Local and Regional Governments’ Access to EU Innovative Development Financing: Mechanisms and Opportunities
3. Multiannual Financial Framework 2021–2027
A.
Strategic Objectives
Changes in the international arena such as the adoption of the SDGs and other global sustainable agendas in 2015–1619 and the UK’s departure from the EU have created significant implications for the financing and implementation of EU external action. The changing strategic vision of the EU towards a greater global role in the world, a new “Geopolitical Commission”,20 the global pandemic and its financial impact on Member States have also played a significant role in the negotiation of the new MFF for 2021–2027. Important objectives included a greater need for flexibility and simplified working procedures to respond to changes and for rapid action on the ground, simplification of instruments, and adapting to future trends and challenges in global financing by leveraging greater public and private financing. The initial proposal was put forward by the Commission in May 2018 which began a series of debates and negotiations within the European Council and Parliament on resources and priorities. Following the COVID-19 crisis and its economic effects, the Commission published amended proposals in May 2020 for greater funding and an additional European Recovery Instrument (‘Next Generation EU’). The Next Generation EU proposals originally included commitments towards external action, but given financial concerns, were subsequently withdrawn by the Council in a July 2020 summit, despite the needs of developing countries coping with the impacts of the pandemic. The European
Parliament and Council reached a political agreement on the new MFF in November 2020, with the MFF Regulation being adopted by Parliament in December 2020. The main international development cooperation and external action component is contained under a new Heading 6 – ‘Neighbourhood and the World’ with a simplified structure that absorbs many separate instruments and incorporates the off-budget EDF. The total budget was set at €98.4 billion in 2018 prices, below the original 2018 and 2020 Commission proposals and a slight increase on the estimated €97.1 billion for the 2014–2020 MFF.21 Separate instruments for pre-accession assistance, humanitarian aid, common foreign and security policy, overseas countries and territories are also contained within Heading 6, but for the purposes of this study, only the main Neighbourhood, Development and International Cooperation Instrument (NDICI – Global Europe) will be considered.
19 Including the Paris Agreement on Climate Change, the New Urban Agenda, the Sendai Framework for Disaster Risk Reduction and Addis Ababa Action Agenda. 20 Notably through the change of the Directorate-General for Development and Cooperation (DEVCO) or EuropeAid to DirectorateGeneral International Partnerships (DG INTPA) in January 2021 - https://ec.europa.eu/international-partnerships/stories/geopoliticalcommission-builds-international-partnerships_en 21 Centre for European Reform. (2020). Is Development Aid a Victim of the EU Budget Deal? https://www.cer.eu/insights/development-aidvictim-eu-budget-deal
18