Changes from report parliamentary committee draft to plenary report

Change 9

Changed8.17. Points out that Draghi puts the annual investment gap with respect to innovation and infrastructure at EUR 750-800 billion per year between 2025 and 2030; underlines that, whilethat the Union budget must play a vital role but it cannot cover that shortfall alone, itand mustthat playthe abulk vitalof role;the effort will have to come from the private sector - points to the need to exploit synergies between public and private investment, in particular by simplifying and harmonising the EU investment architecture;

Change 10

Changed9.18. Stresses that the Union budget must be carefully coordinated with national spendingspending, so as to ensure complementarity, and must be designed such that it can de-risk, mobilise and leverage private investment effectively, enabling start-ups and SMEs to access funds more readily; calls, therefore, for programmes such as InvestEU, which ensures additionality and follows a market-based, demand-driven approach, to be significantly reinforced in the next MFF; considers that financial instruments and budgetary guarantees are an effective use of resources to achieve critical Union policy goals and calls for them to be further simplified;

Change 11

Changed10.19. Insists that, in the next MFF,that more must be done to maximise the potential of the role of the European Investment Bank (EIB) Group – together with other international and national financial institutions – in lending and de-risking in strategic policy areas, such as climate and, latterly, dual-usesecurity and defence projects; calls for an increased risk appetite and ambition from the EIB Group to crowd in investment, based on a strong capital position, and for a reinforced investment partnership to ensure that every euro spent at Union level is used in the most effective manner;

Change 12

Changed11.20. Emphasises that funding for research and innovationinnovation, including support for basic research, should be significantly increased, should be focused on the Union’s strategic priorities andpriorities, should continue to be determined by the principle of excellence;excellence and should remain merit-based; considers that there should be sufficient resources across the MFF and at national level to fund all high-quality projects;projects throughout the innovation cycle and to achieve the 3 % GDP target for research and development spending by 2030;

Change 13

Changed12.21. Stresses that the next MFFMFF, building on the current Connecting Europe Facility, should include much greatergreater, directly managed funding for energy, transport and digital infrastructure, with priority given to cross-border connections and national links with European added value; considers that such infrastructure goesis handan inabsolute handprecondition withfor a successful deepening of the single market;market and for increasing the Union’s resilience in a changing geopolitical order;

Change 14

Removed13. Considers that the Union must develop a competitiveness framework in line with its own values and political aims and that competitiveness must therefore be understood as encompassing not only economic growth, but also social, economic and territorial cohesion and environmental sustainability;

Added22. Points out that a secure and robust space sector is critical for the Union’s autonomy and sovereignty and therefore needs sustained investment;

Change 15

Changed14.23. Underlines that a more competitive, productive and socially inclusive economy helps to generate high-quality, well-paid jobs, thus enhancing people’s standard of living; emphasises that, through programmes such as the European Social Fund+ and Erasmus+, the Union budget can play an important role in supporting education and training systems, enhancing social inclusion, boosting workforce adaptability through reskilling and upskilling, and thus preparing people for employment in a modern economy;

Change 16

Changed15.24. Insists that the Union budget should continue to support important economic and job-creating sectors where the Union is already a world leader, such as tourism and the cultural and creative industries;sectors; underscores the need for dedicated funding for tourism, including to implement the EU Strategy for Sustainable Tourism, in the Union budget post-2027; points to the importance of Creative Europe in contributing to Europe’s diversity and competitiveness and in supporting vibrant societies;

Change 17

Changed16.25. Stresses that, in order to compete with other major global players, the European economy must also become more competitive and resilient on the supply side by investing more in the Union’s open strategic autonomy through enhanced industrial policy and a focus on strategic sectorssectors, resource-efficiency and critical technologies to reduce dependence on third countries;

Change 18

Removed17. Emphasises that food security is a vital component of strategic autonomy and that the next MFF must continue to support the Union’s farming and fisheries sectors, including small and young farmers and fishers, and help the sectors to better protect the climate and biodiversity; highlights the crucial role of the common agricultural policy in increasing productivity through technical progress, ensuring a fair standard of living for farmers and guaranteeing food security; calls for adequate funding for the common agricultural policy in the next MFF;

Added26. Considers that, in light of the above, the idea of an umbrella Competitiveness Fund merging existing programmes as envisaged by the Commission is not fit for purpose; stresses that the fund should instead be a new instrument taking advantage of a toolbox of funding based on lessons learned from InvestEU and the Innovation Fund; recalls that, under Article 182 TFEU, the Union is required to adopt a framework programme for research;

Removed18. Recalls that social, economic and territorial cohesion is a cornerstone of European integration and is vital in binding the Union together and deepening the single market; underlines that a modernised cohesion policy must follow a decentralised, place-based, multilevel governance approach and be built around the shared management and partnership principle, fully involving local and regional authorities;

Added27. Notes that, in the Commission communication on the competitiveness compass, the Commission argues that a new competitiveness coordination tool should be established in order to better align industrial and research policies and investment between EU and national level; notes that the proposed new tool is envisaged as part of a ‘new, lean steering mechanism’ designed ‘to reinforce the link between overall policy coordination and the EU budget’; insists that Parliament must play a full decision-making role in both mechanisms;

Removed19. Stresses that cohesion policy funding must tackle the key challenges the Union faces, such as demographic change and depopulation, and target the regions and people most in need; highlights, in particular, the importance of enhanced support to address the EU-wide housing crisis affecting millions of families and young people;

Added28. Emphasises that food security is a vital component of strategic autonomy and that the next MFF must continue to support the competitiveness and resilience of the Union’s farming and fisheries sectors, including small-scale and young farmers and fishers, and help the sectors to better protect the climate and biodiversity, as well as the seas and oceans; highlights that a modern and simplified common agricultural policy is crucial for increasing productivity through technical progress, ensuring a fair standard of living for farmers, guaranteeing food security and the production of safe, high-quality and affordable food for Europeans, fostering generational renewal and ensuring the viability of rural areas;

Change 19

Changed21.35. Highlights that the green and digital transitions are inextricably linked to competitiveness, the modernisation of the economy and the resilience of society and that,act as catalysts for a future-oriented and resource-efficient economy; insists therefore, that the post-2027 MFF must continue to support and to further accelerate the twin transitions;

Change 20

Changed22.36. Recalls that the Union budget is committedan essential contributor to achieving climate neutrality by 2050, whichincluding requiresthrough support for the 2030 and 2040 targets; underlines that the transition will require a decarbonisation of the economyeconomy, in particular through the deployment of clean technologies, improved energy and transport infrastructure and more energy-efficient housing; notes that the Commission estimates additional investment needs to achieve climate neutrality by 2050 at 1.5 % of GDP per year compared to the decade 2011-2020 and that, while the Union budget alone cannot cover the gap, it must remain a vital contributor; calls, therefore, for increased directly managed support for environment and biodiversity protection and climate action building on the current LIFE programme;

Change 21

Changed23.37. Underlines that industry will be central in the transition to net zero and the establishment of the Energy Union, and that support will be needed in helping some industrial sectors and their workers to adapt; stresses that the importance of a just transition that must leave no one behind, requiringrequiring, inter alia, investment in regions that are heavily fossil-fuel dependent and increased support for vulnerable households, in particular through the Just Transition Mechanism and the Social Climate Fund;

Change 22

Changed24.38. Points to the profound technological shift under way, with new technologies such as artificial intelligence and quantum both creating opportunities, in terms of the Union’s economic potential and global leadership and improvements to the citizens’ lives, and posing reliabilityreliability, ethical and ethicalsovereignty challenges; stresses that the next MFF must support research into, and the development and safe application of suchdigital technologies and help people to hone the knowledge and skills they need to work with and use them;

Change 23

Changed25.39. Recalls that peace and security isare the foundation for the Union’s prosperity andprosperity, social model and competitiveness, and a vital pillar of the Union’s geopolitical standing; stresses that the next MFF must investsupport a comprehensive security approach by investing significantly more in safeguarding the Union against the myriad threats it faces;

Change 24

Changed26.40. Underlines that, as the Niinistö report makes clear, themultiple fragmentingthreats globalare order,combining increasinglyto frequentheighten instability and intenseincrease extremethe weatherUnion’s events,vulnerability, chief among them the fragmenting global order, the security threat posed by Russia,Russia and Belarus, growing tensions globally, hostile international actors, the globalisation of criminal networks, hybrid campaigns,campaigns – which include cyberattacks, foreign information manipulation, disinformation and interference and the instrumentalisation of migration,migration – increasingly frequent and healthintense threatsextreme areweather combiningevents toas heightena instabilityresult andof increaseclimate thechange, Union’sand vulnerability;health threats;

Change 25

Changed27.41. Points out that the Union has played a vital role in achieving lasting peace on its territory and must continue to do so by adjusting to the reality of war on its doorstep and the need to vastly boost defence infrastructure, capabilities and readiness, including through the Union budget, going far beyond the current allocation;allocation of less than 2 % of the MFF;

Change 26

Changed28.42. Notes that European defence capabilities suffer from decades of under-investment and that, according to the Commission President,Commission, the defence spending gap currently stands at EUR 500 billion for the next decade; underlines that the Union budget alone cannot fill the gap, but has an important role to play;play, in conjunction with national budgets and with a focus on clear EU added value; considers that the Union budget and lending through the EIB Group can help incentivise investment in defence; stresses that defence spending must not come at the expense of social and environmental spending, nor must it lead to a reduction in funding for long-standing Union policies that have proved their worth over time;

Change 27

Removed29. Underscores the importance of a competitive and resilient European defence technological and industrial base and considers that joint EU-level investment in defence can generate economies of scale, and thus significant savings for Member States, and help ensure the interoperability of equipment and systems; points to the need to direct support towards the defence industry within the Union, thus creating quality high-skilled jobs;

Added43. Underlines the merits of the defence programmes and instruments put in place during the current MFF, which have enhanced joint research, production and procurement in the field of defence, providing a valuable foundation on which to build further Union policy and investment;

Removed30. Points to the importance of support in the budget for military mobility, which upgrades infrastructure for dual-use military and civilian purposes and thus contributes to the Union’s defence capabilities;

Added44. Emphasises that, given the geopolitical situation, there is a clear need to act and to progress towards a genuine Defence Union, in coordination with NATO and in full alignment with the neutrality commitments of individual Member States; concurs, in that regard, with the Commission’s analysis that the next MFF must provide a comprehensive and robust framework in support of EU defence;

Removed31. Emphasises that the Union needs to ramp up funding for preparedness across the board; underlines that, in addition to efforts to mitigate climate change through the green transition, significant investment is required to adapt to climate change, in particular to protect against and reduce the impact of natural disasters and severe weather events; considers that support for this purpose must be significantly increased in the next MFF;

Added45. Underscores the importance of a competitive and resilient European defence technological and industrial base; considers that enhanced joint EU-level investment in defence in the next MFF backed up by a clear and transparent governance structure can help to avoid duplication, generate economies of scale, and thus significant savings for Member States, reduce fragmentation and ensure the interoperability of equipment and systems; underscores the importance of technology in modern defence systems and therefore of investing in research, cyber-defence and cybersecurity and in dual-use products; points to the need to direct support towards the defence industry within the Union, thus strengthening strategic autonomy, creating quality high-skilled jobs, driving innovation and creating cross-border opportunities for EU businesses, including SMEs;

Change 28

Changed35.56. Insists that, in a context of heightened global instability, the Union must continue to engage constructively with third countries and support peace, and conflict prevention, stability, prosperity, security, human rights, the rule of law, equality, democracy and sustainable development globally, in line with its values;global responsibility values and international commitments;

Change 29

Removed37. Stresses that the next MFF must continue to tackle the most pressing global challenges, from fighting climate change, to providing relief in the event of natural disasters, ensuring global food security, improving healthcare systems, reducing poverty and inequality and boosting competitiveness and the security of global supply chains; emphasises, in particular, the need for support for the Union’s Southern and Eastern Neighbourhoods;

Added58. Underlines that the US’s retreat from its post-war global role in guaranteeing peace, security and democracy, in leading on global governance in the rules-based, multilateral international order and in providing essential development and humanitarian aid to those most in need around the world will leave an enormous gap and that the Union has a responsibility and overwhelming strategic interest in helping to fill that gap; calls on the Commission to address the consequences of the US’s retreat at the latest in its proposal for the post-2027 MFF;

Removed38. Underlines that the budget must uphold the Union’s role as the world’s leading provider of development aid and climate finance in line with the Union’s global obligations and commitments; insists that the budget must continue to support the Union in its efforts to defend the rules-based international order, democracy, multilateralism, human rights and fundamental values;

Added59. Stresses that the next MFF must continue to tackle the most pressing global challenges, from fighting climate change, to providing relief in the event of natural disasters, preventing and addressing violent conflict and guaranteeing global security, ensuring global food security, improving healthcare and education systems, reducing poverty and inequality, promoting democracy, human rights, the rule of law and social justice and boosting competitiveness and the security of global supply chains, in full compliance with the principle of policy coherence for development; emphasises, in particular, the need for support for the Union’s Southern and Eastern Neighbourhoods;

Removed39. Insists that, given the scale of humanitarian crises and mounting global challenges, humanitarian aid funding must be significantly enhanced and made more predictable in the next MFF, and that its use must remain solely needs-based;

Added60. Underlines that, in particular in light of the drastic cuts to the USAID budget, the budget must uphold the Union’s role as the world’s leading provider of development aid and climate finance in line with the Union’s global obligations and commitments; recalls, in that regard, that the Union and its Member States have collectively committed to allocating 0.7 % of their GNI to official development assistance and that poverty alleviation must remain its primary objective; insists that the budget must continue to support the Union in its efforts to defend the rules-based international order, democracy, multilateralism, human rights and fundamental values;

Change 30

Changed46.70. Emphasises the importance of the Union budget and programmes like Erasmus+ and Citizens, Equality, Rights and Values in promoting and protecting democracy and the Union’s values, fostering the Union’s common cultural heritage and European integration, enhancing citizen engagementengagement, civic education and youth participationparticipation, safeguarding and promoting fundamental rights enshrined in the Charter of Fundamental Rights and the rule of law; calls, in this regard, for increased funding for Erasmus+ in the next MFF; points to the importance of the independence of justice,the justice system, the sound functioning of national institutions, de-oligarchisation, robust support for and, in line with article 11(2) TEU, an active dialogue with civil societysociety, which is vital for fostering an active civic space, ensuring accountability and de-oligarchisation;transparency and informing policymakers about best practices from the ground;

Change 31

Removed47. Stresses that instability in neighbouring regions, poverty, underlying trends in economic development and demographic changes continue to generate migration flows towards the Union, placing significant pressure on asylum and migration systems; underlines that the post-2027 MFF must support the full implementation of the Union’s Asylum and Migration Pact, in line with fundamental rights and EU values; underlines, moreover, that, in line with the Pact, cooperation with third countries on migration must abide by EU law and respect international standards;

Added71. Highlights, in that connection, that the recast of the Financial Regulation requires the Commission and the Member States, in the implementation of the budget, to ensure compliance with the Charter of Fundamental Rights and to respect the values on which the Union is founded, which are enshrined in Article 2 TEU; expects the Commission to ensure that the proposals for the next MFF, including for the spending programmes, are aligned with the Financial Regulation recast;

Removed48. Highlights the importance of strong links between respect for the rule of law and access to EU funds under the current MFF; believes that the protection of the Union’s financial interests depends on respect for the rule of law at national level; welcomes, in particular, the positive impact of the Rule of Law Conditionality Regulation in protecting the Union’s financial interests in cases of systemic and persistent breaches of the rule of law; calls on the Commission and the Council to apply the regulation strictly, consistently and without undue delay wherever necessary; emphasises that decisions to suspend or reduce Union funding over breaches of the rule of law must be based on objective criteria and not be guided by other considerations, nor be the outcome of negotiations;

Added72. Stresses that instability in neighbouring regions and beyond, poverty, underlying trends in economic development, demographic changes and climate change, continue to generate migration flows towards the Union, placing significant pressure on asylum and migration systems; underlines that the post-2027 MFF must support the full and swift implementation of the Union’s Asylum and Migration Pact and effective return and readmission policies, in line with fundamental rights and EU values, including the principle of solidarity and fair sharing of responsibility; underlines, moreover, that, in line with the Pact, the EU must pursue enhanced cooperation and mutually beneficial partnerships with third countries on migration, with adequate parliamentary scrutiny, and that such cooperation must abide by EU and international law;

Removed49. Points to the need for a strong link between the rule of law and the Union budget post-2027 and welcomes the Commission’s intention to bolster links between the recommendations in the annual rule of law report and access to funds through the budget; calls on the Commission to outline, in the annual rule of law report from 2025 onwards, the extent to which identified weaknesses in rule of law regimes potentially pose a risk to the Union budget; welcomes, furthermore, the link between respect for Union values and the implementation of the budget and calls on the Commission to actively monitor Member States’ compliance with this principle;

Added73. Underlines that compliance with Union values and fundamental rights is an essential pre-requisite to access EU funds; highlights the importance of strong links between respect for the rule of law and access to EU funds under the current MFF; believes that the protection of the Union’s financial interests depends on respect for the rule of law at national level; welcomes, in particular, the positive impact of the Rule of Law Conditionality Regulation in protecting the Union’s financial interests in cases of systemic and persistent breaches of the rule of law; calls on the Commission and the Council to apply the regulation strictly, consistently and without undue delay wherever necessary; emphasises that decisions to suspend or reduce Union funding over breaches of the rule of law must be based on objective criteria and not be guided by other considerations, nor be the outcome of negotiations;

Change 32

Changed52.77. Stresses that a long-term budget that is fully aligned with the Union’s strategic aims requires that key objectives be mainstreamed across the budget through a set of horizontal principles, building on the lessons from the current MFF;MFF and RRF;

Change 33

Added78. Recalls that the implementation of horizontal principles should not lead to an excessive administrative burden on beneficiaries and be in line with the principle of proportionality; calls for innovative solutions and the use of automated reporting tools, including artificial intelligence, to achieve more efficient data collection;

Change 34

Changed54.80. Points out that effective mainstreaming is best achieved through a toolbox of measures, primarily through policypolicy, project and regulatory design, thorough impact assessments and solid tracking of spending and, in specific cases, spending targets;targets based on relevant and available data; welcomes the significant improvements in performance reporting in the current MFF, which allow for much better scrutiny of the impact of EU spending and calls for this to be further developed in the next programing period;

Change 35

Changed55.81. Welcomes the development of a methodology to track gender-based spending and considers that the lessons learntlearnt, in particular as regards the collection of gender-disaggregated data, the monitoring of implementation and impact and administrative burden, should be applied in the next MFF in order to improve the methodology; calls on the Commission to explore the feasibility of gender budgeting in the next MFF; stresses, in the same vein, the need for a significant improvement in climate and biodiversity mainstreaming methodologies;methodologies to move towards the measurement of impact;

Change 36

Removed56. Is pleased that the climate mainstreaming target of 30 % is projected to be exceeded in the current MFF; regrets, however, that the Union is not on track to meet the target for biodiversity-related expenditure; considers that the targets in the IIA have been a major factor in driving climate and biodiversity spending; recalls, furthermore, the importance of the ‘do no significant harm’ principle, as defined in the Taxonomy Regulation, in implementing the Union budget;

Added82. Regrets that the Commission has not systematically conducted thorough impact assessments, including gender impact assessments, for all legislation involving spending through the budget and insists that this change;

Added83. Is pleased that the climate mainstreaming target of 30 % is projected to be exceeded in the current MFF; regrets, however, that the Union is not on track to meet the 10 % target for 2026 for biodiversity-related expenditure; insists that the targets in the IIA have nevertheless been a major factor in driving climate and biodiversity spending; calls on the Commission to adapt the spending targets contributing positively to climate and biodiversity in line with the Union policy ambitions in this regard, taking into account the investment needs for these policy ambitions;

Added84. Stresses, furthermore, that the Union budget should be implemented in line with Article 33(2) of the Financial Regulation, therefore without doing significant harm to the specified objectives, respecting applicable working and employment conditions and taking into account the principle of gender equality;

Added85. Welcomes the Commission’s commitment to phase out all fossil fuel subsidies and environmentally harmful subsidies in the next MFF; expects the Commission to come forward with its planned roadmap in this regard as part of its proposal for the next MFF;

Change 37

Changed57.86. InsistsUnderlines the need for Union policies to be underpinned by a well-functioning administration; insists that, post-2027, sufficient financial and staff resources be allocated from the outset so that Union institutions, bodies andbodies, decentralised agencies and the European Public Prosecutor’s Office can ensure effective and efficient policy design, high-quality delivery and enforcement, provide technical assistance, continue to attract the best people from all Member States, thus ensuring geographical balance, and have leeway to adjust to changing circumstances;

Change 38

Changed58.87. Regrets that the Union’s ability to implement policy effectively and protect its financial interests within the current MFF has been undermined by stretched administrative resources and a dogmatic attachmentapplication toof a policy of stable staffing, despite increasing demands and responsibilities; points, for example, to the failure to provide sufficient staff to properly implement and enforce the Digital Services and Digital Markets Acts, thus undercutting the legislation’s effectiveness;effectiveness and to the repeated redeployments from programmes to decentralised agencies to cover staffing needs; insists that staffing levels be determined by an objective needs assessment when legislation is proposed and definitively adopted, and factored into planning for administrative expenditure from the outset;

Change 39

Removed59. Stresses that up-front investment in interoperable IT infrastructure and data mining can also generate longer-term cost savings and hugely enhance policy delivery and tracking of spending;

Added88. Emphasises that the Commission has sought, to some degree, to circumvent its own stable staffing policy by increasing staff attached to programmes and facilities and thus not covered by the administrative spending ceiling; underscores, however, that such an approach merely masks the problem and may ultimately undermine the operational capacity of programmes; insists, therefore, that additional responsibilities require administrative expenditure and must not erode programme envelopes;

Added89. Stresses that up-front investment in secure and interoperable IT infrastructure and data mining capabilities can also generate longer-term cost savings and hugely enhance policy delivery and tracking of spending;

Added90. Acknowledges that, in the absence of any correction mechanism in the current MFF, high inflation has significantly driven up statutory costs, requiring extensive use of special instruments to cover the shortfall; regrets that the Council elected not to take up the Commission’s proposal to raise the ceiling for administrative expenditure in the MFF revision, thus further eroding special instruments;

Change 40

Changed60.91. Stresses that the next MFF must be designed so as to simplify the lives of beneficiaries,all harmonisebeneficiaries by cutting unnecessary red tape; underlines that simplification will require harmonising rules and reporting requirements wherever possiblepossible, including, as relevant, ensuring consistency between the applicable rules at European, national and cutregional unnecessarylevels; redunderlines, tapein that respect, the need for a genuine, user-friendly single entry point for EU funding and a simplified application procedure designed in consultation with relevant stakeholders; points out, furthermore, that the next MFF must be implemented as close to people as possible;

Change 41

Changed61.92. Calls for genuine simplification where there are overlapping objectives, diverging eligibility criteria and different rules governing aspectshorizontal provisions that should be uniform across programmes; considers that an assessment of which spending programmes should be included in the next MFF must be based on the above aspects, on the need to focus spending on clearly identified policy objectives with clear European added value and on the policy intervention logic of each programme; stresses that reducing the number of programmes is not an end in itself;

Change 42

Removed62. Insists that a simpler budget must also be a more transparent budget, enabling better control of spending and reducing the risks of double funding; underlines that any reduction in programmes must be offset by a far more detailed breakdown of the budget by budget line, in contrast to some programme mergers in the current MFF, such as the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe), which is an example not to follow; calls, therefore, for a sufficiently detailed breakdown by budget line to enable proper accountability and ensure that decision-making in the annual budgetary procedure is meaningful;

Added93. Underlines that simplification cannot mean more leeway for the Commission without the necessary checks and balances and must therefore be achieved with full respect for the institutional balance provided for in the Treaties;

Removed63. Reiterates its long-standing position that all EU-level spending should be brought within the purview of the budgetary authority; calls, therefore, for the full budgetisation of (partially) off-budget instruments such as the Social Climate Fund, the Innovation Fund and the Modernisation Fund, or their successors;

Added94. Insists that simplification cannot come at the expense of the quality of programme design and implementation and that, therefore, a simpler budget must also be a more transparent budget, enabling better accountability, scrutiny, control of spending and reducing the risks of double funding, misuse and fraud; underlines that any reduction in programmes must be offset by a far more detailed breakdown of the budget by budget line, in contrast to some programme mergers in the current MFF, such as the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe), which is an example not to follow; calls, therefore, for a sufficiently detailed breakdown by budget line to enable the budgetary authority to exercise proper accountability and ensure that decision-making in the annual budgetary procedure and in the course of budget implementation is meaningful;

Added95. Recalls that transparency is essential to retain citizens’ trust, and that fraud and misuse of funds are extremely detrimental to that trust; underlines, therefore, the need for Parliament to be able to control spending and assess whether discharge can be granted; insists that proper accountability requires robust auditing for all budgetary expenditure based on the application of a single audit trail; calls on the Commission to put in place harmonised and effective anti-fraud mechanisms across funding instruments for the post-2027 MFF that ensure the protection of the Union’s budget;

Added96. Reiterates its long-standing position that all EU-level spending should be brought within the purview of the budgetary authority, thereby ensuring transparency, democratic control and protection of the Union’s financial interests; calls, therefore, for the full budgetisation of (partially) off-budget instruments such as the Social Climate Fund, the Innovation Fund and the Modernisation Fund, or their successors;

Change 43

Changed64.97. Points out that, traditionally, the MFF has not been conceived with a crisis response or flexibility logic, but rather has been designed primarily to ensure medium-term investment predictability; underlines that, in a rapidly changing political, security, economic and social context, such an approach is no longer tenable; insists on sufficient in-built crisis response capacity in the next MFF;

Change 44

Changed66.99. Believes that, while allocating a significant portion of funding to objectives up-front, spending programmes should retain a substantial in-built flexibility reserve, with allocation to specific policy objectives to be decided by the budgetary authority; notes that the NDICI – Global Europe’s emerging challenges and priorities cushion provides a model for such a flexibility reserve, but that the decision-making process for its mobilisation must not be replicated in the future MFF; points to the need for stronger, more effective scrutiny powers of the co-legislators over the setting of policy priorities and objectives and a detailed budgetary breakdown to ensure decisions bythat the budgetary authority areis meaningful;equipped to make meaningful and informed decisions;

Change 45

Changed67.100. Underlines that the MFF must have sufficient margins under each heading to ensure that new instruments or spending objectives agreed over the programming period can be accommodated without eroding funding for other policy and long-term strategic objectives or eating into crisis response capacity;

Change 46

Removed68. Calls for a root-and-branch reform of the existing special instruments to bolster crisis response capacity; underlines that the current instruments are both inadequate in size and constrained by excessive rigidity, with several effectively ring-fenced according to crisis type; points out that enhanced crisis response capacity will ensure that cohesion policy funds are not called upon for that purpose and can therefore be used for their intended investment objectives;

Added101. Underlines that the possibility for budgetary transfers under the Financial Regulation already provides for flexibility to adjust to evolving spending needs in the course of budget implementation; stresses that, under the current rules, the Commission has significant freedom to transfer considerable amounts between policy areas without budgetary authority approval, which limits scrutiny and control; calls, therefore, for the rules to be changed so as to introduce a maximum amount, in addition to a maximum percentage per budget line, for transfers without approval; considers that for transfers from Union institutions other than the Commission that are subject to a possible duly justified objection by Parliament or the Council, a threshold below which they would be exempt from that procedure could be a useful measure of simplification;

Removed69. Considers that the post-2027 MFF should include only two special instruments - one dedicated to ensuring solidarity in the event of natural disasters (the successor to the existing European Solidarity Reserve) and one for general-purpose crisis response (the successor to the Flexibility Instrument); insists that both special instruments should be adequately funded from the outset and able to carry over unspent amounts indefinitely over the MFF period; believes that all other special instruments can either be wound up or subsumed into the two special instruments or into existing programmes;

Added102. Recalls that the current MFF has been placed under further strain due to high levels of inflation in a context where an annual 2 % deflator is applied to 2018 prices, reducing the budget’s real-terms value and squeezing its operational and administrative capacity; considers, therefore, that the future budget should be endowed with sufficient response capacity to enable the budget to adapt to inflationary shocks;

Removed70. Calls for the future Flexibility Instrument to be heavily front-loaded and subsequently to be fed through a number of additional sources of financing: unspent margins from previous years (as with the current Single Margin Instrument), the annual surplus from the previous year, a fines-based mechanism modelled on the existing Article 5 of the MFF Regulation, and decommitted appropriations;

Added103. Calls for a root-and-branch reform of the existing special instruments to bolster crisis response capacity and ensure an effective and swift reaction through more rapid mobilisation; underlines that the current instruments are both inadequate in size and constrained by excessive rigidity, with several effectively ring-fenced according to crisis type; points out that enhanced crisis response capacity will ensure that cohesion policy funds are not called upon for that purpose and can therefore be used for their intended investment objectives;

Change 47

Changed72.108. Emphasises that, in order to maximise impact, it is imperative that spending under the next MFF be much more rigorously aligned with the Union’s strategic policy aims and carefullybetter coordinated with spending at national level; underlines that, in turn, consultation with regional and local authorities is vital to facilitate access to funding and ensure that Union support meets the real needs of final recipients and delivers tangible benefits for people; underscores the importance of technical assistance to implementing authorities to help ensure timely implementation, additionality of investments and therefore maximum impact;

Change 48

Added109. Underlines that, in order to support effective coordination between Union and national spending, the Commission envisages a ‘new, lean steering mechanism’ designed ‘to reinforce the link between overall policy coordination and the EU budget’; insists that Parliament play a full decision-making role in any coordination or steering mechanism;

Change 49

Changed75.112. Points out that any application of anspending RRF-styleunder deliveryshared modelmanagement in the next MFF would have to correct the RRF’s fundamental flaws, bymust involvinginvolve regional and local authorities and all relevant stakeholders from design to delivery through a place-based and multilevel governance approach,approach ensuringand in line with an improved partnership principle, ensure the cross-border European dimension of investment projects, focusingand focus on results and impact rather than outputs, guaranteeingoutputs fullby transparencysetting inmeasurable relationperformance toindicators, finalensuring recipientsavailability of Unionrelevant spendingdata and safeguarding Parliament’s role as legislator, budgetaryfeeding andinto dischargeprogramme authoritydesign and in holding the executive to account;adjustment;

Change 50

Added113. 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;

Added114. 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;

Change 51

Changed76.115. 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 forof past debts;

Change 52

Changed77.116. 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;

Change 53

Changed78.117. 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 thatthat, according to the Commission, the total costs for NGEU capital and interest repayments are projected to be around EUR 20-3025-30 billion a year from 2028;2028, equivalent to 15-20 % of payment appropriations in the 2025 budget;

Change 54

Changed79.118. 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 such repaymentall 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;

Change 55

Changed80.119. Points, moreover,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;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;

Change 56

Changed82.121. Underlines that, as described above, the budgetary needs post-2027 will be significantly higher than the amounts allocated to the 2021-2027 MFF;MFF and, in addition, will need to cover borrowing costs and debt repayment; insists, therefore, that the Union willnext onlyMFF be ableendowed with significantly increased resources compared to tacklethe 2021-2027 period, moving away from the significanthistorically challengesrestrictive, itself-imposed faceslevel andof deliver1 on% itsof policyGNI, objectiveswhich ifhas prevented the nextUnion MFFfrom isdelivering endowedon withits ambitions and deprived it of the resourcesability necessaryto respond to meetcrises theand increasingadapt budgetaryto emerging needs;

Change 57

Changed83.122. 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;

Change 58

Changed84.123. 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;

Change 59

Changed85.124. 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; points, furthermore,and tourges the needCommission to explore additional innovative and genuine newspare ownno resources,effort in order to coversupporting the higher spendingadoption needs;process;

Change 60

Added125. 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;

Change 61

Added127. 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;

Change 62

Added128. Underlines that Parliament intends to fully exercise its prerogatives as legislator, budgetary authority and discharge authority under the Treaties;

Change 63

Changed90.132. StressesRecalls 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;

Change 64

Removed91. 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;

Added133. 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;

Added134. 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;