Introduction

The multiannual financial framework (MFF) lays down the maximum expenditure of the European Union for the duration of seven years. A number of EU funding programmes which are important for the work of AKSB, BDKJ, KEB, FEECA and afj such as Erasmus+, the European Solidarity Corps and the European Social Fund depend on the MFF.

At the end of 2020 the MFF 2014-2020 will expire. The political process for the adoption of the MFF 2021-2027 is ongoing. Political discussions are complicated by budgetary gaps resulting from the departure of the United Kingdom and different views among member states on budgetary allocation and revenue generation.

The 2018 proposal

In May 2018 the European Commission published its´ legislative proposal for the MFF 2021-2027. In the proposal the Commission suggested a tentative shift from agriculture and cohesion to research, education and environmental protection. The traditionally strong European Agricultural Guarantee Fund as well as the Cohesion Fund and the European Social Fund (ESF) would decrease slightly in favour of an increased budget for research, education and environment and climate action. The Commission proposed to double the budget of the Erasmus+ programme for youth and education from 13.7 billion EUR to 26.4 billion EUR in 2018 prices. For the European Solidarity Corps (ESC) an envelope of 1.11 billion EUR was proposed. The European Social Fund should be cut from 96.2 billion EUR to 89.6 billion EUR.

The Mitchel-proposal

After complicated political discussions the presidency of the European Council published an own draft proposal in February 2020. The proposal suggested a budget of 21.2 billion EUR for Erasmus+, 893 million EUR for the European Solidarity Corps and 86.6 billion for the European Social Fund. According to the Mitchel-proposal, named after Council president Charles Michel, Erasmus+ and the ESC would receive significantly lower budget increases than proposed by the European Commission in 2018. The envelope for the ESF would receive a significant cut. Given that Erasmus+, the ESC and the ESF are the EUs´ key programmes for the investment in people and are facing increasing financing needs the Mitchel-proposal was received with substantial criticism.

The 2020 proposal

Upon request by the European Council the European Commission published a new MFF-proposal in May 2020. The renewed MFF-proposal has been shaped according to the most pressing challenges currently identified by the EUs´ political leadership: The impact of the COVID-19 pandemic, climate change and the digital transition.

Facts and figures

The numbers support this assessment: 1,400,000 COVID-19 infections were identified in the European Economic Area and the United Kingdom as of June 1, 2020. 165,000 people died from the disease. In the second quarter of 2020, a 15% decline in GDP was registered within the EU. A decline of 7% -16% is expected for the full year. Across Europe, land temperatures increased by 1.6-1.7 ° C between 2009 and 2018. As a result, hit waves, droughts, floods and forest fires in Europe have increased significantly since 2000. The increased incidence of epidemic diseases is also linked to climate change. The hot summer of 2003 alone caused around 70,000 premature deaths across Europe. According to figures from the European Environment Agency, global warming in Europe caused economic damage of EUR 453 billion between 1980 and 2019.

Key elements

A key element of the MFF proposal is the so-called recovery and resilience facility through which member states can access up to EUR 560 billion in loans and grants for national economic stimulus programs. In order to combat climate change, the European Commission would like to increase the rate of building renovations in order to improve energy efficiency and reduce greenhouse gas emissions. National governments can use the funds from the recovery and resilience facility, for example, to award grants to home owners for the renovation of their building.

The new solvency support instrument, with a budget of EUR 31 billion, is intended to help Member States put up parachutes for companies that came into need in the wake of the corona crisis. This instrument is again aimed at countries that lack the financial strength to create such programs out of their own pockets. The Commission proposes SURE to deal with the unemployment resulting from the crisis. Unemployment reinsurance for countries with a budget of EUR 100 billion. The Strategic Investment Facility is expected to mobilize investments of 150 billion euros in the member states with its own budget of 15 billion euros. The goal is to accelerate the transition to renewable energies, for example by building one million charging stations for electric cars. A total of 25% of the MFF is earmarked for expenditure on climate protection. The EU’s new health program, EU4Health, is to finance, among other things, the joint procurement of medicines and medical equipment with a budget of EUR 9.4 billion. With the new rescEU program, the Commission is proposing a program to deal with pan-European disaster cases. For this purpose, an EU reserve of important supplies and equipment is to be created, which can be called up to deal with disasters.

Investment in people  

For Erasmus+ a budget of 24.6 billion EUR is proposed. This is a decrease of 1.8 billion EUR compared to the 2018 proposal but an increase of 3.4 billion EUR compared to the Mitchel-proposal and increase of 10.9 billion EUR compared to the current budget.[1]

For the ESC a budget of 895 million EUR is proposed which is a decrease of 218 million EUR compared to the 2018 proposal but an increase of 2 million EUR compared to the Mitchel-proposal.

The European Social Fund+ is supposed to receive an envelope of 86,3 billion EUR which is a decrease of 9,9 billion EUR compared to the MFF 2014-2020, a decrease of 3,4 billion EUR compared to the 2018 proposal and a decrease of 366 million EUR compared to the Mitchel-proposal.

Evaluation  

The renewed Commission proposal has a strong focus on public investment in key sectors with a strong European added value, such as COVID-19 resolution, combatting climate change and supporting the digital transition. This is to be welcomed. Also to be welcomed are the clear improvements compared to the Mitchel-proposal with strong budgetary increases for Erasmus+ and the ESC.

The Commission proposal shows a strong focus on infrastructure investments. The strong upscaling of ambition when it comes to infrastructure in parallel to the considerable downscaling of investments in people compared to previous proposals, is an issue that warrants further discussion.

While investments in infrastructure are good and well they are insufficient to address Europe´s pressing challenges. Electric cars and face masks are just one element of the solution. People also need to acquire a deeper understanding of climate change and health threats to generate long-term behavioural challenges. Erasmus+ and the European Solidarity Corps have a strong track record in creating open-mindedness across borders and possess a huge potential for environmental, digital and health education. Therefore, investments in people should be seen as part of the solution to overcome Europe´s most pressing challenges.

In the new Erasmus+ programme 2021-2027 multiple new features are planned, for example the European Universities initiative, DiscoverEU and mobilities for adult learning to name just a few. Also next to environmental and health challenges older challenges to education remain. The rise of nationalism and distrust in political institutions require improved civic education for all sectors of the population. To fulfil these ambitions as well as improve funding rates in areas where demand greatly surpassed supply in the current funding period Erasmus+ needs sufficient financing.

As a result, the question whether the current budgetary proposal match the need and potentials the investment in people entails need careful consideration.

 

[1] All figures are in 2018 prices