Changes from plenary report to adopted text

113. Points out that spending under shared management in the next MFF must involve regional and local authorities and all relevant stakeholders from design to delivery through a place-based and multilevel governance approach and in line with an improved partnership principle, ensure the cross-border European dimension of investment projects, and focus on results and impact rather than outputs by setting measurable performance indicators, ensuring availability of relevant data and feeding into programme design and adjustment;

114. Underlines that the design of shared management spending under the next MFF must safeguard Parliament’s role as legislator, budgetary and discharge authority and in holding the executive to account, putting in place strict accountability mechanisms and guaranteeing full transparency in relation to final recipients or groups of recipients of Union spending funds through an interoperable system enabling effective tracking of cash flows and project progress;

115. Considers that the ‘one national plan per Member State’ approach envisaged by the Commission is not in line with the principles set out above and cannot be the basis for shared management spending post-2027; recalls that, in this regard, the Union is required, under Article 175 TFEU, to provide support through instruments for agricultural, regional and social spending;

A long-term budget that manages liabilities sustainably

116. Recalls Parliament’s very firm opposition to subjecting the repayment of NGEU borrowing costs to a cap within an MFF heading given that these costs are subject to market conditions, influenced by external factors and thus inherently volatile, and that the repayment of borrowing costs is a non-discretionary legal obligation; stresses that introducing new own resources is also necessary to prevent future generations from bearing the burden of past debts;

117. Deplores the fact that, under the existing architecture and despite the joint declaration by the three institutions as part of the 2020 MFF agreement whereby expenditure to cover NGEU financing costs ‘shall aim at not reducing programmes and funds’, financing for key Union programmes and resources available for special instruments, even after the MFF revision, have de facto been competing with the repayment of NGEU borrowing costs in a context of steep inflation and rising interest rates; recalls that pressure on the budget driven by NGEU borrowing costs was a key factor in cuts to flagship programmes in the MFF revision;

118. Underlines that, to date, the Union budget has been required only to repay interest related to NGEU and that, from 2028 onwards, the budget will also have to repay the capital; underscores that, according to the Commission, the total costs for NGEU capital and interest repayments are projected to be around EUR 25-30 billion a year from 2028, equivalent to 15-20 % of payment appropriations in the 2025 budget;

119. Acknowledges that, while NGEU borrowing costs will be more stable in the next MFF period as bonds will already have been issued, the precise repayment profile will have an impact on the level of interest and thus on the degree of volatility; insists, therefore, that all costs related to borrowing backed by the Union budget or the budgetary headroom be treated distinctly from appropriations for EU programmes within the MFF architecture;

120. Points, in that regard, to the increasing demand for the Union budget to serve as a guarantee for the Union’s vital support through macro-financial assistance and the associated risks; underlines that, in the event of default or the withdrawal of national guarantees, the Union budget ultimately underwrites all macro-financial assistance loans and therefore bears significant and inherently unpredictable contingent liabilities, notably in relation to Ukraine;

121. Calls, therefore, on the Commission to design a sound and durable architecture that enables sustainable management of all non-discretionary costs and liabilities, fully preserving Union programmes and the budget’s flexibility and response capacity;

A long-term budget that is properly resourced and sustainably financed

122. Underlines that, as described above, the budgetary needs post-2027 will be significantly higher than the amounts allocated to the 2021-2027 MFF and, in addition, will need to cover borrowing costs and debt repayment; insists, therefore, that the next MFF be endowed with significantly increased resources compared to the 2021-2027 period, moving away from the historically restrictive, self-imposed level of 1 % of GNI, which has prevented the Union from delivering on its ambitions and deprived it of the ability to respond to crises and adapt to emerging needs;

123. Considers that all instruments and tools should be explored in order to provide the Union with those resources, in line with its priorities and identified needs; considers, in this respect, that joint borrowing through the issuance of EU bonds presents a viable option to ensure that the Union has sufficient resources to respond to acute Union-wide crises such as the ongoing crisis in the area of security and defence;

124. Reiterates the need for sustainable and resilient revenue for the Union budget; points to the legally binding roadmap towards the introduction of new own resources in the IIA, in which Parliament, the Council and the Commission undertook to introduce sufficient new own resources to at least cover the repayment of NGEU debt; underlines that, overall, the basket of new own resources should be fair, linked to broader Union policy aims and agreed on time and with sufficient volume to meet the heightened budgetary needs;

125. Recalls its support for the amended Commission proposal on the system of own resources; is deeply concerned by the complete absence of progress on the system of own resources in the Council; calls on the Council to adopt this proposal as a matter of urgency; and urges the Commission to spare no effort in supporting the adoption process;

126. Calls furthermore, on the Commission to continue efforts to identify additional innovative and genuine new own resources and other revenue sources beyond those specified in the IIA; stresses that new own resources are essential not only to enable repayment of NGEU borrowing, but to ensure that the Union is equipped to cover its the higher spending needs;

127. Calls on the Commission to design a modernised budget with a renewed spending focus, driven by the need for fairness, greater simplification, a reduced administrative burden and more transparency, including on the revenue side; underlines that existing rebates and corrections automatically expire at the end of the current MFF;

128. Welcomes the decision, in the recast of the Financial Regulation, to treat as negative revenue any interest or other charge due to a third party relating to amounts of fines, other penalties or sanctions that are cancelled or reduced by the Court of Justice; recalls that this solution comes to an end on 31 December 2027; invites the Commission to propose a definitive solution for the next MFF that achieves the same objective of avoiding any impact on the expenditure side of the budget;

A long-term budget grounded in close interinstitutional cooperation

129. Underlines that Parliament intends to fully exercise its prerogatives as legislator, budgetary authority and discharge authority under the Treaties;

130. Recalls that the requirement for close interinstitutional cooperation between the Commission, the Council and Parliament from the early design stages to the final adoption of the MFF is enshrined in the Treaties and further detailed in the IIA;

131. Emphasises Parliament’s commitment to play its role fully throughout the process; believes that the design of the MFF should be bottom-up and based on the extensive involvement of stakeholders; underlines, furthermore, the need for a strategic dialogue among the three institutions in the run-up to the MFF proposals;

132. Calls on the Commission to put forward practical arrangements for cooperation and genuine negotiations from the outset; points, in particular, to the importance of convening meetings of the three Presidents, as per Article 324 TFEU, wherever they can aid progress, and insists that the Commission follow up when Parliament requests such meetings; reminds the Commission of its obligation to provide information to Parliament on an equal footing with the Council as the two arms of the budgetary authority and as co-legislators on MFF-related basic acts;

133. Recalls that the IIA specifically provides for Parliament, the Council and the Commission to ‘seek to determine specific arrangements for cooperation and dialogue’; stresses that the cooperation provisions set out in the IIA, including regular meetings between Parliament and the Council, are a bare minimum and that much more is needed to give effect to the principle in Article 312(5) TFEU of taking ‘any measure necessary to facilitate the adoption of a new MFF’; calls, therefore, on the successive Council presidencies to respect not only the letter, but also the spirit of the Treaties;

134. Recalls that the late adoption of the MFF regulation and related legislation for the 2014-2020 and 2021-2027 periods led to significant delays, which hindered the proper implementation of EU programmes; insists, therefore, that every effort be made to ensure timely adoption of the upcoming MFF package;

135. Expects the Commission, as part of the package of MFF proposals, to put forward a new IIA in line with the realities of the new budget, including with respect to the management of contingent liabilities; stresses that the changes to the Financial Regulation necessary for alignment with the new MFF should enter into force at the same time as the MFF Regulation;