Multiannual Financial Framework review and post-2020 studies ESF Plenary Meeting, 4 December 2015, Luxembourg Vítor Nogueira, DG EMPL – F1

Multiannual Financial Framework (MFF) - It is not the budget of the EU. It is a framework for financial programming and budgetary discipline - Lays down the maximum annual amounts ('ceilings') which the EU may spend in different political fields ('headings') over a period of 7 years. - Ensures that EU spending is predictable and stays within the agreed limits. - The annual EU budget is adopted within this framework and usually remains below the MFF expenditure ceilings

Multiannual Financial Framework (MFF) - Supports the common policies with a long term vision. - Expression of EU political priorities (notably "Europe 2020")

MFF 2014-2020 – Agreement 8 Feb. 2013 - Commitments: EUR 960 bn (2011 prices), 1.00 % GNI (EUR 34 bn less than MFF 2007-2013) - Payments: EUR 908 bn (2011 prices), 0.95% GNI

MFF 2014-2020 – Agreement 8 Feb. 2013 (EUR million - 2011 prices) Source: European Commission, "Multiannual Financial Framework and the EU budget – the figures", 2013

MFF 2014-2020 – Agreement 8 Feb. 2013 Source: European Commission, "Multiannual Financial Framework and the EU budget – the figures", 2013

MFF 2014-2020 – Agreement 8 Feb. 2013 Policy Context - 28 Member States - Europe 2020 Strategy: - Alignment of the funds with EU 2020 and CSRs - Thematic concentration - Result orientation - Conditionalities - Height of the financial and economic crisis (2010-2012) - Revision of the Cohesion Envelopes

MFF 2014-2020 – Agreement 8 Feb. 2013 Adjustment Clauses a) MFF mid-term review (by the end of 2016) (Art. 2 MFF Regulation) b) Use of margins left for growth and employment (youth employment allocation) (any time within the budgetary procedures 2015-2020) (Art. 14 MFF Regulation) c) Revision of "Investment for growth and jobs" allocation by Member State (2016) (7 MFF Regulation and Art.92(3) CPR)

(Article 2 of the MFF Reg.) a) MFF mid-term review (Article 2 of the MFF Reg.) - The Commission will present a review of the functioning of the MFF – Compulsory nature and by the end of 2016 at the latest - Taking full account of the economic situation at that time as well as the latest macroeconomic projections. - Possible legislative proposals for the revision (MFF regulations and other acts) - Pre-allocated national envelopes will not be reduced through the revision (under this article).

b) Use of margins left for growth and employment Margins left available below the MFF ceilings for commitments for the years 2014-2017 constitute a Global MFF Margin for commitments, for the years 2016 to 2020 for growth and employment, in particular youth employment. (Art. 14 of the MFF Reg.) The resources for the YEI may be revised upwards for the years 2016 to 2020 in the framework of the Global MFF Margin. (Art. 16 ESF) Eligibility of the YEI for the period 2016-2020 will be revised to the latest available annual data.

c) Revision of "Investment for growth and jobs" allocation by Member State (Art. 7 MFF and art. 92 CPR) - Adjustment of national envelopes to take account of the situation of Member States affected by the 2010-12 crisis not reflected in the original allocation - Adjustment of total allocations where there is a cumulative divergence of more than +/-5 % between the revised allocations and the total allocations.

c) Revision of "Investment for growth and jobs" allocation by Member State (Art. 7 MFF and art. 92 CPR) - The total net effect of the adjustments, whether positive or negative, shall not exceed EUR 4 billion - Adjustment of cohesion policy allocations will be made as part of the annual technical adjustment of the MFF for the year 2017 and be based on the most recent statistics available in spring 2016. - Implications: Revision of envelopes and reprogramming in 2017 in the terms of the CPR.

"Budget focused on results" Agenda that will steer and animate the work for the MFF review and the post-2020 discussions BUDGET FOCUSED ON RESULTS WHERE do we spend? - Increasing the EU added value of funds 2. HOW do we spend? - More leverage to make more use of each Euro - Provide better incentives to achieve results 3. How are we ASSESSED? - Better results in the discharge procedure - Rigorous application of our control framework and performance-based budgeting. - Higher transparency by providing easier access to information on the budget. (Communication) To introduce and demonstrate improvements of the new generations of funds (2014-2020 MFF) compared to the previous financial period: In which areas we spend: Increasing the EU added value of funds How we spend: More leverage to make more use of each Euro in the budget Better incentives to achieve results Showing measurable results through our simplification strategy How we are assessed: Rigorous application of our control framework and performance based budgeting Dialogue with the CoA and the Parliament on supplementary indicators (the residual error rate) How we communicate: Up-to date public information on the value added of EU expenditure (e.g. project database) EU budget focus on results has the objective to introduce and demonstrate improvements of the new generations of funds (2014-202 MFF) compared to the previous financial period: In which areas we spend: A larger share of EU budget is going to areas serving public goods (on a European level) and, therefore, increasing the EU added value of funds. Assessment if and to which degree the new cohesion and CAP policy achieve the expected improvements. How we spend: The way the EU money is spent maximises the use of EU funds by Creating more leverage to make more use of each Euro in the budget (e.g. financial instruments in the Investment Plan for Europe) Providing better incentives to achieve results (e.g. through performance budgeting) How we are assessed: better results in the discharge procedure by rigorous application of our control framework and performance based budgeting as well as a dialogue with the CoA and the Parliament on supplementary indicators such as the residual error rate. How we communicate: improvement of the quality of spending is on top of the EU agenda; up-to date public information on the value added of EU expenditure (e.g. project database)   What we want to achieve

Post-2020 MFF "Before 1 January 2018, the Commission shall present a proposal for a new multiannual financial framework." (Art. 25 MFF) End 2017- start 2018: New legislative package proposal

5 studies launched in 2015 with DG REGIO 3 main objectives: Explore future developments options of Cohesion Policy and its mechanisms of delivery Evidence base for the post-2020 Prepare the impact assessments for the new legislative package post-2020

5 studies launched in 2015 with DG REGIO - Coordination and harmonisation of the ESI funds and other EU instruments Identify the actions taken at EU and national levels to ensure coordination of the ESI Funds and other EU instruments and assess their actual impact on beneficiaries. Explore additional options to enhance the integration of the ESI Funds and synergies with other EU policies instruments - Improving the take up and effectiveness of financial instruments Assess how Member States use of financial instruments (including EU level instruments such as the SME initiative, and off-the-shelf instruments) and what is their actual impact on beneficiaries access to finance

5 studies launched in 2015 with DG REGIO - Alternative delivery modes Analyse the efficiency of alternative delivery modes to the programme approach. - Feasibility study on performance based budget support Analyse in more detail the feasibility and practicalities of the delivery of the policy through budget support, including the legal set-up this option. - Linkage with Country Specific Recommendations and supporting structural reforms – Lead by DG EMPL Assess how Member States are in fact using the ESI Funds to translate the CSR into practice and to support structural reforms, with a view of developing an evidence-base for lessons for the future.

5 studies: Timing Dec. 2015 – Jan 2016: Signing of contracts and first meetings May-Jun. 2016: First deliverables to feed MFF review Dec. 2016 – Jan 2017: Final reports in time for impact assessment work

Thank you!