European Parliament and Council presidency reach agreement on next EU long-term budget with US$17.7 billion additional funding for development, health, research

European Parliament (EP) negotiators and the German presidency of the Council of the EU have struck a political agreement on the next EU long-term budget that provides €15.0 billion (US$17.7 billion) in additional funding for flagship programs such as health, research, and education and €1.0 billion (US$1.2 billion) more in flexibility funding for future needs and crises. 

These changes would apply to the €1.80 trillion (US$2.10 trillion) deal struck by EU leaders in their July European Council meeting that included €1.07 trillion (US$1.26 trillion) for the 2021-2027 multiannual financial framework (MFF) and €750.0 billion (US$882.8 billion) for the EU recovery fund, Next Generation EU.

The additional €16.0 billion (US$18.8 billion) in the compromise agreement for flexibility and targeted programs will be funded via revenue from competition fines (€12.5 billion, or US$14.7 billion) and reallocations (€2.5 billion, or US$2.9 billion).

Increases to program funding in the compromise deal from the EU leaders’ July deal include: 

  • €4.0 billion (US$4.7 billion) increase for the Horizon Europe research program’s health, climate, and digital research for a final program budget of €84.9 billion (US$99.9 billion);
  • €1.0 billion (US$1.2 billion) increase for the Neighbourhood, Development and International Cooperation Instrument (NDICI) for a total budget of €71.8 billion (US$84.5 billion); and
  • €3.4 billion (US$4.0 billion) increase for the new EU4Health program, tripling the total to €5.1 billion (US$6.0 billion).

The EP-Council presidency agreement also includes a roadmap to introduce new sources of 'own resources' (additional revenue streams) in addition to the planned plastics levy, including a carbon border adjustment mechanism, a digital levy, a financial transaction tax (FTT), and a common corporate tax base. The EP also successfully negotiated the ability to have more budgetary scrutiny over Next Generation EU and increased ambition on biodiversity.

The deal will need to be approved by the whole European Parliament and unanimously adopted by the Council of the EU. The Council must also approve the Own Resources Decision that will enable the EU to begin borrowing funding for Next Generation EU, and then the Own Resources Decision will need to be ratified in the 27 member states’ national parliaments. Following this, negotiations will need to be finalized on the legislative files establishing the various EU programs.

Hungarian Prime Minister Viktor Orbán has threatened to veto the MFF and Next Generation EU over his objection to a new mechanism linking EU funding to the rule of law. Other member states have threatened to veto if the rule-of-law mechanism is not approved. 

News article - Politico

News article - Science|Business

Press release - Council of the EU

Press release - European Parliament