Europe responds to new proposed multiannual financial framework

Europe responds to new proposed multiannual financial framework
Commissioner Günther Oettinger © EPP Group in the CoR

Stakeholders across Europe have broadly praised the EU’s proposed multiannual financial framework, but cuts to some sectors have caused controversy.

The proposed multiannual financial framework was introduced to the European Parliament by European Commission President Jean-Claude Juncker and Commissioner Günther Oettinger during a two-hour question-and-answer session. Euractiv reports that MEPs were broadly positive about the new budget, although stakeholders in other areas have expressed concern about cuts.

The budget proposal is the first to be issued following the UK’s decision to leave the EU, and many expected the budget to decrease as a result of the country no longer making contributions. However, the proposal instead increases the budget to €1.279tn, representing some 1.1% of the bloc’s gross national income.

This will be achieved by accessing additional funds, including a total of €22bn from sources such as new taxes on plastics and carbon emissions, and a 3% common consolidated corporate tax base.

What proposals have received positive responses?

One area which has received additional funding is the Erasmus programme, which celebrated its 30th anniversary last year, and which offers students in EU universities the opportunity to study abroad. Funding for the programme will double to €30bn over the seven year period that the proposed multiannual financial framework covers.

Additionally, the budget includes €700m towards giving out free Interrail train passes to European citizens, with the aim of increasing the use of public transport and thereby decreasing the greenhouse gas emissions from transport.

What cuts have proved controversial?

Some of the biggest cuts have been proposed to the common agricultural policy, which will receive a 5% reduction in budget, and cohesion policy, which will suffer a 7% cut. This will result in a total budget of €442bn for cohesion policy, despite warnings against cuts from stakeholders prior to the proposal.

The increase in the budget has also proved controversial, given that the exit of the UK from the bloc means that both incoming contributions and expenditure will decrease. Some stakeholders – including Danish Prime Minister Lars Løkke Rasmussen, Dutch Prime Minister Mark Rutte and Austrian Chancellor Sebastian Kurz – have argued that with only 27 member states, the EU budget should decrease over the next seven years.

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