Changes from plenary report to adopted text

– having regard to Council Regulation (EU, Euratom) 2022/2496 of 15 December 2022 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027,

– having regard to its position of 16 December 2020 on the draft Council regulation laying down the multiannual financial framework for the years 2021 to 2027,

– having regard to Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021-2027 and to the joint declarations agreed between Parliament, the Council and the Commission in this context and the related unilateral declarations,

– having regard to its interim report on the proposal for a mid-term revision of the multiannual financial framework 2021-2027,

– having regard to its resolution of 27 February 2024 on the draft Council regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027,

– having regard to its resolution of 10 May 2023 on the impact on the 2024 EU budget of increasing European Union Recovery Instrument borrowing costs,

– having regard to its resolution of 15 December 2022 on upscaling the 2021-2027 multiannual financial framework: a resilient EU budget fit for new challenges,

– having regard to the Commission proposal of 16 May 2022 for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (COM(2022)0223),

– having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources,

– having regard to Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union,

– having regard to the Commission proposal of 22 December 2021 for a Council decision amending Decision (EU, Euratom) 2020/2053 on the system of own resources of the European Union (COM(2021)0570) and its position of 23 November 2022 on the proposal,

– having regard to Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis,

– having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget,

– having regard to the Commission communication of 11 December 2019 entitled ‘The European Green Deal’ (COM(2019)0640) and its resolution of 15 January 2020 responding to it,

– having regard to Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (European Climate Law),

– having regard to the Agreement adopted at the 21st Conference of the Parties to the UNFCCC (COP21) in Paris on 12 December 2015 (the Paris Agreement),

– having regard to the Interinstitutional Proclamation on the European Pillar of Social Rights of 13 December 2017 and its resolution of 19 January 2017 thereon, to the Commission Action Plan of 4 March 2021 on the implementation of the European Pillar of Social Rights and to the Porto declaration on social affairs adopted by the members of the European Council in May 2021,

– having regard to the EU gender equality strategy 2020-2025,

– having regard to Rule 93 of its Rules of Procedure,

– having regard to the letters from the Committee on Foreign Affairs, the Committee on Development, the Committee on Budgetary Control, the Committee on Employment and Social Affairs, the Committee on the Environment, Public Health and Food Safety, the Committee on Industry, Research and Energy, the Committee on Transport and Tourism, the Committee on Agriculture and Rural Development, the Committee on Culture and Education, the Committee on Constitutional Affairs and the Committee on Women’s Rights and Gender Equality,

– having regard to the report of the Committee on Budgets (A9-0068/2024),

A people-centred EU budget 2025: Investments tailored to improving people’s lives and boosting the Union’s competitiveness

1. Is adamant that, in times of geopolitical and institutional change, financial pressure, climate change and societal challenges, a reliable, robust, flexible, investment oriented EU budget remain instrumental for the implementation of the Union’s policies and central in responding to people’s increasing needs, leaving no-one behind through the green and digital transitions, in delivering prosperity and security for people and in boosting the competitiveness of the EU economy;

2. Highlights the difficult circumstances of the 2025 budget procedure, which is taking place at a moment of high international tensions and uncertainties, and in an election year when Parliament and the Commission will have to manage the transition of the legislature; is fully aware of the severe yet unavoidable calendar constraints and calls on all actors to take them duly into account with a constructive mindset;

3. Deeply regrets the fact that the Council did not succeed in reaching an agreement on the revision of the multiannual financial framework (MFF) before the end of 2023; notes, therefore, that it had to launch the budgetary procedure in the absence of certainty on several crucial elements in the financial programming for 2025, and is keenly aware of the regrettably very tight, and, in some instances, negative margins under the MFF ceilings;

4. Considers the outcome of the MFF revision to be below the initial aspirations of the EP; underscores that a revision of the MFF regulation is an essential prerequisite for ensuring medium-term financial support to Ukraine, for enabling increased funding for targeted policy priorities, including the promotion of the EU’s strategic autonomy, and for safeguarding Union programmes and the budget’s flexibility in the light of higher-than-forecast interest rates and therefore higher-than-programmed Union borrowing costs; notes that the 2025 annual budgetary procedure will be the first exercise based entirely on the revised MFF regulation;

5. Recalls that the Joint Declaration agreed 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”, still applies and serves as a reference point for the budgetary authority, notably for mobilising the EURI instrument to cover at least part of the NGEU borrowing cost shortfall; intends, therefore, to ensure that all programmes are properly resourced and the budget’s flexibility and response capacity maintained throughout the annual budgetary procedure; insists on the need for the Commission to provide reliable, timely and accurate information on NGEU borrowing costs and on expected Recovery and Resilience Facility disbursements throughout the budgetary procedure;

6. Calls on Council and Commission to apply Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget in full; stresses in particular that compliance with the rule of law is a fundamental pre-requisite to access EU funds; stresses that funds cannot be disbursed if Member States do not comply with all relevant requirements; reiterates that systemic issues with the rule of law, such as the violation of the principle of separation of powers or recent attempts in some Member States to attack the independence of the judiciary constitute clear risks to the financial interests of the EU and the protection of the EU Budget and calls on the Commission to allow no backsliding on achievements in the area of rule of law; reiterates its call on the Commission to ensure as a matter of urgency that suspended EU funds reach citizens, businesses, regional and local authorities, non-governmental organisations and any other relevant stakeholders via local governments and civil society organisations, in accordance with the Rule of Law Conditionality mechanism;

7. Underlines that repayment of the European Union Recovery Instrument (EURI) borrowing costs is a legal obligation for the EU and a non-discretionary expenditure item in the EU budget; notes that borrowing costs depend on the pace of disbursements under the Recovery and Resilience Facility (RRF) as well as on market fluctuations in bond yields and are therefore inherently unpredictable and volatile; reiterates its position that EURI borrowing costs should have been placed fully in a EURI special instrument over and above the MFF ceilings with a view to restoring some margin within Heading 2b and protecting budgetary space in the Flexibility and Single Margin Instruments; will strive to ensure that the application of the EURI cascade mechanism in the revised MFF will not result in arrangements that cause undue collateral damage to programmed expenditure or availabilities under the non-thematic special instruments;

9. Deplores the absence of progress in the Council on the reform of the own resources system; recalls its position on the amended Commission proposals, which endorses the introduction of new own resources; considers that the introduction of fresh genuine revenue sources, in line with the roadmap in the interinstitutional agreement, would serve to cover the additional budgetary burden arising from NextGenerationEU borrowing and would thereby shield the margins and flexibility mechanisms, which in turn would facilitate budgetary decision-making on unforeseen needs as well as new strategic foresight initiatives; urges, furthermore, the Commission to continue the efforts to identify fresh, new and preferably genuine own resources and other revenue sources for the EU budget beyond the IIA;

10. Regrets the fact that the capacity to respond to unforeseen events or to launch new initiatives is severely affected by budgetary scarcities and intends to rectify this situation to the extent possible and also taking account of the increased expectations by EU citizens; recalls that it is necessary to establish an additional special instrument over and above the MFF ceilings so that the EU budget can better adapt and quickly react to crises and their social and economic effects;

11. Is determined, despite these numerous constraints, to maintain a coherent and unified position which reflects its established policy priorities and institutional interests, including boosting the Union’s competitiveness, reducing strategic dependencies, accelerating clean energy deployment, ensuring the achievement of the Union’s climate and biodiversity mainstreaming targets, enhancing its security and defence capabilities as well as contributing to the green and digital transitions while minimising negative impacts on flagship programmes and maximising the spill-over benefits of economic growth for all people in the EU;

An equitable, fair and inclusive budget that offers better opportunities to all EU citizens and ensures economic growth

12. Observes that affordable living and societal cohesion continue to be persistent challenges across EU Member States and their regions and recalls the role of high quality and accessible public services in this regard; wishes to accentuate inclusiveness and accessibility to funding wherever appropriate and in accordance with pertinent eligibility criteria, and maximise funding possibilities by leveraging existing funds; considers that the social dimension of EU spending, as a necessary feature for its legitimacy, should continue to be a cross-cutting criterion for all policy areas;

13. Underlines that the EU budget is above all an investment budget with leverage effect, able to boost the Union’s objectives and policymaking, complementing national policies and, thereby, responding to the needs of all people in the EU; recalls the importance of the Recovery and Resilience Facility in increasing the resilience of the Union and mitigating the socio-economic impacts of the past and ongoing crises; believes that no effort should be spared to ensure that these two major sources of EU funding are spent effectively and without further delay;

14. Is firmly determined to use the EU budget to make a tangible and visible difference to citizens, to the economy in the single market and for achieving the objectives of the Green Deal by supporting quality job creation in cutting-edge industries, future-proofing the labour market through skills development and talent booster schemes, fighting unemployment, enhancing European competitiveness and increasing the Union’s defence readiness; considers that technological autonomy and sustainable growth are key to reaching the Union’s long term energy and climate objectives; reiterates its call to maintain adequate funding to support small and medium-sized enterprises (SMEs) as the backbone of the European economy, start-ups and young people, farmers, teachers and transport workers; underlines the need to further improve the energy and transport infrastructure, invest in upgrading public health and welfare services, social and territorial cohesion and inclusion, and in supporting vulnerable, remote and rural communities including smart villages; points out that the budget needs to ensure the green transition while supporting quality agriculture, ensuring access to quality health and education;

15. Stresses the significant impact of research and innovation on competitiveness, long-term growth and employment in the European Union; recalls the long-standing initiative to push EU research & development investment intensity to 3% of GDP; recognises the existing gap between the objective and the actual funding provided; underlines that European technology leadership is essential to implement the Green Deal and the Health Union as it creates high-skilled jobs in the Union along the entire value chain, and strengthens excellence of research and innovation within the Union; is deeply concerned that the funds available only cover a fraction of all applications submitted, resulting in high levels of oversubscription of programmes and researchers leaving the Union for competing regions;

16. Stresses that sustainable and long-term solutions must be provided in order to successfully fight structural demographic challenges, as well as to mitigate brain drain in less developed regions and cities of the EU; emphasises the need for financial resources to revitalise regions suffering from population decline through investments in social and demographic policies that support families and to provide ageing populations in Europe with adequate support in terms of access to healthcare, mobility and public services;

17. Insists that a maximum of possible funding should be mobilised through Erasmus+ and the European Solidarity Corps to promote learning and entrepreneurship and to improve young people’s skills, formal, non-formal and informal education as well as employability, as well as promoting social inclusion; reiterates the need to ensure that both programmes guarantee equal opportunities, with a special focus on people from disadvantaged backgrounds across the EU and associated countries; maintains its view that mobility grants in Erasmus+ must be further supported in order to cover the increases in living costs and to ensure accessibility, equal opportunity and inclusive participation in particular by increasing the minimum grant per participant to an appropriate level;

18. Underlines the importance of implementing the European Pillar of Social Rights and calls on the Commission to start reflections on a methodology for tracking social expenditure in the EU budget under the next programming period; highlights the crucial role of the EU budget in contributing to initiatives that reinforce social dialogue and strengthen local and regional social actions and provide access for all to vital key services; reiterates the need for a European strategy for elderly people, with specific actions to combat marginalisation, loneliness and isolation; recalls, furthermore the need for full implementation of the strategy for the rights of persons with disabilities 2021-2030 to improve their living conditions in the Union; highlights the case of European hauliers that are confronted with different challenges in each Member State, from rising costs to capacity shortages, and the need for flexibility and better working conditions; stresses the need to reinforce existing rules for their protection and allocate additional resources to monitor working conditions across the Member States; underlines in this regard the benefits of developing IT-tools at EU-level that help improve the implementation of bureaucratic requirements and the standardisation of certificates;

19. Calls on the Commission and the Member States to allocate adequate resources for the effective implementation of EU rules on social security coordination in order to facilitate labour mobility and easier transfer of social security benefits; calls for EU funds to be used to develop the Electronic Exchange of Social Security Information system and to support further digitalisation of the social security systems for fair labour mobility;