Financing EU external action. Understanding member state priorities

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In September 2017 the first of several high-level meetings on the European Union’s next Multi-Annual Financial Framework (MFF) was convened by the European Commission at its Charlemagne premises. The discussions among senior policy-makers revealed a range of visions and expectations for the 2021-2027 EU budget. While some expressed a desire to move beyond ‘business as usual’ and secure an ambitious new budget that befits Europe’s future, others sought to lower expectations of any such outcome given previous experience with EU budget negotiations. These tensions between ambition and caution continue to dominate the debate on the next MFF and it is still unclear what direction it will take.

Key messages

    • The negotiations on the next EU Multi-Annual Financial Framework (MFF) 2020-2027 are moving slowly. Despite the European Commission’s desire for swift progress it now seems unlikely that a deal will be reached before the European Parliament (EP) elections in April 2019.
    • A key feature of the proposed MFF is an ambitious budget for EU external action – Heading 6 – and a new single ‘Neighbourhood, Development and International Cooperation Instrument’ (NDICI). This would merge a large number of stand-alone EU external financing instruments into one.
    • At this stage it is not clear whether the ambitious size of Heading 6 or the new single instrument will survive the negotiations. Financial resources for EU external action will in large part be determined by battles over other elements of the budget, notably agriculture and regional policy, as they have in the past. And the single instrument has yet to gain support from key Member States (MS) such as France and Poland.
    • In addition to the unresolved debate on a new single instrument, the negotiations are currently dominated by outstanding issues on:

        • Migration – The need to show results to domestic constituencies is likely to require visibility of migration funds in the EU budget, either in the form of earmarking or with separate instruments or future trust funds.
        • Security – MS largely agree on the importance of a stronger focus on security in the next budget, yet hold different views on precisely what activities should be funded and the potential implications for EU ODA reporting.
        • Sustainable Development Goals (SDGs) and Paris – There has not yet been a comprehensive debate on how to integrate the SDGs and Paris Agreement into the MFF, and what this would mean for the budget framework. Engagement from all MS is required if the EU is to demonstrate global leadership on sustainable development and climate change.
        • Geography – MS historic and geopolitical ties with third countries, regions and neighbours continue to influence the wrangling over the geographical spread of funding. The relative absence of the UK in these negotiations may tip the balance towards a greater focus on middle income countries.
        • Accountability – mechanisms for reporting and scrutiny of spending have not yet been aligned with the SDGs or caught up with the proliferation of blending operations and EU-managed trust funds. A more convincing accountability framework will need to be set out to satisfy both MS and the EP. 
  • We are a long way from consensus on the proposed single NDICI and these challenges. Progress will be difficult to achieve without clearer direction at the political level. Therefore, the Commission and External Action Service must work closely with the Rotating Council Presidency to convene informed ministerial meetings – with EP leadership participation – at which informal discussion can take place to address the current strategic deficit. This should result in a coherent vision and road map for EU external action that consolidates the various initiatives of recent years to provide a convincing new direction.

Read the full paper here.

Authors: Clare Castillejo, Niels Keijzer, Oscar Chmiel, Mariella Di Ciommo, Juha Jokela, Erik Lundsgaarde, Iliana Olivié, Aitor Perez, Sanne Thijssen, Julie Vaille, Zsuzsanna Vegh, Bernardo Venturi

image courtesy of European Parliament via Flickr.

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