In most countries around the world, a financial planning tool has been in place for over forty years in the form of multi-year budgets which, according to Richard Musgrave’s theoretical model for allocative, redistributive and stabilisation functions, should aim to
– improve macroeconomic balances,
– ensure the effective allocation of resources,
– ensure the predictability of expenditure,
– strengthen the political accountability of executives through parliamentary control where parliaments have real democratic power,
– and implement more efficient public policies.
In this spirit, medium-term expenditure frameworks (MTEFs) normally cover a minimum period of three to five years – as has been the case in Italy since 1978, which will now discuss a budget for 2026-2028, or in Spain from 2025 to 2028, or in Germany from 2025 to 2029 with the Medium-Term Fiscal Structural Plans – which allow national parliaments to take responsibility for controlling the fiscal policy (no taxation without representation) of governments.
In the European Communities first and then in the European Union, multi-annual commitment appropriations were introduced, mainly concerning regional policy, which was considered “non-compulsory” because it was not provided for in the treaties, and annual payment appropriations, mainly concerning agricultural policy and the social fund, which were considered “compulsory” because they were provided for in the treaties (LINK).
The distinction between compulsory and non-compulsory expenditure was abolished in 2010 following the entry into force of the Treaty of Lisbon and the new budgetary procedure laid down in Articles 311-316 TFEU.
In 1988, Jacques Delors introduced for the first time the multiannual financial programming, which appeared necessary at the time to accompany the creation of the single market with European public “policies” and not just “actions” in areas of new competences introduced by the Single European Act of 1987, in particular for the environment and research, with initiatives linked to new objectives that had been identified by the then European Commissioner Altiero Spinelli in the early 1970s, using the lever of an embryonic industrial policy (LINK).
Jacques Delors’ proposals, presented to the European Parliament on 18 February 1987 as part of what was called the “Delors I Package” or, rather, “Making the Single European Act a Success”, had the ambition, or rather the illusion,
– to contribute to the creation of a market without borders by an unspecified date in 1992,
– to create the conditions for effective economic and social cohesion,
– to promote a European research and technology policy,
– to strengthen the EMS,
– to lay the foundations for a European social area,
– and to promote Community action on the environment.
To achieve these results, Jacques Delors warned Member States that it would be necessary to provide the European Communities with adequate financial resources, which, in his opinion, should be concentrated
– on setting a ceiling on revenue,
– on reducing Member States’ contributions through the VAT rate,
– and on the introduction of what was called “the fourth resource,” i.e. a percentage of GDP for each Member State depending on its internal wealth.
Jacques Delors thus accepted from the outset the principle that the European budget should be dictated by the revenue ceiling set by the Council, on which the European Parliament was not even consulted, and not by spending needs.
According to Jacques Delors, this revenue was to come mainly from Member States’ contributions (to which was added an increase from 10% to 25% for the costs of collecting resources from customs duties), thus reinforcing the logic of the so-called “fair return” that had given rise to Thatcher’s famous invective “I want my money back”.
The Delors Commission had thus decided to ignore the reasons that had led the European Parliament to reject the 1980 budget proposed by the Thorn Commission in December 1979, which was followed by the “Crocodile” initiative for a constitutional revision of the Treaties of Rome and then, in December 1984, the budget for the 1985 financial year, which, according to the Assembly, should have
– be included in the European executive’s four-year programme for 1985-1988,
– provide for the issuance of loans and new own resources to cover the expenditure deficit to the extent that it exceeded the ceiling of 1% of VAT revenue (LINK),
– design commitment appropriations on the assumption that, during 1985, the Member States would vote transferring part of the VAT to the Communities to extent what was necessary to ensure the implementation of the four-year programme,
– calculate the order of magnitude of the reductions that Member States could introduce in their expenditure as a result of the expenditure incurred by the Communities.
The first European MTEF proposed by Jacques Delors had a duration of almost five years, covering the period from 29 June 1988 to 31 December 1992, but then the national governments of the Twelve demanded and obtained that, contrary to what was happening in the rest of the world, the duration of the European multiannual financial framework should be seven years.
Since then, the Council of the Union has adopted five more (1993-1999, 2000-2006, 2007-2013, 2014-2020, 2021-2027) with the imprimatur of the European Council and the approval of the European Parliament obtorto collo.
We have thus reached the beginning of the procedure for negotiating the Multiannual Financial Framework, which should start on 1 January 2028 and which the Treaty on the Functioning of the European Union (Article 312.1) provides for a period of “at least five years” but which the European Commission and the Council insist on setting for a period of seven years until 31 December 2034, i.e. for a period of time that will bind the European Commission in office from November 2029 to July 2034 and, above all, the European Parliament that will be elected in spring 2029 and will remain in office until June 2034, despite the foreseeable challenges we will have to face in the first half of the third decade of this century.
The issue of the timing and methods of future European financial planning and the guarantee of public goods relating to policies that can only be effectively implemented at European level, according to a dynamic interpretation of the principle of subsidiarity, must be at the heart of the approach that the European Parliament should adopt in its second plenary session in November 2025.
This should form the basis for negotiations with the Council not provided for in the Treaties – which are limited to the power to approve the MFF by an absolute majority of members (Article 312(2)), also providing for a passerelle clause to overcome the unanimity requirement in the Council – but regulated by the interinstitutional agreement included by the European Commission in its proposals of 16 July 2025.
This approach complements and reinforces the proposals adopted by the European Parliament on the European Commission’s draft, in which the Assembly expressed its budgetary guidelines (LINK)
– on the need and urgency to introduce new and more ambitious own resources to gradually replace national contributions (LINK),
– on opposition to new debt to cover past debts arising from the NGEU,
– on the distinction between the CAP objectives set out in Articles 39-44 TFEU and the objectives of economic, social, and territorial cohesion already set out in Article 3 TEU and then specified in Articles 174-178 TFEU,
– on safeguarding the increase in funds for territorial cohesion, for a sustainable agricultural policy, for the ecological and digital transitions, for the social dimension, for inclusion policies, research and technological development, energy, the social economy, industrial investment and trans-European networks, strategic partnerships, civil society and the shield of European democracy, education and culture, civil protection and health in the face of new and foreseeable investments in European defence and space projects,
– on the essential nature of the social sustainability of European policies as a prerequisite for competitiveness,
– on the alternative between community solidarity and nationalist inequalities,
– on the conditions linked to respect for the Rule of law.
In view of the amendment to Article 311 TEU on the procedure for introducing new own resources – which currently provides for the exclusive power of the Council acting unanimously and simple consultation of the European Parliament – the interinstitutional agreement on the new MFF should introduce a financial cooperation procedure modelled on that introduced on 4 March 1975 for acts of general scope with financial implications, and the convening of two extraordinary sessions of interparliamentary assemblies (assises) modelled on those held in Rome in November 1990, to be convened at the beginning and end of the MFF negotiations (LINK).
Bazoches-sur-Guyonne, 19 October 2025
Pier Virgilio Dastoli