The Danish EU Presidency will put on the table for the first time its 2014-2020 multiannual financial framework (MFF) ‘negotiating box’ at the General Affairs Council meeting, on 26 March. The ministers’ debate is expected to heat up over the European Commission’s proposed macro-conditionality for structural, rural and fisheries funds and the items of expenditure that it has placed outside the financial framework, in particular ITER (International Thermonuclear Experimental Reactor) and GMES (Global Monitoring for Environment and Security).

The negotiating box, seen by Europolitics, contain so far issues relating to Headings 1 (except cohesion and the Connecting Europe Facility), 3, 4, and 5 and to horizontal issues, such as elements to be kept inside or outside the MFF. The non-binding document has been discussed at technical level in the Friends of the Presidency group and in Coreper (Committee of Permanent Representatives). The Danish Presidency indicates that the box will continuously be updated during the coming months and in the run-up to the June European Council, where it is due to be discussed by EU leaders. For the moment, the text contains some placeholders on issues where Copenhagen believes further work is needed and also provides options on some issues where the Presidency will propose choices or compromise solutions at a later stage.

MACRO-CONDITIONALITY

The Commission’s MFF proposal to apply macro-conditionality to structural, rural development and fisheries funds has been under fire from several sectors. Under this plan, stakeholders would be subject to ex ante conditions – to be met even before any funds are distributed – and ex post conditions, which, if met, will reward states with additional funds. Ministers will debate whether such macro-conditionality should apply to the entire EU budget or just cohesion policy. Pro-cohesion member states are not necessarily opposed to the macro-conditionality concept per say but argue that if it is to apply to Structural Funds then it should apply to all funds, explains an EU source.

In order for member states to take responsibility for funding the “explosive costs” of ITER and GMES, the EU executive decided to place these outside the next MFF. That was sharply critised by several net payers, who argue that their funding should be included in the overall ceilings as a matter of transparency and budgetary discipline. Several new member states, on the other hand, defend the Commission’s proposal, says the source.

Other funds or reserves, most already outside the current MFF, will be discussed by ministers. Amongst these, the European Globalisation Fund (EGF) is said to be the most threatened one and could face extinction. Already under German fire in particular at its creation, the Commission’s proposal to extend the EGF to farmers faces resistance from many corners. A handful of countries reportedly want to get rid of the EU Solidarity Fund. The general consensus is that the European Development Fund (EDF) should remain outside the MFF. The new reserve for crises in the agricultural sector, on the other hand, has a number of opponents.

The issue of the spiralling outstanding commitments (RALs - ‘reste à liquider’) the EU is unable to pay out due to the gap between payments and commitments is likely to be raised by several ministers.

The negotiating box states that important synergies will be needed in Heading 1 (competitiveness) between Horizon 2020 and the Structural Funds in order to create a “stairway to excellence”. Many national delegations support the aim of boosting the EU’s role as an active player on the international scene but find the increased funding proposed by the Commission too high. The call for savings in administrative expenditure (Heading 5) in order to consolidate public finances is backed by a majority of member states. There is no agreement yet as to what percentage of staff should be cut to do so. Heading 3 (security and citizenship), which has the smallest budget, is not expected to get much attention from ministers.