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Council of the European Union General Secretariat

READING REFERENCES 2020

Council Library

The long-term EU budget

and the Recovery Plan for Europe

Council of the European Union

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The COVID-19 pandemic has had an unprecedented impact on EU societies and economy. In response to the crisis, the EU has put in place immediate measures to enable maximum flexibility in the application of budget. On 23 April 2020 the European Council decided to work towards establishing a recovery fund to respond to the socio-economic consequences of the COVID-19 crisis. It tasked the Commission with analysing the exact needs and urgently coming up with a proposal commensurate with the challenge facing us. On 27 May 2020 the Commission issued a proposal for a long-term EU budget for the period 2021-2027.

EU leaders will discuss the issue of a recovery fund to respond to the COVID-19 crisis and a new long-term EU budget on 19 June 2020.

The Council Library has compiled a reading list relating to the MFF including research papers, articles and EU publications on the financial framework for the next seven years and on its historical evolution. This list includes recent online resources regarding the new EU recovery plan.

Please note:

This bibliography is not exhaustive; it provides a selection of resources made by the Council Library. Most of the titles are hyperlinked to Eureka, the resource discovery service of the Council Library, where you can find additional materials on the subject.

The contents are the sole responsibility of their authors. Resources linked from this bibliography do not necessarily represent the positions, policies, or opinions of the Council of the European Union or the European Council.

Reuse of the covers is prohibited, they belong to the respective copyrightholders.

Additional resources may be added to this list by request - please contact the Council Library to suggest a title: library@consilium.europa.eu

Click on the titles below to access the resources.

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Books

Features and challenges of the EU budget : a multidisciplinary analysis Luca Zamparini ; Ubaldo Villani-Lubelli Cheltenham : Edward Elgar Publishing, 2019 Available at Legal Library Main Collection (105783) "The budget has been among the most pressing topics facing Brussels throughout the history of the EU. Features and Challenges of the EU Budget proposes a timely analysis of the most pertinent issues surrounding the EU budget with a multidisciplinary approach that includes historical, political, legal and economic interpretations. This thought provoking book considers the history of the EU budget and the European integration process, offering insight into the broader political implications of the budget for both Member State governments and for their citizens."

Les procédures budgétaires de l'Union européenne de 2015 à 2017 : de la crise à la relance Ilkka Saarilahti Florence : European Press Academic Publishing, 2018

Available at Legal Library Main Collection (105563) "Cet ouvrage fournit un eclairage complet sur le deroulement des negociations budgetaires interinstitutionnelles de l'Union europeenne en 2014-2017.Il detaille les differents sujets auxquels les negociateurs ont du faire face et presente en detail le contenu des accords budgetaires conclus pendant cette periode. Une attention particuliere est portee aux compromis entre le Parlement europeen et le Conseil sur les differents elements de flexibilite du cadre financier pluriannuel pour 2014-2020."

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The new European budgetary order

Robin Degron Bruxelles: Bruylant, 2018 Available at Legal Library Main Collection (105396) "The Sovereign debt crisis pushed the EU to take a new step to the common financial rules. After some years of ‘soft budgetary carefreeness’, the European Budgetary Treaty boosted the movement of budgetary convergence in the EU. The ‘Six Pack’ and the ‘Two Pack’ consolidated the effectiveness of a new European budgetary order founded by the Maastricht Treaty and the Stability and Growth Pact. Even if mechanisms adopted by the Member States are formally different in law, conditions of European budgetary orthodoxy have been definitively hardened. This new rigor has a great impact on all the public administrations, as defined by the European Accounts System and Eurostat."

The responsive union: national elections and European governance Christina J. Schneider Cambridge : Cambridge University Press, 2019 Online access See chapters : 5. The EU budget: financially trivial, politically substantial 6. Triumph and agony in the 2007–2013 MFF negotiations "This book presents a comprehensive account of how EU governments signal responsiveness to the interests of their citizens over European policies. The author develops and tests a theoretical framework of the intergovernmental dimension of responsive governance in the European Union, using evidence amassed over nearly ten years of multi-method research. The findings show that European cooperation in the Council of the European Union takes

place in the shadow of national elections. Governments signal responsiveness to their publics by taking positions that are in the interests of politically relevant voters at the national level, defending these positions throughout negotiations in the Council.

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Le financement de l'Union européenne : moteur d'une intégration politique? : contribution a l'etude du systeme budgetaire europeen Angelique Boissenin Issy-les-Moulineaux : LGDJ, 2019 Available at Legal Library Main Collection (105858)

"Le financement de l'Union européenne a assurément contribué au renforcement de l'intégration européenne mais pas nécessairement à celui de l'intégration politique. Le système des ressources propres a joué un rôle déterminant dans la construction du système budgétaire européen. Toutefois, ce dispositif n'a pas évolué conformément à son essence, pas plus qu'il n'a été adapté aux évolutions de l'Union. La problématique actuellement soulevée par le financement de l'Union n'est pas uniquement quantitative. Elle est principalement qualitative et dépasse le cadre budgétaire européen."

The new politics of the European Union budget Stefan Becker ; Michael W Bauer ; Alfredo de Feo Baden-Baden : Nomos, 2017 Available at Legal Library Main Collection (104655)

"After over a decade of relative stability, recent years have seen new momentum in EU budget politics. The Treaty of Lisbon introduced the broadest reform of budgetary procedures since the 1970s, while the financial and economic crisis has intensified scepticism towards European integration among citizens and decision-makers. As a result, the EU budget has become more controversial, more flexible and more fragmented. This volume brings together contributions from scholars and practitioners that address empirical and theoretical questions surrounding the new politics of the EU budget."

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Briefings and studies

Council of the European Union:

Multiannual financial framework (background information) Brussels: Council of the European Union, 2020 Online access

The European Council and the Council of the EU have a central role in the process of establishing the EU's long-term budget, which usually covers a period of five to seven years. Negotiations kick off a few years before the period covered by the new budget is due to start. The formal process begins with the presentation of the so-called multiannual financial framework (MFF) package by the European Commission.

A recovery plan for Europe (background information) Brussels: Council of the European Union, 2020 Online access

A joint effort to recover from COVID-19. The COVID-19 pandemic has tested our societies and economies in unprecedented ways. The public health emergency rapidly turned into the most drastic economic crisis in the EU's history. From the early days of the pandemic, as the EU took immediate measures to tackle the crisis, it was clear that the recovery would require a joint effort at EU level.

European Commission and European Parliament :

The EU budget powering the recovery plan for Europe European Commission, Directorate-General for Budget Luxembourg: Publications Office, May 2020, 5 pages Online access "Building on the considerable progress that has already been made in the European Parliament and the Council, the Commission now proposes to deploy a reinforced EU budget to help repair the immediate economic and social damage brought by the coronavirus pandemic, kickstart the recovery and prepare for a better future for the next generation." Financing the recovery plan for Europe

European Commission; Directorate-General for Budget Luxembourg: Publications Office, May 2020, 3 pages Online access "To finance the necessary investments, the Commission will issue bonds on the financial markets on behalf of the EU. To make borrowing possible, the Commission will amend the Own Resources Decision and increase the headroom – the difference between the Own Resources ceiling of the long-term budget (the maximum amount of funds that the Union can request from Member States to finance its expenditure) and the actual spending. With the headroom as a guarantee, the Commission will raise funds on the markets and

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channel them via Next Generation EU to programmes destined to repair the economic and social damage and prepare for a better future." Outlook for the European Council video-conference of 18-19 June 2020 Ralf Drachenberg ; European Parliament, Directorate-General for Parliamentary Research Services

Brussels : European Parliament, June 2020, 4 pages Online access

"The European Council meeting on 19 June, to be held by video-conference, will be almost exclusively dedicated to the next Multiannual Financial Framework (MFF) and the proposed new EU recovery fund, dubbed ‘Next Generation EU’. The two European Commission proposals are now to be considered as one package for the purpose of negotiation, since the recovery fund is in effect embedded within the revamped EU long-term budget."

2021-2027 multiannual financial framework and new own resources analysis of the Commission's proposal Matthew Parry ; Magdalena Sapała ; European Parliament ; Directorate-General for Parliamentary Research Services Brussels : European Parliament, July 2018, 36 pages Online access "This in-depth analysis is a follow-up to the EPRS briefing 'Post-2020 MFF and own resources – Ahead of the Commission's proposal', published in April 2018, shortly before the Commission published its proposals for a Multiannual Financial Framework (MFF) for the 2021-2027 period and a new system of own resources. It provides an assessment of some of the proposals' most important elements, as well as an overview of how they respond to a series of issues raised by the European Parliament." The next MFF and own resources Alix Delasnerie ; European Parliament, Directorate-General for Internal Policies of the Union Brussels : European Parliament, February 2019, 2 pages Online access "The special legislative procedure for adopting the Multiannual Financial Framework (MFF), set out in Article 312 TFEU, requires both consent of the European Parliament (EP -by a majority of its component members), and unanimity in the Council, while the one for reforming Own resources (OR) requires under Article 311 TFEU consultation of the EP, a unanimous Council decision and ratification by the Member States (MSs)." How flexible is the EU budget?: flexibility instruments and mechanisms in the multiannual financial framework (MFF) : in-depth analysis Sapała, Magdalena; European Parliament, Directorate-General for Parliamentary Research Services Brussels: European Parliament, January 2020, 36 pages Online access

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"The 1988 introduction of multiannual financial frameworks (MFF) in the European Union (EU) budgetary system has improved financial predictability and facilitated the development of multiannual spending programmes, but has had to be balanced by measures that provided some flexibility and ability to react to unexpected situations. Over the years, these flexibility instruments and mechanisms have developed and proved to be useful. Occasions to use them were frequent, as the crises and challenges faced by the EU required actions that could not be financed under the tight expenditure ceilings of the agreed MFFs." Assessment of the Just Transition Fund proposal European Parliament, Directorate-General for Internal Policies of the Union Brussels: European Parliament, March 2020, 12 pages Online access "Soon after unveiling the overall roadmap for its flagship European Green Deal initiative, the European Commission published its first concrete proposal on 14 January 2020, on how to establish a Just Transition Mechanism (European Commission, 2020a, 2020b and 2020c). The objective of this initiative is to provide support to territories facing serious socio-economic challenges arising from the transition towards climate-neutrality. To reach the €100 billion of Just Transition Mechanism financing (for the period 2021-2027) promised by European Commission President Von der Leyen, the initiative relies on three main pillars (European Commission, 2020a): 1. The creation of a Just Transition Fund (JTF): the Commission wants to add €7.5 billion of ‘fresh money’ to the total amount proposed in 2018 for the 2021-2027 Multiannual Financial Framework (MFF)."

Articles and research papers

The European Commission’s Recovery Plan : key points for a full picture Fondation Robert Schuman, 27 May 2020, 4 pages. Online access "A massive three-directional plan – To revive the European economy and tackle the consequences of the Covid-19 pandemic, the Commission is proposing a €750 billion plan, integrated into the Multiannual Financial Framework (MFF) divided into three pillars: support for recovery in the Member States; support for businesses, particularly strategic sectors; and strengthening the EU's health and crisis management capacities." The Commission’s long-term budget proposal and the EU recovery plan: dissecting the jigsaw puzzle Analysis by Dolores Utrilla, In EU Law live website, June 2020 Online access "A few days ago, the European Commission presented its plan for post-pandemic economic recovery in the EU. This includes a revised proposal for the 2021-2027 Multiannual Financial Framework (MFF), as well as proposals to review other budget-related pieces of EU legislation. Overall, this represents an effort by the Commission to place a powerful and modernised EU budget at the heart of the EU’s recovery plan, and involves an unprecedented level of complexity in the use of sectoral mechanisms and

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programmes closely interconnected with each other. That complexity warrants further explanation to understand the plan’s main features, in order to obtain a comprehensive picture of the different pieces forming the proposed new MFF, as well as its envisaged role in the post-pandemic economic recovery process." How to spend it right : a more democratic governance for the EU Recovery and Resilience Facility Policy brief by Lucas Guttenberg and Dr. Thu Nguyen; Bertelsmann Stiftung and the Jacques Delors Centre, June 2020, 6 pages. Online access "The Recovery and Resilience Facility (RRF) will be the core of the EU’s new Recovery Instrument to fight the economic fallout of the pandemic. Under the RRF, 310 billion euros in additional EU spending will be allocated by the European Commission to member states based on individual Recovery and Resilience Plans (RRPs). In this Policy Brief, Lucas Guttenberg and Thu Nguyen argue that the proposed governance to decide on the assessment of RRPs lacks democratic elements as parliaments are largely sidelined" Investigating in Europe's global role: the must-have guide for the negotiations of the Multiannual Financial Framework 2021-2027 Andrew Sherriff ECDPM book, 2019 Online access "In 2019, a new European Parliament, new European Commission and new President of the European Council will have their hands full with the negotiations of the 2021-2027 budget. They will need to agree on the amount and the focus of billions of euros and on how to distribute these along different political priorities. There is still all to play for and these negotiations may well run late into 2020. This guide is a consolidated independent reference point for policymakers, analysts and advocates – inside and outside of the negotiating process. It provides non-partisan insight on the key challenges, issues at stake and dynamics driving change."

Tax-based own resources to finance the EU Budget Schratzenstaller, Margit ; Krenek, Alexander Intereconomics, May 2019, Vol.54 (3), p.171-177 Online access "In the current negotiations about the European Union’s next medium-term Multiannual Financial Framework (MFF) for the period 2021 to 2027, the system of own resources financing EU expenditures plays a relatively important role. Currently, the EU budget primarily rests on contributions from Member States (VAT- and GNI-based own resources), whereas ‘true’ own resources have continuously lost importance. In 2017, VAT-based own resources accounted for 12.2% of overall EU revenues and GNI-based own resources for 56.6%, while traditional own resources contributed the rather small share of 14.7%." Pre-summit Briefing - 20 February the Multiannual Financial Framework Peter Ludlow European Council Studies, No. 1, March, 2020, p. 1-6 Online access

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"The European Council’s meetings about the MFF every seven years are a curious ritual. One dreads them before they start. One wonders what all the fuss was about when they are finished. From Thursday to Friday and possibly Saturday of this week, the heads of state or government from 27 countries will devote a great deal of energy to settling their differences over a seven year budget which the Presidency proposes should be fixed at 1.074% of the EU’s GNI and which however much they may huff and may puff they are highly unlikely to change by more than .025% either way. And if they do not agree this time, they will have another go, as they did in 2005 and again in 2012/13." A new budget for the EU negotiations on the multiannual financial framework 2021–2027 Peter Becker SWP Research Paper, Stiftung Wissenschaft und Politik, 2019 Online access "This research paper looks at the issues the MFF negotiations are facing, such as Brexit, increased protection of the EU’s external borders, and the stabilisation of the Eurozone. Many member states hope that Germany, as the strongest economy and largest net contributor, will provide additional resources to facilitate a successful conclusion of the negotiations on a new MMF. This paper argues that the German government needs clear and firm ideas about the fields in which it wants to modernise EU policies and to further Europeanise and communitise them."

Budget européen 2021-2027 doter l’Europe des moyens de nos ambitions Pénélope Debreu Terra Nova, 2018 Online access "Tous les sept ans, l’Union europeenne (UE) decide de sa programmation budgetaire pluriannuelle pour financer ses politiques et institutions. Et tous les sept ans, cet exercice donne lieu à d'âpres négociations entre États membres. Reflet des compétences de l'UE, la discussion budgétaire est souvent victime de mécanismes institutionnels – règle de l'unanimité et structure inadaptée des ressources alimentant le budget – qui poussent les États membres à regarder uniquement combien l'Europe leur coûte et combien elle leur rapporte. Peut-on changer de regard et faire du budget l'occasion d'un débat sur les priorités de l'Union ? C'est ce que Terra Nova analyse dans ce rapport pour donner au budget européen les moyens de ses ambitions."

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Historical evolution of the EU budget

BOOKS

Budgetary politics : the finances of the European Communities Helen Wallace ; Gordon Roy London : University Association for Contemporary European Studies, 1980 Available at Council Library Main Collection (032324) "A comprehensive study of the background to problems associated with the EU budget and their implications."

The Community budget for an Economic and Monetary Union Paul-Bernd Spahn London : Macmillan, 1993 Available at Council Library Main Collection (055222)

"Maastricht will induce changes to the EC budget the various dimensions of which are explored in this volume. Based on the theory of fiscal federalism the author discusses important aspects of multilayer government finance for existing federations - Australia, Germany, Switzerland and the USA. He sketches the effects of an Economic and Monetary Union (EMU) onto the Community budget, and concludes with a systematic treatment of revenue instruments for its future financing."

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Paying for Europe Iain Begg ; Nige Grimawade, Sheffield : Sheffield Academic Press, 1998 Available at Council Library Main Collection (066792) "As the European Union moves towards full economic and monetary union, the system used to finance the Union will have to change. The current arrangements were designed for a small community at a relatively low stage of integration. This book considers options for reforming the Union Budget to make it more appropriate for the challenges which will face the Union in the next century. It proposes an agenda for gradual reform which takes into account both the political and economic constraints on the Union."

The finances of the European Union Brigid Laffan London : Macmillan, 1997 Available at Council Library Main Collection (063395)

"This volume provides a comprehensive analysis of the growing financial power of the European Union in a lively and accessible form. It examines how the budget is used to enhance the internal cohesion of the Union and its growing external commitments. Considerable attention is paid to lesser known aspects of EU finances such as the work of the EIB and the Court of Auditors. The management of EU finances is a central focus of this book. The book concludes with an assessment of the future prospects of the budget."