PURPOSE: to amend Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances.

LEGISLATIVE ACT: Council Regulation (EU, Euratom) 2017/1123 2017/1123 amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020.

CONTENT: special instruments as well as margins have been extensively used in the first years of implementation of the 2014-2020 multiannual financial framework (MFF) to address new challenges which have arisen in the European neighbourhood and which called for swift and comprehensive Union action to deal with their far-reaching humanitarian and security implications.

The amendments made to Regulation (EU, Euratom) No 1311/2013 aim to increase EU support for facing these persistent challenges and reinforce the capacity of the current MFF to face unforeseen events.

The amending Regulation aims to:

· lay down the maximum amounts of the annual adjustments for the years 2018 to 2020 (2011 prices) as compared to the original payment ceiling of the relevant years:

I. 2018 — EUR 7 billion;

II. 2019 — EUR 11 billion;

III. 2020 — EUR 13 billion;

· lay down the annual amount of the Emergency Aid Reserve at EUR 300 million (2011 prices);

· lay down the ceiling for the annual amount for the Flexibility Instrument at EUR 600 million (2011 prices), this amount being increased each year from 2017 by the unused portion of the European Union Solidarity Fund and the European Globalisation Adjustment Fund from the previous year.

· provide that the margins left available below the MFF ceilings for commitment appropriations shall constitute a Global MFF Margin for commitments, to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment, and to migration and security.

ENTRY INTO FORCE: 14.7.2017.

The European Parliament adopted by 473 votes to 172, with 54 abstentions, a legislative resolution approving the draft Council regulation amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020.

As a reminder, the proposed Regulation seeks to:

fix the maximum amounts of annual adjustments (in 2011 prices) for the years 2018-2020 as compared to the original payment ceiling of the relevant years: 2018 - EUR 7 billion; 2019 - EUR 11 billion; 2020 - EUR 13 billion;

set the annual amount of the Emergency Aid Reserve at EUR 300 million (2011 prices); set a ceiling on the annual amount available for the Flexibility Instrument of EUR 600 million (2011 prices), this amount may be increased each year starting in 2017; provide that margins left available below the MFF ceilings for commitment appropriations shall constitute a Global MFF Margin for commitments , to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment, and to migration and security.

Lastly, specific and maximum possible flexibility should also be ensured by providing for unused amounts from the European Union Solidarity Fund and the European Globalisation Adjustment Fund to be made available to the Flexibility Instrument.

The Committee on Budgets adopted the report presented jointly by Jan OLBRYCHT (EPP, PL) and Isabelle THOMAS (S&D, FR) on the draft Council regulation amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020.

The committee recommended the European Parliament to give its consent to the draft Council regulation as annexed in the draft resolution.

To recall, the proposal intends to:

fix the maximum amounts of annual adjustments (in 2011 prices) for the years 2018-2020 as compared to the original payment ceiling of the relevant years: 2018 - EUR 7 billion; 2019 - EUR 11 billion; 2020 - EUR 13 billion;

set the annual amount of the Emergency Aid Reserve at EUR 300 million (2011 prices); set a ceiling on the annual amount available for the Flexibility Instrument of EUR 600 million (2011 prices), this amount may be increased each year starting in 2017; provide that margins left available below the MFF ceilings for commitment appropriations shall constitute a Global MFF Margin for commitments , to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment, and to migration and security.

Lastly, specific and maximum possible flexibility should also be ensured by providing for unused amounts from the European Union Solidarity Fund and the European Globalisation Adjustment Fund to be made available to the Flexibility Instrument.

PURPOSE: to amend Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: the special instruments have been extensively used in the first years of implementation of the 2014-2020 multiannual financial framework (MFF) set out in Council Regulation (EU, Euratom) No 1311/2013 to address new challenges which arose in the European neighbourhood (such as mass migratory movement) and called for swift and comprehensive Union action to deal with their far-reaching humanitarian and security implications.

Given the persistent nature of these new challenges, the Union shall maintain a sufficient capacity to react to unforeseen circumstances.

CONTENT: the Council draft seeks to amend the MFF Regulation to allow the Union to react rapidly to crises, such as the current migration crisis, as well as to events with serious humanitarian or security implications during the remaining period of the MFF.

The proposal seeks to:

increase the maximum amounts for the adjustment of payment ceilings for the years 2019-2020 under the global margin for payments. The maximum amounts shall be set at EUR 7 billion in 2018; EUR 11 billion in 2019 and EUR 13 billion in 2020; strengthen the Emergency Aid Reserve : the annual amount of the Reserve is fixed at EUR 300 million (2011 prices): strengthen the Flexibility Instrument : a ceiling on the annual amount available for the Flexibility Instrument shall be EUR 600 million (2011 prices); ensure specific and maximum possible flexibility should also be ensured by providing for unused amounts from the European Union Solidarity Fund and the European Globalisation Adjustment Fund to be made available to the Flexibility Instrument; provide that the margins left available below the MFF ceilings for commitment appropriations shall constitute a Global MFF Margin for commitments, to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment, and to migration and security.

PURPOSE: to amend Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: the special instruments have been extensively used in the first years of implementation of the 2014-2020 multiannual financial framework (MFF) set out in Council Regulation (EU, Euratom) No 1311/2013 to address new challenges which arose in the European neighbourhood (such as mass migratory movement) and called for swift and comprehensive Union action to deal with their far-reaching humanitarian and security implications.

Given the persistent nature of these new challenges, the Union shall maintain a sufficient capacity to react to unforeseen circumstances.

CONTENT: the Council draft seeks to amend the MFF Regulation to allow the Union to react rapidly to crises, such as the current migration crisis, as well as to events with serious humanitarian or security implications during the remaining period of the MFF.

The proposal seeks to:

increase the maximum amounts for the adjustment of payment ceilings for the years 2019-2020 under the global margin for payments. The maximum amounts shall be set at EUR 7 billion in 2018; EUR 11 billion in 2019 and EUR 13 billion in 2020; strengthen the Emergency Aid Reserve : the annual amount of the Reserve is fixed at EUR 300 million (2011 prices): strengthen the Flexibility Instrument : a ceiling on the annual amount available for the Flexibility Instrument shall be EUR 600 million (2011 prices); ensure specific and maximum possible flexibility should also be ensured by providing for unused amounts from the European Union Solidarity Fund and the European Globalisation Adjustment Fund to be made available to the Flexibility Instrument; provide that the margins left available below the MFF ceilings for commitment appropriations shall constitute a Global MFF Margin for commitments, to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment, and to migration and security.

PURPOSE: to amend Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: the special instruments have been extensively used in the first years of implementation of the 2014-2020 multiannual financial framework (MFF) set out in Council Regulation (EU, Euratom) No 1311/2013 to address new challenges which arose in the European neighbourhood and called for swift and comprehensive Union action to deal with their far-reaching humanitarian and security implications.

In order to mobilise additional financial means for measures contributing to tackle the above mentioned challenges, wide use has been made of all budgetary availabilities, including redeployments, margins and special instruments, and new instruments such as European Union Trust Funds and the Facility for Refugees in Turkey were set up to draw additional funding whilst respecting the constraints set by the MFF.

In its Communication on the " Mid-Term Review/Revision of the Multiannual Financial Framework 2014-2020 – An EU Budget Focused on Results ", the Commission has assessed the functioning and use made of special instruments in the first two to three years of implementation of the MFF.

As these challenges persist, the Union's continued capacity to react swiftly in emergency situations is at stake . Against this background, the European Parliament called in its resolution of 6 July 2016 for bold steps to enhance the Union budget's flexibility, whilst informal Council discussions also pointed at the need to enhance the ability of the current MFF to respond to unforeseen events.

CONTENT: taking into account the use made of special instruments since the beginning of the MFF period and the new challenges the Union has been and continues to be confronted with, the Commission proposes to amend the MFF Regulation to allow the Union to react rapidly to crises , such as the current migration crisis, as well as to events with serious humanitarian or security implications.

More specifically, it is proposed:

to increase the annual maximum amounts set for the Emergency Aid Reserve and the Flexibility Instrument ; to introduce a new special instrument for setting up a European Union Crisis Reserve financed from de-committed appropriations; to remove the limitations in time and scope of the g lobal margin for commitments ; to remove, concerning the global margin for payments , the annual caps set for 2018-2020 to allow for the full mobilisation, in the later years of the MFF, of the large margins in payments left unused in 2016 and 2017 should it prove necessary, and therefore ensure specific and maximum flexibility.

BUDGETARY IMPLICATIONS: this proposal has no immediate budgetary implications.