Changes from report parliamentary committee draft to plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

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on the Council position on the draft general budget of the European Union for the financial year 2025 (12084/2024 – C100099/2024 – 2024/0176(BUD))

The European Parliament,

– having regard to Article 314 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to Article 106a of the Treaty establishing the European Atomic Energy Community,

Added– having regard to Article 2 of the Treaty on European Union,

Added– having regard to Article 8 of the Treaty on the Functioning of the European Union, whereby ‘in all its activities, the Union shall aim to eliminate inequalities and to promote equality’; whereas this applies including to all levels of the budgetary process,

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– having regard to Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom,

– 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 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 the Council Regulation (EU, Euratom) 2024/765 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027 (MFF Revision),

Added– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (recast) (the ‘Financial Regulation’), in particular Articles 137, 138 and 158 thereof,

Added– having regard to the pertinent reports and special reports of the European Court of Auditors,

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– having regard to its resolution of 13 March 2024 on general guidelines for the preparation of the 2025 Budget - Section III,

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

– having regard to its resolution of 3 October 2023 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,

Added– 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,

Added– having regard to Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law),

Added– 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,

Added– having regard to the EU Gender Equality Strategy 2020-2025,

Added– 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) and to the Agreement adopted at the 15th Conference of the Parties to the United Nations Biodiversity Conference on 19 December 2022 (the Kunming-Montreal Global Biodiversity Framework),

Added– having regard to the United Nations Sustainable Development Goals,

– having regard to its resolution of 25 April 2024 on Parliament’s estimates of revenue and expenditure for the financial year 2025,

– 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,

Changed– 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, including the climate, biodiversity and gender-related provisions, as well as on new own resources, including a roadmap towards the introduction of new own resources,

Removed– having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014 and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (the ‘Financial Regulation’),

– having regard to the draft general budget of the European Union for the 2025 financial year, which the Commission adopted on 19 June 2024 (COM(2024)120),

– having regard to the position on the draft general budget of the European Union for the 2025 financial year, which the Council adopted on 13 September 2024 and forwarded to Parliament on 16 September 2024 (12684/2024 – C10 0099/2024),

– having regard to Rule 96 of its Rules of Procedure,

Changed– having regard to the opinionopinions of the Committee on Foreign Affairs, the Committee on Agriculture and Rural Development, the Committee on FisheriesDevelopment and the Committee on Civil Liberties, Justice and Home Affairs,Fisheries,

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

Changed– having regard to the report of the Committee on Budgets (A100000/2024),(A10-0008/2024),

Change 1

ChangedSection III – European Commission - A people-centred EU budget 2025: Investments tailored to improving people’s lives and boosting the Union’s competitiveness and sustainability

Change 2

Removed1. Emphasises that Russia’s war of aggression against Ukraine and its economic and societal consequences continue to put a severe strain on the everyday lives of people across Europe and frontline countries; acknowledges that a confluence of political, security, socio-economic, climate and environmental challenges demand a resolute response from the Union, including by exploiting to the fullest possible extent the crisis response capacity of the EU budget; considers it crucial for the Union to be able to act swiftly and adequately in emergency situations caused by major natural disasters, humanitarian emergencies or public health crises in Member States and accession countries and to support third countries suffering from conflicts, refugee crises or natural disasters;

Added1. Is adamant that, in times of geopolitical and institutional change, financial pressure, climate change and biodiversity crisis, as well as of societal challenges, a reliable, robust, flexible, investment oriented EU budget remains instrumental for the implementation of the Union’s policies and is key in responding to people’s increasing needs, in leaving no-one behind through the green and digital transitions, in delivering prosperity and security for people and in boosting the competitiveness and sustainability of the Union economy, in order to defend the social dimension of Union spending; reinforces, therefore, in its reading, budgetary lines that have a direct impact on improving peoples’ lives and that respond to the global challenges;

Removed2. Notes with concern that while inflation has begun to subside compared to previous years’ peaks, its longer term impact on the cost of living, energy and food prices continues to be a burden on households’ purchasing power and companies’ competitiveness and productivity; stresses that, against this background, a combination of policy responses comprising regulatory, fiscal and budgetary measures will have to be deployed to adequately address the broad range of challenges; reminds that the Union budget, in complementarity with the national budgets of the Member States and private finance should play a central role in this regard; recalls that the EU budget is an investment budget in line with Union’s political priorities and programmes which generates a return on investment and growth possibilities; emphasises that the 2024 European Parliament elections have sent a clear message for more solidarity between Member States and more investments in policies and programmes which improve people’s lives; highlights that this call must not be answered by ever more budgetary cuts and by a reduction in badly needed resources to help people go through these difficult times;

Added2. Emphasises that Russia’s illegal and unjustifiable war of aggression against Ukraine has brought further substantial economic and social consequences for people across Europe, especially the most vulnerable, in frontline countries and in Ukraine; acknowledges that a confluence of political, security, socio-economic, climate, biodiversity and environmental challenges demand a comprehensive and resolute response from the Union, including by exploiting to the fullest possible extent the prevention as well as the crisis response capacity of the EU budget; considers it crucial for the Union to be able to act swiftly and adequately in emergency situations caused by major natural disasters, linked to the worsening climate and biodiversity crisis, humanitarian emergencies or public health crises in Member States and accession countries as well as to support third countries suffering from such crises;

Removed3. Highlights that the Budget 2025 procedure takes place in a context of institutional changeover where the next Commission’s policy priorities, strategic focus and legislative initiatives and their budgetary implications are not yet know in any detail; stresses that most expenditure programmes of the 2021-2027 financial programming period are finally being executed according to plan and that the obligation to implement multiannual programmes in a reliable and predictable manner must be squared with the necessity to swiftly respond to new developments and unforeseen events and crises; highlights that, given the new institutional cycle, cooperation across the institutional settings is crucial as investments and political decisions taken today will shape the EU’s agenda for the next decades and beyond;

Added3. Notes with concern that while inflation has begun to subside compared to previous years’ peaks, its longer-term impact on the cost of living, energy insecurity, energy poverty and food prices continues to be a burden for people across Europe, on households’ purchasing power and on companies’, in particular SMEs’, competitiveness and productivity; stresses that, against this background, a combination of policy responses will have to be deployed to adequately address the broad range of challenges; reminds that the Union budget, in complementarity with the national budgets of the Member States and private finance should play a central role in this regard; recalls that the EU budget is an investment budget in line with Union’s political priorities and programmes which generates a return on investment and growth possibilities; emphasises that more solidarity among people of Europe, as well as between Member States is needed, as well as more investments in efficient policies and programmes which improve the Union's security and competitiveness and which have a positive impact on people’s lives, in particular in areas such as public health, housing and environment;

Removed4. Underscores that the revision of the Multiannual Financial Framework has been partly successful and partly unsatisfactory; acknowledges that the revision has resulted in providing additional resources for Ukraine, the Western Balkan and several other budget lines of strategic importance as well as replenished flexibility mechanism; welcomes that the Commission has proceeded with translating the outcome of the MFF revision into the Financial Programming as well as amending budgets 2024 and the draft general budget for 2025 (the “DB”); underlines once again that the higher than foreseen repayment costs of the European Union Recovery Instrument (EURI) 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; recalls the Interinstitutional Agreement adopted as part of the 2020 MFF agreement, according to which expenditure to cover NGEU financing costs “shall aim at not reducing programmes and funds”;

Added4. Highlights that the Budget 2025 procedure takes place in a context of institutional changeover where the next Commission’s policy priorities, strategic focus and legislative initiatives and their budgetary implications are not yet known in any detail; stresses that most expenditure programmes of the 2021-2027 financial programming period are being executed according to plan and that the obligation to implement multiannual programmes in a reliable and predictable manner must be in line with the necessity to swiftly respond to new developments and unforeseen events and crises; highlights that, given the new institutional cycle, cooperation across the institutional settings is crucial as investments and political decisions taken today will shape the EU’s agenda for the next decades and beyond;

Removed5. Stresses that the 2025 Budget will be the first full annual budgetary procedure under the revised MFF ceilings and rules; insists that the spirit and letter of the MFF revision be respected and the additional appropriations resulting from the revision be fully authorised and committed; reminds that a certain level of redeployments, in particular under headings 1 and 6 was part of the MFF revision package; wishes to not see such reductions repeated or made worse in the annual procedure;

Added5. Underlines that while the MFF revision represented a clear improvement on the status quo, the EU budget is still under pressure, with limited margins and flexibility, with cuts and redeployments to key programmes and with reduced ambition in important future-oriented policy areas; acknowledges that the revision has resulted in providing additional resources for Ukraine, the Western Balkans, the implementation of the new Asylum and Migration Pact, the European Defence Fund as well as moderate increases in the flexibility mechanism; regrets, however, that the revision has also resulted in cuts to flagship programmes, such as Horizon Europe and EU4Health; welcomes that the Commission has proceeded with translating the outcome of the MFF revision into the Financial Programming as well as amending budgets 2024 and the draft general budget for 2025 (the “DB”);

Removed6. Reiterates its concern, that, despite the MFF revision, overall ceilings and margins are still very low in the Financial Programming and the DB and stand at zero in several headings (Heading 2b, Heading 5, Heading 7); takes note that the NGEU overrun costs, i.e. the needs for the EURI refinancing costs which have not yet been programmed, amount to approximately EUR 2,6 billion, twice the Commission’s forecast; is aware that the Amending Letter 1/2025 will update the needs estimation for 2025; is keenly aware that identifying the sources of financing this amount, without causing undue collateral damage to essential programmes and maintaining some flexibility for unforeseen future events, constitutes the biggest challenge in the 2025 procedure;

Added6. Notes that the 2025 Budget will be the first full annual budgetary procedure under the revised MFF ceilings and rules; insists that the spirit and letter of the MFF revision be respected and the additional appropriations resulting from the revision be fully authorised and committed; reminds that a certain level of redeployments, in particular under headings 1 and 6 was part of the MFF revision package; stresses its firm position to not see such reductions repeated or made worse in the annual procedure;

Added7. Recalls its long-standing position that new policy priorities or tasks should be accompanied by fresh money and that Union institutions, bodies, decentralised agencies and the EPPO, must be properly staffed and adequately resourced to fulfil their mandate; points out that it is the responsibility of the Union to make sure that all institutions, bodies and agencies have sufficient level of cybersecurity in place; emphasises that all spending through the Union budget must be subject to parliamentary scrutiny;

Added8. Regrets, that, despite the MFF revision, overall ceilings and margins are still very low in the Financial Programming and the DB and stand at zero in several headings (Heading 2b, Heading 5, Heading 7); takes note with concern that the NGEU overrun costs, i.e. the needs for the EURI refinancing costs which have not yet been programmed, amount to approximately EUR 2,6 billion, twice the Commission’s forecast; is aware that the Amending Letter 1/2025 will update the needs estimation for 2025; is keenly aware that identifying the sources of financing this amount, without causing undue collateral damage to essential programmes and maintaining some flexibility for unforeseen future events, constitutes the biggest challenge in the 2025 procedure;

9. Recalls that the Commission in the DB proposed a total level of appropriations, including special instruments (which are counted outside the MFF ceilings), amounting to EUR 199 716.8 million in commitment appropriations corresponding to 1.08% of GNI, and EUR 152 684.1 million in payment appropriations, corresponding to 0.83% of GNI;

Change 3

Changed8. Takes10. noteDeplores that the Council, in its position which it calls “prudent”, proposes to cut commitment appropriations by EUR 1.52 billion across the MFF headings, leaving a total of EUR 191,527191.527 billion, and reduces payment appropriations by EUR 876 million across the MFF headings; stresses that, by cuttingapplying such largely unjustified cuts across headings on programme lines to generate additional unallocated margins, the Council’s positionreading maysticks conveyto an ambiguous messageapproach ofthat creatingis additionalnot availabilitiesfit for 2025;purpose in times of crisis; underlines that this approach, however,approach is not in accordancebased within the reality of current budgetary needs, as these margins are not intended for use in the annual budget 2025;2025 at all; considers that many of the budgetary cuts from important programmes such as Erasmus are made with the sole intention of repaying the NGEU interest costs cutting precisely from funding for the next generation that is supposed to benefit the most from such programmes;

Change 4

Removed9. 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 Union economy; to defend the social dimension of Union spending in all policy areas, in other words, we will work to reinforce budgetary lines that have a direct impact on improving peoples’ lives;

Added11. Emphasises its strong preference for covering a larger share of EURI borrowing costs by availabilities in the de-commitment compartment of the EURI Special Instrument over and above the MFF ceilings which would have the effect of restoring some margin within Heading 2b and creating budgetary space in the Flexibility Instrument; proposes, therefore, to cover 65% of the overrun costs in 2025 by the de-commitment compartment of the EURI special instrument;

Added12. Reiterates its 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 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 or to dismantle the institutions to fight against corruption 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 and safeguarding institutions;

Added13. Recalls that, in accordance with the Financial Regulation, when implementing the budget, Member States and the Commission must ensure compliance with the Charter of Fundamental Rights, and respect the Union’s values enshrined in Article 2 TEU; underlines, in particular Articles 137, 138 and 158 of the Financial Regulation and recalls the Commission’s and Member States’ obligation to exclude from Union funds any persons or entities found guilty by a final judgment of terrorist offences as well as final judgements on terrorist activities, inciting, aiding, abetting or attempting to commit such offences , corruption or other serious offences;

Added14. Reaffirms the significance of the horizontal principles concerning climate, biodiversity and gender equality that underpin the MFF and all related EU policies, also in the context of annual budgetary procedures; calls on the Commission to fulfil its obligation under the Interinstitutional Agreement of 16 December 2020 to ensure that the agreed targets related to climate and biodiversity, as well as the obligation to respect the ‘do no significant harm’ principle and to promote gender equality are fully met;

Added15. Deplores the absence of progress in the Council and Member States on the reform of the own resources system; recalls its position on the amended Commission proposal, 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; reiterates the need to fully respect the timeline of the legally-binding roadmap for the introduction of new own resources annexed to the IIA and underlines that swift progress on new own resources is essential both for the repayment of EURI borrowing costs and for the financial robustness and implementation of the current and future MFFs; 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;

Added16. Takes note that the climate mainstreaming target of 30% is projected to be met with 33.5% while the expenditure related to biodiversity is projected to be at 8.5% following the CAP revision so that the 10% target will not be met in 2026; welcomes the efforts for a more transparent and comprehensive reporting on the horizontal targets, and emphasises the need to carry out sufficient ex-post evaluations with a particular focus on impact;

Added17. Reiterates that all Union programmes, policies and activities should be implemented in a way that promotes gender equality in the delivery of their objectives; welcomes that the Commission has further developed a methodology to track gender equality-related spending in the 2021-2027 MFF, which looks at policy design and resource allocation and in particular the presentation of an ex-post gender impact assessment on a more granular level and reporting on volumes; calls for an extension of the methodology to all MFF programmes in order to demonstrate results for the 2025 budget; stresses, in this regard, the need for systematic collection and analysis of gender-disaggregated data; at the same time notes that only EUR 17.9 million have been spent in the first three years of this MFF which resulted in a direct positive impact for women;

Special Instruments and Cascade mechanism