Multiannual Financial Framework – MFF
The EU's Multiannual Financial Framework (MFF) in general represents the definition of the structure and binding ceiling for expenditure as well as the revenue of the EU budget for several years.
The multiannual financial framework is adopted by the Council of the EU after obtaining the consent of the European Parliament, acting unanimously. The European Parliament gives its assent by a majority of its Members (Article 312 TFEU).
MFF 2021-2027 and NextGenerationEU
The first draft of the European Union's multiannual budget was presented by the European Commission in May 2018. In 2020, marked by the COVID-19 pandemic, the European Union found itself on the threshold of the most severe economic crisis during its existence. The economic consequences of the crisis call on the Union to set a long-term financial budget to pave the way for a fair and inclusive transformation into a green and digital future, to support the Union's longer-term strategic autonomy and to ensure the Union's resilience to future shocks. That is why EU leaders agreed in July 2020 on the MFF 2021-2027 package and the NGEU, which aims to secure the EU's main investment priorities for 7 years and help deal with the consequences of this pandemic. The European Union will have EUR 1 211 billion at its disposal to support the regions, agriculture, science and research, students and security. EUR. The structure of revenue and expenditure of the EU budget for the years 2021 - 2027 is regulated by Council Regulation (EU, Euratom) no. 2020/2923 of 17 December 2020 laying down the multiannual financial framework for 2021-2027 and the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council and the Commission on budgetary discipline, cooperation on budgetary matters and sound financial management.
The budget for this period can be considered as really modernized:
- More than 50% of the total long-term budget and NextGenerationEU will go to support the modernization of the European Union through research and innovation; equitable climate and digital transformation; readiness, recovery and resilience.
- 30% of the EU budget is spent on combating climate change. The package pays special attention to the protection of biodiversity and gender issues.
- 20% NextGenerationEU invests in digital transformation.
- In 2026 and 2027, 10% of annual long-term budget expenditure will be spent on halting and reversing biodiversity loss.
- For the first time ever, the new and strengthened priorities have the highest share in the long-term budget - 31.9%.
The document in which the Ministry of Finance of the Slovak Republic quantified the expected impacts of the EU multiannual financial framework 2021 - 2027 on the public finances of the Slovak Republic is available here: https://rokovania.gov.sk/RVL/Material/24969/1
More detailed information on the MFF 2021-2027 is available here:
According to Council Regulation (EU, Euratom) No 2020/2923 of 17 December 2020, the European Commission will present a proposal for a new multiannual financial framework for the period after 2027 by 1 July 2025.
European Union Recovery Plan 2021-2023 (NextGenerationEU)
This is the so-called "Superstructure" MFF 2021-2027, which will provide financing for the adverse economic consequences of the COVID-19 crisis and strengthen the economy by 806 billion EUR, which represents 5% of EU GDP, in the form of grants and loans. The European Commission will borrow the amount through financial operations on the capital market during the years 2021-2026 and subsequently the amount will be repaid by EU Member States either directly (for loans) or through the EU budget (for grants) by December 2058 at the latest. 407.5 billion EUR 386 billion in grants (including the Recovery and Resilience Mechanism, React-EU, EAFRD, JTF) and EUR 386 billion. EUR in loans.
More information on the EU Recovery Plan is available here:
Climate action will be broadly taken into account in MFF and NGEU-funded policies and programs. The total amount of MFF and NGEU expenditure will be subject to an overall climate target of 30%, which will be taken into account in the relevant targets under sectoral legislation. These targets must respect the EU's 2050 climate neutrality goal and contribute to the Union's new 2030 climate goals, which will be updated by the end of the year. As a general principle, all EU spending should be in line with the objectives of the Paris Agreement and the "do no harm" principle enshrined in the Europe Green Agreement.
Budgetary relations of the Slovak Republic with the EU
Since joining the EU, the Slovak Republic has been in the position of a net recipient of funds. Even in 2020, the net financial position of the Slovak Republic vis-à-vis the EU was positive - the revenues of the Slovak Republic from the EU budget were by 860 mil. Higher than the contributions to the EU budget. The total net financial position of the Slovak Republic vis-à-vis the EU for the period from accession to the EU to 10 December 2020 thus reached the level of almost 16.2 billion EUR.