Proposal for a COUNCIL REGULATION laying down the multiannual financial framework for the years 2021 to 2027
Date: 2018-05-15
Institutions: European Commission, Secretariat-General
Subjects: budgetary procedure, commitment of expenditure, financial management, general budget (EU)

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.5.2018 COM(2018) 322 final/2 2018/0166 (APP)  CORRIGENDUM Annule et remplace le document COM(2018) 322 final du 2 mai 2018. Concerne toutes les versions linguistiques: modification de l'acronyme. Proposal for a COUNCIL REGULATION laying down the multiannual financial framework for the years 2021 to 2027  
 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Article 312 of the Treaty on the Functioning of the European Union (‘the Treaty’) stipulates 
that  a  unanimously  adopted  Council  Regulation  shall  lay  down  a  Multiannual  Financial 
Framework.  It  shall  determine  the  amounts  of  the  annual  ceilings  on  commitment 
appropriations  by  category  of  expenditure  and  of  the  annual  ceiling  on  payment 
appropriations  and  it  lay  down  any  other  provisions  required  for  the  annual  budgetary 
procedure to run smoothly. 

The  first  multiannual  financial  framework  (called  financial  perspectives  at  that  time)  was 
adopted  thirty  years  ago  together  with  provisions  on  interinstitutional  cooperation  and 
budgetary discipline1. This and the following financial frameworks allowed for improving and 
facilitating the annual budgetary procedure and cooperation between institutions whilst, at the 
same  time,  increasing  budgetary  discipline  and  predictability  of  funding  for  multiannual 
programmes and investments. 

By enshrining the Multiannual financial framework into the Union's primary law, the Treaty 
has recognised its importance as a cornerstone of the budgetary architecture of the European 
Union. 

The  current  Multiannual  Financial  Framework  regulation  for  the  years  2014  to  2020  was 
adopted on 2 December 20132. On the same date, the European Parliament, the Council and 
the  Commission  approved  the  Interinstitutional  Agreement  on  budgetary  discipline,  on 
cooperation in budgetary matters and on sound financial management3. The MFF Regulation 
was revised in 20154 in accordance with the provisions of its Article 19 to cater for the late 
programming of funds under shared management and, again, on 20 June 20175, following its 
mid-term review. 

The  present  explanatory  memorandum  focuses  on  elements  which  are  new  or  which  the 
Commission proposes to amend as compared with the current MFF Regulation, for both the 
proposal  for  a  Regulation  laying  down  the  Multiannual  Financial  Framework  for  the  years 
2021 to 2027 ('the MFF Regulation') and the draft Interinstitutional Agreement on cooperation 
in budgetary matters and sound financial management6 (' the draft IIA'). 

These proposals provide for a date of application as of 1 January 2021 and are presented for a 
Union  of  27  Member  States,  in  line  with  the  notification  by  the  United  Kingdom  of  its 
intention  to  withdraw  from  the  European  Union  and  Euratom  based  on  Article  50  of  the 
Treaty on European Union, received by the European Council on 29 March 2017. 

1 

2 
3 
4 
5 
6 

Interinstitutional  Agreement  on  budgetary  discipline  and  improvement  of  the  budgetary  procedure, 
signed by Parliament, the Council and the Commission on 29 June 1988 (OJ L 185, 15.7.1988, p. 33). 
OJ L 347, 20.12.2013, p. 884. 
OJ C 373, 20.12.2013, p.1. 
OJ L 103, 22.04.2015, p.1. 
OJ L 163, 24.06.2017, p.1 
COM(2018)323, 02.05.2018. 

EN 

1 

  EN 

 
 
                                                 
2. 

A NEW, MODERN BUDGET. 

2.1.  Main political guidelines 

The  proposal  for  the  MFF  Regulation  and  the  draft  IIA  follow  the  principles  and  main 
political objectives outlined in the Commission Communication on "A modern Budget for a 
Union  that  protects,  empowers  and  defends:  The  Multiannual  Financial  Framework  for  the 
years  2021-2027"  adopted  on  2  May  20187  (the  ‘MFF  Communication’),  in  particular  with 
regard  to  its  duration,  its  structure  reflecting  political  priorities,  the  need  for  increased 
flexibility, and the amounts foreseen for the Multiannual Financial Framework itself. 

2.2.  MFF Structure and MFF ceilings 

The  structure  of  the  expenditure  'headings'  of  the  MFF  reflects  the  proposal  for  a  more 
streamlined  and  transparent  budget,  focused  on  clear  policy  priorities.  The  detail  of  the 
structure and policies covered under each heading is described in the MFF Communication. 

The  MFF  is  structured  in  seven  headings  with  three  sub-ceilings:  on  'Economic,  social  and 
territorial  cohesion'  in  heading  II,  on  'Market  related  expenditures  and  direct  payments'  in 
heading III and on 'Administrative expenditure of the institutions' in heading VII (see table in 
the Annex to this Regulation). 

To  support  the  Union's  priorities  in  a  context  of  EU  27,  and  to  take  into  account  the 
integration  of  the  European  Development  Fund  into  the  Union  budget,  the  Commission 
proposes  for  the  MFF  2021-2027  a  ceiling  for  commitments  of  EUR 1 134.6 billion  in 
constant prices of 2018 equal to 1.11% of EU GNI and a corresponding payment ceiling of 
EUR 1 104.8 billion in constant prices of 2018 equal to1.08% of EU GNI. 

The Commission is proposing together with this proposal a legislative package for the reform 
of  the  Union’s  Own  resources  system,  including  a  proposal  for  a  Council  Decision  on  the 
system  of  own  resources  of  the  European  Union8,  including  an  increase  of  the  ceiling  for 
annual  calls  for  own  resources  for  payments  to  1.29%  of  GNI,  and  1.35%  of  GNI  in 
commitments. This increase is reflecting the higher payment needs for the integration of the 
European  Development  Fund  into  the  budget  and  the  financing  of  new  priorities  while 
providing  a  sufficient  safety  margin  in  order  to  ensure  that  the  Union  is  able  –  under  any 
circumstances – to fulfil its financial obligations. 

2.3. 

Flexibility 

Whilst aimed at ensuring budgetary discipline the financial framework must, at the same time, 
provide for adequate levels of flexibility to allow for effective resources allocation and a swift 
Union response to unforeseen circumstances and emergency situations. 

In the first years of the Multiannual Financial Framework for the years 2014-2020, the Union 
was  confronted  with  unforeseen  challenges  of  an  unprecedented  scale  resulting  from 
instability in its neighbourhood occasioning security threats and mass migratory movements. 
In order to mobilise additional financial means for measures contributing to tackle the above 
mentioned challenges, the flexibility of the MFF was extensively used, in particular through 
the  mobilisation  of  special  instruments  established  as  part  of  the  MFF  Regulation.  This 
allowed the Union to take decisive action, but tested the budget's flexibility to the limit. 

7 
8 

COM(2018)321, 02.05.2018.  
COM(2018)325, 02.05.2018 

EN 

2 

  EN 

 
                                                 
Therefore, the functioning of the flexibility 'toolbox' was examined in detail in the context of 
the  mid-term  review/revision  of  the  2014-2020  MFF9  in  2016  and  additional  improvements 
were introduced in the 2017 revision of the MFF Regulation. 

A number of parameters, such as the length of the period covered by the financial framework, 
the  number  and  design  of  expenditure  headings,  the  share  of  EU  spending  pre-allocated  to 
Member  States  and  regions  or  pre-determined  by  'amounts  of  reference'  in  co-decided 
legislation,  the  margins  available  within  each  expenditure  ceiling,  and  the  margins  left 
between the financial framework ceilings and the own resources ceiling, have  an impact  on 
the degree of flexibility or rigidity of a financial framework. When elaborating its proposals 
for the next financial framework, the Commission has taken those elements into account. 

For  the  reasons  laid  out  in  the  MFF  Communication,  budgetary  flexibility  will,  more  than 
ever,  be  an  essential  principle  underpinning  the  next  Multiannual  Financial  Framework. 
Building on the innovative provisions already included in the 2014-2020 MFF, the focus for 
the future should be on consolidating, enhancing and streamlining flexibility mechanisms, to 
create a more agile framework while preserving the stability that the multiannual framework 
offers. 

The Commission therefore proposes the following flexibility provisions to be included in the 
MFF Regulation and the draft IIA: 

1. 

2. 

3. 

Maximising the  use of the  expenditure ceilings  through specific and maximum 
flexibility between headings and years: in addition to keeping a sufficient level of 
unallocated  margins,  the  Commission  proposes  to  fully  exploit  the  mechanisms  of 
the  Global  Margin  for  Payments  introduced  under  the  current  framework.  As  a 
novelty,  it  proposes  to  widen  the  size  and  scope  of  the  existing  Global  Margin  for 
Commitments  in  order  to  establish  a  Union  Reserve  financed  from  margins  left 
available under the ceilings for commitments of the previous financial year as well as 
through funds that have been committed to the EU budget but which are ultimately 
not  spent  in  the  implementation  of  EU  programmes  and  have  been  decommitted. 
Also, the Contingency Margin is to be maintained as a last resort instrument. 

The possibility to differ from the indicative amounts in the programmes adopted by 
ordinary  legislative  procedure  is  proposed  to  be  increased  from  10%  to  15%  to 
increase flexibility within headings. 

With  regard  to  special  instruments  which  allow  entering  appropriations  in  the 
budget  over  and  above  the  ceilings  set  in  the  MFF,  it  should  be  clarified  that  this 
applies to both commitment and payment appropriations mobilised. Furthermore: 

(a) 

(b) 

the  scope  of  special  instruments  such  as  the  European  Globalisation 
Adjustment  Fund  and  the  Emergency  Aid  Reserve  is  revised,  and  where 
appropriate  extended  (for  instance,  in  order  to  allow  the  activation  of  the 
Emergency  Aid  Reserve  for  emergencies  inside  the  Union),  coupled  with 
streamlined mobilisation procedures. 

the  size  of  the  maximum  amounts  available  each  year  for  the  European 
Globalisation  Adjustment  Fund,  the  European  Union  Solidarity  Fund,  the 
Emergency  Aid  Reserve,  and  the  Flexibility  instrument  is  proposed  to  be 
increased. Finally, the Flexibility instrument should also be allowed to use the 
unused portion of the annual amounts of the Emergency Aid Reserve, as it is 

9 

Mid-term  review/revision  of  the  multiannual  financial  framework  2014-2020:  An  EU  budget  focused 
on results, COM(2016)603final, 14.09.2016. 

EN 

3 

  EN 

 
                                                 
currently  already  the  case  for  the  European  Union  Solidary  Fund  and  the 
European Globalisation Adjustment Fund. 

2.4. 

Adjustments, review and revision of the MFF 

The  2021-2027  financial  framework  is  presented  in  2018  prices.  The  procedure  for  its 
technical  adjustment  is  maintained  as  well  as  the  2%  deflator.  The  annual  technical 
adjustment  also  includes  the  calculations  of  the  amounts  relating  to  the  global  margin  for 
payments, the global margin for commitments (Union reserve), the Flexibility Instrument and 
the  Contingency  Margin,  in  line  with  the  provisions  on  maximum  annual  amounts  and 
transfers  of  unused  amounts  stemming  from  previous  years  provided  for  in  the  Regulation. 
The results of the adjustments should be communicated to the budgetary authority ahead of 
the budgetary procedure for the year n+1. 

The adjustments to the MFF ceilings may also be due to other circumstances. This is the case 
for example to allow "re-budgeting" of commitments in the case of delayed adoption of new 
rules or programmes under shared management, or to adapt cohesion policy envelopes to the 
most recent statistics in relation to the allocation method. It is also the case to enable the re-
budgeting  of  appropriations  as  a  consequence  of  the  lifting  of  suspension  measures  which 
may  have  been  decided  under  specific  basic  acts  linking  effectiveness  of  funds  to  sound 
economic  governance  or  to  the  protection  of  the  Union’s  budget  in  the  case  of  generalised 
deficiencies as regards the rule of law in the Member States. 

It appears appropriate maintaining the provisions which specify cases for which a revision of 
the  MFF  should  be  foreseen  (revision  of  the  Treaties  with  budgetary  implications, 
enlargement of the Union, re-unification of Cyprus). 

A  mid-term  review  of  the  MFF  is  foreseen  by  the  end  of  2023.  This  review  may,  as 
appropriate, be accompanied by relevant proposals for revision of the Regulation. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1.  Multiannual Financial Framework Regulation 

As  per  the  current  Regulation  1311/2013,  the  provisions  of  the  draft  MFF  Regulation  are 
structured in Chapters. The order  of some of the provisions has  been  changed  to  streamline 
the presentation. 

Chapter 1 – General Provisions 

Article 1 – Multiannual Financial Framework 

The  wording  of  Article  1  specifies  the  duration  of  the  Multiannual  Financial  Framework 
which  is  set  for  seven  years  (from  2021  to  2027)  for  the  reasons  set  out  in  the  MFF 
Communication. 

Article 2 – Compliance with the ceilings of the MFF 

The first paragraph of Article 2 refers to  the Annex containing the table of the Multiannual 
Financial Framework ceilings, and lays down an obligation for the institutions to respect the 
ceilings during the budgetary procedure in compliance with the provisions of the Treaty.  

It also provides for the adjustment of the sub-ceiling for market related expenditure and direct 
payments  in  accordance  with  application  of  the  flexibility  between  the  two  pillars  of  the 
Common Agricultural Policy (CAP) as set out in the CAP legislation. 

The second paragraph introduces the Special instruments which are further defined in Chapter 
3 of the draft Regulation (Articles 9 to 14), with the principle that these instruments are not 

EN 

4 

  EN 

 
included  in  the  Multiannual  Financial  Framework  and  that  their  financing  in  specific 
circumstances  is  provided  over  and  above  the  ceilings  of  the  Multiannual  Financial 
Framework,  both  for  commitment  and  corresponding  payment  appropriations.  In  order  to 
maintain the current level of flexibility and the roles of the institutions in the mobilisation of 
these  instruments,  the  procedures  applicable  for  the  mobilisation  of  these  instruments  are 
included in the draft IIA. 

The third paragraph reproduces the text of current Article 3(3), aligning it to the definition of 
Financial assistance  to Member States  set  out in Title X of the Financial Regulation10. This 
includes any loan to Member States which may be provided under the Balance of Payments 
Facility ("BoP")11 and the European Financial Stabilisation Mechanism ("EFSM")12, as well 
as  the  new  European  Investment  Stabilisation  Function  providing  loans  to  Member  States 
experiencing a severe asymmetric shock. The principle that provides that if the repayment of a 
guaranteed  loan  under  Financial  assistance  to  Member  States  has  to  be  covered  from  the 
Union's budget, such potential expenditure should be excluded from the financial framework 
(i.e. the amounts would be mobilised over and above the ceilings of the Multiannual Financial 
Framework) is maintained. 

The relevant ceiling constraining the Union's capacity to guarantee lending from the Union's 
budget is the own resources ceiling, not the MFF ceiling. 

Article 3 – Respect of own resources ceiling 

This Article reproduces the text of Article 4 of the current Regulation. The compliance with 
the  own  resources  ceiling  must  be  ensured  for  each  year.  Should  the  ceilings  for  payment 
appropriations result in call-in rate for own resources exceeding the own resources ceiling, the 
ceilings of the financial framework have to be adjusted.  

Chapter 2 – Adjustments to the MFF 

Article 4 – Global Margin for Payments 

This  Article  reproduces  the  text  of  Article  5  of  the  current  Regulation  for  the  period  2022-
2027, however without any restriction in terms of the amount of the adjustment of ceilings to 
ensure specific and maximum flexibility. 

Article 5 – Technical adjustment 

This  Article  reproduces  the  text  of  Article  6  of  the  current  Regulation.  The  financial 
framework is presented in 2018 prices. The procedure for its annual technical adjustment is 
maintained  as  well  as  the  2%  deflator.  In  paragraph  1,  the  order  of  paragraphs  (d)  to  (f)  is 
amended to reflect the order of articles in Chapter 3. 

Article 6 – Adjustment of cohesion policy envelopes 

This  Article  reproduces  the  text  of  Article  7  of  the  current  Regulation  in  relation  to  the 
adjustment  of  cohesion  policy  envelopes  based  on  the  most  recent  statistical  data,  with  the 
exception of the eligibility review of the Cohesion Fund. The changes introduced reflect the 
timing for the 2021-2027 MFF. 

10 

11 

12 

Regulation n° EU XXX/201X] of the European Parliament and of the Council of …] on the financial 
rules applicable to the general budget of the Union (OJ L…) 
Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-
term financial assistance for Member States' balances of payments, OJ L 053, 23.02.2002, p.1. 
Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation 
mechanism, OJ L 118, 12.5.2010, p. 1. 

EN 

5 

  EN 

 
                                                 
Article 7 – Adjustments related to measures linked to sound economic governance or to the 
protection of the Union’s budget in the case of generalised deficiencies as regards the rule of 
law in the Member States. 

In relation to macro-economic conditionality, this Article reproduces the text of Article 8 of 
the current Regulation. It is proposed to extend this mechanism to adjust the MFF ceilings in 
the case of lifting of measures related to the protection of the Union’s budget in the case of 
generalised deficiencies as regards the rule of law in the Member States 13. In both cases, the 
maximum  time  period  allowed  for  re-entering  suspended  commitments  in  the  budget  is 
proposed to be limited to n+2 years. 

Article 8 – Adjustment following new rules or programmes under shared management 

It is proposed to make the modification of ceilings in case of delayed adoption of new rules or 
programmes under shared management through a technical adjustment rather than a revision 
as it is currently the case (Article 19 of the current MFF Regulation), as this is essentially an 
automatic  and  mechanical  modification,  which  needs  to  be  implemented  swiftly  so  as  to 
facilitate the finalisation of the programming process. It is proposed to transfer the allocations 
not used in 2021 in equal tranches to the four subsequent years 2022 to 2025. 

Chapter 3 – Special instruments 

The order  of presentation of Special instruments is  changed, to  include first the two special 
instruments  (European  Globalisation  Adjustment  Fund,  European  Union  Solidarity  Fund) 
linked to specific basic acts. The provisions on mobilisation are streamlined in the Regulation 
and the draft IIA, taking into account the provisions already included in the specific sectoral 
basic acts and in the Financial Regulation. 

Article 9 – European Globalisation Adjustment Fund 

This Article reproduces the text of Article 12 of the current Regulation. The definition of the 
objectives and scope of the European Globalisation  Adjustment Fund  will be defined in the 
specific basic act (Regulation (EU) XXXX/XX14). The maximum annual amount is increased 
to EUR 200 million (in 2018 prices). 

Article 10 – European Union Solidarity Fund 

This Article reproduces the text of Article 10 of the current Regulation. The definition of the 
objectives and scope of the European Union Solidarity Fund are defined in the specific basic 
act  (Regulation  (EC)  No  2012/2002  as  amended  by  Regulation  (EU)  No  661/2014  of  the 
European  Parliament  and  of  the  Council  of  15  May  2014),  for  which  no  amendment  is 
proposed. The maximum annual amount is increased to EUR 600 million (in 2018 prices). 

Article 11 – Emergency Aid Reserve 

This Article corresponds to Article 9 of the current Regulation. Taking into account the need 
to ensure the responsiveness of the Union budget and the new challenges the Union has been 
and continues to be confronted with, it is proposed to extend the scope of the Emergency Aid 
Reserve to operations inside the EU, to provide a common mechanism to financially reinforce 
EU  actions  in  response  to  all  kinds  of  crises  (natural  disasters,  migration  management 
emergencies,  humanitarian  emergencies,  health  epidemics,  etc.)  and  in  all  geographic 
locations. To maximise the EU budget  response capacity, there is  no earmarking  or priority 
use for specific programmes. However, temporary limitations of use would apply through the 
year to ensure the capacity to respond at all times to internal or external crises and to ensure 

13 
14 

COM(2018)324, 02.05.2018 
OJ L, , p. . 

EN 

6 

  EN 

 
                                                 
that  funds can  be  mobilised to  cover  needs  that  may  arise  towards  the end  of  the  year.  The 
maximum annual amount is increased to EUR 600 million (in 2018 prices). 

Article 12 – Global Margin for Commitments (Union Reserve) 

This  Article  corresponds  to  Article  14  of  the  current  Regulation.  In  addition  to  the  margins 
left  available  below  the  MFF  ceilings  for  commitments  of  year  n-1,  applicable  as  soon  as 
2022,  it  is  proposed  that,  as  of  2023,  the  resources  of  the  Global  margin  for  Commitments 
(Union reserve) are increased with amounts corresponding to de-committed appropriations of 
the year n-2, with the exception of de-committed appropriations made available again under 
specific  rules  set  out  in  article  15]  of  the  Financial  Regulation.  The  provisions  on 
mobilisation remain unchanged from the current Global Margin for Commitments. 

Article 13 – Flexibility Instrument 

This  Article  corresponds  to  Article  11  of  the  current  Regulation.  The  maximum  annual 
amount is increased to EUR 1 billion (in 2018 prices).Moreover, it is proposed to add to the 
Flexibility Instrument the unused amounts of the Emergency Aid Reserve which have lapsed 
in  the previous year, as is  already the case for the European Union Solidarity  Fund and the 
European Globalisation Adjustment Fund under the current Regulation. The calculation of the 
amounts  available  under  the  Flexibility  Instrument  will  continue  to  be communicated  under 
the annual technical adjustment set out in Article 5. 

Article 14 – Contingency Margin 

This Article reproduces the text of Article 13 of the current Regulation. 

Chapter 4 – Review and revision of the MFF 

Article 15 – Revision of the MFF 

The wording of this Article corresponds to Article 17 of the current Regulation. The text of 
paragraph 3 in relation to the examination of possibilities of redeployment within the relevant 
MFF heading was simplified. 

Article 16 – Mid-term review of the MFF 

This  Article  corresponds  to  Article  2  of  the  current  Regulation.  It  is  proposed  that  the 
Commission  presents  by  the  end  of  2023  a  review  of  the  functioning  of  the  MFF, 
accompanied as appropriate by relevant proposals for the remainder of the period, including a 
proposal for the revision of the MFF (Article 15(1)). 

Article 17 – Revision related to implementation 

The wording of this Article corresponds to Article 18 of the current Regulation. The general 
rule concerning the timing of the adoption of the revision is removed, so as not to restrict in 
time the possibility to revise the MFF on the basis of implementation, should such need arise. 

Article 18 – Revision of the MFF in case of a revision of the Treaties 

This Article reproduces the text of Article 20 of the current Regulation. 

Article 19 – Revision of the MFF in the event of enlargement of the Union 

This Article reproduces the text of Article 21 of the current Regulation. 

Article 20 – Revision of the MFF in the event of the reunification of Cyprus 

This Article reproduces the text of Article 22 of the current Regulation. 

Chapter 5 – Contribution to the financing of large scale projects 

EN 

7 

  EN 

 
Article 21 – Contribution to the financing of large scale projects 

This Article corresponds to Article 16 of the current Regulation. It is proposed to maintain for 
the period 2021 to 2027 provisions setting maximum amounts for the contributions from the 
Union's  budget  to  large-scale  infrastructure  projects  which  are  financed  within  the  MFF 
ceilings but whose lifetime extends well beyond the period set for the financial framework.  

This  would  concern  large  scale  projects  under  the  proposed  European  Space  Programme  as 
well as the International Thermonuclear Experimental Reactor project (ITER). 

Consequently, the proposed provision foresees a 'ring-fencing' of the amount available for the 
2021  –  2027  MFF.  The  legislative  acts  concerning  the  above  mentioned  programmes  shall 
comply with the financial provisions set in the present Regulation. 

Chapter 6 – Interinstitutional cooperation in the budgetary procedure 

Article 22 – Interinstitutional cooperation in the budgetary procedure 

This Article reproduces the text of Article 23 of the current Regulation. 

Article 23 – Unity of the budget 

This Article reproduces the text of Article 24 of the current Regulation. 

Chapter 7 – Final provisions 

Article 24 - Transition towards the next financial framework 

The wording of this Article corresponds to Article 25 of the current Regulation. It lays down 
the obligation for the Commission to present a new financial framework before 1 July 2025.  

The rules in case no new financial framework is agreed by the end of the financial framework 
covered by the Regulation are defined by primary law (Article 312(4) TFEU) and need not be 
reproduced in the Regulation. They are recalled in recital 15. 

Article 25 - Entry into force 

The final Article of the draft MFF Regulation sets the date of entry into force and the date of 
applicability of the Regulation. The IIA should enter into  force on the same day as  the two 
legal texts complement each other. 

3.2. 

Interinstitutional Agreement on cooperation in budgetary matters and on sound 
financial management 

Introduction – Points 1 to 6 of the draft IIA 

The  introductory  part  of  the  draft  IIA  introduces  the  Treaty  reference  (Article  295),  the 
binding nature of this agreement, its coherence with other legal acts linked to the multiannual 
financial framework and the budgetary procedure,  describes the structure of the Agreement, 
and stipulates the date of its entry into force (the same date as the MFF Regulation).  

It reproduces the wording of Points 1 to 6 of the current IIA.  

Part I – provisions related to the financial framework 

A. Provisions related to the financial framework 

Point 7 of the IIA concerns the margins beneath the ceilings. The MFF Regulation establishes 
the ceilings for all headings that have to be respected during each annual budgetary procedure 
as required by the Treaty. However, the practice to ensure as far as possible sufficient margins 
beneath  the  ceilings  should  be  preserved.  It  constitutes  an  element  of  the  interinstitutional 
cooperation and good will of the institutions in the budgetary procedure. The provision is kept 

EN 

8 

  EN 

 
without any change from point 8 of the current IIA, save for the reference to the sub-heading 
'Economic, Social and territorial cohesion' as no such sub-heading is proposed under the new 
MFF structure. 

Point 8 provides for an update of forecast for payment appropriations after 2027 in the fourth 
year of the MFF, according to the current practice and point 9 of the current IIA. 

B. Provisions related to special instruments 

Points  9  to  13  correspond  to  points  10  to  14  of  the  current  IIA  and  define  the  procedures 
applicable for the  mobilisation of the following special instruments which are set  out  in the 
MFF Regulation: European Globalisation Adjustment Fund, European Union Solidarity Fund, 
Emergency  Aid  Reserve,  Flexibility  Instrument  and  Contingency  Margin.  The  order  of  the 
provisions is changed to reflect the order of the draft MFF Regulation. 

The text of the provisions is amended to: 

 

 

align  the  voting  rules  required  for  the  mobilisation  of  the  European  Globalisation 
Adjustment Fund, the European Union Solidarity Fund and the Flexibility Instrument 
to the rules applicable to the adoption of the EU budget under Article 314 TFEU; 

simplify and streamline the text where specific provisions are already included in the 
Financial  Regulation  or  the  relevant  sectoral  basic  act:  rules  applicable  to  transfers 
(European  Globalisation  Adjustment  Fund  and  Emergency  Aid  Reserve), 
mobilisation  decision  (European  Globalisation  Adjustment  Fund  and  European 
Union Solidarity Fund). 

Part II – improvement of interinstitutional cooperation in budgetary procedure 

A. The interinstitutional collaboration procedure 

Point  14  refers  to  the  details  of  the  interinstitutional  cooperation  during  the  budgetary 
procedure, which are included in the Annex to the IIA. 

Point  15  on  'budgetary  transparency'  maintains  the  wording  of  point  16  of  the  current  IIA, 
with modifications to take into account reports for which detailed provisions are now included 
in the Financial Regulation (e.g. Trust Funds in Articles and 41(6) and 252, 5 year forecast on 
inflows and outflows in Article 247(1)(c)). The text is also amended to reflect the proposal to 
integrate the European Development Fund in the Union budget as of 2021. The reporting on 
the  European  Development  Fund  under  point  15  of  the  IIA  should  thus  apply  only  to 
outstanding issues of the previous European Development Funds. 

B. Incorporation of financial provisions in legislative acts 

The provisions of the current IIA are maintained. The possibility to depart from the amounts 
included in the legislative acts is increased from 10% to 15% in order to increase flexibility 
within  the  headings  (point  16).  This  provision  does  not  apply  to  amount  pre-allocated  to 
Member  States  for  the  whole  duration  of  the  financial  framework  ,  nor  to  the  large  scale 
projects referred  in Article 21 of the MFF Regulation. 

Point 17 is revised to align terminology with TFEU. The reference to the Joint Declaration of 
the European Parliament, the Council and the Commission of 4 March 1975 is deleted as it is 
now obsolete. 

C. Expenditure relating to fisheries agreements 

The  text  of  the  current  IIA  for  provisions  related  to  cooperation  and  information  related  to 
budgetary  matters  in  relation  to  fisheries  agreements  is  maintained,  except  to  take  into 
account  the  fact  that,  since  the  -  non-budgetary  -  issue  of  participation  in  conferences 

EN 

9 

  EN 

 
negotiating  on  international  agreements  is  already  set  out  in  points  25  and  26  of  the 
Framework  Agreement  on  relations  between  the  European  Parliament  and  the  European 
Commission of 20 October 2010 15, it is better to avoid a parallel text in the IIA. 

D. Financing of the Common Foreign and Security policy  

Point 20 reproduces the text of point 23 of the current Interinstitutional Agreement. 

The wording of point 21 largely reproduces the wording of point 24 of the current IIA, with a 
re-ordering  of  paragraphs  and  a  clarification  of  terminology  ('operations'  rather  than 
'instruments'). The reference to the Emergency Aid Reserve is removed, bearing in mind that 
under  the  extended  scope  proposed  under  Article  11  of  the  draft  MFF  Regulation,  it  will 
remain  possible  to  mobilise  the  Emergency  Aid  Reserve  for  the  purposes  of  urgent 
reinforcement of the Common Foreign and Security Policy budget. 

In point 22, it is proposed to set a fixed date (30 November each year) for the agreement on 
the annual timetable for the joint consultation meetings to be held in the subsequent year for 
the  purposes  of  the  regular  dialogue  between  the  European  Parliament  and  the  High 
Representative. 

E. Involvement of the institutions as regards development policy issues 

The  provision  of  point  23  is  amended  to  take  into  account  the  proposed  integration  of  the 
European Development Fund in the Union budget. 

Part III – Sound financial management of EU funds 

Points 28 and 29 of the current IIA on joint management and on the annual evaluation report 
provided  for  in  Article  318  TFEU  are  deleted  as  these  reports  are  now  covered  by  specific 
provisions of the Financial Regulation (Articles 41(3)(g) and 247(1)(e), respectively). 

Point 24 on Financial programming reproduces the text of point 30 of the current IIA, with 
adjustments to align the dates with those defined in article 41(2) of the Financial Regulation. 

Section  B  on  Agencies  and  European  Schools  (points  25  to  28)  are  unchanged  from  the 
current IIA. 

Annex – Interinstitutional cooperation during the budgetary procedure 

The  provisions  included  in  the  Annex  are  unchanged  from  the  current  IIA,  as  they  have 
proved  to  be  a  sound  basis  for  the  cooperation  between  institutions,  except  for  two 
modifications: 

– 

– 

The text of point 9 in relation to letters of amendment to the draft budget is aligned 
with the wording of article 42 of the Financial Regulation; 

To  reflect  current  practice,  and  in  order  to  align  the  wording  with  point  20  of  the 
Annex, the word 'implementability' is replaced by 'executability'. 

15 

OJ L 304, 20.11.2010, p. 47 

EN 

10 

  EN 

 
 
                                                 
2018/0166 (APP) 

Proposal for a 

COUNCIL REGULATION 

laying down the multiannual financial framework for the years 2021 to 2027 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 312 thereof, 

Having  regard  to  the  Treaty  establishing  the  European  Atomic  Energy  Community,  and  in 
particular Article 106a thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the consent of the European Parliament16, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

16 
17 

Taking into account the need for an adequate level of predictability for preparing and 
implementing  medium-term  investments,  the  duration  of  the  Multiannual  Financial 
Framework (MFF) should be set at seven years starting on 1 January 2021. 

The  annual  ceilings  on  commitments  appropriations  by  category  of  expenditure  and 
the  annual  ceilings  on  payment  appropriations  established  by  the  MFF  must  respect 
the  applicable  ceilings  for  commitments  and  own  resources,  which  are  set  in 
accordance with the Council Decision on the system of own resources of the European 
Union adopted in accordance with the third paragraph of Article 311 TFEU. 

If  it  is  necessary  to  mobilise  the  guarantees  given  under  the  general  budget  of  the 
Union for financial assistance to Member States authorised in accordance with Article 
208(1)]  of  Regulation  No  EU  [xxx/201x]  of  the  European  Parliament  and  of  the 
Council17 ('the Financial Regulation'), the necessary amount should be mobilised over 
and above the ceilings of the commitments and payments appropriations of the MFF, 
while respecting the own resources ceiling. 

The  MFF  should  not  take  account  of  budget  items  financed  by  assigned  revenue 
within the meaning of the Financial Regulation. 

The  MFF  should  be  laid  down  in  2018  prices.  The  rules  for  annual  technical 
adjustments to the MFF to recalculate the ceilings and margins available should also 
be laid down. 

OJ C , , p. . 
Regulation n° EU XXX/201X] of the European Parliament and of the Council of …] on the financial 
rules applicable to the general budget of the Union (OJ L…) 

EN 

11 

  EN 

 
                                                 
(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

Specific and maximum possible flexibility should be implemented to allow the Union 
to fulfil its obligations in compliance with Article 323 of the Treaty on the Functioning 
of the European Union (TFEU). 

The  following  special  instruments  are  necessary  to  allow  the  Union  to  react  to 
specified  unforeseen  circumstances,  or  to  allow  the  financing  of  clearly  identified 
expenditure  which  cannot  be  financed  within  the  limits  of  the  ceilings  available  for 
one or more headings as laid down in the MFF in order to allow the budget procedure 
to  run  smoothly:  the  European  Globalisation  Adjustment  Fund,  the  European  Union 
Solidarity  Fund,  the  Emergency  Aid  Reserve,  the  Global  Margin  for  Commitments 
(Union  Reserve),  the  Flexibility  Instrument  and  the  Contingency  Margin.  The 
Emergency Aid Reserve is not aimed at addressing the consequences of market related 
crises  affecting  the  agricultural  production  or  distribution.  Specific  provision  should 
therefore be made for the possibility to enter commitment and corresponding payment 
appropriations into the budget over and above the ceilings set out in the MFF where it 
is necessary to use special instruments. 

The  national  envelopes  for  cohesion  policy  are  established  on  the  basis  of  the 
statistical  data  and  forecasts  used  for  the  May  2018  Commission  proposal  for  this 
Regulation. Given the forecasting uncertainties, and the impact for the capped Member 
States, it is necessary to carry out during the period of the MFF a review comparing 
the forecasted and  actual statistical data,  and in the case of significant differences to 
provide for an adjustment of the national envelopes for the Member States concerned 
and of the relevant MFF ceilings. 

Rules  should  be  laid  down  for  other  situations  that  may  require  the  MFF  to  be 
adjusted.  Those  adjustments  may  be  related  to  the  delayed  adoption  of  new  rules  or 
programmes  under  shared  management,  or  to  measures  linked  to  sound  economic 
governance  or  to  the  protection  of  the  Union’s  budget  in  the  case  of  generalised 
deficiencies  as  regards  the  rule  of  law  in  the  Member  States  adopted  in  accordance 
with the relevant basic acts. 

It is necessary to carry-out a review of the functioning of the MFF at mid-term of its 
implementation. The results of this review should be taken into account in any revision 
of this Regulation for the remaining years of the MFF. 

It  is  necessary  to  provide  for  a  revision  of  the  MFF  in  the  event  of  revision  of  the 
Treaties, of the reunification of Cyprus or of the enlargement of the Union, as well as 
in the light of the implementation of the budget. 

(12)  This  Regulation may  also need  to  be  revised  in relation to unforeseen  circumstances 
that  cannot  be  dealt  with  within  the  ceilings  set  out  in  the  MFF.  It  is  therefore 
necessary to provide for revision of the MFF in such cases. 

(13)  Specific  rules  are  also  necessary  for  dealing  with  large  scale  infrastructure  projects 
whose  lifetime  extends  well  beyond  the  period  set  for  the  MFF.  It  is  necessary  to 
establish  maximum  amounts  for  the  contributions  from  the  general  budget  of  the 
Union  to  those  projects,  thereby  ensuring  that  they  do  not  have  any  impact  on  other 
projects financed from that budget. 

(14) 

It  is  necessary  to  provide  for  general  rules  on  interinstitutional  cooperation  in  the 
budgetary procedure. 

(15)  The Commission should present a proposal for a new multiannual financial framework 
before 1 July 2025, to enable the institutions to adopt it sufficiently in advance of the 
start  of  the  subsequent  multiannual  financial  framework.  In  accordance  with  Article 

EN 

12 

  EN 

 
312(4) TFEU the ceilings corresponding to the last year set out in this Regulation are 
to continue to apply in the event that a new financial framework is not adopted before 
the end of the term of the MFF laid down in this Regulation, 

HAS ADOPTED THIS REGULATION: 

Chapter 1 
General provisions 

Article 1 
Multiannual Financial Framework 

This  regulation lays down the multiannual  financial framework for the  period 2021 to  2027 
(MFF). 

Article 2 
Compliance with the ceilings of the MFF 

1. 

The  European  Parliament,  the  Council  and  the  Commission  shall,  during  each 
budgetary  procedure  and  when  implementing  the  budget  for  the  year  concerned, 
comply with the annual expenditure ceilings set out in the Annex ('MFF ceilings'). 

The  sub-ceiling  for  Heading  III  as  set  out  in  the  Annex  is  established  without 
prejudice  to  the  flexibility  between  the  two  pillars  of  the  Common  Agricultural 
Policy (CAP). The adjusted ceiling to be applied to pillar I of the CAP following the 
transfers between the European Agricultural Fund for Rural Development and direct 
payments shall be laid down in the relevant legal act and the MFF shall be adjusted 
accordingly  under  the  technical  adjustment  provided  for  in  Article  5  of  this 
Regulation. 

Where it is necessary to use the resources from the special instruments provided for 
in Articles 9 to 14, commitment and corresponding payment appropriations shall be 
entered in the budget over and above the relevant MFF ceilings. 

Where  it  is  necessary  to  mobilise  a  guarantee  for  financial  assistance  to  Member 
States  authorised  in  accordance  with  Article  208(1)]  of  Regulation  No  EU 
[xxx/201x] ('the Financial Regulation'), the necessary amount shall be mobilised over 
and above the ceilings laid down in the MFF. 

Article 3 
Respect of own resources ceiling 

For  each  of  the  years  covered  by  the  MFF,  the  total  appropriations  for  payments 
required,  after  annual  adjustment  and  taking  account  of  any  other  adjustments  and 
revisions  as well as  the application of paragraphs  2 and 3  of Article 2,  may not  be 
such  as  to  produce  a  call-in  rate  for  own  resources  that  exceeds  the  own  resources 
ceiling set in accordance with the Council decision on the system of own resources 
of the European Union adopted in accordance with the third paragraph of Article 311 
TFEU ('Own Resources Decision') in force. 

Where  necessary,  the  ceilings  set  in  the  MFF  shall  be  lowered  in  order  to  ensure 
compliance  with  the  own  resources  ceiling  set  in  accordance  with  the  Own 
Resources Decision in force. 

2. 

3. 

4. 

5. 

EN 

13 

  EN 

 
Chapter 2 
Adjustments to the MFF 

Article 4 
Global margin for payments 

1. 

2. 

1. 

2. 

3. 

4. 

1. 

Every year, starting in 2022, as part of the technical adjustment referred to in Article 
5, the Commission shall adjust the payment ceiling for the years 2022-2027 upwards 
by  an  amount  equivalent  to  the  difference  between  the  executed  payments  and  the 
MFF payment ceiling of the year n-1. 

Any  upward  adjustment  shall  be  fully  offset  by  a  corresponding  reduction  of  the 
payment ceiling for year n-1. 

Article 5 
Technical adjustments 

Each  year  the  Commission,  acting  ahead  of  the  budgetary  procedure  for  year  n+1, 
shall make the following technical adjustments to the MFF: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

revaluation,  at  year  n+1  prices,  of  the  ceilings  and  of  the  overall  figures  for 
appropriations for commitments and appropriations for payments; 

calculation  of  the  margin  available  under  the  own  resources  ceiling  set  in 
accordance with the Own Resources Decision in force; 

calculation of the global margin for payments provided for in Article 4; 

calculation of the global margin for commitments (Union reserve) provided for 
in Article 12; 

calculation  of  the  amounts  to  be  made  available  to  the  Flexibility  Instrument 
under the second subparagraph of Article 13(1); 

calculation of the absolute amount of the Contingency Margin provided for in 
Article 14. 

The technical adjustments referred to in paragraph 1 shall be made on the basis of a 
fixed deflator of 2 % per year. 

The Commission shall communicate the results of the technical adjustments referred 
to in paragraph 1 and the underlying economic forecasts to the European Parliament 
and the Council. 

Without  prejudice  to  Article  6,  7  and  8,  no  further  technical  adjustments  shall  be 
made in respect of the year concerned, either during the year or as ex post corrections 
during subsequent years. 

Article 6 
Adjustment of cohesion policy envelopes 

The  Commission  shall  in  2024,  together  with  the  technical  adjustment  for  the  year 
2025, review all Member States' total  allocations  under the "Investment for growth 
and jobs" goal of cohesion policy for the years 2025 to 2027, applying the allocation 
method set out in the relevant basic act on the basis of the then available most recent 
statistics  and  of  the  comparison,  for  the  capped  Member  States,  between  the 

EN 

14 

  EN 

 
cumulated  national  GDP  observed  for  the  years  2021  to  2023  and  the  cumulated 
national GDP estimated in 2018. It shall adjust those total allocations whenever there 
is a cumulative divergence of more than +/ - 5 %. 

2. 

3. 

The adjustments required shall be spread in equal proportions over the years 2025 to 
2027 and the corresponding ceilings of the MFF shall be adjusted accordingly. The 
payment ceilings shall also be adjusted accordingly to ensure an orderly progression 
in relation to the appropriations for commitments.  

The  total  net  effect,  whether  positive  or  negative,  of  the  adjustments  referred  to  in 
paragraph 2 shall not exceed EUR 4 billion. 

Article 7 
Adjustments related to measures linked to sound economic governance or to the protection of 
the Union’s budget in the case of generalised deficiencies as regards the rule of law in the 
Member States 

In  the  case  of  the  lifting,  in  accordance  with  the  relevant  basic  acts,  of  a  suspension  of 
budgetary commitments concerning Union funds in the context of measures linked to sound 
economic  governance  or  to  the  protection  of  the  Union’s  budget  in  the  case  of  generalised 
deficiencies as regards the rule of law in the Member States, the amounts corresponding to the 
suspended  commitments  shall  be  transferred  to  the  following  years  and  the  corresponding 
ceilings of the MFF shall be adjusted accordingly. 

Suspended commitments of year n may not be entered in the budget beyond year n+2. 

Article 8 
Adjustment following new rules or programmes under shared management 

In the event of the adoption after 1 January 2021 of new rules or programmes under shared 
management for the Structural Funds, the Cohesion Fund, the European Agricultural Fund for 
Rural  Development,  the  European  Maritime  and  Fisheries  Fund,  the  Asylum  and  Migration 
Fund,  the  Internal  Security  Fund  and  the  instrument  for  border  management  and  visa  under 
the  Integrated  Border  Management  Fund,  the  amounts  corresponding  to  the  allocations  not 
used  in  2021  shall  be  transferred  in  equal  proportions  to  the  years  2022  to  2025,  and  the 
corresponding ceilings of the MFF shall be adjusted accordingly. 

Chapter 3 
Special instruments 

Article 9 
European Globalisation Adjustment Fund 

1. 

2. 

The European Globalisation Adjustment Fund, the objectives and scope of which are 
set  out  in  Regulation  (EU)  XXXX/XX  of  the  European  Parliament  and  of  the 
Council18],  shall  not  exceed  a  maximum  annual  amount  of  EUR 200 million  (2018 
prices). 

The appropriations for the European Globalisation Adjustment Fund shall be entered 
in the general budget of the Union as a provision. 

18 

OJ L, , p. . 

EN 

15 

  EN 

 
                                                 
Article 10 
European Union Solidarity Fund 

The European Union Solidarity Fund, the objectives and scope of which are set out 
in  Council  Regulation  (EC)  No  2012/200219,  shall  not  exceed  a  maximum  annual 
amount  of  EUR 600 million  (2018  prices).  On  1  October  of  each  year,  at  least  one 
quarter of that annual amount shall remain available in order to cover needs arising 
until the end of that year. The portion of the annual amount not used in year n may be 
used up to year n+1. The portion of the annual amount stemming from the previous 
year shall be drawn on first. That portion of the annual amount from year n which is 
not used in year n+1 shall lapse. 

In  exceptional  cases  and  if  the  remaining  financial  resources  available  in  the 
European  Union  Solidarity  Fund  in  the  year  of  occurrence  of  the  disaster  are  not 
sufficient  to  cover  the  amount  of  assistance  considered  necessary,  the  Commission 
may propose that the difference be financed through the annual amounts available for 
the following year. 

Article 11 
Emergency Aid Reserve 

The Emergency Aid Reserve may be used for a rapid response to specific emergency 
needs  within  the  Union  or  in  third  countries  following  events  which  could  not  be 
foreseen when the budget was established, in particular for emergency response and 
support operations following natural or man-made disasters, humanitarian crises, in 
cases  of  large-scale  public  health,  veterinary  or  phytosanitary  threats,  as  well  as  in 
situations  of  particular  pressure  resulting  from  migratory  flows  at  the  Union's 
external borders where circumstances so require. 

The  annual  amount  of  the  Reserve  is  fixed  at  EUR 600 million  (2018  prices)  and 
may  be  used  up  to  year  n+1  in  accordance  with  the  Financial  Regulation.  The 
Reserve  shall  be  entered  in  the  general  budget  of  the  Union  as  a  provision.  The 
portion  of  the  annual  amount  stemming  from  the  previous  year  shall  be  drawn  on 
first. That portion of the annual amount from year n which is not used in year n+1 
shall lapse. 

By 1 October of each year, at least one quarter of the annual amount for year n shall 
remain available to cover needs arising until the end of that year. 

No  more  than  half  of  the  amount  available  until  30  September  each  year  may  be 
mobilised for, respectively, internal or external operations. 

As of 1 October, the remaining part of the amount available may be mobilised either 
for internal or external operations to cover needs arising until the end of that year. 

Article 12 
Global Margin for Commitments (Union Reserve) 

The  Global  Margin  for  Commitments  (Union  Reserve),  to  be  made  available  over 
and  above  the  ceilings  established  in  the  MFF  for  the  years  2022  to  2027,  shall 
comprise the following: 

Council  Regulation  (EC)  No  2012/2002  of  11  November  2002  establishing  the  European  Union 
Solidarity Fund (OJ L 311, 14.11.2002, p.3). 

1. 

2. 

1. 

2. 

1. 

19 

EN 

16 

  EN 

 
                                                 
(a)  margins left available below the MFF ceilings for commitments of year n-1; 

(b) 

as  of  2023,  in  addition  to  the  margins  referred  to  in  point  (a),  an  amount 
equivalent to de-commitments of appropriations made during year n-2, without 
prejudice to Article 15] of the Financial Regulation. 

2. 

The  Global  Margin  for  Commitments  (Union  Reserve)  or  part  thereof  may  be 
mobilised  by  the  European  Parliament  and  the  Council  in  the  framework  of  the 
budgetary procedure provided for in Article 314 TFEU. 

Article 13 
Flexibility Instrument 

The Flexibility Instrument may be used for the financing, for a given financial year, 
of clearly identified expenditure which could not be financed within the limits of the 
ceilings  available  for  one  or  more  other  headings.  Subject  to  the  second 
subparagraph,  the  ceiling  of  the  annual  amount  available  for  the  Flexibility 
Instrument is set at EUR 1 000 million (2018 prices). 

Each  year  the  annual  amount  available  for  the  Flexibility  Instrument  shall  be 
increased by the following amounts: 

(a) 

(b) 

(c) 

an  amount  equivalent  to  the  portion  of  the  annual  amount  for  the  European 
Globalisation Adjustment Fund which has lapsed in the previous year; 

an  amount  equivalent  to  the  portion  of  the  annual  amount  for  the  European 
Union  Solidarity  Fund  which  has  lapsed  in  the  previous  year  in  accordance 
with Article 10(1); 

an  amount  equivalent  to  the  portion  of  the  annual  amount  for  the  Emergency 
Aid Reserve which has lapsed in the previous year in accordance with Article 
11(2). 

Amounts made available to the Flexibility Instrument in accordance with the second 
subparagraph shall be used in accordance with the conditions set out in this Article. 

The unused portion of the annual amount of the Flexibility Instrument may be used 
up  to  year  n+3.  The  portion  of  the  annual  amount  stemming  from  previous  years 
shall  be  used  first,  in  order  of  age.  That  portion  of  the  annual  amount  from  year  n 
which is not used in year n+3 shall lapse. 

Article 14 
Contingency Margin 

A Contingency Margin of up to 0.03 % of the Gross National Income of the Union 
shall  be  constituted  outside  the  ceilings  of  the  MFF,  as  a  last  resort  instrument  to 
react  to  unforeseen  circumstances.  It  may  be  mobilised  only  in  relation  to  an 
amending or annual budget. 

Recourse  to  the  Contingency  Margin  shall  not  exceed,  at  any  given  year,  the 
maximum amount provided in the annual technical adjustment of the MFF, and shall 
be consistent with the own resources ceiling. 

Amounts  made available  through the mobilisation of the Contingency Margin shall 
be fully offset against the margins in  one or more MFF headings for the current or 
future financial years. 

3. 

1. 

2. 

3. 

EN 

17 

  EN 

 
4. 

1. 

2. 

3. 

4. 

5. 

The amounts offset in accordance with paragraph 3 shall not be further mobilised in 
the  context  of  the  MFF.  Recourse  to  the  Contingency  Margin  shall  not  result  in 
exceeding the total ceilings of commitment and payment appropriations laid down in 
the MFF for the current and future financial years. 

Chapter 4 
Review and Revision of the MFF 

Article 15 
Revision of the MFF 

Without  prejudice  to  Article  3(2)  and  Articles  16  to  20  and  24,  in  the  event  of 
unforeseen  circumstances,  the  MFF  may  be  revised  in  compliance  with  the  own 
resources ceiling set in accordance with the Own Resources Decision in force. 

As  a  general  rule,  any  proposal  for  a  revision  of  the  MFF  in  accordance  with 
paragraph  1  shall  be  presented  and  adopted  before  the  start  of  the  budgetary 
procedure for the year or the first of the years concerned. 

Any proposal for revision of the MFF in accordance with paragraph 1 shall examine 
the  scope  for  reallocating  expenditure  between  the  programmes  covered  by  the 
heading concerned by the revision, with particular reference to any expected under-
utilisation of appropriations. 

Any revision of the MFF in accordance with paragraph 1 shall take into account the 
scope for offsetting any raising of the ceiling for one heading by the lowering of the 
ceiling for another heading. 

Any  revision  of  the  MFF  in  accordance  with  paragraph  1  shall  maintain  an 
appropriate relationship between commitments and payments. 

Article 16 
Mid-term review of the MFF 

Before 1 January 2024, the Commission shall present a review of the functioning of the MFF. 
This review shall, as appropriate, be accompanied by relevant proposals. 

Article 17 
Revision related to implementation 

When  notifying  the  European  Parliament  and  the  Council  of  the  results  of  the  technical 
adjustments  to  the  MFF,  the  Commission  shall,  where  appropriate,  submit  any  proposal  to 
revise  the  total  appropriations  for  payments  which  it  considers  necessary,  in  the  light  of 
implementation,  to  ensure  a  sound  management  of  the  yearly  payments  ceilings,  and  in 
particular their orderly progression in relation to the appropriations for commitments. 

Article 18 
Revision of the MFF in case of a revision of the Treaties 

Should a revision of the Treaties with budgetary implications occur, the MFF shall be revised 
accordingly. 

EN 

18 

  EN 

 
Article 19 
Revision of the MFF in the event of enlargement of the Union 

If there is an accession or accessions to the Union, the MFF shall be revised to take account of 
the expenditure requirements resulting therefrom. 

Article 20 
Revision of the MFF in the event of the reunification of Cyprus 

In the event of the reunification of Cyprus, the MFF shall be revised to take account of the 
comprehensive settlement of the Cyprus problem and the additional financial needs resulting 
from the reunification. 

Chapter 5 
Contribution to the financing of large scale projects 

Article 21 
Contribution to the financing of large scale projects 

1. 

2. 

A maximum amount of EUR 14 196 million (in 2018 prices) shall be available from 
the  general  budget  of  the  Union  for  the  period  2021  to  2027  for  the  large  scale 
projects under Regulation XXXX/XX of the European Parliament and the Council - 
Space Programme]20. 

A maximum amount of EUR 5 406 million (in 2018 prices) shall be available for the 
International Thermonuclear Experimental Reactor project (ITER) from the general 
budget of the Union for the period 2021 to 2027. 

Chapter 6 
Interinstitutional cooperation in the budgetary procedure 

Article 22 
Interinstitutional cooperation in the budgetary procedure 

The  European  Parliament,  the  Council  and  the  Commission  ('the  institutions')  shall  take 
measures to facilitate the annual budgetary procedure. 

The  institutions  shall  cooperate  in  good  faith  throughout  the  procedure  with  a  view  to 
reconciling  their  positions.  The  institutions  shall,  at  all  stages  of  the  procedure,  cooperate 
through appropriate interinstitutional contacts in order to monitor the progress of the work and 
analyse the degree of convergence. 

The institutions shall ensure that their respective calendars of work are coordinated as far as 
possible, in order to enable proceedings to be conducted in a coherent and convergent fashion, 
leading to the final adoption of the general budget of the Union. 

Trilogues may be held at all stages of the procedure and at different levels of representation, 
depending on the nature of the expected discussions. Each institution, in accordance with its 
own rules of procedure, shall designate its participants for each meeting, define its  mandate 
for the negotiations and inform the other institutions in good time of the arrangements for the 
meetings. 

20 

OJ C, …., p. . 

EN 

19 

  EN 

 
                                                 
Article 23 
Unity of the budget 

All expenditure and revenue of the Union and Euratom shall be included in the general budget 
of the Union in accordance with Article 7] of the Financial Regulation, including expenditure 
resulting  from  any  relevant  decision  taken  unanimously  by  the  Council  after  consulting  the 
European Parliament, in the framework of Article 332 TFEU. 

Chapter 7 
Final provisions 

Article 24 
Transition towards the next multiannual financial framework 

Before 1 July 2025, the Commission shall present a proposal for a new multiannual financial 
framework. 

Article 25 
Entry into force 

This Regulation shall enter into force on the third day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from 1 January 2021. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

EN 

20 

  EN