EU budget for 2021: European Council and Parliament reach common understanding

The Council and the Parliament today reached a common understanding on the content of the EU budget for 2021, based on the multiannual financial framework for 2021-2027 preliminarily agreed earlier this year.

The common understanding was reached in the budgetary conciliation committee, pending clarity on the adoption of the multiannual financial framework for 2021-2027. In order for the budget to be formalised, the next multiannual financial framework will need to be adopted first.

According to the agreement reached today, the total commitments in the 2021 budget are set at €164.2 billion.

€0.8 billion of margins are kept available under the expenditure ceilings of the next multiannual financial framework to give the EU sufficient leeway to react to unforeseeable needs that may arise next year, including in relation to the COVID-19 crisis. Total payments amount to €166.1 billion.

Funding under the draft budget has been directed towards mitigation of the effects of the COVID-19 pandemic, support for a sustainable recovery and the EU’s green and digital transitions, in line with the priorities addressed in the next multiannual financial framework.

Next steps

The budgetary conciliation period laid down in the treaties will end on 7 December 2020.

As the Council and the Parliament will not sign a joint text in the conciliation committee during that period, due to the fact that the adoption of the multiannual financial framework is still pending, the Commission will have to present a new draft budget.

In a joint statement agreed today, it has been invited to do so, taking due account of the common understanding reached in conciliation, as soon as there are sufficient assurances about the adoption of the next multiannual financial framework.

This will allow the Council and the Parliament to quickly adopt the budget for 2021 on the basis of the Commission’s new draft budget.

If it is not possible to adopt the EU budget for 2021 by 1 January 2021, the system of provisional twelfths will apply. This will considerably restrict possibilities to fund EU policies and programmes from the beginning of next year.