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Multiannual Financial Framework

Multiannual Financial Framework

The EU decides a 'financial perspective' that sets limits on EU spending for different categories of expenditure. The financial perspective is renamed the "Multiannual Financial Framework" in the Lisbon Treaty Art. 312 TFEU.

The adoption is part of the budget procedure. It takes place before the estimates of the institutions’ expenditures and the Commission’s setting up of the preliminary draft budget. The annual budget must respect the adopted framework.

The adoption of the financial perspective is regulated by the Lisbon Treaty by unanimity. It can later be altered to qualified majority - but this decision requires unanimity according to the special passerelle clause in Art. 312.2 TFEU.

The European Parliament must give its consent, by absolute majority of its members.

Before the Lisbon Treaty the multiannual financial perspective was regulated by an inter-institutional agreement between the Commission, Council and Parliament.

ON THE CONTENT

The next Multiannual Financial Framework must at least cover 5 years. This is the period 2013-2017. In lack of a unanimous agreement among member states and an absolute majority in the European Parliament the annual budgets must respect the latest adopted financial perspective.

A single member state can therefore block an increase in overall spending by the EU until the requirement for unanimity may be changed - by unanimity.

The EU summit in Copenhagen in December 2002 decided a financial perspective which included the costs for enlargement of the EU. The figures were then included in the accession treaties.

This meant that the European Parliament was side-lined from influencing the expenditures. The Parliament first reacted by threatening to delay the enlargement process, but finally gave its assent and won a higher amount.

In 2006 a new conflict about the economical guidelines for 2007-2013 occurred between the Council and the European Parliament. The Parliament first insisted on the result from the summit in December 2005. A compromise, which included more money to the new member states, was reached under the Austrian presidency. 

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