Debate: Guidelines for the  budget - Section III
Date: TUESDAY, 18 APRIL 2023
Speaker: Johannes Hahn
Language: EN

The 2024 budget will be the fourth budget of the current MFF. This will be the midway point of the 2021-2027 Multiannual Financial Framework in the budget to be negotiated and adopted in even more difficult economic and geopolitical circumstances than last year.  We are more than a year into the unprovoked and unjustified Russian war against Ukraine. The Russian military aggression in Ukraine represents a massive challenge and its evolution is still impossible to predict. We will continue to react to constantly changing circumstances and support the suffering Ukrainian people, while also providing support to the European citizens affected by this war of aggression.  Next year’s budget comes at a very challenging time for the Union. High inflation and persistent uncertainty and risks mean that we all must remain vigilant and cautious. We must remain ready and flexible to react to the evolving situation in Ukraine. We will also have to deal with the impact of rapidly rising interest rates and the funding costs for the borrowing of NextGenerationEU.  We must also ensure adequate resources for existing priorities to continue work on long-term projects, notably the recovery from the pandemic and enabling the green and digital transitions. The Member States should swiftly make use of the available funding both under NextGenerationEU but also under the MFF to deliver on the ground. I can only assure you that the Commission, in the draft Budget 2024, will use limited resources in the most effective and efficient way. Inflation remains very high and affects the overall salary-related expenditure and other indexed expenditure such as rent as well as energy bills. This happened already last year. It will continue this year and of course also in 2024. This has a major impact on Heading 7, where resources are under heavy pressure. I would therefore urge all institutions to exercise restraint and don’t add more burdens to Heading 7.  I have noted that both institutions, in their guidelines, stressed the need to ensure an adequate level of payment appropriations. I can reassure you that the Commission monitors the needs on a permanent basis and that an adequate level of payments will be proposed in the draft budget. Certainly we will take into account the stage of the MFF cycle and the implementation of programmes.  Let me now turn to our next steps in the first trilogue next week; we will discuss the calendar for the budgetary procedure for the financial year 2024. The Commission aims to adopt the Commission’s statement of estimates and to submit a proposal containing the full draft budget before the summer break. This year’s budget negotiations will inevitably be impacted by the upcoming discussion on the MFF review. First, we will present the draft budget and shortly afterwards we will present the mid-term review.  Our three institutions succeeded over the past years to agree on many ground-breaking files that have changed the Union’s budgetary and financial landscape, and with this spirit of cooperation, dialogue and availability to compromise, will again be in order to reach a timely agreement on next year’s budget.