EU budget for 2021: Council and Parliament reach common understanding

The Council and the Parliament today reached a common understanding on the content of the EU budget for 2021, based on the Multiannual Financial Framework for 2021-2027 preliminarily agreed earlier this year.

German Federal Minister of Finance Olaf Scholz said of the agreement:

The common understanding achieved today between the Council and the European Parliament on the EU budget for 2021 shows that the EU is capable of acting, even in difficult times. We are now ready to use the EU budget to stimulate economic recovery, promote innovation and strengthen economic and social cohesion in Europe in 2021. In order to get started, we need quick agreement on the EU’s Multiannual Financial Framework and the Recovery Fund. The citizens of Europe justifiably expect a swift agreement. Those who are hindering the process must finally clear the way. Member states urgently need these funds in order to save lives and support the economy.

The common understanding was reached in the budgetary conciliation committee, pending clarity on the adoption of the Multiannual Financial Framework for 2021-2027. In order for the budget to be formalised, the next Multiannual Financial Framework will need to be adopted first.

Michael Clauß, Permanent Representative of Germany to the EU:

This is a good result based on the agreement reached on the next multiannual financial framework. I am glad that it has been achieved in a record time due to the excellent cooperation between the EU institutions. This shows that Europe can pull together in times of crisis. However, the budget for 2021 can only enter into force once the blockage on the overall EU budget and recovery package is lifted. Without this, we are looking at a drastic cut in EU funding from the beginning of next year.

According to the agreement reached today, the total commitments in the 2021 budget are set at 164.2 billion euro. 0.8 billion euro of margins are kept available under the expenditure ceilings of the next Multiannual Financial Framework to give the EU sufficient leeway to react to unforeseeable needs that may arise next year, including in relation to the COVID-19 crisis. Total payments amount to 166.1 billion euro.

Funding under the draft budget has been directed towards mitigation of the effects of the COVID-19 pandemic, support for a sustainable recovery and the EU's green and digital transitions, in line with the priorities addressed in the next Multiannual Financial Framework.