Regulation on the current financial framework
The MFF Regulation is adopted under a special legislative procedure set out in article 312 TFEU, with the Council acting unanimously after obtaining the consent of the European Parliament. The three main EU budgetary institutions must ensure that expenditure in the EU’s annual budgets comply with the ceilings in the MFF.
The current MFF Regulation was approved in December 2020. It sets a maximum level of spending of €1 074 trillion (all amounts in 2018 prices) over the period 2021-2027, covering seven major areas.
The MFF also sets out maximum amounts that may be spent in addition to the MFF ceilings for emergency response or unforeseen needs (special instruments).
Various adjustments can be made to the MFF during its lifetime:
- annual technical adjustments in current prices to the MFF ceilings
- programme-specific adjustments
- re-entering or re-programming of budgetary commitments
- revisions due to unforeseen circumstances or other events (e.g. revision of the EU’s treaties with budgetary consequences, accession of new EU members)
Decision on the system of own resources
The EU budget is funded almost entirely by own resources.
The basic rules for the own resources system are laid down periodically in a Council Decision adopted unanimously by the EU Council and ratified by every Member State in accordance with their national procedures.
On 14 December 2020, the Council approved the Decision on the system of own resources which applies as of 1 January 2021 once ratified by all Member States:
The Decision on the system of own resources is complemented by several acts:
- Council Regulation (EU, Euratom) No 609/2014 on traditional, VAT and GNI-based own resources
- Council Regulation (EU, Euratom) No 608/2014 laying down implementing measures for the system of own resources [amended version not yet in force]
- Council Regulation (EEC, Euratom) No 1553/89 on arrangements for the collection of own resources accruing from VAT [amended version not yet in force]
- Council Regulation for making available the own resource on plastic packaging waste [not yet in force]
More information on the EU budget’s Own resources
The bulk of the recovery measures proposed by the Commission for the Multi-Annual Financial Framework 2021-2027, will be powered by NextGenerationEU. The instrument, with a financial firepower of €750 billion, will be exceptional and temporary. The financing will be made possible by the Own Resources Decision, which will allow the Commission to exceptionally borrow up to €750 billion on behalf of the Union, through the issuance of bonds, for measures over the period 2021- 2024. The Commission will then direct the funds in pursuit of EU priorities to the specific and new financing needs that have been revealed by the crisis through grants and loans.
To facilitate the repayment of the market finance raised and further help reduce the pressure on national budgets, the Commission will propose additional new own resources on top of those proposed in 2018 at a later stage of the financial period.
More information on the EU Recovery Plan
The Financial Regulation lays down the operating principles and basic rules governing the EU budget. It deals thoroughly with budget implementation and control issues.
The Financial Regulation is reviewed whenever it proves necessary to do so and in any case at the latest two years before the end of each multiannual financial framework.