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Covid-19 & the MFF 2021-27: accountability and transparency for all Europeans

Helga Hallgrimsdottir (Professor at the School of Public Administration, Senior Researcher at the Borders in Globalization Project, Acting Director of the School of Child and Youth Care and Associate Fellow in the Centre for Global Studies and Emmanuel Brunet-Jailly (Professor & Jean Monnet Chair, director of the Jean Monnet EU Centre of Excellence and the Borders in Globalization Research Lab at the Centre for Global Studies), University of Victoria

In the 2006 volume Democracy in Europe, Vivien Schmidt argued that the European Union (EU, Union) was formed from ‘regional states; ’ its members shared sovereignty, but the EU had variable boundaries, fragmented identities and various challenges to democratic governance – a democratic deficit. At that time, the EU was under much pressure to address this democratic deficit, which according to many critics was primarily about a lack of transparency and legitimacy across most EU level institutions. Decision-making behind closed doors, and the role of interest groups, large non-profits, and the private sector in making decisions led to charges that democratic accountability and transparency were far from clear. Schmidt argued that the central problem was that national politics led to restricted policies nationally, while at the Union level, limited politics resulted in overbearing policies with Union wide implications.

The recent decision of the Special European Council of July 17-21, 2020, illustrates how much such practices have changed since the early years of the new century.

In order to address the impact of the Covid-19 pandemic and the concurrent upcoming economic and social crises, the European Council met to discuss two major financial packages (1) the Multiannual Financial Framework for 2021-27 and (2) the Next Generation EU instrument. Together they amount to 1824.3 billion euros (nearly CA$2.9 trillion). The funding package was agreed with the unanimity of all member states, represented by their prime ministers or presidents. The conclusions are readily available online. The President of the EU Council, Charles Michel, upon leaving the fifth day of meetings stated ‘We did it: Europe is strong, Europe is robust, and above all Europe is United.’

What is remarkable, is the context of this decision with multiannual implications. The origins of this decision can be found in both the 2009 Lisbon Treaty as well as more recently in 2017:

Indeed, the origins of the MFF are found in the Treaty of Lisbon, the Treaty on the Functioning of the European Union, article 312 (1) that states ‘the annual budget of the union shall comply with the multiannual financial framework’ i.e. a long-term framework setting the limits of the annual budget of the Union. Original goals were to make funding predictable long term; today it makes budgetary exercises visible, and accountable long term. For instance, the first discussion papers regarding the MFF for 2021 were published on the 02 of May 2018 as A modern budget for a Union that Protects, Empowers and Defends (COM (2018) 321 final). The preparation of this document had been set as early as February 2018 thanks to a European Parliament position paper, initiated in Parliamentary committed in 2017, but also in consultation with Member States, national parliaments, beneficiaries of EU funds and stakeholders, as well as 11,000 members of the European public. The document’s core aim is to modernise budget decision making, implementation and evaluation. Transparency is to be much stronger thanks to clear links between program and expenditures, and, also most importantly, it suggests to ‘strengthen the protection of the EU budget from financial risks linked to generalised deficiencies as regards to the rule of law in the Member States.’ Indeed, this MFF linked the respect of fundamental rights principles with the ‘limited’ funding as criteriums to account for EU funds added value and performance. Notably interesting is the direct link made in this preparatory document to the European Court of Auditors, and the current concurrent yet, separate, establishment of the European Public Prosecutor’s Office whose new role is to bring to judgement crimes against the EU budget.

This budget proposal had set up eight major and 17 sub-areas of expenditures to enhance visibility, and included a set of instruments outside the MFF ceilings. The first area, the single market, innovation and digital was to grow by 60%. Second area, cohesion and values, was set to increase by 200%. Third, natural resources and the environment, rising by 70%. Fourth, migration and border management increase 2.6 times from nearly 13 to well over 32 billion to address issues of asylum, border and custom management, migration, IT systems and the new EU border and coast guard agency. Fifth, security and defence, increases notably with 15 billion for defence and overall increase of 80%. Sixth, neighborhood and the world, budgets increase by nearly 20% to resource neighborhood, development and international cooperation efforts, humanitarian aid and pre-accession assistance policies. Finally, public administration remains stable thanks to reduction of 5% in staffing levels and new efficiency measures that are notably not being affected by Brexit. In sum, the EU MFF budget for 2021-27 was to increase by 114 billion euros to reach 1279 billion euros.

The Covid-19 crisis did not derail this ambitious plan, but cuts were made during the special EU Council meeting to reach a smaller MFF pluriannual budget of 1074 billion euros (CA$1.9 Trillion). But this MFF comes alongside the Covid-19 recovery plan, called the Next Generation EU instrument, which contributes 750 billion in loans (360 billion) and grants (312.5 billion) primarily to all member states (as well as 77.5 billion for specific pre-existing EU program and a Brexit reserve, a solidarity fund and a fund to support workers losing their jobs because of reorganisation measures resulting from globalization). Remarkably, this Next Generation EU instrument is a historical breakthrough: all member states will borrow jointly on the financial markets for the first time in the history of the EU, and the Commission will pay back the loans.

Today, Europeans know negotiations had to bring together all 27-member states with their various national priorities; all know the MFF and Next Generation EU funds result from a compromise between nationalist, frugal, and indebted governments. However, opinion polls show that Europeans look up to the Union for their future even in Poland and Hungary, the two most nationalist countries of the European Union. The response to this most recent Covid-19 crisis shows, once again, the importance of the Union in forging a way forward in the post-pandemic world for all Europeans.

Emmanuel Brunet-Jailly, is Professor and Jean Monnet Chair in European Union Governance in the school of Public Administration at the University of Victoria. He is the co-editor, with Amy Verdun and Achim Hurrelmann, of European Union Governance and Policy Making, University of Toronto Press, 2018.

Helga Kristin Hallgrimsdottir, is professor and interim director of the School of Child and Youth Care at the University of Victoria. She is the co-editor, with Helga Thorson, of Narratives of Memory, Migration and Xenophobia in the European Union and Canada, University of Victoria, 2019.


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