Issue link: https://maltatoday.uberflip.com/i/1186350
11 ONE of the primary points for discussion currently being undertaken within EU insti- tutions is the formulation of the next Multiannual Finan- cial Framework (MFF) for the 2021-2027 period. It presents a range of oppor- tunities for the EU to effec- tively re-allocate its resources towards areas which are con- sidered as being a 'top prior- ity'. The MFF is the instrument through which the EU financ- es its activities and opera- tions, ranging from an array of EU funding opportunities afforded to EU citizens and businesses, and the opera- tions of the different EU insti- tutions, agencies and bodies. This includes programmes such as the Cohesion Policy and those dealing investments in research and innovation. In May 2018, the European Commission made a number of proposals aimed at achiev- ing a far-reaching EU budget, which covers a wide-range of policy areas. The objective of the proposal is to put in place a new MFF which reflects rap- id modern-day developments in innovation, the economy, the environment and geopoli- tics. The proposal focuses on six distinct areas: cohesion, natural resources, the single market, the EU's role outside Europe, migration, as well as security and defence. The MFF is funded primar- ily through contributions made by Member States, in- cluding contributions made through national VAT rates and import duties on goods entering from outside the EU. The main challenge in fund- ing the upcoming budget re- volves around the issue of the United Kingdom's withdrawal from the EU. While the pre- vious budget was financed by 28 Member States, the next MFF will experience a mod- erate decrease. As such, the EU and its Member States must look towards ensuring they may do more with less. The European Commission's proposed budget amounts to 1.11% of the EU's Gross Na- tional Income (GNI). As such, the current pro- posal would see an increase in funds allocated to research and innovation, Erasmus, border management, and se- curity. Such increases would be offset, with slight decreas- es in funding going towards cohesion policy and agricul- ture. The changes being proposed on how the EU budget would be allocated highlights those policy areas which the EU is looking to address, particu- larly when it comes to cli- mate change. In fact, current proposals would see 25% of the next MFF be dedicated exclusively to climate-related actions. Additionally, the ar- eas of cohesion policy and agriculture would also have important climate-related ob- jectives. The European Parliament, in its review of the Commis- sion's proposal, has suggested that the total budgetary al- location for the upcoming MFF be increased to 1.3% of the EU's GNI. This would translate to a 16.7% increase in budgetary allocations, par- ticularly to keep funding al- locations for cohesion policy and agriculture similar to their 2014-2020 budgetary al- locations. Negotiations are still ongo- ing between Member States within the Council of the EU, particularly because of op- posing views on the overall size of the new budget and the reduction in agricultural and cohesion funding. The uncertainty surrounding the United Kingdom's member- ship is also making it diffi- cult for the Council to reach a final united position, and developments are expected early in 2020. The drawing up of the next EU budget is a long and com- plicated process which will have important ramifications for the future of the EU and its Member States. The MFF is an important instrument which will play an integral role in the EU's operations in the upcoming years, and their effectiveness. It presents an opportunity for the EU to prioritise those areas which are most important in the current global climate, and to tackle the many challenges on its doorstep. maltatoday | WEDNESDAY • 20 NOVEMBER 2019 Mark Abdilla forms part of the European Policy & Legislation team at MEUSAC OPINION Mark Abdilla Looking ahead: The next EU Budget Negotiations are still ongoing between Member States within the Council of the EU, particularly because of opposing views on the overall size of the new budget and the reduction in agricultural and cohesion funding www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way