The 

Multiannual Financial Framework (MFF) of the European Union, also called the financial

perspective, is a seven-year framework regulating its annual budget. It is laid down in a
unanimously adopted Council Regulation with the consent of the European Parliament. The financial
framework sets the maximum amount of spendings in the EU budget each year for broad policy
areas ("headings") and fixes an overall annual ceiling on payment and commitment appropriations.[1]

Contents

 12007–2013 Financial perspective

 22014–2020 Financial Framework

 32021–2027 Financial Framework and recovery package

o 3.1Expenditures

o 3.2Revenue

o 3.3National rebates

o 3.4Criticism

 4Notes

 5References

 6External links

2007–2013 Financial perspective[edit]

The common budget of the 2007 to 2013 perspective was fixed to 1.045% of the European GDP.[citation
needed]
 UK Prime Minister Tony Blair accepted to review the British rebate, negotiated by Margaret
Thatcher in 1984. French President Jacques Chirac declared that this increase in budget will permit
Europe to "finance common policies" such as the Common Agricultural Policy – which represents
about 44% of the EU's spending – or the Research and Technological Development Policy.
However, France's demand to lower the VAT in catering was refused.

2014–2020 Financial Framework[edit]

The MFF for 2014 to 2020 set a ceiling for expenditure at 1% of European Gross National Income, a
reduction from the prior framework.[2] Per the European Council, €959.51 billion in commitments and
€908.40 billion in payments for the given timeframe were allotted for expenditure.[3]
The EU's expenditure in this period was in six categories or "headings" with respective ceilings for
spending.[4]
1. Smart and inclusive growth
a. Competitiveness for growth and jobs: the ceiling for this program, supporting research and
innovation, investment in trans-European networks and development of small and medium-sized
enterprises, was €125.61 billion, which exceeded the previous ceiling for 37%.
b. Economic, social and territorial cohesion: with ceiling in amount of €324.94 billion for this
subheading. The main goal was reduction of asymmetric levels of development of the EU's regions
and expansion of the support of the Union's cohesion policy.
2. Sustainable growth, natural resources: the ceiling equals to €372.93 billion. Aimed covering
environmental action, the common fisheries policy and the common agricultural policy (CAP).
3. Security and citizenship: the set limit in amount of €15.67 billion. Asylum and migration related
actions were financed, as well as initiatives connected with internal security and external borders.
4. Global Europe: the spending limit of €58.70 billion. Mainly covered Union's activities on
international level (humanitarian aid, development assistance).
5. Administration: with €61.63 billion limit on expenditure, which was decreased in amount of €2.5
billion in comparison with the previous MFF in order to consolidate public finances.
6. Compensations: ceiling in sum of €27 million was set to support Croatia in contributing less than
gained benefits during the first year after its accession to the European Union.
Below are the ‘special instruments’ used for the MFF of this period:[4]
Emergency aid reserve, with annual amount of €280 million, was used to deal with unpredictable
events such as financing humanitarian aid, managing civilian crisis and conducting protection
operations in non-EU countries.
EU solidarity fund, with annual budgeted amount of not more than €500 million, was designed for
the cases of major disasters in any of the member states or in countries negotiating with EU
regarding accession.
Flexibility instrument, with fixed annual amount of €471 million, was dedicated to clearly identified
needs out of the scope of the MFF ceilings.
European globalization adjustment fund, with mobilization up to €150 million annually, aiming to
support workers, who became unemployed because of globalization, economic crisis, etc., in finding
new opportunities of employment.
Contingency margin equals to 0.03% of the EU's gross national income (approximately €4 billion)
was intended to be used as last-resort instrument in reacting to unforeseen circumstances.
Specific flexibility to tackle youth unemployment and strengthen research was giving an
opportunity to spend an additional €2.543 billion on youth unemployment and research. In order to
maintain the total annual ceilings and headings' allocation the same, the amount was fully balanced
out within and/or between headings.
The framework did receive a number of amendments and changes during its effective period
following a midterm review.[4] Particularly, the budget was shifted towards cushioning labor impacts
resulting from the migration crisis straining the budget at the time.[4]

2021–2027 Financial Framework and recovery package [edit]

 MFF and NGEU expenditures

The European Union's MFF for the period 2021-2027 is equipped with a budget of €1,074.3 billion in
2018 prices to address the EU's long-term priorities.[5] It goes together with the Next Generation
EU recovery package (NGEU) of €750 billion in grants and loans over the period 2021-2024 to meet
the unparalleled socio-economic challenge of the COVID-19 pandemic.[6] An overall of 30% of the
total expenditure from MFF and NGEU is to target climate-related spending.
The MFF will incorporate the European Development Fund for the first time. As revenues for MFF
and NGEU, the EU will establish new own resources (OR) by raising levies. Germany and the Frugal
Four will benefit from increased national rebates of €53.2 billion.[7]

Expenditures[edit]
MFF and NGEU will cover seven areas providing the framework for the funding of 40 spending
programs.[8]

Breakdown of expenditures (in € billion)[9]

Spending area % MFF MFF NGEU Total area

1 Single market, innovation and digital 14,7 132,78 10,60 143,38

721,9
2 Cohesion, resilience and values 34,5 377,77 1099,67
0

Natural resources and the

3 29,7 356,37 17,50 373,87
environment

4 Migration and border control 2,7 22,67 22,67

5 Security and defence 2,1 13,19 13,19

 6 Neighbourhood and the world 9,6 98,42 98,42

7 European public administration 6,7 73,10 73,10

750,0
Total expenditure 100,0 1074,30 1824,30
0

This is topped-up by additional €12.5 billion agreed with the European Parliament.[10]

 Single market, innovation and digital include among others programmes

for Euratom, ITER, European space.
 Cohesion, resilience and values include among others programmes for Cohesion
Fund, Erasmus, European Social Fund.
 Natural resources and the environment include among others programmes
for Agricultural fund, Just Transition.
 Migration and border control include a militarization of EU-borders as Frontex will have
its budget tripled allowing to increase its standing corps from currently 1.500 to 10.000.[11]
 Neighbourhood and the world include among others the diplomatic service of the
European Union.
Revenue[edit]
 For the first time Euro bonds are borrowed on the capital markets for NGEU-funding.[12]
 Traditional own resources
o Member States retain, by way of collection costs, 25% of customs duties and
sugar levies collected by them.
o GNP income-based national contributions.
 A system of new own resources relying on levies, to be approved by all member states,
will be created[13]
o Levy on non-recycled plastic waste as of 1 January 2021 with a call rate of
EUR 0.80 per kg.
o A tariff on climate-unfriendly carbon import and digital levy to be
implemented during the MFF term.