20.12.2013 EN Official Journal of the European Union L 347/884 COUNCIL REGULATION (EU, EURATOM) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 312 thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof, Having regard to the proposal from the European Commission, Having regard to the consent of the European Parliament, After transmission of the draft legislative act to national parliaments, Acting in accordance with a special legislative procedure, Whereas: (1) The annual ceilings on commitments appropriations by category of expenditure and the annual ceilings on payment appropriations established by this Regulation must respect the ceilings set for commitments and own resources in Council Decision 2007/436/EC,Euratom (1). (2) Taking into account the need for an adequate level of predictability for preparing and implementing medium-term investments, the duration of the multiannual financial framework (MFF) should be set at seven years starting on 1 January 2014. A review will take place in 2016 at the latest, following the European Parliament elections. This will allow the institutions, including the European Parliament elected in 2014, to reassess the priorities. The results of this review should be taken into account in any revision of this Regulation for the remaining years of the MFF. This arrangement is hereinafter referred to as "review/revision". (3) In the context of the mid-term review/revision of the MFF, the European Parliament, the Council and the Commission agree to jointly examine the most suitable duration for the subsequent MFF before the Commission presents its proposals with a view to striking the right balance between the duration of the respective terms of office of the members of the European Parliament and the European Commission - and the need for stability for programming cycles and investment predictability. (4) Specific and maximum possible flexibility should be implemented to allow the Union to fulfil its obligations in compliance with Article 323 of the Treaty on the Functioning of the European Union (TFEU). (5) The following special instruments are necessary to allow the Union to react to specified unforeseen circumstances, or to allow the financing of clearly identified expenditure which cannot be financed within the limits of the ceilings available for one or more headings as laid down in the MFF, thereby facilitating the budgetary procedure: the Emergency Aid Reserve, the European Union Solidarity Fund, the Flexibility Instrument, the European Globalisation Adjustment Fund, the Contingency Margin, the specific flexibility to tackle youth unemployment and strengthen research and the global margin for commitments for growth and employment, in particular youth employment. Specific provision should therefore be made for a possibility to enter commitment appropriations into the budget over and above the ceilings set out in the MFF where it is necessary to use special instruments. (6) If it is necessary to mobilise the guarantees given under the general budget of the Union for the loans provided under the Balance of Payment Facility or the European Financial Stabilisation Mechanism set out in Council Regulation (EC) No 332/2002 (2) and in Council Regulation (EU) No 407/2010 (3), respectively, the necessary amount should be mobilised over and above the ceilings of the commitments and payments appropriations of the MFF, while respecting the own-resources ceiling. (7) The MFF should be laid down in 2011 prices. The rules for technical adjustments to the MFF to recalculate the ceilings and margins available should also be laid down. (8) The MFF should not take account of budget items financed by assigned revenue within the meaning of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (4) (the "Financial Regulation"). (9) This Regulation might need to be revised in case of unforeseen circumstances that cannot be dealt with within ceilings established as part of the MFF. It is therefore necessary to provide for revision of the MFF in such cases. (10) Rules should be laid down for other situations that might require the MFF to be adjusted or revised. Such adjustments or revisions might be related to the implementation of the budget, measures linking effectiveness of funds to sound economic governance, revision of the Treaties, enlargements, the reunification of Cyprus, or delayed adoption of new rules governing certain policy areas. (11) The national envelopes for cohesion policy are established on the basis of the statistical data and forecasts used for the July 2012 update of the Commission proposal for this Regulation. Given the forecasting uncertainties and the impact for the capped Member States, and to take account of the particularly difficult situation of Member States suffering from the crisis, the Commission will, in 2016, review all Member States' total allocations under the "Investment for growth and jobs" goal of cohesion policy for the years 2017 to 2020. (12) It is necessary to provide for general rules on interinstitutional cooperation in the budgetary procedure. (13) Specific rules are also necessary for dealing with large-scale infrastructure projects whose lifetime extends well beyond the period set for the MFF. It is necessary to establish maximum amounts for the contributions from the general budget of the Union to those projects, thereby ensuring that they do not have any impact on other projects financed from that budget. (14) The Commission should present a proposal for a new multiannual financial framework before 1 January 2018, to enable the institutions to adopt it sufficiently in advance of the start of the subsequent multiannual financial framework. This Regulation should continue to apply in the event that a new financial framework is not adopted before the end of the term of the MFF laid down in this Regulation. (15) The Economic and Social Committee and the Committee of the Regions were consulted and have adopted opinions (5), HAS ADOPTED THIS REGULATION: CHAPTER 1 General provisions Article 1 Multiannual Financial Framework The multiannual financial framework for the period 2014 to 2020 (the "MFF") is set out in the Annex. Article 2 Mid-term review/revision of the MFF By the end of 2016 at the latest, the Commission shall present a review of the functioning of the MFF taking full account of the economic situation at that time as well as the latest macroeconomic projections. This compulsory review shall, as appropriate, be accompanied by a legislative proposal for the revision of this Regulation in accordance with the procedures set out in the TFEU. Without prejudice to Article 7 of this Regulation, preallocated national envelopes shall not be reduced through such a revision. Article 3 Compliance with the ceilings of the MFF 1. The European Parliament, the Council and the Commission shall, during each budgetary procedure and when implementing the budget for the year concerned, comply with the annual expenditure ceilings set out in the MFF. The sub-ceiling for Heading 2 as set out in the Annex is established without prejudice to the flexibility between the two pillars of the Common Agricultural Policy (CAP). The adjusted ceiling to be applied to pillar I of the CAP following the transfers between the European Agricultural Fund for Rural Development and direct payments shall be laid down in the relevant legal act and the MFF shall be adjusted accordingly under the technical adjustment provided for in Article 6(1) of this Regulation. 2. The special instruments provided for in Articles 9 to 15 shall ensure the flexibility of the MFF and shall be laid down in order to allow the budget procedure to run smoothly. The commitment appropriations may be entered in the budget over and above the ceilings of the relevant headings laid down in the MFF where it is necessary to use the resources from the Emergency Aid Reserve, the European Union Solidarity Fund, the Flexibility Instrument, the European Globalisation Adjustment Fund, the Contingency Margin, the specific flexibility to tackle youth unemployment and strengthen research and the global margin for commitments for growth and employment, in particular youth employment, in accordance with Council Regulation (EC) No 2012/2002 (6), Regulation (EC) No 1927/2006 of the European Parliament and of the Council (7), and the Interinstitutional Agreement between the European Parliament, the Council and the Commission (8). 3. Where a guarantee for a loan covered by the general budget of the Union in accordance with Regulation (EC) No 332/2002 or Regulation (EU) No 407/2010 needs to be mobilised, it shall be over and above the ceilings laid down in the MFF. Article 4 Respect of own resources ceiling 1. For each of the years covered by the MFF, the total appropriations for payments required, after annual adjustment and taking account of any other adjustments and revisions as well as the application of paragraphs 2 and 3 of Article 3, shall not be such as to produce a call-in rate for own resources that exceeds the own resources ceiling set in accordance with Decision 2007/436/EC, Euratom. 2. Where necessary, the ceilings set in the MFF shall be lowered by way of revision in order to ensure compliance with the own-resources ceiling set in accordance with Decision 2007/436/EC, Euratom. Article 5 Global margin for payments 1. Every year, starting in 2015, as part of the technical adjustment referred to in Article 6, the Commission shall adjust the payment ceiling for the years 2015-2020 upwards by an amount equivalent to the difference between the executed payments and the MFF payment ceiling of the year n-1. 2. The annual adjustments shall not exceed the following maximum amounts (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 9 billion 2020 - EUR 10 billion. 3. Any upward adjustment shall be fully offset by a corresponding reduction of the payment ceiling for year n-1. Article 6 Technical adjustments 1. Each year the Commission, acting ahead of the budgetary procedure for year n+1, shall make the following technical adjustments to the MFF: (a) revaluation, at year n+1 prices, of the ceilings and of the overall figures for appropriations for commitments and appropriations for payments; (b) calculation of the margin available under the own-resources ceiling set in accordance with Decision 2007/436/EC, Euratom; (c) calculation of the absolute amount of the Contingency Margin provided for in Article 13; (d) calculation of the global margin for payments provided for in Article 5; (e) calculation of the global margin for commitments provided for in Article 14. 2. The Commission shall make the technical adjustments referred to in paragraph 1 on the basis of a fixed deflator of 2 % per year. 3. The Commission shall communicate the results of the technical adjustments referred to in paragraph 1 and the underlying economic forecasts to the European Parliament and the Council. 4. Without prejudice to Article 7 and 8, no further technical adjustments shall be made in respect of the year concerned, either during the year or as ex-post corrections during subsequent years. Article 7 Adjustment of cohesion policy envelopes 1. To take account of the particularly difficult situation of Member States suffering from the crisis, the Commission shall in 2016, together with the technical adjustment for the year 2017, review all Member States' total allocations under the "Investment for growth and jobs" goal of cohesion policy for the years 2017 to 2020, applying the allocation method defined in the relevant basic act on the basis of the then available most recent statistics and of the comparison, for the capped Member States, between the cumulated national GDP observed for the years 2014 and 2015 and the cumulated national GDP estimated in 2012. It shall adjust those total allocations whenever there is a cumulative divergence of more than +/- 5 %. 2. The adjustments required shall be spread in equal proportions over the years 2017-2020 and the corresponding ceilings of the MFF shall be modified accordingly. The payment ceilings shall also be modified accordingly to ensure an orderly progression in relation to the appropriations for commitments. 3. In its technical adustment for the year 2017, following the mid-term review of the eligibility of Member States for the Cohesion Fund provided for in Article 90(5) of Regulation (EU) No 1303/2013 of the European Parliament and of the Council (9), in case a Member State either becomes newly eligible to the Cohesion Fund or loses its existing eligibility, the Commission shall add or subtract the resulting amounts to or from the funds allocated to the Member State for the years 2017 to 2020. 4. The required adjustments resulting from paragraph 3 shall be spread in equal proportions over the years 2017-2020 and the corresponding ceilings of the MFF shall be modified accordingly. The payment ceilings shall also be modified accordingly to ensure an orderly progression in relation to the appropriations for commitments. 5. The total net effect, whether positive or negative, of the adjustments referred to in paragraphs 1 and 3 shall not exceed EUR 4 billion. Article 8 Adjustments related to measures linking effectiveness of funds to sound economic governance In the case of the lifting by the Commission of a suspension of budgetary commitments concerning the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development or the European Maritime and Fisheries Fund in the context of measures linking effectiveness of funds to sound economic governance, the Commission, in accordance with the relevant basic act, shall transfer the suspended commitments to the following years. Suspended commitments of year n may not be re-budgeted beyond year n+3. CHAPTER 2 Special instruments Article 9 Emergency Aid Reserve 1. The Emergency Aid Reserve is intended to allow for a rapid response to specific aid requirements of third countries following events which could not be foreseen when the budget was established, first and foremost for humanitarian operations, but also for civil crisis management and protection, and situations of particular pressure resulting from migratory flows at the Union's external borders where circumstances so require. 2. The annual amount of the Reserve is fixed at EUR 280 million (2011 prices) and may be used up to year n+1 in accordance with the Financial Regulation. The Reserve shall be entered in the general budget of the Union as a provision. The portion of the annual amount stemming from the previous year shall be drawn on first. That portion of the annual amount from year n which is not used in year n+1 shall lapse. Article 10 European Union Solidarity Fund 1. The European Union Solidarity Fund is intended to allow financial assistance in the event of major disasters occurring on the territory of a Member State or of a candidate country, as defined in the relevant basic act. There shall be a ceiling on the annual amount available for that Fund of EUR 500 million (2011 prices). On 1 October each year, at least one quarter of the annual amount shall remain available in order to cover needs arising until the end of that year. The portion of the annual amount not entered in the budget may be used up to year n+1. The portion of the annual amount stemming from the previous year shall be drawn on first. That portion of the annual amount from year n which is not used in year n+1 shall lapse. 2. In exceptional cases and if the remaining financial resources available in the European Union Solidarity Fund in the year of occurrence of the disaster, as defined in the relevant basic act, are not sufficient to cover the amount of assistance considered necessary by the European Parliament and the Council, the Commission may propose that the difference be financed through the annual amounts available for the following year. Article 11 Flexibility Instrument 1. The Flexibility Instrument is intended to allow the financing, for a given financial year, of clearly identified expenditure which could not be financed within the limits of the ceilings available for one or more other headings. There shall be a ceiling on the annual amount available for the Flexibility Instrument of EUR 471 million (2011 prices). 2. The unused portion of the annual amount of the Flexibility Instrument may be used up to year n+3. The portion of the annual amount stemming from previous years shall be used first, in order of age. That portion of the annual amount from year n which is not used in year n+3 shall lapse. Article 12 European Globalisation Adjustment Fund 1. The European Globalisation Adjustment Fund, the objectives and scope of which are defined in Regulation (EC) No 1927/2006 of the European Parliament and of the Council, shall not exceed a maximum annual amount of EUR 150 million (2011 prices). 2. The appropriations for the European Globalisation Adjustment Fund shall be entered in the general budget of the Union as a provision. Article 13 Contingency Margin 1. A Contingency Margin of up to 0,03 % of the Gross National Income of the Union shall be constituted outside the ceilings of the MFF, as a last-resort instrument to react to unforeseen circumstances. It may be mobilised only in relation to an amending or annual budget. 2. Recourse to the Contingency Margin shall not exceed, at any given year, the maximum amount foreseen in the annual technical adjustment of the MFF, and shall be consistent with the own-resources ceiling. 3. Amounts made available through the mobilisation of the Contingency Margin shall be fully offset against the margins in one or more MFF headings for the current or future financial years. 4. The amounts thus offset shall not be further mobilised in the context of the MFF. Recourse to the Contingency Margin shall not result in exceeding the total ceilings of commitment and payment appropriations laid down in the MFF for the current and future financial years. Article 14 Global margin for commitments for growth and employment, in particular youth employment 1. Margins left available below the MFF ceilings for commitment appropriations for the years 2014-2017 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. 2. Each year, as part of the technical adjustment provided for in Article 6, the Commission shall calculate the amount available. The Global MFF Margin or part thereof may be mobilised by the European Parliament and the Council in the framework of the budgetary procedure pursuant to Article 314 TFEU. Article 15 Specific flexibility to tackle youth unemployment and strengthen research Up to EUR 2 543 million(in 2011 prices) may be frontloaded in 2014 and 2015, as part of the annual budgetary procedure, for specified policy objectives relating to youth employment, research, ERASMUS in particular for apprenticeships, and Small and Medium-sized Enterprises. That amount shall be fully offset against appropriations within and/or between headings in order to leave unchanged the total annual ceilings for the period 2014-2020 and the total allocation per heading or sub-heading over the period. Article 16 Contribution to the financing of large-scale projects 1. A maximum amount of EUR 6 300 million (in 2011 prices) shall be available for the European satellite navigation programmes (EGNOS and Galileo) from the general budget of the Union for the period 2014-2020. 2. A maximum amount of EUR 2 707 million (in 2011 prices) shall be available for the International Thermonuclear Experimental Reactor project (ITER) from the general budget of the Union for the period 2014-2020. 3. A maximum amount of EUR 3 786 million (in 2011 prices) shall be available for Copernicus (the European Earth Observation Programme) from the general budget of the Union for the period 2014-2020. CHAPTER 3 Revision Article 17 Revision of the MFF 1. Without prejudice to Article 4(2), Articles 18 to 22 and Article 25, in the event of unforeseen circumstances, the MFF may be revised in compliance with the own-resources ceiling set in accordance with Decision 2007/436/EC, Euratom. 2. As a general rule, any proposal for a revision of the MFF in accordance with paragraph 1 shall be presented and adopted before the start of the budgetary procedure for the year or the first of the years concerned. 3. Any proposal for revision of the MFF in accordance with paragraph 1 shall examine the scope for reallocating expenditure between the programmes covered by the heading concerned by the revision, with particular reference to any expected under-utilisation of appropriations. The objective should be that a significant amount, in absolute terms and as a percentage of the new expenditure planned, shall be within the existing ceiling for the heading. 4. Any revision of the MFF in accordance with paragraph 1 shall take into account the scope for offsetting any raising of the ceiling for one heading by the lowering of the ceiling for another. 5. Any revision of the MFF in accordance with paragraph 1 shall maintain an appropriate relationship between commitments and payments. Article 18 Revision related to implementation When notifying the European Parliament and the Council of the results of the technical adjustments to the MFF, the Commission shall present any proposals to revise the total appropriations for payments which it considers necessary, in the light of implementation, to ensure a sound management of the yearly payments ceilings and, in particular, their orderly progression in relation to the appropriations for commitments. The European Parliament and the Council shall decide on those proposals before 1 May of year n. Article 19 Revision following new rules or programmes for the Structural Funds, the Cohesion Fund the European Agricultural Fund for Rural Development, the European Maritim and Fisheries Fund, the Asylum and Migration Fund and the Internal Security Fund 1. In the event of the adoption after 1 January 2014 of new rules or programmes under shared management for the Structural Funds, the Cohesion Fund, the European Agricultural Fund for Rural Development, the European Maritime and Fisheries Fund, the Asylum and Migration Fund and the Internal Security Fund, the MFF shall be revised in order to transfer to subsequent years, in excess of the corresponding expenditure ceilings, allocations not used in 2014. 2. The revision concerning the transfer of unused allocation for the year 2014 shall be adopted before 1 May 2015. Article 20 Revision of the MFF in case of a revision of the Treaties Should a revision of the Treaties with budgetary implications occur between 2014 and 2020, the MFF shall be revised accordingly. Article 21 Revision of the MFF in the event of enlargement of the Union If there is an accession or accessions to the Union between 2014 and 2020, the MFF shall be revised to take account of the expenditure requirements resulting therefrom. Article 22 Revision of the MFF in the event of the reunification of Cyprus In the event of of the reunification of Cyprus between 2014 and 2020, the MFF shall be revised to take account of the comprehensive settlement of the Cyprus problem and the additional financial needs resulting from the reunification. Article 23 Interinstitutional cooperation in the budgetary procedure The European Parliament, the Council and the Commission (hereinafter "the institutions") shall take measures to facilitate the annual budgetary procedure. The institutions shall cooperate in good faith throughout the procedure with a view to reconciling their positions. The institutions shall, at all stages of the procedure, cooperate through appropriate interinstitutional contacts in order to monitor the progress of the work and analyse the degree of convergence. The institutions shall ensure that their respective calendars of work are coordinated as far as possible, in order to enable proceedings to be conducted in a coherent and convergent fashion, leading to the final adoption of the general budget of the Union. Trilogues may be held at all stages of the procedure and at different levels of representation, depending on the nature of the expected discussions. Each institution, in accordance with its own rules of procedure, shall designate its participants for each meeting, define its mandate for the negotiations and inform the other institutions in good time of the arrangements for the meetings. Article 24 Unity of the budget All expenditure and revenue of the Union and Euratom shall be included in the general budget of the Union in accordance with Article 7 of the Financial Regulation, including expenditure resulting from any relevant decision taken unanimously by the Council after consulting the European Parliament, in the framework of Article 332 TFEU. Article 25 Transition towards the next multiannual financial framework Before 1 January 2018, the Commission shall present a proposal for a new multiannual financial framework. If no Council regulation determining a new multiannual financial framework has been adopted before 31 December 2020, the ceilings and other provisions corresponding to the last year of the MFF shall be extended until a regulation determining a new financial framework is adopted. If a new Member State accedes to the Union after 2020, the extended financial framework shall, if necessary, be revised in order to take the accesion into account. Article 26 Entry into force This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union. It shall apply from 1 January 2014. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 2 December 2013. For the Council The President E. GUSTAS (1) Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the European Communities' own resources (OJ L 163, 23.6.2007, p. 17). (2) Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments (OJ L 53, 23.2.2002, p. 1). (3) Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ L 118, 12.5.2010, p. 1). (4) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1). (5) Opinion of the European Economic and Social Committee on the 'Proposal for a Council Regulation laying down the multiannual financial framework for the years 2014-2020' (OJ C 229, 31.7.2012, p. 32); Opinion of the Committee of the Regions on 'New Multiannual Financial Framework post-2013' (OJ C 391, 18.12.2012, p. 31). (6) Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (OJ L 311, 14.11.2002, p. 3). (7) Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund (JO L 406, 30.12.2006, p. 1). (8) Interinstitutional Agreement between the European Parliament, the Council and the Commission of 2 December 2013 on budgetary discipline, cooperation in budgetary matters and on sound financial management (OJ C 373, 20.12.2013, p. 1). (9) Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Council Regulation (EC) No 1083/2006 (See page 320 of this Official Journal.). ANNEX I MULTIANNUAL FINANCIAL FRAMEWORK (EU-28) (EUR million - 2011 prices) COMMITMENT APPROPRIATIONS 2014 2015 2016 2017 2018 2019 2020 Total 2014–2020 1. Smart and Inclusive Growth 60 283 61 725 62 771 64 238 65 528 67 214 69 004 450 763 1a: Competitiveness for growth and jobs 15 605 16 321 16 726 17 693 18 490 19 700 21 079 125 614 1b: Economic, social and territorial cohesion 44 678 45 404 46 045 46 545 47 038 47 514 47 925 325 149 2. Sustainable Growth: Natural Resources 55 883 55 060 54 261 53 448 52 466 51 503 50 558 373 179 of which: Market related expenditure and direct payments 41 585 40 989 40 421 39 837 39 079 38 335 37 605 277 851 3. Security and citizenship 2 053 2 075 2 154 2 232 2 312 2 391 2 469 15 686 4. Global Europe 7 854 8 083 8 281 8 375 8 553 8 764 8 794 58 704 5. Administration 8 218 8 385 8 589 8 807 9 007 9 206 9 417 61 629 of which: Administrative expenditure of the institutions 6 649 6 791 6 955 7 110 7 278 7 425 7 590 49 798 6. Compensations 27 0 0 0 0 0 0 27 TOTAL COMMITMENT APPROPRIATIONS 134 318 135 328 136 056 137 100 137 866 139 078 140 242 959 988 as a percentage of GNI 1,03 % 1,02 % 1,00 % 1,00 % 0,99 % 0,98 % 0,98 % 1,00 % TOTAL PAYMENT APPROPRIATIONS 128 030 131 095 131 046 126 777 129 778 130 893 130 781 908 400 as a percentage of GNI 0,98 % 0,98 % 0,97 % 0,92 % 0,93 % 0,93 % 0,91 % 0,95 % Margin available 0,25 % 0,25 % 0,26 % 0,31 % 0,30 % 0,30 % 0,32 % 0,28 % Own Resources Ceiling as a percentage of GNI 1,23 % 1,23 % 1,23 % 1,23 % 1,23 % 1,23 % 1,23 % 1,23 %

Summary: Multiannual EU budget (2014-2020) Multiannual EU budget (2014-2020) SUMMARY OF: Regulation (EU, Euratom) No 1311/2013 — the EU’s multiannual financial framework for the years 2014-2020 WHAT IS THE AIM OF THE REGULATION? It sets out the maximum annual amounts that can be spent on the EU’s different policy areas over the 2014-2020 period. KEY POINTS The EU adopted the 7-year plan for the 2014-2020 period in December 2013. The multiannual financial framework (MFF) amounts to €960 billion in commitments (legal promise to provide finance, assuming certain conditions are met) and €908.4 billion in payments (actual transfers to beneficiaries) over the 7-year period, expressed in constant prices of the year 2011.The MFF regulation lays down ceilings (maximum amounts) for each category of EU spending over the period. These must be respected when agreeing the EU’s annual budgets.The 2014-2020 MFF is broken down into headings, as follows. Heading 1 - Smart and inclusive growth: €450.763 billion (of which €325.149 billion for economic, social and territorial cohesion). Heading 2 - Sustainable growth: natural resources: €373.179 billion. Heading 3 - Security and citizenship: €15.686 billion. Heading 4 - Global Europe: €58.704 billion. Heading 5 - Administration: €61.629 billion. A central focus of the 2014-2020 MFF is on growth and employment. Subheading 1a on ‘competitiveness’ has increased by over 37% compared with the previous 2007-2013 MFF, reflecting the importance of this political priority. However, the new MFF is smaller than its predecessor, given that many EU countries face budgetary pressures on the home front. The MFF regulation also provides for special instruments that allow the EU to react to specified, unforeseen circumstances. It can also allow the financing of clearly identified expenditure that cannot be financed within the limits of the ceilings that are available for one or more headings, notably: the Emergency Aid Reserve (used to finance, for example, humanitarian aid and civilian crisis management); the European Union Solidarity Fund; the Flexibility Instrument; the European Globalisation Adjustment Fund; the Contingency Margin (a last-resort instrument to react to unforeseen circumstances). An interinstitutional agreement on budgetary discipline, cooperation in budgetary matters and sound financial management was also agreed between the European Parliament, the Council and the European Commission. This should rationalise the annual budgetary procedure and complement the MFF regulation. Reallocation of 2014 unused commitments The MFF regulation provides that in the event of the adoption of programmes under shared management for the Structural and Investment Funds, the European Agricultural Fund for Rural Development, the European Maritime and Fisheries Fund, the Asylum, Migration and Integration Fund and the Internal Security Fund after 1 January 2014, the MFF should be revised to reallocate the amounts not used in 2014 to subsequent years.As a result, the MFF regulation has been revised so as to allow the transfer of 2014’s unused commitments: €16.5 billion to 2015, €4.5 billion to 2016 and €0.1 billion to 2017. This was due to the late adoption of 300 out of the 645 EU programmes in areas covered by the abovementioned EU funds.The revision of the EU’s MFF keeps the total expenditure ceilings unchanged and involves no additional money. Review The MFF had to be reviewed no later than in 2016 to allow the European Parliament (elected in 2014), the Council and the Commission (appointed in 2014) to reassess the priorities for the remaining years of the framework. This assessment was undertaken in light of the economic situation at the time as well as of the latest macroeconomic projections. Following the mid-term reviewRegulation (EU, Euratom) No 1311/2013 was amended by Regulation (EU, Euratom) 2017/1123 in 2017. The revised MFF increases the resources earmarked for the EU’s main priorities by €6.01 billion for the years 2017-2020, as follows: €2.08 billion for boosting growth and creating jobs through programmes such as the youth employment initiative (+ €1.2 billion), Horizon 2020 (+ €200 million), and Erasmus+ (+ €100 million); €2.55 billion for addressing migration, enhancing security and strengthening external border control; €1.39 billion for tackling the root causes of migration. Each year, ahead of the budgetary procedure for the following year, the Commission makes a technical adjustment to the MFF in line with movements in the EU’s gross national income and prices. The results of this adjustment for 2018 were first communicated to the European Parliament and the Council in May 2017. However, these results were subsequently revised to take into account the 2017 amendment to Regulation (EU, Euratom) No 1311/2013 and were communicated to the European Parliament and the Council in September 2017. FROM WHEN DOES THE REGULATION APPLY? It has applied since 1 January 2014. BACKGROUND For more information, see: Multiannual financial framework (European Commission) Multiannual financial framework (Council). MAIN DOCUMENT Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, pp. 884-891) Successive amendments to Regulation (EU, Euratom) No 1311/2013 have been incorporated into the original document. This consolidated version is of documentary value only. RELATED DOCUMENTS Communication from the Commission to the Council and the European Parliament — Technical adjustment of the financial framework for 2018 in line with movements in GNI (ESA 2010) (Article 6 of Council Regulation No 1311/2013 laying down the multiannual financial framework for the years 2014-2020) updating and replacing Communication COM(2017)220 final (COM(2017) 473 final, 15.9.2017) Interinstitutional agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (OJ C 373, 20.12.2013, pp. 1-11) last update 29.11.2017