The EU Multiannual Financial Framework (MFF): agreement but at a price

Following the traditional overnight negotiation marathon, EU leaders finally agreed the next EU Multiannual Financial Framework (MFF) for 2014-2020 at the end of last week. After the expected failure to reach agreement last November, this time round most commentators expected a deal, involving further cuts to assuage the net payers, especially Germany and the UK.

In the end, the deal involves an upper limit of commitments of 1.0% of EU GNI (Gross National Income), with payments expected to be 0.95% of EU GNI, equivalent to 908 billion Euros. These are reductions compared to the current MFF of 3.5% and 3.7% respectively, despite the increased responsibilities at EU level, raising the open question of whether all EU policy ambitions can be met through this budget. However, there will be a review after two years (2016) to determine whether this ‘austerity’ budget needs to be adjusted in light of economic circumstances.