ETUC priorities on the Post-2027 EU budget and the next EU multiannual financial framework (MFF)
Adopted at the Executive Committee Meeting of 15-16 October 2024
Context
In view of the significant geopolitical risks and external threats, it is essential that the EU budget ensures the EU remains united in tackling challenges related to social progress and reducing inequalities between Member States. During the period 2024-2029, the EU and its Member States need to secure additional resources to strengthen territorial, regional and social cohesion, ensuring quality jobs and the just transitions of our societies. This will require an increased and better tailored EU budget, and an EU-financed investment facility dedicated to develop social and environmental assets and infrastructures.
The Open Strategic Autonomy sets new common objectives for the EU, supported by the MFF, its magnitude calls for increased resources. However, further resources must also be allocated to preserve rights, cohesion and solidarity, in line with the EPSR and La Hulpe Declaration, to offset the risk of inequalities as the internal market deepens.
The ETUC is keen to an early contribution to the institutional discussions and anticipate policy developments on the post-2027 EU budget, by timely drawing the trade union milestones vi-à-vis the new Commission.
ETUC demands
Values: The rules governing the use of EU funds must ensure compliance with the rule of law, democratic principles, fundamental human and workers' rights, EU acquis and the highest EU social standards. In line with the ETUC position “Towards more social and democratic rules for the EU funds” and the ETUC resolution on “Industrial policy for quality jobs - Social conditionalities for social progress” and in continuity with the trade union victory of EFFAT with the renegotiated CAP, social conditionalities must be guaranteed. Social conditionalities are even more urgent when more public resources are allocated to business: they must be accessible only to employers who ensure quality jobs, respect employment standards and enhance fair labour practices. The ETUC also reiterates its call for a revision of the EU public procurement Directives to ensure that public money goes to organisations that respect workers’ and trade union rights, that negotiate with trade unions and whose workers are covered by collective agreements.
Policies: The competitiveness agenda can be positive but there must be no disproportion with respect to the social agenda (Annex n. 10). The EU must adequately fund upward convergence, fight inequalities, have greater cohesion across all European regions and horizontal principles, including gender equality, equal opportunities and non-discrimination, consistently with needs. It must support investment in green policies, just transitions and fair economic policies. Competitiveness must be based on innovation, public investment, public services, fair and progressive taxation, investment in inclusive and high-quality social protection, industrial relations and social dialogue, quality jobs and good living and working conditions.
Budget: The EU post-2027 MFF must be increased to meet both known and unforeseen needs (Annex 5). Additional own resources must ensure the long-term financing of the EU budget, essential to sustain the Union's initiatives equally benefitting all Member States and prevent any further burden on workers and pensioners.
The social agenda must be supported by appropriate and need-based funds: in particular, cohesion and structural funds, and especially the ESF+, must be increased and strengthened in order to invest in all regions, strengthen the social dimension, thus the single market and the EU competitiveness. The next MFF must also significantly support youth, and ensure the continuity of and reinforce Erasmus+, that also supports the mobility of youth, teachers and educational workers.
Also funds crucial to manage key transitions must benefit in priority from budget increase consistently with the needs, in addition to and in coordination and coherence with cohesion funds. The Just Transition Fund and the Social Climate Fund, among others, are underfunded. The EU must ensure these are confirmed after 2027 with more resources, broader scope and revision through social dialogue. It has to tackle energy and mobility poverty, address the social consequences of climate policies and support workers and households. The ETUC also calls for permanent EU funding for national and trans-national trade union counselling services for mobile/migrant workers.
Appropriate resources for crises management must be allocated to cope with global shocks, on top of all other funds: the post-2027 MFF must not repeat the mistake of withdrawing funds that are necessary for cohesion policy to cover emergencies. Moreover, the EU's economic and social resilience should rely on the establishment of automatic stabilisers designed upon positive experiences such as SURE.
An EU-financed permanent instrument to maintain public investment at competitive levels is needed. The recent RFF based on joint EU-borrowing through EU bonds, is an inspiration to build this instrument. The Von Der Leyen’s proposal for an EU investment fund for clean industry is a positive step, but a broader facility should support public/social investments, particularly in the fields of the cross-border infrastructure, completion of the energy union, in the industrial sector and reskilling and training. Also, such an additional instrument must not be implemented at the expense of existing ones, but complement them in a meaningful way.
The MFF resources must not replace national spending commitments for social objectives, in particular those related to the just transition, labour market policies and social protection schemes. The Porto targets and SDG indicators should guide these investments, aligning the EU financial strategies with broader social objectives.
Governance: An EU's increased budgetary capacity should be accompanied by political improvements in priority management: defence and competitiveness, for instance, should not be prioritised above social cohesion and enforcement of EU social legislation.
The EU needs more effective political power to manage more complex challenges and increased resources, with unified and responsive EU decision-making. There is an opportunity to revise the EU decision-making processes towards more transparency, decisiveness and democracy, and areas of EU competence in a way that is more respondent to todays’ needs.
The MFF should contribute to establish 'European common goods and services', encompassing not only defence, security, competitiveness and energy autonomy, but also social priorities, poverty and inequality eradication, ageing in dignity, pensions, health care, education, food security and housing.
A democratisation of the budgetary process must ensure greater involvement of the European and national parliaments. The partnership principle must be strengthened and enshrined into EU law beyond the existing scope of the Code of conduct. The meaningful involvement of social partners must be guaranteed in the design, the implementation, the follow-up and the evaluation of funds, including technical assistance (TSI) especially in cohesion-related expenditure. Consistent financial resources must be allocated for capacity building, in order to empower social dialogue both at European and national level, to enhance social partners’ potential and the role of social dialogue, including in neighbourhood policies, enlargement and development cooperation.
"Reaction to the possible restructuring of EU budget
The proposal on reorganisation of MFF raises many concerns that must be addressed.
The new design of the EU budget foresees only 3 major funds; Single National Plans; European Competitiveness Fund and Strategic Funding approach aims to remodel the MFF along the lines and logics of the Recovery and Resilience Facility (RRF).
The ETUC stresses that before any reorganisation of the MFF, in particular if this would have any impacts on the ESF+, cannot be put forward by the Commission without a dedicated and informed social partners consultation.
Any proposal for MFF reorganisation must be the result of such consultation and must in any case address the following key concerns:
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Social, territorial and economic cohesion funding and policies, as well as ESF+ must be safeguarded, and spending for social progress objectives must be increased, including supporting quality jobs, promoting social dialogue and collective bargaining, capacity building for social partners;
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Proposed RFF/NGUE style of financing needs to be assessed in terms of accountability, budgetary control and enforcement of conditionalities (rule of law, public procurement and social conditionalities). The greater power to national governments could risk weakening the regional and local dimension, that already lack the resources and control over need-based interventions;
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The reorganization risks pre-empting the political debate needed on the competitiveness fund, which must first identify the industrial policy we need, the role of public investments and how to match competitiveness, social fairness and environmental protection;
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The MFF should not be linked to the European Semester process. Social convergence and cohesion policies cannot be traded off to contingencies of fiscal consolidation and negotiations between Member States and the EU Commission on reforms and investments."