Von der Leyen calls for EU budget based on NRRP model, linking funds to results

Brussels – No more ‘helicopter’ money or funding based on good intentions, and no longer the ‘everything all at once’ formula. Starting in 2028, the system will change: EU budget funds will be disbursed to member states gradually, only after achieving concrete results. Ursula von der Leyen wants to transfer the model of the National Recovery Plans (NRPs) to the multi-annual budget (MFF 2028–2034), linking financing to objectives and milestones. The President of the European Commission presented her reform at the EU’s annual budget conference, where she announced the proposal for change.

“The new budget will be faster, focusing not just on how much is spent but what is delivered for our citizens and businesses,” von der Leyen said. It is here, and for this reason, that “we will rely on our recent experience in terms of milestones and targets” underlying the use of the Recovery Fund, which finances the NRRPs.  “Each tranche of funding will be disbursed when agreed objectives have been achieved. Because this is the strongest incentive to get things done.”

Spend well, efficiently, and without waste to ultimately have what it takes to improve the economy and everyday life. Within this approach, a new structure is considered too rigid, overly inflexible, and, therefore, not very functional. “Today, 90% of the Budget is pre-allocated from the start,” the president of the community executive noted. “ In other words, today, we are working with a budget designed in the years 2019 and 2020.” The EU is, therefore, working five years later than planned, and the current model does not allow for timely action on challenges, especially sudden ones such as climate or geopolitical ones.

“The new budget will be faster, focusing not just on how much is spent but what is delivered for our citizens and businesses,” von der Leyen said. It is here, and for this reason, that “we will rely on our recent experience in terms of milestones and targets” underlying the use of the Recovery Fund, which finances the NRRPs.  “Each tranche of funding will be disbursed when agreed objectives have been achieved. Because this is the strongest incentive to get things done.”

The Commission, therefore, wants budgetary “flexibility.” Von der Leyen stresses the need for “a  more flexible, agile and responsive MFF.” Less pre-allocated money and easier to use. In this debate, the College of Commissioners is considering an operation as innovative as it is radical: in the impossibility of reaching a degree of spending flexibility considered satisfactory, the duration of the common budget could be shortened — no longer seven years but perhaps four or five years. The idea of the duration is not there yet, but in the document on the orientation debate on the topic, the idea emerges within the College.

Von der Leyen is keen to note that the research program will not disappear in this review and reform process. “Horizon Europe will stay as a self-standing program,” she assures. “It is an outstanding brand – the most renowned research program worldwide. But it will be tightly connected to our Competitiveness Fund” to better respond to new needs and the new twelve-star agenda prioritizing competitiveness.  “We need a seamless flow from fundamental research to applied research to start-ups to scale-up,” she stresses.