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Adopted text

Interinstitutional Agreement on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources

TA-9-2020-0358 · P9_TA(2020)0358 · PE660.218

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Parliament approves an interinstitutional agreement between Parliament, the Council and the Commission on budgetary discipline, budgetary cooperation, sound financial management and new own resources. The agreement covers the 2021-2027 multiannual financial framework, special instruments, interinstitutional cooperation in the annual budgetary procedure, financial programming, agencies and European schools, and data on beneficiaries of Union funding. It sets a roadmap for new own resources, including a plastic-based contribution from 1 January 2021, proposals on a carbon border adjustment mechanism and a digital levy by June 2021, and further resources by 1 January 2026. It provides for monitoring of climate spending of at least 30% of the Union budget and recovery instrument expenditure, biodiversity spending of 7.5% in 2024 and 10% in 2026 and 2027, and gender equality spending. It strengthens scrutiny of the European Union Recovery Instrument and requires standardised collection of data on final recipients and beneficiaries of Union funding.

Key points

  1. The agreement implements budgetary discipline, improves the annual budgetary procedure and cooperation, ensures sound financial management, and establishes a roadmap for new own resources.
  2. It is binding on the institutions while in force, covers all expenditure, and replaces the Interinstitutional Agreement of 2 December 2013.
  3. The institutions must leave sufficient margins beneath MFF heading ceilings, except for the cohesion sub-heading, and the Commission updates payment forecasts annually until at least 2027.
  4. Special instruments are mobilised by joint decisions or Commission proposals: the European Globalisation Adjustment Fund, Solidarity and Emergency Aid Reserve, Brexit Adjustment Reserve, Single Margin Instrument and Flexibility Instrument.
  5. The institutions take measures to facilitate adoption of a new MFF, including regular meetings and exchange of information, and the Commission reports annually on assets, liabilities, revenue and expenditure.
  6. The Commission reports on climate spending towards at least 30% of the Union budget and recovery instrument expenditure, and on biodiversity spending towards 7.5% in 2024 and 10% in 2026 and 2027.
  7. The Commission promotes gender equality and mainstreaming, develops a methodology to measure gender expenditure, and tests it by 1 January 2023 for certain centrally managed programmes.
  8. Legislative acts for multiannual programmes under the ordinary legislative procedure must contain a financial envelope, and the institutions undertake not to depart by more than 15% from that amount.
  9. The Commission submits financial programming twice a year for most MFF headings, and before creating a new agency produces an impact assessment and follows procedural steps for timely financing agreement.
  10. The institutions introduce standardised measures to collect, compare and aggregate data on final recipients and beneficiaries of Union funding, and the Commission makes available an integrated information and monitoring system.
  11. The Commission is empowered to borrow up to EUR 750 000 million in 2018 prices for the recovery instrument, and the institutions enhance scrutiny of external assigned revenue under it.
  12. The roadmap sets a plastic-based own resource from 1 January 2021, proposals on a carbon border adjustment mechanism and digital levy by June 2021, and further resources by 1 January 2026.

Who is affected

  • Member states, which must approve new own resources and apply decommitment rules.
  • The Commission, which must report, propose and implement the agreement.
  • The European Parliament and the Council, which gain enhanced scrutiny of recovery instrument spending.
  • Beneficiaries and recipients of Union funding, whose data will be collected for control and audit.
  • Small and medium-sized enterprises and citizens, for whom the institutions aim to reduce red tape.

Figures and deadlines

  • At least 30% of the total amount of the Union budget and recovery instrument expenditures supporting climate objectives.
  • 7.5% in 2024 and 10% in 2026 and 2027 of annual spending under the MFF to biodiversity objectives.
  • No later than 1 January 2023, the Commission will implement the gender expenditure methodology for certain centrally managed programmes.
  • The institutions undertake not to depart by more than 15% from the financial envelope for the entire duration of the programme.
  • The Commission will be empowered to borrow up to EUR 750 000 million in 2018 prices, of which up to EUR 390 000 million for expenditure and up to EUR 360 000 million for loans.
  • A deviation from forecasted recovery instrument expenditure is significant if it deviates by more than 10%.
  • All related liabilities will be fully repaid by 31 December 2058 at the latest.
  • The limit for repayment of the principal is set at 7.5% of the maximum amount to be used for expenditure.

Legal basis: Articles 295, 310, 311, 312, 323 and 324 of the Treaty on the Functioning of the European Union.