Changes from report parliamentary committee draft to plenary report

Added3. Considers that the ‘one national plan per Member State’ approach as envisaged by the Commission, with the Recovery and Resilience Facility model as a blueprint, cannot be the basis for shared management spending post-2027; underlines that the design of shared management spending under the next MFF must fully safeguard Parliament’s roles as legislator and budgetary and discharge authority and be designed and implemented through close collaboration with regional and local authorities and all relevant stakeholders;

Added4. Calls for the next MFF to continue support for economic, social and territorial cohesion in order to help bind the Union together, deepen the single market, promote convergence and reduce inequality, poverty and social exclusion;

Added5. Considers that 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 and complementing existing, highly successful programmes;

Added6. Stresses that, in particular in the light of the US’s retreat from its role as a global guarantor of peace and security, there is a clear need to progress towards a genuine Defence Union, with the next MFF supporting a comprehensive security approach through an increase in investment; stresses that defence spending cannot come at the expense of nor lead to a reduction in long-term investment in the economic, social and territorial cohesion of the Union;

Added7. Calls for genuine simplification for final beneficiaries by avoiding programmes with overlapping objectives, diverging eligibility criteria and different rules governing horizontal provisions; 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;

Added8. Insists on enhanced in-built crisis response capacity in the next MFF and sufficient margins under each heading; stresses that, alongside predictability for investment, spending programmes should retain a substantial in-built flexibility reserve, with allocation to specific policy objectives to be decided by the budgetary authority; underlines that flexibility for humanitarian aid should be ring-fenced; considers that the post-2027 MFF should include two special instruments – one dedicated to ensuring solidarity in the event of natural disasters and one for general-purpose crisis response;

Added9. Underlines that compliance with Union values and fundamental rights is an essential pre-requisite to access EU funds; insists that the Union budget be protected against misuse, fraud and breaches of the principle of the rule of law and calls for a stronger link between the rule of law and the Union budget post-2027;

Added10. Underlines that the repayment of NGEU borrowing must not endanger the financing of EU policies and priorities; stresses, therefore, that all costs related to borrowing backed by the Union budget or the budgetary headroom be treated distinctly from appropriations for EU programmes within the future MFF architecture;

Added11. Calls on the Council to adopt new own resources as a matter of urgency in order to enable sustainable repayment of NGEU borrowing; stresses that new genuine own resources, beyond the IIA, are essential for the Union’s higher spending needs; considers that all instruments and tools should be explored in order to provide the Union with the necessary resources, and considers, in this respect, that joint borrowing 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;

Added12. Stands ready to work constructively with the Council and Commission to deliver a long-term budget that addresses the Union’s needs; highlights that the post-2027 MFF is being constructed in a far from ‘business as usual’ context and takes seriously its institutional role as enshrined in the Treaties; insists that it will only approve a long-term budget that is fit for purpose for the Union in a changing world and calls for swift adoption of the MFF to enable timely implementation of spending programmes from 1 January 2028;

A long-term budget with a renewed spending focus

13. Considers that, in view of the structural challenges facing the Union, the post-2027 MFF should adjust its spending focus to ensure that the Union can meet its strategic policy aims as detailed below;

Competitiveness, strategic autonomy, social, economic and territorial cohesion and resilience

Change 7

Changed6.14. Is convinced that boosting competitiveness, decarbonising the economy and enhancing the Union’s innovation capacity are central priorities for the post-2027 MFF and are vital to ensure long-term, sustainable and inclusive growth and a thriving, more resilient economy and society;

Change 8

Added15. Considers that the Union must develop a competitiveness framework in line with its own values and political aims and that competitiveness must foster not only economic growth, but also social, economic and territorial cohesion and environmental sustainability as underlined in both the Draghi and Letta reports;

16. Underlines that, as spelt out in the Letta and Draghi reports, the European economy and social model are under intense strain, with the productivity, competitiveness and skills gap having knock-on effects on the quality of jobs and on living standards for Europeans already grappling with high housing, energy and food prices; is concerned that a lack of job opportunities and high costs of living increase the risk of a brain drain away from Europe;

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;

Removed20. Points out that Russia’s war of aggression against Ukraine has had substantial economic and social consequences, in particular in Member States bordering Russia; insists that the next MFF provide support to these regions;

Added29. Points out that the farming sector is particularly vulnerable to inflationary shocks which affect farmers’ purchasing power; calls for adequate and predictable funding for the common agricultural policy in the next MFF;

Added30. 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; reaffirms, in that respect, the importance of the convergence process; 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 and relevant stakeholders, ensuring that resources are directed where they are most needed to reduce regional disparities;

Added31. 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; calls, furthermore, for enhanced access to EU funding for cities, regions and urban authorities;

Added32. Recalls the importance of the social dimension of the European Union and of promoting the implementation of the European Pillar of Social Rights, its Action Plan and headline targets; emphasises that the Union budget should, therefore, play a pivotal role in reducing inequality, poverty and social exclusion, including by supporting children, families and vulnerable groups; recalls that around 20 million children in the Union are at risk of poverty and social exclusion; stresses that addressing child poverty across the Union requires appropriately funded, comprehensive and integrated measures, together with the efficient implementation of the European Child Guarantee at national level; emphasises that Parliament has consistently requested a dedicated budget within the ESF+ to support the Child Guarantee as a central pillar of the EU anti-poverty strategy;

Added33. Highlights, in this regard, the EU-wide housing crisis affecting millions of families and young people; stresses the need for enhanced support for housing through the Union budget, in particular via cohesion policy, and through other funding sources, such as the EIB Group and national promotional banks; acknowledges that, while Union financing cannot solve the housing crisis alone, it can play a crucial role in financing urgent measures and complementing broader Union and national efforts to improve housing affordability and enhance energy efficiency of the housing stock;

Added34. Points out that Russia’s war of aggression against Ukraine has had substantial economic and social consequences, in particular in Member States bordering Russia and Belarus; insists that the next MFF provide support to these regions;

The green and digital transitions

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;

Security, defence and preparedness

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;

Removed32. Recalls that the COVID-19 pandemic wreaked economic and social havoc globally and that a key lesson from the experience is that there is a need to invest in preparedness for health threats, in medical research and in the resilience of public health systems in the Union; considers that the next MFF must build on the work done in the current programming period;

Added46. Points to the importance of increasing support in the budget for military mobility, which upgrades infrastructure for dual-use military and civilian purposes, enabling the large-scale movement of military equipment and personnel at short notice and thus contributing to the Union’s defence capabilities and collective security; highlights, in that regard, the importance of financing for the trans-European transport networks to enable their adaptation for dual-use purposes;

Removed33. Underlines that, with technological change, it has become easier for malicious and opportunistic foreign actors to spread disinformation, interfere in elections and mount cyberattacks against the Union’s interests; insists that the next MFF must invest in enhanced cybersecurity; points to the importance of digital and media literacy and critical thinking in this regard, and to the need for continued Union budget support for initiatives in these areas;

Added47. Emphasises that the Union needs to ramp up funding for preparedness across the board; is alarmed by the growing impact of natural disasters, which are often the result of climate change and are therefore likely to occur with greater frequency and intensity in the future; points out that, according to the 2024 European Climate Risk Assessment Report, cumulated economic losses from natural disasters could reach about 1.4 % of Union GDP;

Removed34. Underscores the importance of continued funding, in the next MFF, for effective protection of the EU’s external borders; underlines the need to counter trafficking networks and address hybrid attacks and the instrumentalisation of migrants, in particular by a third country or a hostile non-state actor;