Last week, EU Commission published two important documents: a Communication on ‘The Road to the next Multiannual Financial Framework’ and the Commission work programme 2025.
The key deliverables of the 2025 Commission work programme focus on competitiveness, decarbonization of industry, reinforcing defence and security, strengthening our social model, sustaining our quality of life, and protecting democracy and union values.
In July, the Commission will also present a new Multiannual Financial Framework focused on simplifying access to EU funding and enhancing financial impact to support national, private, and institutional financing.
Given a wide spectrum of challenges ranging from rising security threats, war in Ukraine, climate related disasters, to poverty, shortcomings of the Single Market, lack of competitiveness and getting ready for next enlargement, the EU’s long-term budget will have to overcome a total metamorphosis.
The scale of the challenges ahead calls for an ambitious budget, both in size and design. Based on Brussels’ rumors and the Commission’s plans, that’s’ exactly what is going to happen. There will be something old, something new, something borrowed and something blue. The magic words include simpler, more flexible, more targeted and impactful.
There will be no new MFF without regions. By involving the regional actors is the only way to ensure ownership of future investments and reforms needed to deliver on EU priorities.
Something old
Last week, EU Commission published two important documents: The first one was a Communication on ‘The Road to the next Multiannual Financial Framework’. In addition, the Commission adopted its 2025 work program, outlining its plans to boost competitiveness, enhance security, and bolster economic resilience in the EU.
Every year, the Commission adopts a work plan setting out the list of actions it will take in the following year. Similarly, the EU has an annual budgetary cycle and a long-term budget MFF, which provides for predictability of the EU expenditure, especially for multiannual projects and policies.
The key deliverables of the 2025 Commission work programme focus on competitiveness, decarbonization of industry, reinforcing defence and security, strengthening our social model, sustaining our quality of life, and protecting democracy and union values.
Some of it sounds like business as usual. But there is much more to these plans…
Something new…
According to the Commission work programme 2025 the newly launched Competitiveness Compass will guide sustainable growth efforts, with the EU Start-up and Scale-up Strategy empowering entrepreneurs through better access to capital. Moreover, the Clean Industrial Deal will set a plan to decarbonize industry.
In the current geopolitical situation, the EU needs to intensify efforts to safeguard security and ensure peace. This means, among others, investing collectively and strategically with NATO’s cooperation thereby reinforcing defence industry and reducing strategic dependencies.
The Commission 2025 work program is accompanied also with a “Communication on Implementation and Simplification”. This is not only a welcome initiative but also very necessary.
Among others, simplification will be applied widely across different areas: For example, there are plans to simplify sustainable finance reporting, sustainability due diligence and taxonomy. In relation to industrial decarbonization the simplification will focus on streamlining permit granting, authorizations and reporting requirements. More efforts will be focused also on lightening the regulatory load for SMEs so that they have better possibilities to grow. Regarding the Common Agricultural policy, the idea is to cut excessive administrative burden for national administrations and farmers.
These are just some examples, which all aim at lightening the regulatory load and boost competitiveness to create better opportunities for innovation and growth. Couldn’t agree more.
A new MFF proposal on its way…
As a part of this year’s work programme, the Commission will also present a new Multiannual Financial Framework proposal, focused on simplifying access to EU funding and enhancing financial impact to support national, private, and institutional financing.
The Commission Communication from last week outlines the key policy and budgetary challenges that will shape the design of the next Multiannual Financial Framework (MFF). The key question is how to adapt the EU’s long-term budget to evolving needs and priorities.
Given a wide spectrum of challenges ranging from rising security threats, war in Ukraine, climate related disasters to poverty, shortages of the Single market, a lack of competitiveness and getting ready for next enlargement, the EU’s long-term budget will have to overcome a total metamorphosis. The scale of the challenges ahead thus calls for an ambitious budget, both in size and design. Based on Brussels’ rumors and the Commission’s plans, that’s’ exactly what is going to happen. The magic words include simpler, more flexible, more targeted and impactful.
As the EU budget benefits all Europeans, it’s only natural that they should have the opportunity to express their views on the future EU budget. With its MFF Communication, the Commission launches in parallel a Europe-wide campaign activating various stakeholders, including Member States governments, regional entities, and citizens.
Something borrowed…
According to the Commission MFF -communication, the new approach for a modern EU budget should include the RRF-type single plan for each country with key reforms and investments, designed and implemented in partnership with national, regional, and local authorities. The crucial word here is “in partnership”.
In addition to the single plan model, there is also an idea to focus more on performance. After all, a stronger focus on performance has helped aligning EU policy objectives and EU spending. Some programmes like RRF, the Ukraine Facility, Western Balkans Facility, and CAP have moved from payments based on the reimbursement of costs to delivery models that are more focused on objectives and results. This performance orientation will be one of the core elements in the next MFF.
The future budget will also continue the work on the rule of law and own resources. The idea is to provide additional safeguards protecting the rule of law. Furthermore, there is a need to find new own resources to ensure sufficient and sustainable financing for common priorities.
Something blue…
Regions have expressed their worry about the idea of a single national plan and RRF-type of centrally managed system. Isn’t it a contradiction in terms, to have a centrally managed regional policy? On the governance of the Recovery and Resilience Fund (RRF), the Vice-president Fitto has said that the idea of one plan per Member State was “a debate, not a decision”. Thus, nothing has been decided yet. In practice this hopefully means that, while drafting the next MFF proposal, the Commission makes use of the RRF experience but uses only those elements that have turned out to be useful and effective.
The role of regional and local authorities is not only crucial but remains a matter of concern. After all, we at the regional and local level know the best, what is needed to implement EU legislation and make the common EU priorities reality. By involving the regional actors is also the only way to ensure ownership of future investments and reforms needed to deliver on EU priorities.
No new MFF without regions
During the past months, EU regions have indeed been very active in defending the role of regions and the strengthening of the future cohesion policy.
Regions have underlined that we need a budget that addresses the diverse challenges in all EU Regions. This means that the budget should be big enough and that a future cohesion policy should be available to all regions, because even the most innovative regions have underperforming areas and regions that suffer from development traps.
The future cohesion policy should also respect a territorial, place-based approach and honor the principles of partnership and subsidiarity by granting Europe’s regions a real decisive role in the programming and implementation process, through shared management and multilevel governance.
To further improve the performance of the cohesion policy post 2027, there is a need for an enhanced dialogue between the European Commission and the European regions. This enhanced dialogue has started already.
On behalf of the 144 signatory regions, a delegation of more than twenty presidents and regional ministers met the Executive Vice-President for Social Rights, Skills, Quality Jobs, and Preparedness, Roxana Mînzatu, the Executive Vice-President for Cohesion and Reforms, Raffaele Fitto, and the Commissioner for Budget, Anti-Fraud, and Public Administration, Piotr Serafin.
The meetings, which took place on Tuesday, January 28 in Brussels, were an important step in the process of defending regional interests, with the aim of strengthening cohesion policy after 2027.
At the meetings, the regional politicians outlined the contribution of cohesion policy to competitiveness and green transition. They highlighted the results of cohesion policy and the crucial role of regions in negotiating directly with the European Commission.
During the exchange with the Executive Vice-President Roxana Mînzatu, the regions emphasized the contribution of cohesion policy to the European pillar of social rights and stressed the key role of the European Social Fund for reskilling and upskilling of workers and supporting young people.
On the next Multiannual Financial Framework (MFF), Commissioner Serafin stated that “strong regions are needed to preserve a healthy democracy in Europe”. On cohesion policy, he underlined it should be improved, both in terms of simplification and flexibility. According to the Commission communication, Commissioner Serafin is planning to undertake a Tour d’Europe throughout 2025 to engage in one-to-one consultations with Member State authorities, regional stakeholders and beneficiaries of the EU budget.
The delegation of regions exchanged views also with Executive Vice-President Raffaele Fitto who stressed several times the fundamental role of regions and local authorities. Also the Vice-president Fitto was planning to visit as many regions in the EU as possible. He also stated that it was impossible to defend the old cohesion policy and called the regions to work together on new changes.
We still have some months to go before the Commission reveals its next MFF proposal. In the meantime, we regions should keep on reminding about our crucial role and that at the end of the day, cohesion policy is the face of Europe in the territories. It’s the regions that implement 70 % of EU-legislation, come up with breakthrough innovations and technological leaps in universities, start-ups and SMEs”. It’s the regions that make the EU green, digital and competitive, delivering on EU priorities and making the Union fit for new challenges.
More information
Niina Pautola-Mol
Regional Mayor
+358 44 077 3010
niina.pautola-mol(a)paijat-hame.fi
