In December 2023, debates about budget do not only dominate the public discourse in Germany but are also in a decisive phase at European level, as EU institutions revise the current multiannual financial framework (MFF) and start debating the next MFF starting in 2028. A large part of the European budget is traditionally dedicated to cohesion policy, which will pose a financial challenge, particularly in view of a possible enlargement of the EU.
The negotiations on the next MFF are taking place against the backdrop of the experiences with the “Next Generation EU” (NGEU) instrument and the Recovery and Resilience Facility (RRF), which is based on joint borrowing. While cohesion policy focuses on regions, NGEU promotes structures and reforms at the national level, too. The binding link to the European Semester and rule of law requirements can be considered successful components of the RRF, which could also be relevant for cohesion policy at large. Both kinds of European investments should create European added value beyond supplementing national budgets.
The experiences with NGEU and the RRF also play a role when considering cohesion policy within a potentially enlarged EU. The principles of reform-orientation, efficiency and cohesion should also be adhered to when preparing candidate countries for EU accession. This could simultaneously increase the attractiveness for investments from the private sector in the regions. However, whether the EU budget needs to be increased in order to meet the challenges, or whether a more efficient investment of existing funds would be sufficient remains debated.
Discussants at the lunch debate were Kim Jørgensen, DG and Permanent Representative of EIB to the EU Institutions; Céline Gauer, Director General of the Recovery and Resilience Task Force (RECOVER), Prof Dr Friedrich Heinemann, Head of Research Unit “Corporate Taxation and Public Finance”, ZEW, Mannheim and Adjunct Professor of Economics, University of Heidelberg and Dr Thu Nguyen, Deputy Director, Jacques Delors Centre, Berlin.
The IEP organised the event in cooperation with the European Investment Bank. IEP also thanks the Federal Foreign Office and the European Commission for their support of the lunch debates.
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