16 November 2020

EU funding for 2021 – 2027: Too early to celebrate?

David SASSOLI, EP President, gives a press conference on the EU Budget. Picture Credit: DAINA LE LARDIC | © European Union 2020 – Source : EP

By Hanna Hanses

EU decision making rolling on

You can be forgiven for thinking that EU policy decision making is cumbersome and complicated. In July 2020, after 4 days of acrimonious debate, the European Council reached agreement on an historic financing package for the period 2021-2027. Everyone was then relieved about this so-called multiannual financial framework worth an unprecedented 1.1 trillion euros, combined with an additional amount of 750 billion euros under a COVID-19 recovery fund called Next Generation EU. Yet this week, we are once again told that this package has been agreed. So, what happened in the meantime, why was it necessary to reach agreement again and what exactly has been decided?

In order to understand what is going on, we must recall that the European Council takes policy orientations, but has no law-making power. The EU budgetary authority is in fact shared by the European Parliament and the Council of Ministers. This is why, following the above-mentioned EU leaders’ political agreement in July, intense negotiations on a range of details took place between these two institutions. The main players in this process were the rotating German Presidency of the Council and Mr Johan van Overtveldt (ECR, BE), as Chair and Rapporteur for the EU Parliament’s Committee on Budgets. On Tuesday 10 November, the outcome was made public: negotiators for the Council and the European Parliament agreed on an ambitious and future oriented package, in line with what philanthropic organisations and wider civil society had pleaded all the way.

What’s in it for philanthropy?

Philanthropy Advocacy welcomes the reinforcement of EU’s flagship programmes by 15 billion euros, particularly the inclusion of a stronger EU Values Fund. This Values Fund will enable civil society to promote and protect the rights and values enshrined in the EU Treaty. Other related programmes are designed to support key EU priorities such as protection of the environment, social inclusion, democracy and fundamental rights, gender equality, culture, education and health. On InvestEU, one of the top priorities for philanthropy, the Council agreed on a negotiating mandate. We will follow these negotiations closely to ensure that this programme is strong enough to encourage more entry points for philanthropic organisations as grant-makers and co-investors and recipients. Another key element in this week’s provisional agreement is the indicative roadmap towards the introduction of new own resources. This is crucial, since the third sector (philanthropy and civil society) will likely need to step in to address inequalities which will arise if the costs of this crisis are carried by citizens.

A week previously, another immensely important deal had also been struck on the so-called rule of law conditionality. That means that from now on, EU governments have to live up to European core values such as democracy, fundamental rights, independent judiciary, effective legal remedies and so on, in order to be able to receive EU funding. It should no longer be tolerated that EU money is taken while EU values are breached and vilified. The EU Parliament also ensured that final beneficiaries of EU funding will not be negatively affected by this mechanism. This had been an important point for philanthropy and civil society.

What happens next?

This week’s agreement on the multiannual financial framework between the Council presidency and the EU Parliament’s negotiating teams still needs to be formally adopted. This should happen at the Council session on 10-11 December 2020. The Council can adopt the whole package by qualified majority, meaning that 15 of the 27 EU Member States, representing at least 65% of the population, must vote ‘Yes’. The European Parliament, for its part, discussed and welcomed the package on 11 November at its plenary session. Next, it has to be formally scrutinised by the budget committee and will then be put to a vote at the EP plenary, but here a simple majority will be sufficient.

Are there any stumbling blocks left? Maybe, yes. In fact, in a letter to the President of the European Council, Mr Charles Michel, the Hungarian Prime Minister Victor Orban threatened to veto the deal in connection with the rule of law conditionality. Observers are now speculating whether he has the means to do so. There are expectations that German Chancellor, whose CDU party is in the European People’s Party together with Orban’s FIDESZ, can temper Mr Orban’s ire.

Continued vigilance is required

In the end, a negotiators’ platitude remains as valid as ever: “Nothing is agreed until everything is agreed”. Reason for Philanthropy Advocacy to remain vigilant, to continue following the process and to keep you posted on any new EU developments impacting philanthropy.

Our continued vigilance will be necessary in order to make sure that philanthropy and civil society are consulted upfront on the national recovery and resilience plans. EU Member States are currently setting out such plans, in accordance with the European Commission guidelines. The Commission specifically recommends consultations with philanthropy and civil society. However, our recent survey of Dafne and EFC members showed that so far only very few EU governments have consulted with philanthropy and civil society.

Philanthropy Advocacy continues to closely monitor the developments on the multiannual financial framework, the Covid-19 recovery fund and the related national recovery and resilience plans, to ensure that philanthropic organisations, civil society and their public benefit goals are considered and reflected in the outcomes.

Hanna Hanses is a Project Officer at Dafne and a member of the Philanthropy Advocacy legal team.