The “Multiannual Financial Framework” (MFF) provides a stable basis for implementing the budget over a period of at least five years. The MFF allows the EU to carry out common policies over a period that is long enough to make them effective and to complement national budgets, by funding policies with an European value added. This long term vision is important for potential beneficiaries of EU funds, co-financing authorities as well as national treasuries.
The current MFF covers 2014-2020 and allows the EU to invest around €1 trillion over that period. It provides a framework for financial programming and budgetary discipline by ensuring that EU spending is predictable and stays within the agreed limits. The MFF lays down the maximum annual amounts (ceilings) which the EU may spend in 5 different categories of expenditure (headings).
By defining in which areas the EU should invest more or less over the seven years, the MFF is an expression of political priorities as much as a budgetary planning tool. The annual budget is adopted within this framework and usually remains below the MFF expenditure ceilings in order to retain some flexibility to cope with unforeseen needs.
Proposed by the European Commission, the regulation laying down the MFF must be adopted by the Council by unanimity after obtaining the consent of the European Parliament.
The MFF is part of a comprehensive package which also comprises the EU own resources and a set of sector-specific legislations defining the conditions of eligibility and the criteria for the allocation of funds for each EU spending programme.