced in all external action instrument regulations, including the Partnership Instrument. The text of the Development Cooperation Instrument (DCI) refers to "Policy Coherence for Development" rather than just "coherence".

CONCORD recommendations to DCI

On differentiation: We welcome the call to prioritise and focus on least developed and low income countries in the EC’s proposal. However, the EU should not cease addressing poverty and inequality in Middle-Income Countries around the world. By introducing differentiated partnerships the EU risks turning away from the fight against poverty and inequality. On CSO: We welcome the EC’s recognition of civil society as an essential actor in development notably by maintaining a separate thematic program under the DCI to support the work of civil society but also by referring to civil society participation at all stages of development processes. However, the EC proposal does not specifically recognise the problem of lack of political space for civil society and some gaps need to be filled to make sure civil society participation can reach its full potential. The EU should earmark 1 5% of funds for civil society within the geographic programme and ensure an institutionalised consultation with CSOs On benchmarking: Separate or specific accounting for climate finance is used within the MFF, and the EU should recommits to the established EU benchmark and previous commitments3 of allocating at least 20% of the European Development Fund and the Development Cooperation Instrument to health and basic education.

CONCORD recommendations on ENI The EC defines concrete, measurable and implementable benchmarks against which a country can be assessed according to whether it lives up to the democratic values the EU intends to promote through the ENI. The EC should clearly define and apply benchmarks for its cooperation with all countries in the region based on improvement, stagnation or regression in the area of human rights. These should be determined through an open process with civil society involvement, and should only be based on the affected peoples'interests, not on the EU's political, security or ideological interests. The EU downgrades relations with countries that violate human rights and democratic principles – a ‘less for less’ approach – but without forgetting vulnerable populations in countries which do not develop in a democratic way. Lack of progress in relation to reforms should not lead to cuts in development assistance to individual countries but rather a redistribution of assistance from government to civil society.

What Baltic CONCORD members can do

What Baltic CONCORD members can do

CONCORD overall lobby goals: 1) On quantity: the size of future development aid:That

the next MFF has a higher level of ODA (DCI+EDF) or at least maintains the same level of ODA (DCI+EDF) as today.

2) On quality: how the money should be used: That the external action instruments have a strong poverty eradication orientation and a human rights based, especially in the DCI and EDF.

What Baltic CONCORD members can do

National Platforms: In general NPs can influence Council position through contact to Member States (Minister, civil servants, perm rep in Brussels) and the position of the European Parlament though ‘national’ MEPs. In the MFF negoatioations: Votes in the European Parlaments have taken place already little room lef for influence in EP at this stage focus on Council/Member States instead. Council has already agreed on positions on external action instruments little room for influence on the negotations on the instruments (but still some!) most focus on the negotiations on the size of heading 4 (lobby goal 2).

What Baltic CONCORD members can do

On quantity: • Develop arguments for support of EU development aid. • Support CONCORD campaign (tbd – blog ahead of key

meeting in October + open letter placed in media ahead of key meeting in November).

• Meet with Minister of Finance/civil servants from Ministry of Finance + contact Perm Rep in ‘Friends of the presidency1’ and advocate for lobby goal 1.

On quality: • Develop common key asks on the external action

instruments. • Meet with MFA civil servants and Perm Reps in CODEV and

advocate for key asks (trialogue process).

Conclusions:

• The Multiannual Financial Framework is not just about technicalities and money – it is about the political priorities for the world’s biggest aid donor for the next 7 years!

• You don’t have to be an expert in the MFF in order to advocate for CONCORD lobby goals.

• The time is now!