Multiannual Financial Framework Research Articles

The emergence of geo-economic institutions: observations on European and Chinese development cooperation in Ukraine, Georgia, and Moldova 2014 – 2020

The emergence of China as a major provider of development finance has garnered considerable scholarly debate. Chinese investments and their impact on recipient states have been extensively studied, mainly focusing on the Belt and Road Initiative (BRI). In response to the BRI, the European Commission recently announced its connectivity strategy, the Global Gateway initiative. In this context, and even before the announcement, little work has been done to map Chinese state capitalist development finance side by side with the European Union’s (EU) market-led, public-private partnership-oriented strategies, especially within Europe’s own neighborhood. Additionally, the literature insufficiently explains why development institutions (agents) would act geo-economically to enforce their most powerful member states’ (principals) international agendas. This lack of theoretical explanatory power poses a serious puzzle. Thus, we ask, how has EU and Chinese institutional investment cooperation developed (legally and financially) in the EU’s Eastern Partnership (EaP) region in the previous EU Multiannual Financial Framework (MFF) from 2014 to 2020? We argue that development institutions have acted in accordance with their principal’s policy goals by facilitating investment and institutional agreements and by offering beneficial cooperation conditions, so that the EU and China can direct investment in a geo-economic manner if they choose to do so. In the following, we find that European investment in the EaP countries Ukraine, Moldova, and Georgia, has been huge in absolute terms (amount invested) and strong in relative terms––through deeper economic cooperation––when compared to Chinese investment activity in the same countries. This development supports the EU’s aim of countering China’s increasing economic presence in the region. However, we find that this gap has been closing in total terms. Our study suggests that while China has not matched EU investment in the EaP region for the previous MFF, further research is needed to unpack individual sectors and their geo-economic implications for official development institutions and their respective states.

Challenges of instruments that should tackle multi-hazard and multi-risk situations: an assessment of the recent reforms of the European Solidarity Fund and the Solidarity and Emergency Aid Reserve

The European Union has some dedicated tools and mechanisms available to respond to natural hazard events including the European Union Solidarity Fund (EUSF). It follows the objective of granting financial assistance to Member States in the event of a major disaster with serious consequences. In the latest EU long-term budget plan—the Multiannual Financial Framework 2021–2027—the EUSF was merged with the Emergency Aid Reserve (EAR) to form the new Solidarity and Emergency Aid Reserve (SEAR). One additional significant change was made in 2020 which saw an extension of the scope of the EUSF. This extension allowed the EUSF to cover losses incurred due to major public health emergencies such as the COVID-19 pandemic. It is therefore now a multi-hazard and multi-risk financing instrument designed to financially assist during the emergency phase in case of an emergency event. We assess the consequences of these changes in the light of potential advantages as well as disadvantages compared to the prior EUSF structure. The results will be used to provide some policy recommendations as to how to move forward with the identified challenges. We especially recommend separating the EUSF from the coverage of large-scale public health emergencies and the emergencies covered by the EAR. Instead, we suggest establishing a new flexibility instrument that covers emergencies such as public health related ones as well as the ones within the EAR. The analysis gives some important insights, scientific as well as policy wise, about advantages as well as limitations of financial instruments that simultaneously should tackle different types of hazards and risks.

EU의 국제문화관계 전략에 관한 고찰

It has been more than 30 years since the Treaty of Maastricht officially introduced cultural policy in 1992. Cultural policy has been restructured in accordance with the EU’s Multi-annual Financial Framework. Sometimes the policy had to change its official programmes and its policy orientation had to change as well, accordingly. Cultural policy in earlier times implemented various cultural programmes in which different foci were given in providing financial support. DIfferent programmes supported either cultural heritage preservation, performing art or literary translation depending on their respective objectives of the programmes. From the year 2000 onwards, however, the existing programmes were converged into a single programme as the EU emphasised the effectiveness of operating different programmes in a single instrument. From 2014, the focal point of the cultural policy is cultural and creative sectors. The ‘Creative Europe’ programme the EU introduced for the sake of establishing creative Europe, integrated audiovisual policy (which had existed separately from cultural policy) into the programme aiming at strengthening cultural and creative sectors in the digital era. In addition, the EU proclaimed that it will actively make use of culture in its external relations in its communication on ‘International Cultural Relations’. While expanding various types of ‘networks’ through Creative Europe at a global level, the EU makes attempt to establish ‘European Spaces of Culture’ worldwide in the end. By doing so, the EU pursues enhancing its position as a global actor in this field.

The Multiannual financial framework 2021–2027 and Next Generation EU - A turning point of EU multi-level governance?

ABSTRACT The agreements on Next Generation EU (NGEU) and the Multiannual Financial Framework 2021–2027 (MFF 2021–2027) are extraordinary milestones for the EU integration process. Not only do both regulations have important redistributive effects within a defined timeframe, but both regulations shape the hierarchy of objectives and instruments of EU budgetary policies. This is particularly true for cohesion policy, which has been characterised as the model of EU multilevel governance (MLG). Drawing on historical institutionalism and Peter Hall’s classification of policy change, this text examines the dynamics of change in MLG. In particular, this research looks at the timing and scope of changes in EU cohesion policy since the 1980s. We ask whether or not the adoption of NGEU and the MFF 2021–2027 is likely to represent a critical juncture for the MLG and to what extent both regulations modify objectives and instruments of cohesion policy.

Cost-Efficiency Evaluation into the European Union Budget

This review is a qualitative study, according to the heterodox approaches, assessed the leading beneficient State under the European Union budget system. For this purpose, the study utilized the Multiannual Financial Framework reports between 2014-2020, which dealt with more than 700 indicators, measuring success against more than 60 general objectives, and more than 220 specific objectives in the performance framework. Therefore, trade globalization, political economy, economic history, social contribution by the European Union budget, and international economics under new-institutional economics have been evaluated in this process. Assessment outcomes found that poorer Member States are the net beneficient regarding the European Union budget’s net balance and financial corrections. However, Germany is the leading beneficient of the European Union budget system as it has extended trade to all along the border of the European Union without tariffs and has become a more cost-effective economy against the outside economies (like the United States of America or China) of the European Union territory. Thus, the current study suggested that nations under the European Union budget system should invest more in sustainable production to get real-time benefit from the European Union integration.

Political Own Resources: Towards a legal framework

Following its latest Own Resources Decision, the European Union is equipped with a new fiscal policy instrument. In addition to its financing function, the Own Resources Decision can pursue policy objectives by linking the contribution burden of Member States to a political objective of the Union. The article presents the concept, function, and problems of this new category of political own resources and develops a legal framework to ensure that political own resources do not shift the institutional balance between the Council and the Parliament. Own Resources Decision, fiscal own resources, political own resources, Multiannual Financial Framework

Digitalization of Public Administration in the Context of the Multiannual Financial Framework (MFF) 2021-2027 and the Implementation of the National Recovery and Resilience Plan (NRRP)

Digitalization of Public Administration in the Context of the Multiannual Financial Framework (MFF) 2021-2027 and the Implementation of the National Recovery and Resilience Plan (NRRP)

The issue of impartiality of voivodeship board members involved in the implementation of the European Union funds within the Multiannual Financial Framework 2021-27

The purpose of this paper is to consider the standard of impartiality promoted by the European Commission regarding the implementation of European Union funds and expressed in particular in identifying and excluding conflicts of interest in terms of the issue of its adequacy at the level of regional programmes in Poland. We attempted to answer the horizontal question of whether and what legal problems are raised by potential inadequacy in this respect and how they can be constructively counteracted. In our study we primarily used the dogmatic-legal method. The findings of our research show that in some situations, the “zealous” implementation of EU standards of impartiality may result in unexpected legal issues, such as in the situation related to the declarations of members of voivodeship boards who are managing authorities of regional programmes. The value of the study lies in its critical and at the same time constructive approach towards the issue of counteracting a possible conflict of interest through declarations of interest by members of voivodeship boards (as the managing institution of the regional programmes financed with EU funds) during the period of the real start of implementation of EU funds by Polish regions in the financial perspective 2021-27.

COMPARATIVE ASPECTS IN FINANCING OF SOCIAL INSURANCE BENEFITS IN ROMANIA AND THE REPUBLIC OF MOLDOVA

The purpose of the article is to present some aspects of the public social security system in Romania and the Republic of Moldova, starting from the premise that each country has its own mechanism of operation of the economy, which depends on the way in which the economic processes are planned and governed, on the size of the material, the way they are managed and the way economic processes, human and other resources are carried out, the way these resources are assimilated into the economic cycle, the development of policies and the adoption of laws. This economic mechanism must be adapted to the needs and opportunities of the national economy, which change in a relatively short period of time and is a dynamic and coherent instrument. The research was based on bibliographic documentation, observation, induction supplemented with deduction, analysis with synthesis, as well as the logical method with the historical one. The results of the research lead to the existing similarities between Romania and the Republic of Moldova in terms of budget revenues and expenditures from the state social insurance budget by observing the same basic principles, rules and forecasts determined in the multiannual financial framework of both countries.

The European Union’s post-pandemic strategies for public health, economic recovery, and social resilience

The European Union has implemented various strategies and policies to mitigate the effects of the coronavirus-19 pandemic and promote recovery. This article reviews the European Union’s response and management decisions, examines the public health measures implemented to contain the virus, and explores the Union’s economic recovery and support initiatives. These include the “NextGenerationEU” recovery fund, the “European Support” instrument to mitigate “Unemployment Risks in an Emergency” (SURE) program, and the Multiannual Financial Framework recognizing the EU’s efforts to promote social welfare and inclusion during the pandemic. The challenges and lessons learned from the EU’s experience are analyzed, highlighting the importance of solidarity, cooperation, and resilience in crisis management. Drawing from the pandemic, this study explores the prospects and conclusions drawn from the pandemic, the need for building more resilient healthcare systems, fostering environmentally sustainable initiatives, strengthening social protection and inclusion, enhancing crisis preparedness and response, and promoting global health and equity.

Comparison of the Multiannual Financial Frameworks in the European Union and its Hungarian Aspects

The long-term viability of the European Union depends not only on well-defined goals, but also on the financial means behind them. Integration can achieve greater success in areas that nation states would otherwise not be able to do effectively enough on their own. Examples include sustainability and strengthening international competitiveness. There are therefore some tasks that can be more successfully achieved at Community level, but they would require adequate financial support. The EU itself has an annual budget, but even more interesting is the so-called Multiannual Financial Framework, which sets out not only the financial possibilities but also the prevailing economic strategic orientations. Some areas are given priority, while others have to be diverted. Budgeting in this way is a continuous series of choices and dilemmas, which are not easy decisions for the decision-maker. The present study aims to compare the structure of the two most recent Multiannual Financial Frameworks and focuses on Hungary's share of each heading. The study will hopefully make it clear that EU funding is a complex issue and that planning an appropriate budget is not as simple as one might first think.

The budget and European disintegration – what role for the post-2020 MFF?

ABSTRACT With each negotiation round for a new multiannual financial framework (MFF), European policy actors are confronted with claims for significant reforms. In most cases, those claims are not-well justified as they often lack recognition of the stabilizing function of the framework’s complex institutional structure. Given that the future path of European integration appears quite uncertain after a decade of multiple crises, this contribution argues that there are two main challenges that exist for the post-2020 budget. Firstly, the 2021–2027 MFF has to reinforce the EU’s problem-solving capacity in areas of integration that are largely undisputed among member states. This holds especially for the functioning and integrity of the single market and its supporting policies, but also for the main expenditure programs in agriculture, regional development, or research and innovation. Secondly, the budget must provide a sufficient amount and targeting of resources to prevent the Union from further disintegration in socio-economic, territorial, and political terms, especially in light of future challenges such as the ‘greening’ of the Union’s economy.

Climate Change and SMEs: Green Transition, European Institutional Framework & Necessary Adaptations to Increase the Competitiveness of SMEs in the Region of Western Greece

Over the last decade, the climate crisis has been recognized as a great threat to humanity on a global and institutional scale. In this context, every country, with the European Union (EU) paving the way, is planning the ways and means of transitioning to a more sustainable future. Inevitably, the transition will affect citizens’ daily life and countries’ economic activity. In this framework, small and medium enterprises (SMEs) have a central role; especially in countries such as Greece, where most of the enterprises are SMEs. Thus, both the EU and the UN are promoting policies and incentives for SMEs so that they will be actively involved in promoting sustainable development goals. With the Multiannual Financial Framework 2021-2027, the EU decided to use € 401 billion to assist innovations in the fields of green transition and renewables, including SMEs to these actions. At the same time, the National Plan for Recovery and Sustainability “Greece 2.0” is moving in the same direction. Thus, the present study is an attempt to record the actions, reforms, and financial tools that “Greece 2.0” offers to SMEs, focusing on the region of Western Greece. At the same time, we will try to capture the impacts of natural gas introduction in the region. The study aims to outline the future of SMEs in Western Greece based on the current situation and the possibilities that the green transition will bring.

THE TOURISM INDUSTRY IN ROMANIA DURING THE COVID-19 PANDEMIC

The COVID-19 pandemic has had a dramatic and unprecedented impact on the tourism sector, drastically reducing tourism flows and, therefore, the revenues of businesses in this sector. International, regional and local travel restrictions immediately affected national economies, including tourism systems, international travel, domestic tourism, air transport, public transport, accommodation, restaurants, festivals, sports events etc. Beyond the immediate shock, the tourism sector faces other, longer-term challenges, related to its green and digital transformation, its competitiveness, its sustainability and its resilience (according to ECA, Special Report 27 p.4) The paper presents an analysis of tourism in Romania during the 2019-2021 period, based on the analysis of the main indicators and the presentation of the solutions proposed by the European Union to recover the tourism sector. The multiannual financial framework for the 2021-2027 period comprises a number of 14 programs designed to finance actions in the tourism sector and the Recovery and Resilience Mechanism (RRM) provides Member States with the opportunity to finance investments and reforms, including in the tourism sector. Romania’s National Recovery and Resilience Plan approved by the Commission in September 2021 focuses, in particular, on digitizing services, increasing responsiveness and ensuring institutional resilience at national level. Furthermore, through the S.O.S. Romanian Tourism, the Alliance for Tourism (APT) presents us with two important objectives: helping tourism out of the critical state in which it currently is and resetting the entire hospitality industry, as well as the measures taken to achieve the proposed objectives.

Coordination and Control in European Council Centred Governance. The Netherlands and the Covid Recovery Fund

AbstractThis paper provides a reconstruction and game‐theoretical characterization of the coming about of the €750 billion Covid Recovery Fund (RRF). It does this from the perspective of one prominent member state, the Netherlands, who was arguably the most prominent opponent to the idea. The case of the Netherlands is revealing for the ability of individual Member States to oversee and control EU decision‐making in this new system of European Council centred governance. We provide an embedded process tracing analysis of the decision‐making from the first Summit on the Multiannual Financial Framework of 20/21 February, up until the ‘historic’ deal on the MFF and RRF of 21 July. Where most media accounts and scholarly evaluations focus on the proceedings at the highest political level and particularly the role of German Chancellor Merkel, we highlight the early, technical‐level developments and proceedings, that laid out the tracks for the final deal.

Germany as the European Union’s status quo power? Continuity and change in the shadow of the Covid-19 pandemic

ABSTRACT In July 2020 the European Council adopted the new multiannual financial framework (MFF) and the additional European recovery budget ‘Next Generation EU’ (NGEU). Certainly, this agreement marked a clear change in German European policy. Germany was not only prepared to pay significantly higher contributions to the EU budget, but also accepted to launch an additional European economic stimulus programme that will be financed through European common debt. However, Germany insisted on significant constraints and substantive limitations in scope of these new instruments. This restrictive, hesitant and rather defensive policy of prevention can be explained by Germany’s role as status quo-power (SQP) in the European Union (EU). This role implies that Germany is trying to preserve the existing status quo, the agreed structures and rules, and is only prepared to agree to far-reaching changes if this status quo or even the existence of the EU itself appear to be at risk.

The New Priorities of the European Union Migration Policy

The aim of the research is to critically comment the New Pact on Migration and Asylum of the European Union, which introduces a new principle of flexible solidarity, consisting of two opposite characteristics – on the one hand – mandatory solidarity and on the other – a flexible one. Member States’ quotas will be replaced by flexible contribution to various aspects of the migration policy, which will allow countries that refuse to accept migrants to support the so-called first-line countries. The result of the research is a generalization and analysis of the new Migration Pact, which covers all areas of migration issues and applies a single approach and harmonizing of existing European legislation in the field. Other part of the results of the research analyse the new Multiannual Financial Framework of the European Union which foresees an increase in the migration and border management spending up to 22.7 bln. euro and an increase in the field of security and defence spending up to 13.2 bln. Euro.

New institutional leadership goes viral EU crisis reforms and the coming about of the covid recovery fund

AbstractThis article reconstructs the coming about of the 750 billion EU Covid Recovery Fund. We provide an embedded process‐tracing analysis of the dynamics from mid‐March 2020, when the idea of ‘Corona‐bonds’ was parachuted onto the Heads’ Agenda, up until the ‘historic’ deal on the Multiannual Financial Framework and Recovery Fund of 21 July. Where most media accounts and scholarly assessments focus on the high‐level deal making between political leaders, we trace the proceedings inside the EU's institutional machinery, which produced the solutions and laid out the groundwork for a deal. The reconstruction assesses the role and influence of the EU institutions – the European Commission in particular – in producing this major step. We show that the process was characterized by a handicapped European Council, which hampered the ability of member states to oversee and control developments. The conclusions discuss the implications of our findings for our understanding of (institutional) leadership and policy making during crisis.

Новые принципы распределения ресурсов ЕС и их влияние на страны Балтийского региона

The Multiannual Financial Framework for 2021—2027 was adopted during the severe crisis caused by the ongoing coronavirus pandemic. In the face of a rapidly deteriorating economic situation, EU countries took unprecedented steps radically changing the principles of resource allocation in the Union. These included the recovery plan for Europe, making the EU budget conditional on respect for the rule of law and the new EU resources system. This article seeks to identify the essential characteristics of the decisions made within the Multiannual Financial Framework and define their significance for advancing integration. The study attempts to answer two questions: do these decisions mark the transition to a new stage of integration and to what extent do they comply with the law of the Union. Several EU initiatives related to debt redistribution are analysed, along with the impact of these initiatives on Eastern European countries, particularly those of the Baltic Sea region. The research explores the decisions from the standpoint of legal and political science. In particular, it is stressed that, when reaching a compromise on making the budget conditional on respect for the rule of law, the EU and its member states had to use a mechanism for postponing the execution of an act of the Union, which contradicts the basic principles of EU law. From a political point of view, the adoption of a package of legislative acts within the Multiannual Financial Framework means growing dependence of the member states and an increase in solidarity and loyalty within the Union.

Ocena zdolności jednostek samorządu terytorialnego do finansowania projektów inwestycyjnych w perspektywie finansowej 2021–2027

Purpose – The aim of the research is to assess the capacity of Polish local governments to finance investments in the EU 2021–2027 multiannual financial framework. Due to the importance of local governments as public investors, their capacity to finance invest-ments, which are largely development projects, is an important factor in increasing the international competitiveness of the entire country.Research method – The research consists in the construction of a forecasting model and then preparation of cash flow forecasts for all local governments in Poland. Four forecast scenarios made it possible to estimate the impact of changes in individual assumptions on the size of the investment capacity of local governments.Results – Forecasts indicate some symptoms of the local government finance crisis and the risk of its aggravation. Maintaining a faster growth rate of current expenditure than cur-rent revenue, with investment needs resulting, inter alia, from the necessity to absorb the EU funds, will lead to an unprecedented increase in debt. This relates primarily to poviat -cities responsible for the implementation of a significant part of public development projects. Originality / value / implications / recommendations – The study was based on the authors’ method of forecasting financial processes in each local government (excluding voivodships). Its results allow the formulation of important conclusions. It was shown that in the case of a large number of local governments, the implementation of investments at the current level will be possible only on condition of a significant reduction in the growth of current expenditures. However, with regard to cities with poviat rights, it may be necessary to change the financing system itself.