Proposal for a COUNCIL REGULATION amending Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027
Date: 2022-11-09
Institutions: Directorate-General for Budget, European Commission
Subjects: EU aid, Ukraine, budgetary procedure, commitment of expenditure, economic reform, economic stabilisation, financial management, general budget (EU), macro-financial assistance, multiannual financial framework

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   EUROPEAN COMMISSION  Brussels, 9.11.2022  COM(2022) 595 final 2022/0369 (APP)  Proposal for a COUNCIL REGULATION amending Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
This  proposal  for  an  amendment  of  Regulation  (EU,  Euratom)  2020/20931  is  presented 
together with the proposal for a Regulation establishing an instrument  to  provide support to 
Ukraine2  and  the  proposal  to  amend  Regulation  (EU,  Euratom)  2018/10463  as  regards  the 
establishment of a diversified funding strategy as a general borrowing method. 

Following  the  unprovoked  and  unjustified  Russian  invasion  of  Ukraine,  the  Union  has 
provided  significant  support  to  Ukraine  to  strengthen  its  resilience,  provide  humanitarian 
assistance, military aid and other support. Ukraine will require continued assistance to sustain 
the functioning of the State.   

The macro-financial assistance (MFA) to Ukraine by the Union so far has been generous and 
effective, but it has been provided on an ad hoc basis, covering a few months at a time, and 
required  significant  provisioning  from  the  Union’s  budget  and  national  guarantees  in  each 
funding round. The experience with the Macro-Financial Assistance (MFA) loans to Ukraine 
has revealed the constraints  to finance the provisioning for new loan programmes  under the 
ceilings of the Multiannual Financial Framework (MFF) 2021-2027. The recourse to Member 
States’  guarantees  to  complement  the  budgetary  resources  presented  numerous  operational 
and financial drawbacks. The fragmented approach that had to be applied for the recent MFA 
loans  to  Ukraine  is  in  the  light  of  the  current  situation  no  longer  sustainable.  The  Union’s 
budget needs to be equipped with a structural solution to ensure continued financial support 
for Ukraine. 

The amendment of Regulation (EU, Euratom) 2020/2093 will extend the budgetary coverage 
currently applied to the loans to the Member States also to loans to Ukraine available for the 
years  2023  and  2024,  which  refers  to  financial  assistance  in  respect  of  which  a decision 
authorising  the  release  is  adopted  in  those  years.  Accordingly,  if  the  Union  has  to  honour 
repayment obligations from resources of the Union’s budget - in the case a beneficiary state (a 
Member State or Ukraine for financial assistance available for the years 2023 and 2024) fails 
to  provide  the  due  payment  on  time  –  the  necessary  amounts  would  be  mobilised  over  and 
above  the  MFF  ceilings  up  to  the  limits  of  the  own  resources  ceiling  (from  the  so  called 
‘headroom’). 

The related  amendment  of Regulation  (EU, Euratom) 2018/1046 provides that  borrowing is 
organised based on the diversified funding strategy. Thanks to the diversified funding strategy 
any  temporary  cash  shortages  that  arise  could  be  met  by  recourse  to  the  liquidity  pool  that 
supports this solution. The combination of the diversified funding strategy and alignment of 

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Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual 
financial framework for the years 2021 to 2027, OJ L 433I, 22.12.2020, p. 11. 
Proposal for a Regulation of the European Parliament and of the Council establishing  an instrument to 
provide support to Ukraine (macro-financial assistance +), COM(2022)597. 
Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  amending  Regulations  (EU)  No 
1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) 
No  1316/2013,  (EU)  No  223/2014,  (EU)  No  283/2014,  and  Decision  No  541/2014/EU  and  repealing 
Regulation (EU, Euratom) No 966/2012, OJ L 193, 30.7.2018, p. 1. 

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the  budgetary  coverage  of  loans  to  Ukraine  for  financial  assistance  available  for  the  years 
2023 and 2024  to  that of Member States  in  the  MFF Regulation  therefore ensures a robust, 
flexible and efficient framework for financial assistance to Ukraine. The two amendments will 
allow to put in place a structured financing solution for continuing the EU support to Ukraine 
proposed in the Regulation establishing an instrument to provide support to Ukraine. 

The budgetary coverage from the headroom should only apply to new financial assistance to 
Ukraine,  which  is  available  for  the  years  2023  and  2024  and  authorised  in  accordance  with 
Article 220(1) of the Financial Regulation.   

In view of allowing the provision of rapid and efficient support to Ukraine, it is proposed to 
treat this specific proposal for a targeted amendment of Regulation (EU, Euratom) 2020/2093 
as a stand-alone proposal, separate from the proposal of 22 December 2021 (COM(2021)569). 

2. 

• 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

Article  312  TFEU  constitutes  the  legal  basis  for  the  adoption  of  the  Multiannual  Financial 
Framework. 

• 

Subsidiarity (for non-exclusive competence)  

The initiative falls under a policy area where the EU has exclusive powers (under Article 312 
TFEU). Therefore, the subsidiarity principle does not apply. 

• 

Proportionality 

The  changes  are  proportionate  to  the  urgent  needs  to  establish  an  instrument  to  provide 
support  to  Ukraine,  which  can  only  be  implemented  after  the  budgetary  coverage  currently 
applied to the loans to the Member States over and above the MFF ceilings up to the limits of 
the  own  resources  ceiling  is  extended  to  Ukraine  for  financial  assistance  available  for  the 
years 2023 and 2024. 

• 

Detailed explanation of the specific provisions of the proposal 

Under  the  existing  provisions  of  Article  2(3)  of  Regulation  (EU,  Euratom)  2020/2093 
amounts needed to honour repayment obligations of the Union under borrowing-and-lending 
operations  in  case  the  Union  does  not  receive  from  the  beneficiary  Member  State  the  due 
payment  on  time  (i.e.  the  mobilisation  of  a  guarantee  for  financial  assistance  to  Member 
States)  would  be  mobilised  over  and  above  the  MFF  ceilings.  This  provision  was  first 
introduced  in  Article  3(2)  of  Council  Regulation  1311/20134  laying  down  the  MFF  for  the 
years 2014-2020. 

The amount mobilised cannot result in exceeding the limits of the own resources ceiling. The 
provision extending the budgetary coverage from the headroom to the guarantee for financial 
assistance to Ukraine is therefore compatible with paragraphs 1 and 3 of Article 312 TFEU, 
under  which  the  MFF  ‘shall  ensure  that  Union  expenditure  develops  in  an  orderly  manner 
and within the limits of its own resources’, and ‘shall lay down any other provisions required 
for the annual budgetary procedure to run smoothly’. 

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Council  Regulation  (EU,  Euratom)  No 1311/2013  of  2 December  2013  laying  down  the  multiannual 
financial framework for the years 2014-2020, OJ L 347, 20.12.2013, p. 884–891. 

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3. 

BUDGETARY IMPLICATIONS 

By extending the mobilisation of a guarantee for financial assistance over and above the MFF 
ceilings to Ukraine for financial assistance available for the years 2023 and 2024 in addition 
to financial assistance to EU Member States, the proposal will allow a more efficient use of 
the  budgetary  resources  under  the  MFF  ceilings.  The  possibility  to  mobilise  the  guarantee 
over  and  above  the  MFF  ceilings  would  offer  full  coverage  of  the  financial  assistance  to 
Ukraine  available  for  the  years  2023  and  2024,  in  accordance  with  the  principle  of  sound 
financial management. The proposal has no impact on the expenditure of the 2021-2027 MFF. 

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2022/0369 (APP) 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 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 Parliament5,  

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

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  Union  has  been  supporting  Ukraine  following  the  unprovoked  and  unjustified 
aggression  of  Russia  with  a  series  of  financial  measures.  The  support  has  been 
provided  on  an  ad  hoc  basis  for  a  limited  period  of  time  and  requires  significant 
provisioning from the Union’s budget and national guarantees. 

Ukraine will require continued assistance to sustain the functioning of the State.  The 
Union is expected to contribute together with other international partners to covering 
these  urgent  needs.  To  that  end,  the  Union  has  adopted  a  new  instrument  under 
Regulation  (EU)  [XXX]  of  the  European  Parliament  and  of  the  Council6.  In 
accordance with that instrument, a significant part of the envisaged financial assistance 
is to be provided in the form of loans. 

Amid  heightened  external  instability,  it  is  appropriate  to  provide  for  a structured 
financing solution for the years 2023 and 2024 to ensure continued  financial support 
for Ukraine. 

It  is  therefore  appropriate  to  allow  the  Union  to  provide  the  needed  budgetary 
resources  in  a  sustainable  and  sound  manner.  This  should  be  done  by  extending  the 
existing  mechanism  in  the  form  of  a  Union  budget  guarantee  to  cover  financial 
assistance which is available to Ukraine in the years 2023 and 2024. This mechanism 
should enable a mobilisation of up to 100% of the financial liability amounts needed to 
honour repayment obligations of the Union under borrowing-and-lending operations in 
the  event  that  the  Union  does  not  receive  from  the  beneficiary  country  the  due 
payment on time. 

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OJ C […], […], p. […]. 
OJ […], […], p. […]. 

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(5) 

(6) 

(7) 

(8) 

(9) 

It should be possible to mobilise the needed appropriations in the Union budget over 
and above the ceilings of the Multiannual Financial Framework for Member States, as 
well as for financial assistance for Ukraine available for the years 2023 and 2024. This 
possibility should be without prejudice to the obligation to respect the own resources 
ceiling laid down in Article 3(1) Council Decision (EU, Euratom) 2020/20537. 

This  Regulation  should  only  apply  to  programmes  of  financial  assistance  to  Ukraine 
available for the years 2023 and 2024. 

In view of the urgency entailed by the exceptional circumstances caused by Russia’s 
unprovoked  and  unjustified  war  of  aggression,  it  is  considered  to  be  appropriate  to 
invoke the exception to the eight-week period provided for in Article 4 of Protocol No 
1 on the role of national Parliaments in the European Union, annexed to the Treaty on 
European Union, to the Treaty on the Functioning of the European Union and to the 
Treaty establishing the European Atomic Energy Community. 

In light of the current situation in Ukraine, this Regulation should enter into force as a 
matter of urgency on the day following that of its publication in the Official Journal of 
the European Union. 

Council  Regulation  (EU,  Euratom)  2020/2093  should 
accordingly. 

therefore  be  amended 

HAS ADOPTED THIS REGULATION: 

Article 1 

In Article 2(3) of Regulation (EU, Euratom) 2020/2093, the following subparagraph is added: 

ʻWhere  it  is  necessary  to  mobilise  a  guarantee  for  financial  assistance  to  Ukraine 
which  is  available  for  the  years  2023  and  2024  and  authorised  in  accordance  with 
Article 220(1) of the Financial Regulation, the necessary amount shall be mobilised 
over and above the MFF ceilings.ʼ 

Article 2 

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

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

Done at Brussels, 

For the Council 
The President 

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Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of 
the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1) 

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