Documents considered by the Committee on 12 September 2018 Contents

18Long-term EU budget 2021–27

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; drawn to the attention of the Public Accounts and Treasury Committees

Document details

(a) Proposal for a Council Regulation laying down the multiannual financial framework for the years 2021 to 2027; (b) Proposal for a Council Decision on the system of Own Resources of the European Union

Legal base

(a) Article 312 TFEU,special legislative procedure, unanimity; (b) Article 311 TFEU; special legislative procedure, unanimity and national ratification

Department

Treasury

Document Numbers

(a) (39683), 8354/18 + ADD 1, COM(18) 322; (b) (39686), 8357/18 + ADDs 1–2, COM(18) 325

Summary and Committee’s conclusions

Background

18.1In May 2018, the European Commission tabled its proposal for the EU’s next long-term budget. This so-called Multiannual Financial Framework (MFF) would establish the EU’s expenditure limits between 2021 and 2027 in six broad policy areas, which under the Commission proposal would cumulatively amount to €1.134 trillion (approximately £1 trillion).

18.2In terms of expenditure priorities over that seven-year period, the Common Agricultural Policy and the EU’s regional development funding again account for the lion’s share, although spending on these would be reduced in real terms compared to the 2014–2020 budgetary period, in order to fund increases for research investment and the EU’s foreign and defence policies. In May and June 2018, the Commission tabled a series of proposals for specific EU funding programmes under the next MFF, such as the Horizon Europe’ research programme, the European Defence Fund and the farming subsidies component of the Common Agricultural Policy. It also proposed a new ‘rule of law’ mechanism that would allow EU payments to be suspended to Member States where the independent administration of justice is at risk. The Committee is considering these sectoral MFF proposals in more detail individually, as shown in the Annex to this Report.

18.3In parallel to the proposed EU expenditure priorities from 2021 to 2027, the Commission also proposed a new legal framework for the way in which the Member States fund the EU budget during that period (the ‘Own Resources Decision‘). At present, the EU budget is funded from 80 per cent of the customs duties on goods entering the Union, a share of the EU’s VAT base, and a contribution proportional to the Gross National Income (GNI) of each Member State. Under its new proposal, those ‘own resources’ would be maintained, but share of customs duties from Member States to the EU would increase to 90 per cent.183 In addition, the Commission wants to create new EU funding streams based on a share of tax receipts from the proposed Common Consolidated Corporate Tax Base for the largest multinationals in the EU; a ‘penalty’ on Member States based on each country’s volume of unrecycled plastic waste; and a slice of the proceeds of each EU country’s auctions of greenhouse gas emission rights under the EU’s emissions trading system (ETS).

18.4Both the Multiannual Financial Framework and the Own Resources Decision must be agreed unanimously by all Member States, and the latter must additionally also be approved by each EU country in accordance with its “constitutional requirements”. In the UK, until most provisions of the European Union Act 2011 were repealed by statutory instrument under the European Union (Withdrawal) Act 2018, the Own Resources Decisions had to be approved by Act of Parliament.184 However, the UK notified its intention to leave the EU in March 2017 and will—by operation of law—cease to be a Member State on 29 March 2019. The new Own Resources Decision is therefore not expected to be directly applicable in the UK, and the agreement of the Government (and by extension the UK Parliament) will not be necessary if—as is likely—formal adoption takes place after the UK has ceased to be a Member State.

18.5Under the terms of the post-Brexit transitional arrangement in the draft Withdrawal Agreement, the UK would pay into the EU budget until 31 December 2020 as if it were still a Member State (and contribute towards outstanding EU expenditure commitments entered into before that date during subsequent years). This financial settlement would be governed by the existing 2014 Own Resources Decision, irrespective of when the UK’s payments become due. The potential implications of the new Own Resources Decision, if the post-Brexit transitional period were to be extended beyond December 2020 for whatever reason, would require a fresh assessment.

Potential financial implications of the 2021–27 MFF for the UK

18.6The UK’s exit from the EU in March 2019 notwithstanding, the Committee has previously concluded that there nevertheless potentially significant financial implications of the post-2020 MFF for the UK as a ‘third country’, as part of its future partnership with the EU after Brexit.185

18.7As set out in more detail in our Report of 4 July 2018, continued significant UK contributions to the EU during the 2021–27 MFF are a distinct possibility given the Government’s ambition to seek post-Brexit participation in various EU programmes (such as the Framework Programme for Research and the European Defence Fund). The Commission’s proposals for those programmes often allow for “third country” participation by countries such as Norway or Switzerland (or the UK after Brexit), in return for a commensurate financial contribution by their national governments. In recognition of the unique position the UK will occupy as the only former Member State, the Commission proposals for the sectoral programmes under the next MFF seek to explicitly bar the UK from having any “decisional power” as a ‘third country’, although the exact implications of this provision are not yet clear.186 The Government is also seeking continued UK ‘associate membership’ of the European Medicines Agency, the European Chemicals Agency, and the European Aviation Safety Authority.187

18.8The size of the UK’s financial contribution to any individual EU programme (or agency) will depend on a methodology to be agreed between the Government and the EU. However, based on existing precedent it is likely that the size of its annual contribution will largely be determined by allocation from the EU budget to the specific Programmes in which the UK participates as a ‘third country’.188 Those annual budgets will, in turn, depend on the broad expenditure limits that the Member States and the European Parliament agree on in the next Multiannual Financial Framework. Moreover, for post-Brexit participation in the Framework Programme for Research, of which the UK is currently a major net beneficiary, the Commission has also proposed an undefined “automatic correction” to ensure the UK contribution is more or less proportional to its receipts.189

18.9The financial mechanism for programmes in which the UK wants to remain involved will be a key consideration for Parliament as its scrutinises the Government’s negotiations with the EU on the future relationship. As the UK’s contribution will be closely linked to the EU’s own budget for the programmes in question, the current discussions on the expenditure ceilings for the MFF remain politically important despite the UK’s exit from the EU. In the Annex to this Report, we have set out the various sectoral proposals under the 2021–2027 MFF and indicated whether the Government is minded to seek continued UK participation after Brexit (and therefore is considering an on-going financial contribution).

18.10The Committee has also considered other possible financial aspects of the Government’s ambitions for a “deep and special” economic partnership with the EU. In the area of customs, for example, the Government has made proposals for both a “temporary customs arrangement“ (TCA) as a backstop to avoid a customs border with Ireland, and for a long-term “facilitated customs arrangement” (FCA) in its White Paper on the ‘future relationship’. Under both, the UK would effectively be part of the Customs Union (described in the case of the FCA as a situation were the UK and EU acted “as if” they formed a combined customs territory).190 Leaving aside the feasibility of these proposals given the EU’s opposition,191 we have already expressed concern that a customs arrangement of this type could lead the EU to request a revenue sharing mechanism: since Member States transfer 80 per cent of their customs duties to the EU budget, a situation where the UK was treated ‘as if’ it part of the same customs territory means it might be asked to do the same. While the EU-Turkey Customs Union does not require Ankara to remit customs duties to Brussels, the level of market access for goods foreseen in the Government’s White Paper goes much further than Turkey’s agreement with the EU,192 and as such its usefulness as a precedent is doubtful.

18.11Given the depth of the economic partnership the Government is seeking, there is also the possibility of a UK assistance programme for the economic development of southern and eastern Europe: both Norway and Switzerland operate bilateral financial assistance programmes—the €2.8 billion EEA & Norway Grants193 and the €1.1 billion ‘Enlargement Contribution194 respectively—for the EU’s lower-income Member States, as part of the quid pro quo for preferential access to the EU’s internal market.195 These extensions of the EU’s Structural & Investment Funds (ESI Funds) are run by those countries themselves, and therefore do not involve a transfer of money to the EU budget. However, they are still for all practical purposes a cost of a close trading arrangement with the Single Market. Whether the remaining Member States might request something similar from the UK is not yet clear.

18.12In light of these considerations, the Committee asked the Chief Secretary to the Treasury (Elizabeth Truss) to clarify a number of matters, namely:

The Minister’s letter of 24 July 2018

18.13The Chief Secretary sent us a reply to our questions by letter dated 24 July, covering UK participation in EU programmes; the potential impact of the post-2020 Own Resources Decision on the UK; and the possibility of UK version of the Norwegian or Swiss financial assistance for the EU’s lower-income Member States.

18.14With respect to the cost of UK participation in EU programmes as a third country, the Minister’s reply reiterates that the Government is seeking cooperation with the EU in a number of fields—including “science and innovation, culture and education, overseas development assistance and international action, and defence research and capability development”. The Minister adds that the Government is “evaluating all the [relevant] programmes” but is “not in a position […] to set out a list of programmes that we will or will not seek participation in at this early stage”. However, to allow the UK to keep its options open, the Government is “encouraging” the Commission and Member States to design the programme-specific proposals under the 2021–27 MFF “in a way that keeps options open for future UK and EU cooperation opportunities”. She adds that there is no clarity yet about the practical impact of the provisions relating to “automatic corrections” of financial contributions or the ban on “decisional powers” for third countries participating in EU programmes. This is an area the Committee will therefore need to keep under review as the negotiations on the relevant sectoral proposals continue.

18.15With respect to the possibility that the UK’s proposal of a customs arrangement which would function “as if” the UK and EU formed a combined customs territory, the Committee asked if this could lead to a continued remittance of customs duties collected by HMRC to the European Commission (as is the case for EU Member States). The Minister’s reply states that “neither the UK’s technical paper nor the EU’s draft protocol on Ireland/Northern Ireland makes provision for the continued application of the Own Resources system”, and even if the new customs arrangement was accepted by the EU, “the UK will no longer have a legal requirement to remit revenue in this way”. It should be noted in this regard that the EU’s draft protocol on Ireland would apply only to Northern Ireland, meaning the issue of the UK as a whole collecting customs duty on EU-bound goods did not arise, and even so refers to the possibility of an (unspecified) “mechanism for revenue collection and distribution”. This is also acknowledged in the Government’s own customs backstop proposal.

18.16With respect to the proposed new Own Resource linked to the proceeds from auctions under the EU emissions trading system, the Chief Secretary reiterates that the Government has yet to decide whether to stay part of the ETS. Any such decision in the future would be “subject to negotiation”, adding that “whilst ETS revenue could be made an EU Own Resource and this may need to be considered, the UK will clearly no longer be legally bound by the future Own Resources Decisions as a Member State”. That does not, however, preclude a similar contribution by the UK from being made a condition of continued post-Brexit participation in the ETS, should the 27 remaining Member States accept the new Own Resource (which is clearly not a given at this stage of the negotiations on the amendments to the ORD).

18.17As regards the possibility of a UK version of the EEA & Norway Grants or Switzerland’s ‘Enlargement Contribution’ as part of an economic partnership with the EU, the Chief Secretary states that “no negotiations have been held on this matter, and it is not for the UK government to speculate on how the EU Commission might approach future negotiations”. We note in this respect that the Government has stated that “any final decision on ESI Fund196 participation [after 2020] will be taken as part of the discussions on the Future Economic Partnership with the EU”, although it is not clear to what extent this how any such participation would in relate to the new Shared Prosperity Fund, which the Government has billed as the domestic replacement forthe Cohesion Funds.

Our assessment

18.18We remain concerned about the lack of clarity on the financial implications of the EU’s next Multiannual Financial Framework and Own Resources Decision for the UK, in the context of its negotiations of a new economic partnership with the EU as a ‘third country’.

18.19There remain many unresolved questions about the costs and conditions attached to future UK participation in a range of specific EU programmes under the 2021–2027 MFF. There are at least six which the Government has identified as providing added value for the UK, and where it may therefore seek continued involvement after Brexit. We have previously estimated the UK’s potential annual gross contribution for participation in EU programmes as a ‘third country’ as more than £4 billion, although that figure remains highly speculative.197 We will continue to assess the legislative proposals for those programmes on an individual basis, with a particular focus on the position of the other Member States and the European Parliament as regards the conditions for ‘third country’ participation.

18.20In the event of a ‘no deal’ Brexit, UK participation in EU programmes like Horizon Europe would be highly uncertain. We expect that negotiations with the EU would have to recommence, covering at the very least the financial settlement to which the UK has already provisionally agreed—i.e. the provisions which would commit the UK to make contribution to the current Multiannual Financial Framework until the end of 2020 as if it had remained a Member State before the EU was likely to contemplate any UK participation in the new generation of investment programmes from 2021 onwards.

18.21With respect to other possible financial aspects of the new UK-EU partnership, such as the allocation of customs revenue and potential continued UK contributions to economic cohesion in the EU, the Chief Secretary has repeatedly, and rightly, emphasised that the Own Resources Decision the basis for transfers of contributions from national Exchequers to the EU budget—will not apply to the UK beyond the end of the post-Brexit transitional period. However, that does not preclude the EU from seeking to include analogous provisions into agreements with the UK in areas such as customs cooperation or emissions trading, which would depend largely on the level of the UK’s continued integration in the EU’s economic structures and mechanisms. The same would apply with respect to the possibility of a UK-funded assistance programme for lower-income EU Member States, as is shown by the Norwegian and Swiss precedents. The Chief Secretary’s letter takes no position on this, and so it appears the Government has neither made an offer nor rejected it as a possibility.

18.22Overall, the costs to the UK taxpayer of the new partnership with the EU could easily run into billions of pounds per year. The Committee will continue to closely monitor the negotiations on the future partnership to gauge the financial implications of the overall economic agreement with the EU the Government intends to strike. We also draw the Chief Secretary’s reply to the attention of the Public Accounts and Treasury Committees.

Full details of the documents

(a) Proposal for a Council Regulation laying down the multiannual financial framework for the years 2021 to 2027: (39683), 8354/18 + ADD 1, COM(18) 322; (b) Proposal for a Council Decision on the system of Own Resources of the European Union: (39686), 8357/18 + ADD 1–2, COM(18) 325.

Previous Committee Reports

See the Committee’s Thirty-Fourth Report HC 301–xxxii (2017–19), chapter 6 (4 July 2018).

Annex: Parliamentary scrutiny of the 2021–2027 MFF

The table below shows the scrutiny status for the European Commission’s horizontal and sectoral proposals under the 2021–2027 Multiannual Financial Framework. For the sectoral proposals, the third column indicates whether the Government has indicated it may seek continued participation in each programme after Brexit. We will publish an updated version of this overview regularly in light of progress made in the negotiations on the future UK-EU partnership.

Horizontal proposals

Description

Scrutiny status

Regulation establishing the MFF 2021–2027

This proposal establishes the EU’s spending priorities and limits for the 2021–2027 period.

Last considered on 12 September 2018. Remains under scrutiny.

Own Resources Decision 2021–2027

The Own Resources Decision sets out how Member States contribute to the EU budget.

Last considered on 12 September 2018. Remains under scrutiny.

Rule of Law Mechanism

This new mechanism would allow the EU to suspend payments to a Member State where the rule of law is at risk.

Last considered on 4 July 2018. Remains under scrutiny.

Sectoral proposals

Proposed budget 2021–2027 for EU-27

UK participation sought

Scrutiny status

Research

Horizon Europe—the Framework Programme for Research

€86.6bn

Yes

To be considered in autumn 2018. Remains under scrutiny.

EU space programme 198

€14.2 bn

Yes

To be considered in autumn 2018. Remains under scrutiny.

ITER nuclear fusion project

€5.4 bn

Yes

Last considered on 5 September 2018. Remains under scrutiny.

Euratom Research & Training Programme

€2.1 bn

Yes

Last considered on 5 September 2018. Remains under scrutiny.

Economic development, infrastructure and stability

European Regional Development Fund

€200.6 bn

Partial 199

To be considered in autumn 2018. Remains under scrutiny.

Connecting Europe Facility

€42.3 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Cohesion Fund

€41.4 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Structural Reform Support Programme

€22.2 bn

No 200

Cleared from scrutiny on 5 September 2018.

InvestEU fund

€13.1 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Digital Europe

€8.2 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Single Market Programme 201

5.4 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Globalisation Adjustment Fund

€1.6 bn

No 202

To be considered in autumn 2018. Remains under scrutiny.

Eurozone Investment Stabilisation Function

Not applicable 203

No 204

To be considered in autumn 2018. Remains under scrutiny.

Cooperation on tax, customs and financial matters

Customs Control Equipment Instrument

€1.3 bn

No 205

First Report considered on 5 September 2018. Remains under scrutiny.

Customs cooperation

€950 mn

Unclear

First Report considered on 5 September 2018. Remains under scrutiny.

Fiscalis: tax cooperation

€270 mn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

EU anti-fraud programme

€181 mn

No 206

To be considered in autumn 2018. Remains under scrutiny.

Pericles (anti-counterfeiting)

€8 mn

Unclear 207

To be considered in autumn 2018. Remains under scrutiny.

Social programmes

European Social Fund Plus

€89.7 bn

Partial 208

To be considered in autumn 2018. Remains under scrutiny.

Erasmus+

€26.4 bn

Unclear

First Report considered on 5 September 2018. Remains under scrutiny.

Creative Europe

€1.6 bn

Unclear

First Report considered on 27 June 2018. Remains under scrutiny.

European Solidarity Corps

€1.1 bn

Unclear

First Report considered on 5 September 2018. Remains under scrutiny.

Justice & Values Programme

€841 mn

Unclear

Last considered on 18 July 2018. Remains under scrutiny.

Agriculture, fisheries and environment

Agricultural Guarantee Fund

€254.2 bn

No 209

To be considered in autumn 2018. Remains under scrutiny.

Agricultural Fund for Rural Development

€70 bn

No 210

To be considered in autumn 2018. Remains under scrutiny.

Maritime and Fisheries Fund

€5.4 bn

No 211

To be considered in autumn 2018. Remains under scrutiny.

LIFE Environment Programme

€4.8 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Nuclear Decommissioning Instrument (including Lithuania)

€1 bn 212

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Justice and home affairs

Asylum & Migration Fund

€9.2 bn

Unclear, opt-in decision pending

To be considered in autumn 2018. Remains under scrutiny.

Border Management Fund

€8.2 bn

No 213

To be considered in autumn 2018. Remains under scrutiny.

Solidarity Fund 214

€4.7 bn

No 215

No separate proposal pending as part of the MFF negotiations.

Internal Security Fund

€2.2 bn

Unclear, opt-in decision pending

To be considered in autumn 2018. Remains under scrutiny.

Civil Protection Mechanism (rescEU) 216

€1.2 bn

Unclear

Last considered on 4 July 2018. Remains under scrutiny.

Foreign affairs and defence

Neighbourhood, Development & International Cooperation Instrument

€79.2 bn

Yes

To be considered in autumn 2018. Remains under scrutiny.

Instrument for Pre-Accession Assistance

€12.9 bn

No

To be considered in autumn 2018. Remains under scrutiny.

European Defence Fund

€11.5 bn

Yes 217

To be considered in autumn 2018. Remains under scrutiny.

European Peace Facility

€10.5 bn

Unclear

To be considered in autumn 2018. Remains under scrutiny.

Humanitarian Aid Instrument 218

€9.8 bn

Yes

No separate proposal pending as part of the MFF negotiations.

Emergency Aid Reserve 219

€4.2 bn

No 220

No separate proposal pending as part of the MFF negotiations.

Support for the EU’s Overseas Countries & Territories

€444 mn

No 221

Cleared from scrutiny on 5 September 2018.

Nuclear Safety Instrument

€300 mn 222

Unclear

To be considered in autumn 2018. Remains under scrutiny.


183 Customs duties are a ‘traditional own resource’ of the EU. At present, Member States collect customs duties on behalf of the EU; 80 per cent are due to the EU budget, while 20 per cent is retained by the Member States as a collection cost.

184 See section 7 of the European Union Act 2011 ( “EU Act”). It was repealed by the European Union (Withdrawal) Act 2018 (Commencement and Transitional Provisions) Regulations 2018 on 4 July 2018. These Regulations repeal sections 1 to 13, 14(1) and 15(1) of, and Schedule 1 to, the EU Act.

185 As a hypothetical, the Committee also considered the financial implications of a post-Brexit transitional period that lasts beyond 31 December 2020. It concluded that any such extension would likely trigger further negotiations about the UK’s financial contributions to the EU budget, given that at the core of the transition is a requirement for the UK to continue applying EU law—including, presumably, the Own Resources Decision—in return for the almost all the benefits of membership. The Committee has resolved to return to this should it be necessary in light of developments in the Article 50 negotiations.

186 At present, the Government has significant influence over how EU funding is spent, as it has a weighted vote over work programmes drafted by the Commission in each sectoral programme’s Committee of Member States. Third countries like Norway and Switzerland are typically observers on those Committees, without voting rights.

187 As we noted in our Report of 4 July 2018, UK participation in EU regulatory agencies will be difficult to negotiate as they are typically only open to countries within the Single Market that apply the relevant EU acquis (i.e. EU pharmaceuticals or chemicals legislation). The exception is EASA, which has Switzerland as a member, but which still requires acceptance of EU aviation law.

188 Typically, a ‘third country’ yearly contribution is calculated by using the EU’s own budget for the Programme in question in a given year (over which the UK will have no influence). A proportional contribution is then calculated by using that country’s GDP as a share of that of the EU plus that country as a whole. The UK’s share of the GDP of the UK and EU-27 is 16 per cent, so to a Programme that has an EU budget of €100 million it could be expected to make a (gross) contribution of €16 million.

189 The UK is currently the second-largest recipient of EU research funding, after Germany.

190 The Government White Paper on the future relationship states: “As if in a combined customs territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy for goods intended for consumption in the UK.”

192 The Government White Paper suggests that no border controls would be necessary on goods moving between the UK and EU-27. Trade in goods between the EU and Turkey still requires border controls to ensure compliance with customs duty on agricultural goods, VAT, excise and regulatory standards.

193 The €2.8 billion EEA & Norway Grants cover the 2014–2021 period. A new contribution will be discussed between the EFTA-EEA Countries and the EU in parallel to the MFF negotiations.

194 The Swiss ‘Enlargement Contribution’ was invested between 2007 and 2016. Negotiations are due to begin on a successor programme with approximately the same financial endowment.

195 The Committee also considered the possibility that the post-Brexit transitional period, during which the UK would remain a full contributor to the EU budget, could be extended beyond its current scheduled end of 31 December 2020. In such an eventuality, the UK might become a contributor to the next MFF under the terms of an Own Resources Decision which neither Government nor Parliament approved.

196 The European Structural & Investment Funds (ESI Funds) are the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for Rural Development and the European Maritime & Fisheries Funds. As the last two are linked to the Common Agricultural and Fisheries Policies, participation in which the Government has ruled out, the Government is presumably referring to the ERDF, the ESF and the CF.

197 See our Report of 4 July 2018, para. 6.67.

198 The EU Space programme under the 2021–2027 MFF includes the Galileo satellite navigation project and the Copernicus earth observation programme.

199 The December 2017 Joint Report of the UK Government and the European Commission commits the UK to ‘examine favourably’ the possibility of post-2020 participation in the European Territorial Cooperation (PEACE/ Interreg) component of the ERDF.

200 The Structural Reform Support Programme is not open to ‘third country’ participation.

201 The Single Market Programme includes the current ‘COSME’ programme that supports small businesses, as well as the current EU support programmes for food safety, health, statistics and competition policy.

202 The EGF is not open to ‘third country’ participation. In any event, the Government does not support the existence of the EU-level Globalisation Adjustment Fund, and therefore it seems unlikely it would seek participation as a ‘third country’.

203 The Eurozone Investment Stabilisation Function would provide loans to Eurozone countries in financial difficulties; these would be capped at €30 billion, guaranteed against the EU budget.

204 The EISF applies only to Eurozone countries

205 The Customs Control Equipment Instrument is not open to participation by third countries.

206 The EU anti-fraud programme targets fraudulent use of the EU budget or fraud affecting its own resources (revenue). This will in principle not be relevant to the UK as a non-Member State, although it may depend on the nature of any revenue sharing mechanism as part of a customs cooperation agreement (see above).

207 Pericles is focussed on tackling counterfeiting of the euro.

208 The Government is exploring participation in the ‘Health’ component of the Social Fund, but not the remainder. 209

209 The Government has repeatedly stated that the UK will not be part of the Common Agricultural and Fisheries Policies after the end of the post-Brexit transition period. However, it is unclear to what extent that is compatible with tariff- and non-tariff barrier free access to the EU market for UK agri-food and fisheries products, which is also its ambition. 209

210 Idem.

211 Idem.

212 Of the cumulative €1.018 billion budget, €552 million is earmarked for the decommissioning of the Ignalina nuclear power plant in Lithuania, and €466 million for the decommissioning of other nuclear facilities in Bulgaria, Slovakia, the Netherlands, Belgium, Germany and Italy..

213 The UK is not entitled to participate in the Border Management Fund as it is a Schengen measure.

214 The Solidarity Fund is established by Regulation 2012/2002, to which no amendments are proposed as part of the MFF.

215 The Solidarity Fund is open only to EU Member States and candidates which are “involved in accession negotiations”.

216 The proposal for the amended legal framework of the Civil Protection Mechanism is not strictly linked to the wider MFF negotiations, as ‘RescEU’ is meant to be operational indefinitely and not just for the duration of the 2021–2027 budgetary period.

217 The UK is seeking participation in the European Defence Fund, but its legal framework as proposed by the Commission restricts maximum involvement to EEA countries only.

218 The Humanitarian Aid Instrument was established by Regulation 1257/96. No amendments are proposed as part of the MFF negotiations.

219 The Emergency Aid Reserve is a ‘special instrument’, outside of the budgetary ceilings of the Multiannual Financial Framework. Its legal basis is the Regulation establishing the 2021–2027 MFF; it is not subject to a separate sectoral proposal.

220 The Emergency Aid Reserve is a special budgetary instrument that is not open to third country participation.

221 The British Overseas Territories will cease to benefit from their special ‘association’ status with the EU when the UK leaves the EU.

222 The financial allocation for the Nuclear Safety Instrument is part of the overall budget for the Neighbourhood, Development & International Cooperation Instrument.




Published: 18 September 2018