Negotiating the EU long-term budget

Overview

The decision-making process behind the multiannual financial framework.

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. The package includes, most notably:

  • a multiannual financial framework regulation, which lays down how much the EU can spend
  • an own resources decision, which defines where EU revenue comes from

The Commission also makes proposals for sectoral programmes for the new programming period.

How is the EU's long-term budget decided?

The General Affairs Council is responsible for the work on the MFF package and prepares the so-called negotiating box.

The draft negotiating box brings together those elements which are most likely to require political direction and priority-setting from EU leaders. The aim is to facilitate the preparation of draft European Council conclusions on the MFF, which are tabled by the President of the European Council.

In the European Council, EU leaders provide political guidance on the main features of the long-term budget. This enables the Council to reach its position.

The MFF regulation is adopted under a special legislative procedure:

  • unanimity is required to secure a deal in the Council
  • the consent of the European Parliament is required to conclude the decision-making process
  • in practice, the Parliament may approve or reject the Council's position but it may not make amendments to it 

The own resources decision requires:

  • a unanimous agreement for adoption in the Council
  • an opinion from the European Parliament
  • ratification by every member state according to its constitutional requirements before entering into force

Sectoral programmes are decided by ordinary legislative procedure.

How are sectoral programmes decided?

Sectoral Council configurations are responsible for work on EU funding programmes within the Council.

For example, the Agriculture and Fisheries Council works on the legislative proposals related to the Common Agricultural Policy (CAP), the Competitiveness Council on the programmes for the single market, research and space.

With few exceptions, these programmes are decided together with the European Parliament by ordinary legislative procedure.

The financial and horizontal aspects of the programmes depend on the outcome of the MFF negotiations.