After long and intense negotiations, there is real progress at last. The formal adoption of programmes and Own Resources is expected for early 2021.
As 2020 draws to a close, Germany can look back on a successful, if at times hectic, Presidency of the Council of the EU. The unprecedented situation of the COVID-19 pandemic shaped the developments throughout the past months. Just three weeks into the Presidency, on 21 July, the European Council had agreed not only on a new multiannual financial framework (MFF) for 2021-2027, but also on the Next Generation EU (NGEU) recovery instrument to help Member States confront the economic fallout of the pandemic. NGEU foresees for the first time that the EU can raise loans on the financial markets. The following negotiations with the European Parliament (EP) lasted well into autumn. The compromise, that was finally achieved on 10 November, also included two firsts: The budget includes a mechanism of conditionality that could allow stopping payments to Member States in case the rule of law is not respected. In addition, the EP was able to extract concessions from the Council to top up forward-looking programmes, like Horizon Europe or Erasmus+, by a total of €16 billion. The initial vetoes from Poland and Hungary targeting the new rule of law conditionality could be overcome at the December European Council. On 10 December, the Member States found an agreement reassuring Poland and Hungary that the application of the rule of law conditionality mechanism will be objective, fair and ensure equal treatment of Member States. At the same time, the mechanism will remain in place.
Only a few days later, on 16 December, the European Parliament (EP) overwhelmingly approved the next MFF with 548 votes in favour, 81 against and 66 abstentions. Finally, the Council formally adopted the MFF on 17 December. The new budget amounts to €1’836.8 billion, including €750 billion from the NGEU recovery instrument and €16 billion from the 10 November compromise between the Council and the EP, which will be financed from budget margins, competition fines and de-commitments (at 2018 prices). On 18 December, the Council Presidency and the EP reached a provisional agreement on the Recovery and Resilience Facility under NGEU that serves as a basis for the national recovery and resilience plans. At least 37% of each plan’s allocation has to support the green transition and at least 20% the digital transformation. In order for the implementation of the NGEU recovery instrument to begin, national parliaments still have to agree to raise the EU’s Own Resources.
Almost simultaneously to the finalisation of the next MFF, the trilogue negotiations between Council, EP and European Commission (EC) on the legal basis of Horizon Europe, Erasmus+ and the Digital Europe Programme (DEP) reached successful conclusions in mid-December, leading to provisional political agreements. The final budget for Horizon Europe will amount to €84.9 billion, slightly higher than initially proposed by the EC in 2018. It includes €5 billion from the recovery instrument and €4 billion from the compromise with the EP. Erasmus+ will receive a €2.2 billion top-up from the EP deal to a total of €23.4 billion and the budget of the new DEP will be €6.761 billion (all budget figures at 2018 prices).
The agreed text of the Horizon Europe regulation specifies that the €5 billion that were added to the budget from the recovery instrument will be equally split between the Clusters Health; Digital, Industry and Space; and Climate, Energy and Mobility within the 2nd Pillar and the EIC in the 3rd Pillar. €1 billion out of the €4 billion top-up clinched by the EP will be added to the budget of the European Research Council (ERC). The Horizon Europe deal between the Council and the EP left the provisions on association of third countries unchanged, compared to the Council general approach of late September. Thus, Switzerland will remain part of the category of “third countries” under article 12(1)(d) of the Horizon Europe regulation. The Permanent Representatives Committee endorsed the agreed text of the Horizon Europe regulation on 18 December 2020. The legislative basis of Horizon Europe still has to be formally adopted by the EP plenary and the Council before the programme will enter into force retroactively on 01 January 2021. This will most certainly happen in early 2021 under the Portuguese Presidency that will start on New Year.
European associations in the domains of research, innovation and education had hoped and lobbied for higher budgets of the next generation of EU programmes. However, after weeks of negotiations with many ups and downs, they reacted with relieve over the developments and that the programmes are up for a timely start after all. The European University Association (EUA) communicated its “relief and satisfaction” after the breakthroughs of mid-December. The EUA is especially satisfied that the budgets for the ERC and the Marie Skłodowska-Curie Actions received top-ups from the compromise with the EP, after both instruments had been left empty-handed by the NGEU budget increase. Also The Guild and the League of European Research Universities (LERU) welcome in particular that the ERC receives additional funding.
While the German Presidency has achieved breakthroughs on the EU budget and programmes, one important file still awaits closure: The EU-UK negotiations continue to this date. A meeting in Brussels on 20 December did not lead to a positive outcome. Thus, yet another deadline, this time set by the EP, was not met. According to the Chair of the Committee on Foreign Affairs, David McAllister, the EP will not be able to grant consent to an agreement anymore in 2020. Thus, the effort to set up a post-Brexit agreement will most likely have to continue under the upcoming Portuguese Presidency.