The new proposed EU Budget for 2021-2027 is set to be €1824.3 billion. The budget is a combination of the Multiannual Financial Framework (MMF) (€1074.3 billion) and the EU's recovery effort for the COVID-19 pandemic called Next Generation EU (€750 billion). But how will this budget be allocated? And what are the rising opportunities?
The recovery plan
Next Generation EU, along with the required private investments in Europe, will seek to create jobs and fix the consequences of the COVID-19 pandemic, focusing on green and digital transformation. It is mentioned that this recovery plan should be spent by 2023 through existing programs, thus increasing their overall budgets. The EU programs benefit from this plan are the following:
Budget Allocation
The usual European programs will continue to exist and benefit from the EU budget 2021-2027. But how will the EU distribute the funds? Namely, the Common Agricultural Policy (CAP) will receive a significant portion of this budget. It is essential to mention that EU leaders agreed that 30% of the budget goes to climate-related projects. Next on the list is the European Regional and Development Fund (ERDF) and then the Framework Programme for Research and Innovation (Horizon Europe). The difference between these programs is that the budget is allocated indirectly for the first two, while Horizon Europe receives direct funding from the European Commission.
- The new Framework Programme for Research and Innovation (Horizon Europe) budget is set at €81bn. In this context, it is worth mentioning that the European Innovation Council (EIC) will play a significant role in the coming years. EIC’s mission is to support innovative tech start-ups through equity. Finally, Horizon Europe partnerships will continue existing as they are but with a new focus in mind. The new swift, or else called Missions of Horizon Europe, is towards the Ocean, Cancer, Cities, Soil, and Adaptation to climate change. The Commission will distribute €1bn to each of the missions.
- A total budget of €21.4bn will go to the Connecting Europe Facility. It is a financial program that aims at the European regulations' convergence in Energy, Transport, and the Digital Single Market.
- The ERASMUS programs are expected to receive a boost for the coming financing period. Although there were disagreements between the Institutions and the Member states, the budget is expected to increase to €21bn from €14bn. However, this is much lower than the initial expectations for ERASMUS programs. For the coming years, an effective plan for ERASMUS is the establishment of a European Education Area by 2025.
- The European Innovation Fund is related to the Emission Trading Scheme (ETS), aiming to reduce emissions and expects to receive up to €10bn.
- The LIFE program, which aligns perfectly with the Green deal priorities, will receive a budget boost for this financial period. Up to €5.45bn from €3.5bn, this program will champion the shift to clean energy, circular economy, biodiversity protection, climate change adaptation, and more.
- Finally, the Digital Europe program facilitates the broader deployment of digital technologies. This program will boost supercomputing, artificial intelligence (AI), cybersecurity, advanced digital skills, and Digital Innovation Hubs. This program's budget will probably be a little lower (€6.8bn) than the €9.2bn initially proposed by the EC.
Conclusion
While the debate on exact budget allocation to each EU Programme is still ongoing, one thing is sure. The EU budget 2021-2027 will be significantly larger than the previous financing year due to the COVID-19 pandemic. This recovery plan that will add €750 bn to the existing EU programs poses an excellent opportunity for all interested parties in the coming years.
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