Committee on Budgets Ordinary meeting
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BUDG European Parliament
Follow its sittingsSpeaker 2
Therefore, the budget of Digicom in 2027 foresees only a small increase of 0.99% compared to the overall request on 02/19/33. I would like to point out to members to bear in mind a responsible level of financing and financial predictability for the European political foundations, given the fact that two new foundations have been established. Unfortunately, the political foundations and their work in observing, analyzing, and contributing to the debate on European public policy issues are sometimes forgotten. Finally, I want to highlight the support from the bureau for enabling a €500 aid per month scheme for trainees based in Luxembourg to cope with rising housing costs. And we all know that housing in Luxembourg is extremely costly.
And if we want to continue offering young people the possibility of a traineeship, we need to help them financially. So I think that's also a very important social task: we have to give the opportunity to the lower income ranks, especially to trainees, to be able to stay in Luxembourg. Thank you very much.
Speaker 1
Thank you, Vice President Ferreira, and I pass the floor to Vice President Lopez. Please. Thank you.
Speaker 3
Thank you very much, Chair of the Committee on Budget, Mr. Van Overveldt, their Vice President Berhagen, their Secretary General, and their colleagues. I'm happy to be here once again in this committee together with Vice President Berg Haagen and the Secretary General to present the estimates for the Parliament for the 2027 budget, whose ultimate goal is to strengthen our capacities as a legislative body and as a chamber of representation of the European citizens. I would like to thank the Secretary General and all the services involved for the extensive and crucial work reflected in these documents, which have been given to all of you and which I am sure you have carefully examined. As you have seen, this budget is stable compared to the previous one of 2026, which includes increases that are in line with previous years. Also, in the core business of this institution and the strategic goals for this mandate.
The total proposed increase for the 2027 budget is €60,600,000, which represents an extra 2.33%. Out of this, it has been mentioned that we had previous budgets with 5% or 6% increase. Out of this €2.33 billion increase, we have €0.33 billion that are statutory financial obligations, €2.01 billion, and then €27.3 billion that are non-statutory expenditures. In addition, like in the previous four exercises, the parliament is not requesting new temporary or permanent posts. This is something extremely important in terms of political analysis, also for the budget of this institution.
As you can see, a very significant part of the budget is our obligations in terms of salaries and remunerations, which increase automatically with the indexation. A positive note is that the pressure exerted by inflation in the past years seems to have moderated and therefore provides a more stable and predictable environment for our finances. I want to highlight the focus of this budget on strengthening our core functions, continuing with the deployment of technological advances in our working methods, and enhancing our cybersecurity to ensure that we can do our work, protect the sensitive data of our process, members, and staff, and guarantee the overall independence of our house. Another important part of the budget is the expenditures on infrastructure, which are very well detailed with significant and necessary upgrades to our premises. Now you know we have new strategic buildings based on the consolidation of our portfolio, but also preparing the works for the SPAC renovation.
It has been mentioned by her, and I completely share her point of view, which will be the cornerstone of this mandate's project. It's extremely important for the well-functioning of this house. It's legally mandatory, and it was unanimously approved during the previous mandate. We are looking forward to starting to work with all of you to improve this balanced proposal and to complete it with your constructive suggestions. The budgeting task is not an easy task and perhaps one that does not receive as much media attention as other committees do, but it is a vital element for making sure that we can do our job properly and that everything in this house functions smoothly.
Rest assured that Vice President Berhayen and I will continue working with the Secretary General and with all of you in the next weeks, with the greatest constructive spirit, to conclude the 2027 budgetary procedure in due time. Thank you very much.
Speaker 1
Thank you, Vice President Lopez. I pass the floor now to the Secretary General, Mr. Giotchetti.
Speaker 4
Thank you, President. Thank you for the invitation. The disadvantage of having two very capable vice presidents is that they said everything I had to say. So, nevertheless, I will maybe touch upon some aspects. First of all, next year will be a normal year for parliament.
We don't have major events, nor do I hope for any in the economy and so on. Inflation is under control. So, this is a typical budget for a typical parliamentary year. As recalled by the two vice presidents, it is a very, let's say, realistic and modest budget in the sense that we try to do with what we have without going too much beyond the 2% foreseen by the framework of the MFF. So, 63% of this budget, as was recalled, cannot be touched because these are statutory obligations.
And where we have a margin is the other part, which is the non-statutory obligations. Of course, we have a lot of things to do. We have a project. We have initiatives. We have needs for members, and we try to finance them with what we have.
And of course, I understand that when we have the budget reconciliation, we will probably have to cut a little. But I want to be clear: I don't like the Marrakesh technique, which means asking for a lot in order to get less. What we have done is, let's say, a realistic calculation of what we need in order to finance our priority. Vice President Lopez mentioned cybersecurity. We will have an increase of 55%.
So we passed from €8,300,000 to €12,900,000. You will remember that in the cybersecurity regulation, we have a target of 10%. This target, however, is not fixed in time, in the sense that there is no date or deadline by when to reach this target. And this target is not even, let's say, obligatory. It's not a shell. It's a kind of recommendation to reach 10%.
And we will do it in the coming years. Now, as I say, we are at 8.25%. We will be in the budget for 2027. So the target will be reached in the next few years. We have to do it gradually.
Of course, we have another priority area for the administration, but for the institution as such, it is the digital transformation. And this includes, for instance, support tools for legislation, modernization of applications, managing visitors and visitor groups, or the restructuring of the Euro Parliament website. Spark, of course, has to be mentioned, even though in 2027, we don't have particular budgetary needs because, as you know, the decision was taken to apply Article 272.6 of the financial regulation, which means that we will finance the refurbishment of Spark through loans. As you know, we have requested a loan from the European Investment Bank, and the final decision is expected to be taken on March 15. Of course, the investment bank will not finance 100%.
Normally, they go up to 50%, and I hope that we will get 50%. And, of course, the rest will be financed through loans on the private sector market. So, on the Spark, I have to say we are on a good track. Of course, we have not yet started, so you will say it is easy to be on the right track. But, I mean, all the preparatory steps were concluded.
We have a plan to relocate the people that, at present, occupy the building, which are nearly 800 people. We have rented a building to temporarily host these colleagues and this staff of political groups. And therefore, I think that we have started in the right way. Of course, I do not underestimate the value of the project, but the intention is that we keep the budget and the timing. I have to be very clear because I already hear people saying the cost has increased.
Fake news, the cost has not increased. And we will also include in the contract for the constructors penalties for delays and so on. Also, bonuses for work done in advance, which are very unlikely. But I think if we are really following it every day, we will be able to keep both the timing and the budget. One maybe one word on the additional voluntary pension funds because, as you know, the bureau has decided to adopt some measures.
One, to cut 50% of the pension; the other, to increase the pension age from 65 to 67, and then to freeze the indexation. And, one week later, we had a lot of former members taking us to court. But in December, on December 17, the Court of Justice confirmed the legality of what we did. And therefore, I am very happy, and I'm very grateful to the bureau, because this allows us to save 228,000,000, which we would have had to pay if we hadn't done this. Of course, the situation is not completely solved because the fund remains in an extremely precarious financial situation, and the bureau is currently analyzing the course of action.
And, of course, the budget committee will be informed as soon as the bureau takes any other decision. Finally, I would mention the 6,000,000 reserve, which is proposed in the budget as always. Of course, our reserve should be a little higher. But, okay, I think we can live with 6,000,000 of reserve. So, President, I would conclude here.
And, of course, I would be happy to answer questions if they are not too difficult. Thank you.
Speaker 1
Thank you for this introduction or introductions in plural. I pass the floor now to our 27th rapporteur for the Parliament's budget, Mr. Haji Pantella. Please.
Speaker 6
Thank you, Chair. I would like to thank the vice presidents and the secretary general for their presence today and for their comprehensive presentations. Cooperation and coordination are very important to ensure a sound and balanced outcome for Parliament's estimates. I would also like to thank the Secretary-General for the constructive proposal, which provides a solid basis for our work. We have already begun examining the estimates and had fruitful discussions with several DGs to ensure that any adjustments are duly justified and aligned with the services' actual needs.
I am confident that, in coordination with the shadow drivers, we will reach a balanced outcome while ensuring that the increase in non-stability expenditure does not exceed 2%. We still have some doubts on specific aspects, and I would therefore like to ask you some questions for clarification. Most of the clarifications and questions were answered during your presentation. Cybersecurity. First, cybersecurity remains a top priority.
We must ensure that Parliament is adequately equipped to address evolving threats, while also guaranteeing that budgetary allocations are proportionate and based on real needs. However, we must also ensure that the amounts are reasonable and meet the real needs. Given that the proposed allocation for cybersecurity increased significantly by 55%, could you clarify whether the administration has the capacity to effectively absorb and implement these additional resources? Secondly, regarding the SPAC, the secretary general answered most of our questions regarding the financing. But I would like some more information regarding the rent: how much rent would be paid for the new buildings, and also, what is your planning regarding the meeting that will take place in the premises you have found?
Thirdly, could you please provide us with more information on the action plan for administrative simplification? When do you expect the full implementation of the plan, and what are the associated budgetary implications? The concept of the Europa experience has been revised recently. Two Europa Experience Centers will be open in 2027 in Munich and Bratislava, but seven capital cities, including Nicosia and Lisbon that we have here, do not have Europa Experience Centers yet. Could you explain how the revised concept is expected to generate long-term cost savings?
Speaker 7
Additionally, what are the plans for the capitals that do not yet have Europa Experience Centers? Finally, how do you foresee the role of artificial intelligence in the application of multilingualism? Thank you very much.
Speaker 1
Thank you. We now go to the shadow reporters for S and D, Ms. Gomez Lopez, please.
Speaker 9
Thank you to the Vice President and the Secretary-General for your presentations. I'd like to start by mentioning something with which the Secretary General is quite familiar. This is an ambitious proposal when it comes to the non-statutory expenditure, 89%, and we will need to be able to focus on this to ensure that the budget is okay. Now, when we look at what happened in the budget last year, we're going to tighten our belts to ensure that everything fits into the budget. Now, when it comes to specific questions on statutory expenditure, there are a few questions which we've noticed.
Speaker 8
Do you know the Bureau decided to freeze certain expenditures, but we've seen an increase in the draft budget? At the same time, the per diems were also restricted to change for parliamentary systems based on the modifications to salaries. But there's a contradiction here because, for the first time, the European Parliament and the Secretary General are presenting a reduction of this proposal compared to 2026. Now, of course, it's our duty to remind you that these are statutory forms of expenditure. They need to be planned, and they must also contain contingencies if they are not enough, taking into account that there will be an adjustment to salaries, increasing salaries in 2026.
When it comes to the SPAC renovation, we know that it will be done via a loan. But we wanted to ask you if you could explain what the profile is for repaying that loan in the long term? And also mopping up: will this be enough in the upcoming years to deal with this? On the political groups, '22, and now, I'm sorry, just very briefly, then two quick questions. On the political groups, they're proposing a 0% reduction.
So the 0% proposal, which is actually a reduction. This parliament created a committee on the democratic Democracy Shield. We believe that supporting foundations can help us defend democratic values. Last question: participation of APAs in missions. Year after year, in the plenary, this is approved.
We need to resolve this question. In specific cases, when there is no adviser or no other form of support for MEPs, we need to be able to have the APAs attend the missions as the statute recognizes.
Thank you.
Speaker 1
Of absence of conflict of interest. We don't have it from your side, so you will have to wait until after the other shadows.
Speaker 14
I'm quite convinced that I filled it in yesterday, but all right. I will withdraw, then.
But it's for you to do it.
Speaker 1
Okay. Apparently, it is confirmed that you filled it out. It's okay. It's okay. It's okay.
Speaker 13
So you have had 3 or 4 emails about this. And, you know, at some point, I've tried to fill in just whatever. But we only received.
It apparently happened yesterday evening.
Speaker 12
Thank you very much. Thank you very much. If no one has a problem with it, I'll stay in touch. Chairman,
I think the explanations given are very interesting indeed. Thank you very much for making them available. But if we look at the comparison to the previous year, one wonders how we can actually implement the budget, bearing in mind the difficulties. I think we've already overshot our budget, it would appear to me. I have worked a lot in industry and also in the government sector, and when you're talking about a state budget or private market budget, you have to stick to it.
We're talking about just a 20% increase. And if we don't use it or take it up, it will be lost or used by other institutions under the budget heading. And we shouldn't forget that this is a burden as far as the European taxpayer is concerned. So, between expenditure on the one hand and revenue on the other, it's a little difficult to see how all this is going to work out. I have the feeling that for 2027, things are not going to work out favorably.
We've received a technical note or memo recently where we're informed that 4,600,000,000 of flexibility will be built into the budget, but that will lead to an increase in debt. We're not talking about savings, after all. So, quite honestly, I don't see how this is going to work out. And for 2027, the figure indicated includes all the events and visits. There's a whole host of activities that are going to have to be funded.
My group, for years now, has been issuing warnings, saying that we need to be a little more prudent, a little more cautious, as we need sound management. I think, between the APPS, D, and others, we are allowing expenditure to run out of control. And there is not enough money at the end of the day. But in spite of that, it appears that the parliament is launching fresh initiatives. We're seeing more staff and more activities of all kinds, and I think all of that needs to be funded.
Whereas, in fact, we don't have sufficient money to fund all these. These are the general comments I wish to share with you, and I'll come back possibly to raise more technical issues. But those are my comments of a more general nature. I think we need greater moderation in our general approach to the budget.
Renewal.
Speaker 16
Thank you. Thank you very much, indeed, sir. I'd like to thank Vice Presidents Sabine Verhaen and Javier Lopez for their presentations, and the statement we've heard from the Secretary General, Alessandro Cioquetti, always very much to the point. We will be working together with Mr. Hajibantella, our rapporteur on the budget. I look forward to that.
Speaker 15
Rapporteur, you've talked about your desire to cooperate and coordinate with us, and I think you've already shown that. So, I think that is your working method. I welcome that. EBP, S and D renew working to achieve a reasonable budget, but one that will nevertheless enable our institution to go about its job, organize debates, and inform our citizens of the work of the European Parliament in a European spirit. So, I welcome this excellent cooperation, Mr. Kyokete.
I think our aim is to get through just under 2%. Other expenditures might overshoot that. So it's the same exercise each year. I think we need to find reasonable savings to enable the house to comply with its obligations. So I would subscribe to the questions posed by the rapporteur and my colleagues from the Socialist group.
Perhaps I could stress or concentrate on one or two more technical elements or some lines that are extremely important, such as salaries and remuneration. Could you share with us the details of the calculations? How is it that some items increase while others decrease? There's 12:20, the line in the budget. So, the person is placed on leave in the interest of the service.
It seems to be a bit random, but then 1,200 remunerations, pensions. So, perhaps you could share your calculations with us. Then, there's the issue of translation. That's something that we will need to look into: interpretation, translation, and the role of artificial intelligence, as the rapporteur has said. When it comes to current business, the number of meetings has possibly increased; there is a significant high end, as was said.
So perhaps we could have 1, 2, 20. Then, there's energy consumption. We're going down. Luxembourg, Strasbourg. But not in Brussels: energy expenditures.
What's happening? The energy mix and energy efficiency are not exactly the same thing. So the question is, can we have a little more information on that overall line within the budget? Otherwise, we work in this excellent spirit of cooperation. I think we want a budget that works, that is operational, that enables us to be ambitious, but that is serious and effective at the same time.
So, thank you.
Speaker 17
Yes. Thank you, Chair, and thank you for the presentation and also for this opportunity for this exchange. And I think it's a good start to come to a joint budget for 2027 together with the colleagues from EPP, S&D, and Renew. I want to second a little bit what Rabota Hajipantilla already mentioned: in the non-statutory cost, we're seeing right now an increase of 2.8%, while we know that in the end, we will probably have to limit ourselves to 2%. So if we don't bring this down to 2%, we run the risk that the commission is going to do it for us.
So, this is probably not the favorable solution for us. So, in this light, I have three different questions. First, in line with our position for this mandate to exercise maximum restraint on non-fagility spending, can you please explain the disconnect between our current investment strategy and the bottom line? So, specifically considering the Spark building works, which is our most significant investment. As already mentioned, it is being financed via a loan.
So why are we still seeing such a high increase in the non-statutory operating costs, despite this not being included in the calculation there? Second, it has also already been mentioned in one way or another: the IT and digital sovereignty in Budget Line 21 101, which also includes Computing and Telecommunications. We see an increase of almost 10%. Is this growth directly tied to the procurement of European solutions to bolster our digital sovereignty? So, if this is the case, it is explainable.
If not, has the administration conducted a formal risk assessment regarding our continued reliance on non-European providers? Because, unless I or we have missed it so far, this time the preliminary draft estimates lack a dedicated IT chapter to explain these figures. So, some clarifications are definitely welcome. And on the cybersecurity plan, we do need a clearer roadmap. For example, what are the projected long-term budgetary impacts of this plan beyond the current financial year?
And the third part is staff travel and missions. So, the fourth largest item increase in this budget is linked to staff missions and travel. In this era of hybrid work and advanced digital collaboration tools, and knowing also, of course, that the Strasbourg travel is not exactly a PR success for us, how are we to justify this upward trend? And should we not rather focus on decreasing our overall mission-related expenditure there? Thank you.
Speaker 1
Thank you. I don't see anybody from the left or ESN. Any other MEP wanting to take the floor? If Monsieur Sanchez, one minute, please.
You have 1 minute.
Thank you.
Speaker 18
Thank you very much, Chairman. Thank you. Just wanted to come back to the SPAC renovation project that was approved in 2024, actually under the previous term. So we have over €300,000,000 for the actual renovation work, and in 2027, we'll see over €50,000,000 for work. But these are not actually part of the 2024 budget.
Speaker 21
Operational work will be funded by loans. But there is a user contract for 8 years covering a figure of €30,000,000. How can we justify €105,000,000 for a long-term budget of the parliament when there is a call for budgetary discipline? And how can we ensure proper transparency on all the costs for which the taxpayers will have to foot the bill? Thank you. Thank you very much, Chairman.
Speaker 19
Thank you very much, Vice President and Secretary General, for being here. My question is also about the SPAC building and the loan strategy. You mentioned that half of the loan could be covered by a loan from the EIB. Do you have any idea about the interest rate that has been offered on the loan? And the second question, this is the most important one.
Speaker 20
You mentioned that the other half would be funded through bank loans. That's quite surprising for an institution that issues huge quantities of eurobonds. So, what is the strategy of the commission here? Euro bonds and the issuance of euro bonds could be a strategy for funding this bank renovation.
Speaker 1
Questions and remarks for our three distinguished guests. I start with Madame Verhae, please. Yeah.
Speaker 2
Thank you very much for the question. First, I would like to go to the Arupa Experience question because it is also part of our work. Yes. The rollout of Arupa Experience was set, I think, two years ago on hold to check because we had to renew the concept for the Auhopa Experience. As you know, in the past, we had a structure for Auhopa Experience with this 360-degree cinema and other things that are, meanwhile, a little bit outdated.
So, we made a completely new concept where the needs for buildings and the spaces that are needed are different. We know that, for example, the role-playing game is one of the most successful elements of the Oropa experience, and there we need a different room program than in the past. And that was the reason why we, until this concept was fixed or elaborated, did not work on new Arupa experiences, because they should have been done in the new concept and not follow up with old concepts that would not be realized in the end. So now we are step by step taking a look everywhere where we have to renew contracts, for example, also for the EPLOS, and where we can go together with the commission. We are searching for new places where we can integrate the Oropa experience into the cons in the new concept, and that takes a little bit of time.
I know that we were, for example, in Riga just in January to check if we could find a building that fits the new concept, the new needs we have, and the needs of the EPLOR and the commission's offices. So we are working on these programs for a proper experience. When it comes to the question, what is it about the rooms there? Then we had the question on the 2020 budget. I said it very clearly because we have, let's say, a budget line, and it was always said to protect the working ability of this house, to protect the parliament in its functionality, that at a minimum 20% of the budget for the institutions is spent on the parliament. Because otherwise, other institutions can go and cut the parliament repeatedly and reduce it.
And especially, sorry, the person who asked that question is not present anymore. But if we reduce the work ability of the parliament, we reduce our own efficiency and our own possibilities to make legislation. And that is the reason why I insisted on not going under 20%, because it will be welcomed by other institutions, as it will never be a saving since the budget lines are there. And that is something where the Commission and the Council will take the money to address things that are out of our control in the short term. And I think we have a lot of work to do.
We have to take our work seriously as parliament, and that is the reason why we also need serious budgets that have a minimum. You have always requested, for example, that assistance may also travel on missions, that we have better support for visitor groups, and that we have a sustainable and good building approach. These are all costs that have to be covered by the 20%, and that's the reason why I also insist on the 20% budget. Thank you.
Thank you. Mr. Lopez, please.
Speaker 3
Thank you very much. I will do three or four comments about your questions, and I'm sure I will also share the details of the answers made by the secretary general. First, European experience. Since you mentioned it, with the new model of the Europe experience, do you want to decrease the cost? No.
This is basically the question. Our idea with the new model of the Europe experience is to try to have a more efficient Europe experience. And this is what it means: well, it means less cost, more visitors. This is what we try to do on both sides. With the new model, like what we made as analysis with the help of the staff, the goal is to know what is working and what is not working, especially where, and try to replicate the model and the exercise, the content that is working in our European experience that is a success now.
And at the same time, decrease the resources that we spend, especially taking into account that we learned that paying more for renting doesn't mean having more visitors. This is something that we have learned during these years. No? And something that we also saw as a model of success is when we have partnerships and agreements with local, regional, or national administrations that rent the space. Usually, this means fewer resources because it's cheaper than the private market and also, automatically, more partnership with the local authorities rather than more content or more visitors.
And then, for this reason, it's related to the new model; it's not directly related. Okay. We want less money for the European experience. No. But we want a more efficient European experience.
And how to have fewer resources spent per person, how to have better content and more visitors, and how to be more efficient in terms of renting. No. And especially for the new ones, what it means for the newest ones is that we are looking for this model of partnership with opportunities brought by administrations, so that it could be cheaper and, at the same time, have potentially more content and be more integrated into the serial life of the city and the country. This is a European experience because it was also a long discussion in the working group on buildings. Well, it has been made on a question that now it's not the person who made it, about the budget.
To be honest, the comment was really general about the budget in the EU and so on. Well, we are discussing the budget of the Parliament in 2027, not other things. And what we are discussing today is a prudent, balanced budget. If you take into account the level of inflation in the last years, these institutions, first of all, we don't have new posts or new people contracted in general, in terms of number of people. Second, if you compare the increase of the budget of the parliament over the last four years and the level of inflation that we had in Brussels and in Europe during the last four years, in fact, we decreased the budget of the parliament.
Like this, this is what we made. And, if I think, like, this is what we made last year. And if I think about how this parliament works, and you know, like me, because you have the same experience as me as members and consumers of the service of this parliament, I think we have an efficient administration, an efficient institution. Obviously, we have things that can be improved, but if we think about the cost for the citizens and the influence and impact that the loss produced by this parliament has, I think it's an efficient administration. And the last thing is, I think we are able to provide a high level of quality of services as an institution, with human resources capabilities, and at the same time, we don't have a luxury administration.
I don't feel like that, to be honest. And I think we are quite prudent and balanced on this side. And my last comment, sorry, it will be about the SPAC. And my last comment: the details will be provided by the Secretary General. But my comment is, well, we don't do this because we like to do it.
Like, face this huge amount of disturbance financially, economically, and for the proper functioning of the house. This is not something we enjoy. Yeah? We do it because we have to. And I think we are facing this huge operation with the best of our technical assets as an administration.
Speaker 4
Thank you, President. So, Mr. Agipantella, you asked me about cybersecurity and if we have the capacity to absorb it. Well, concerning cybersecurity, I think that we have to have the capacity to absorb it because this is too important for us and for everybody nowadays. If we don't have the capacity, then we have to build the capacity to absorb it because I want to avoid what happened in the past and what happened to many other institutions in Europe, such as cyber attacks and so on. And, of course, I know perfectly well that we can never be 100% certain because the first thing I learned is that you can never have 100% certainty. But what we can do is implement the cybersecurity regulation to follow the indications of CerteU, which is the common structure in institutions dealing with cybersecurity.
Therefore, we have to do our part, and our intention is to do it. And then, of course, we can never prevent future incidents, but at least we can say that we did everything that was possible. Concerning the administrative simplification, I just want to mention that I established a unit on this because I think that we need to see the administration in its entirety and to see where we can improve our processes and our cooperation among entities to avoid duplications that we had. So I asked the director general to come forward with assessments, and then we put together this simplification plan. And the aim is, of course, to facilitate life and also to save resources if possible.
I mean, the process is ongoing. And as soon as we have the first result, I will, of course, also inform the committee on budgets. Missus Gomez, technical questions, but very pertinent. Indeed, we have taken into account the preparation of the 2027 budget, the indexation of members' allowances, in particular the travel and daily subsistence allowance, which was increased by 2.5% as of 01/01/2026, and concerning the ordinary travel expenses and the other travel expenses. And the adjustment of the monthly allowance for trainee members, which is financed by the monthly amount of parliamentary assistant expenses.
And this was adjusted with effect from 1 July 2025, following the annual adjustment applied to the remuneration of officials and other servants of the European Union, which is plus 3%. You also ask why there is, let's say, an increase in the JR, and why the bureau decided not to. And the reason is very trivial, I would say, because the project of the budget was done in December. In December, when the bureau was supposed to decide on the indexation of JR, the decision was postponed to January. So it was too late to incorporate it in this document.
But I have to say, the bureau has not yet decided because the decision was taken not to index, but to find a mechanism that could be used every time instead of asking ourselves every year whether we increase it or not. The decision was that the bureau will discuss and see what mechanism can be applied. So for sure, if the bureau decided to take into account also the previous indexation, for instance, then we need the money. If not, then we don't need the money, but it's better to have it than not to have it. Concerning the upper budget line, this is an apparent contradiction, but it's not, because indeed what we have done in 2025 and 2026 is a very prudent forecast of this upper budgetary line, meaning that we don't know at the beginning of the term how much assistance the members will have.
So, for the first years, we stay high in order to finance even the extreme case, which never happens, where the members use all their possibilities for APAS. And then, of course, we have to see the execution of the budget. And the execution of the budget has shown that there is a decrease of 3.7% compared to 2026 because we have seen that the budget line is not used. So in theory, the members have the possibility to hire, to make full use, but in practice, this is not done. And we see this only after one or two years to observe the trend.
And this is why we based ourselves on the execution of the budget, and this is why we have decreased it. On the Spark renovation, Monsieur Sanchez, Jose Bien.
Mister Sanchez, I know you do not like this project. As the vice president has said, we do have this project. Obviously, we have not won the lotto, as it were. The problem is that we have no other possibilities because the building can no longer be used. It's a building that was built in the mid-1980s and has not been renovated since.
In certain areas, we don't have hot water running anymore in the Spark Building due to an issue with the taps. And you know that a few years ago, part of the ceiling fell in the hemicycle. Obviously, we're here to do things, not only things that we want to do, but also things that we don't like so much, but that are necessary. Obviously, we've had discussions that have gone on for years. There was one idea to completely knock the building down and build something new, but we've gone for a more modest option, which is to leave the building in place, renovate it, and also bring it up to modern standards when it comes to energy saving and that kind of thing.
Mister Tegatoff, I absolutely agree on the necessity of becoming European-oriented in our choices. It's clear that this is a strategic decision, and I think that we will progressively get there. But, of course, it's not easy because, in certain fields, we are completely in the hands of others, let's say. But I can reassure you on the intention, whenever it is possible to go for European solutions and also to push for these European solutions to be created, because sometimes, as I say, we do not have them. The report, the shadow Mr. Zaelstra, is not there anymore.
On the parliament, I forgot to answer about the APA's traveling missions. I'm not your man in this, in the sense that this problem was already discussed several times by the conference of presidents, and the last decision was that one. So it's not the bureau responsible, and it's not even, thank God, the secretary general. This is very complex; it looks simple, but it's not. So, I also understand that there are difficulties.
And finally, Madam Keller.
Speaker 4
The EIB loan, we indeed asked the investment bank about the possibility of financing. The European Investment Bank can finance up to 75% of environmental projects, but this excludes buildings. So, for buildings, we can only reach 50%, which is the maximum they can achieve. The interest is not yet known, at least not by me. But on March 15, we will know the conditions according to which the European Investment Bank can give us money.
Concerning your idea, we have not explored it. Yes. I mean, we would still be on time, if I may say. I'm not able to answer. I'm not able to judge whether this is a very good idea or a nonfeasible idea.
So, I will look into that, and then I will get back to you.
Speaker 1
Thank you all three: the two Vice Presidents and the Secretary General. Thank you for this meeting. Before closing this item, let me remind you about the upcoming exchanges of views on the Parliament's budget. During the budget meeting on March 5, the Directors General of DG Finns, Com In Law, and Aitik will present their priorities for 2027. And during the budget meeting in March, the rapporteur will present their draft report.
Thank you. We go now to point number five: budget 26, section three, no transfer request. Maybe we can stop for one minute in order for people who want to leave to leave in peace. Okay. Let us resume.
Colleagues, let us resume because we are a little behind schedule. We still have to wait a few minutes for the voting time because we first have to do point number six, the budget, other sections, and more specifically the European Data Protection Supervisor's request. I pass the floor to Helmut Keller, the acting head of unit on HR and budget for the EP EDPS. Go ahead, Keller.
Speaker 26
Thank you. Thank you, Mr. Chair. Good morning to all of you. Indeed, EDPS has submitted a request for the transfer of appropriations under its 2026 budget. Maybe just to contextualize, the EDPS is one of the smaller EU institutions; we currently employ around 170 staff.
Speaker 27
So, accordingly, our budget is of a rather modest size. The main rationale for our request is based on the structure of the 2026 budget adopted: a disproportionate cut of Articles 112 and 303 by more than 70% compared to 2025, and consequently, a lack of sufficient appropriations to cover related expenditure adequately. In addition, we will lack sufficient appropriations under Article 111 concerning the remuneration of contract staff, also in a few of the five additional posts granted by the budgetary authority under the 2026 budget, as well as under Article 300 concerning expenditure related to office rent. As you may know, the EDPS is hosted in one of the Parliament's buildings, and we have just received the index costs for 2026. Against this context, we have carefully assessed how to address these shortcomings, and we identified Articles 110 and 301 as having sufficient margin for this purpose.
Speaker 26
These articles cover salaries and allowances for all officials in our establishment plan. However, as in other EU institutions, the EDPS also has an occupancy rate that is never fully at 100%, with natural staff turnover leaving a certain number of posts vacant. And we would therefore like to use these articles to reinforce the articles, as explained in detail in the supporting document that has been submitted for this purpose. Please be assured that the requested transfers would by no means undermine the timely filling of the new post granted under the 2026 budget and/or delay the filling of any vacant posts. Many thanks for your favorable consideration, and we stand, of course, ready to explain in more detail.
Speaker 1
Thank you. The floor is for Mr. Nemec, the rapporteur for the '26 budget on other sections.
Speaker 42
Thank you, Chair. As regards the first transfer request by the EDPS, I can confirm that we have analyzed it based on the initial proposal and the follow-up questions. The request reflects the challenges that we have identified in the annual budgetary procedure. So, following the cuts proposed by the commission, despite our efforts in the parliament to restore most of the cuts, we understand that certain transfers will be necessary this year, particularly taking into account additional staff posts for EDPS, for which we have fought hard in the parliament. To conclude, as the responsible reporter, I can give a positive recommendation and ask the committee to support this transfer request.
Thank you, Chair.
Speaker 1
Thank you, Mr. Nemec. Are there any shadow reporters wanting to take the floor? Okay. Then we can go to point number 7 of our agenda: the building policy, more specifically, the EBA building project.
And I give the floor to François-Louis Michaud, Executive Director of EBA, for a presentation.
Speaker 28
Thank you, Mr. Chair, honorable members of Parliament, Monsieur Laporte, ladies and gentlemen. I'm François Laporte, the Executive Director of the European Banking Authority. The authority has been established in Paris since its move from London in 2019. We are currently occupying approximately 5,000 square meters in La Défense under our nine-year lease, and we have expressed our intention to start a procurement procedure to secure comparable office space in the context of the expiry of our current lease, which will happen in 2028.
Speaker 32
We approached this process with three main objectives: first, to ensure that our premises remain fully suited to the authorities' activities, including from a sustainability perspective; secondly, to minimize costs; and thirdly, to maximize potential synergies with other European agencies in Paris. Our current lease conditions are already very competitive. We are in one of the cheapest areas of Paris. In 2024, our annual rent amounted to approximately €3,000,000, representing approximately 5% of EBA's total expenditure. The building procurement procedure should allow us to get even more favorable terms in a market that is oriented downwards, including improving the indexation conditions.
Speaker 30
We've completed extensive post-COVID space optimization. We've achieved a 41% reduction in nonproductive space, a 37% increase in effective workspace, and a 9% increase in desk capacity. On top of that, we are also having a lot of synergies with other agencies in Paris, and we plan to continue fostering as many synergies as possible. Thank you for your attention.
Speaker 34
Yes. Thank you very much. Very quickly, I would like to thank Mr. Monsieur, firstly, thank you for his presentation, and also for the very clear replies that he has given to us to the written questions that we put to him during the whole prior information process, given the request from the EBA. At this juncture, I have no further questions.
Speaker 29
And obviously, I'm going to be following the evolution of the negotiations on this file. And obviously, I look forward to listening to the EBA when they come before the committee.
Evelyne Corbière Naminzo
Yes. Thank you, Chairman. For once, we can actually welcome the desire of a European agency to rationalize its costs. The choice of the EBA to move to the area of La Défense, where the rental costs are three times lower than elsewhere, is a decision based on good sense. But there is one major inconsistency in this file.
You have said that you want to lease 5,400 square meters, which is about the same size as your current location. But you have said that you want to favor hybrid forms of working or remote working, and you have been doing this since 2022. So how can you justify to our citizens that you want to have this vast working area in service, where your working methods would allow you to drastically reduce your premise footprint? Thinking in terms of the taxpayer, I think the best way to reduce costs is physical mutualization rather than increasing the number of leases. Maybe you could bring together several European institutions under one roof so that you can cut operating costs?
Thank you.
Speaker 35
Jakos? Thank you, Chairman. In general, our group is positive with respect to this project, but I still have three questions, if I may. The first one is about the flexibility of the lease and the way EBA can keep it flexible since we've got the ESMA lease that will be running until 2035. So, this is question number 1.
Speaker 36
Question number two is about the exit costs, which are estimated to be €1,290,000 and have to be taken into account when the decision to move or stay is made. And the third question is about the space calculated per person, and we see an increase in the space per person. And the question is that we are dealing right now with 5,400 square meters. Do you have any forecast for when this amount of square meters will no longer be enough to comfortably accommodate the current number of staff or when the staff number is growing? Thank you, Chairman.
Speaker 32
Thank you for your questions. Indeed, I am very happy to answer that. So the space is, and thank you first for acknowledging the fact that we are targeting an area which is indeed one of the cheapest ones in Paris. The space is indeed a very simple answer. We first reduced the space using the meeting rooms we had.
We've been able to reduce the space allocated to meeting rooms, thanks to the post-COVID situation and the fact that more meetings are now also taking place remotely. And then we've been able to reduce that and, at the same time, accommodate hybrid work. So, in fact, there is more square meter per person, but there are fewer desks potentially used by people at the same time because of hybrid work. And we have more capacity to do so because we still have one floor, which is made up of meeting rooms to accommodate all the meetings we organize with our competent authorities and the industry in the context of our work. We also increasingly mutualize the rooms and offer them to other agencies that want to benefit from our premises.
Of course, there are arrangements to cover the cost. But we can also reduce that capacity going forward if we have to. And that's why we are asking for the same amount of square meters, because we have this buffer with the meeting rooms that we can use going forward if we were to grow in terms of staff. On top of that, if we were also to grow in terms of staff and not have enough space, even with the meeting rooms. We could also change the ratio of desks per person, with desks to be used at the same time in the agency.
So we have a number of flexibilities embedded here that should allow us to accommodate possible changes in the establishment plan. Now, on the fact that there could indeed be more rationalizations, it's something that we've been discussing with one of our main partners in Paris. They needed to move early themselves to drastically reduce their costs because they were in an area that was much more expensive and they had too much space. So, they decided to go their own way first. But we still have opportunities, and that's also related to the second question we heard now: to have breakout clauses that would allow us to work out or walk away from the lease at an early stage before the end of the 9-year period if we had to.
And then that could also offer an opportunity for several agencies to regroup and use the same premises. So, we have this breakout clause in mind that will allow us to move already after 3 years if we need to. That will be part of the procurement. The exit costs: we expect that if we had to move to a different building, the fact that the market is oriented downwards would anyway allow us to have some savings and benefit from savings that would more than offset the exit costs. And again, I think I answered the question about the space per person.
Thank you.
Speaker 1
Thank you. This closes point number seven of our agenda. So we can go to point number 8, the voting time. Let's first check the machinery. I open the vote.
I close the vote, and it is apparently working. So, the first vote we have to do is on the European Globalization Adjustment Fund for displaced workers, following an application from Belgium. Compromise amendment. No. Sorry.
First Amendment, four. Who is in favor? Who's against it? Who abstains? Adopted.
Compromise one: who is in favor? Who's against it? Who abstained? Adopted. Amendment six, who's in favor?
Who's against it? Who abstains? Rejected. Amendment seven, who's in favor? Who's against it?
Who abstains? Adopted. Amendment eight, who's in favor? Who's against it? Who abstained or rejected?
Amendment nine, who's in favor? Who's against it? Who abstained from adopting? Amendment 10, who's in favor? Was against, who abstained, rejected Amendment 14; was in favor, who was against, who abstained, rejected Amendment 15; was in favor, who was against, abstentions adopted.
Amendment no. false. Then we have Amendment One. Who is in favor, who is against, and who abstains? Rejected. Amendment 2. Who is in favor?
Who's against it? Who abstains? Rejected. Amendment 3. Who is in favor?
Who is against it? Who abstains? Rejected. And then we vote on the draft text as an amendment, with a roll call vote. The vote is open.
The vote is closed, and it is adopted: 26 in favor, 2 against, 3 abstentions. Then we vote on the budget, section three, the transport transfer of appropriations, deck two, roll call vote. The vote is open. The vote is closed. And it is adopted: 26 in favor, 3 against, 2 abstentions.
And then the budget for other sections, again, transfer of appropriations number one. Roll call vote: the vote is open. The vote is closed. It is accepted. 24 in favor, 5 against, 1 abstention.
Speaker 38
And this is a request for the building policy. This is the end of the vote. Thank you all. Colleagues, let's proceed to number 12 of our agenda: the mobilization of the European Globalization Adjustment Fund, again for displaced workers following an application from Belgium. I give the floor to the rapporteur, Mr. Sousa Silva.
Please.
Speaker 39
Thank you. Thank you, dear shareholder rapporteur, dear representative of the European Commission, dear colleagues. The bankruptcy of CASA in March 2025 led to four hundred and sixteen workers losing their jobs in Belgium, mainly in the retail and logistics sectors in the province of Antwerp. This is not an isolated case, unfortunately. Belgium has experienced a significant rise in bankruptcies since 2022, leading to the loss of around 45,000 jobs in the past 18 months, mainly in the region of Flanders. Behind these numbers are workers and families facing uncertainty.
Speaker 40
It is on such occasions that Europe must continue to show its commitment to solidarity. The current proposal will allow the mobilization of €1,900,000 from the European Globalization Adjustment Fund, covering 85% of the total costs. This proposal will finance targeted and personalized measures with a clear goal to support and reintegrate these 416 workers into the labor markets as quickly as possible. Nevertheless, we must underline that the fund is a limited and complementary instrument. It is neither a structural economic policy tool nor a substitute for competitiveness.
Speaker 39
It is designed to respond to major restructuring events, not to replace national responsibilities or compensate for structural weaknesses. The CASA example is also a strong reminder that Europe must strengthen its economic resilience. Our companies face intense global competition, rapid digital transformation, and changing consumer patterns. We need a business-friendly environment in Europe, which promotes innovation, supports technological developments, strengthens competitiveness, reduces unnecessary regulatory burdens, and simplifies bureaucratic procedures. Strong and competitive businesses are essential to sustain high-quality jobs, drive economic growth, promote territorial economic and social cohesion, and reinforce Europe's strategic resilience.
Speaker 40
Therefore, solidarity must be accompanied by responsibility and public policies that enhance Europe's long-term competitiveness. For these reasons, and to conclude, while recognizing the exceptional character of this mobilization, we support the proposal and call for its rapid, effective, and responsible implementation. Thank you.
Speaker 1
Thank you. I pass the floor to the shadows. First of all, Monsieur Germain.
Speaker 20
Thank you, Chair. We speak in French. Maybe this fund should be renamed the Belgium Globalization Adjustment Fund. I don't know if it's because you're the Chair of this committee, but maybe all of the files are related to Belgium, even when a company like Gaza has closed shops and places all over Europe. Well, I'm going to continue in English.
No, just to say thank you for the excellent report. We fully support not only the necessity for European unions to be beside the workers and to accompany them to new job opportunities, but also the need for new economic tools. And I would also add that trade tools should be used to protect our companies, together with strong support for our European economy. We will table a couple of amendments, but of course, we will support both the proposal of the Commission and the excellent report of Mr. Sousa Silva. Thank you very much.
Speaker 1
Thank you. For the record, I plead not guilty. Monsieur Chastel, maybe he is guilty. No. Olivier.
Speaker 34
Thank you, Chair. I'd also like to thank our rapporteur for his work. The bankruptcy of CASA hit the local economy hard. The company went into receivership after years of uncertainty as a result of the rise of e-commerce and recurrent financial difficulties. And this tangible European solidarity seeks to retrain some 416 workers to be laid off by the Kazza Group in March 2025.
This reconversion will entail training in situ, technical digital reskilling, and personal coaching. New Europe supports the request made by Belgium to the European Globalization Adjustment Fund to support the 416 workers laid off. The total amount is approximately 2,250,000. And as we said, 1,916 were taken onboard by the EU, the rest being put out by the Flemish region.
Speaker 1
I want to take the floor. Mister Lekova, do you want to add something? Thank you. The vote will take place at the meeting of March 17, and the deadline for amendments is March 4 at noon. Amendments are to be tabled in English only. Point number 13 of our agenda, this time also the Globalization Adjustment Fund, but for Austria.
I pass the floor to Mr. Lewandowski, the rapporteur. Please.
Speaker 41
Good morning. Thank you. One more, another very positive story behind the mobilization of the Globalization Adjustment Fund. This case is from Austria and is for €1,800,000. And the company affected is Katm Kronerife on Trunkenpolz Mattinghofen.
Once, for many years, one of the most successful motorcycle brands in Europe. Now, in November, filing for insolvency and restructuring was approved in 2025. Unemployment in this area is rising sharply this year. The application is on 1,488 workers. That is the biggest displacement in this part of Austria, and I think one of the biggest in Europe recently.
What is regrettable and indicated in the report is that the new owner of the company from India, after attempts to assist, finally decided to move operations and business to India and China, which again indicates the competitive position of Europe. So, I also strongly support a strong statement by Mr. Sausa on this point. A weak consolation is that this part of Austria is absolutely beautiful and recommended for tourism, including my favorite destination, Hallstatt, which is also highly recommended for our chair. But this is really weak consolation, and now we are going for mobilization of this fund. Amendments deadline is March 4, amendments in English only, and voting is scheduled for March 17, 2026. Thank you.
Speaker 42
Thank you, sir. And thanks to the reporter for the report, which we consider a very good basis. What is important for the S and D group is the protection of workers. At the same time, it is important to call out certain decisions of the company, which were not financially sound and in line with good corporate management. For example, the case of dividend payouts in the years 2021 and 2024, when the company had already experienced financial difficulties and had even received state aid during the corona pandemic period.
So, I just wanted to underline this point. Thank you so much, Chair.
Speaker 1
Thank you. Any other shadow or MEP wanting to take the floor? Ms. Madame Furet, Alési.
Speaker 43
Just a quick word to say thank you to our rapporteur for his very good work and to say that we will vote for it.
Speaker 1
Thank you. Ms. Filipkova, no, thank you. And Mr. Lewandowski already outlined what needed to be done for amendments, etc.
Thank you all. Point number 14 on our agenda. In January, the Commission updated the financial programming for the last year of the current multi-annual financial framework. The financial programming is the foundation on which the draft budget will be built. And it also shows what margins, if any, remain for the EU budget to respond to emerging needs and to finance political priorities.
Ms. Filipkova, you have 10 minutes, please.
Speaker 44
Thank you very much, sir. Chair. And indeed, this is basically the last financial programming of this MFF. It is a purely technical update. It is indicative, but it indeed informs the start of the budgetary procedure for the draft budget 2027.
Speaker 45
So, as the Chair quite clearly explained in the introductory part of the document, you can actually see the overview of the remaining margins, which is also quite useful to know for the start of the budgetary process. Maybe just to clarify that it is prepared on the basis of Article 40(1-2) of the financial regulation and point 26 of the inter-institutional agreement. With the draft budget '27, it is the one instance in the annual budgetary process where we actually do not have financial programming. We will prepare the full financial programming for the next MFR with the draft budget for 2028. So, the main aim of this technical update is really to take into account what has happened since June, when we presented the financial programming accompanying the draft budget for 2026.
Speaker 44
It is, as I said, purely technical and indicative. It doesn't prevent either us from proposing changes without a draft budget, or you or the council from proposing different budgetary amendments. In the explanatory part, we also summarized the changes that were agreed upon in the consultation for the budget 2026, so that we have a full picture of the seven years of the MFF. And maybe I will just very quickly run through the impact and the changes for the 2027 budget or financial programming. I'll do it one heading at a time.
But again, the changes are very limited. So, under heading one, the changes are very limited and linked to the adoption of legislative changes impacting central decentralized agencies, including the European Railways Agency, the Aviation Safety Agency, and the Agency for Cooperation of Energy Regulators, as well as the impact of the Connecting Europe Facility. There are also changes due to legislative proposals with budget impact for the European Banking Authority, the Securities and Markets Authority, and the European Chemicals Agency. Under subheading 2B, there is actually no change presented in the heading. Also, we will see a margin presented under heading 2B, which, however, does not take into account the need that we have for the uric cascade.
As an indicative amount, you might see in the text that at the moment, we foresee about 5,000,000,000 needed on top of the financial programming for the financing of the Eury Cascade. So, in principle, 50% of that should be financed from existing availabilities. But again, as usual, we will have a more updated forecast during the NGO meeting in April. Then, we will propose an amount in the draft budget, but the final amount will only be known at the time of the amending letter in October. Maybe also to mention, while there are no changes for Erasmus Plus, we also, in previous years, incorporated the impact of the recoveries for Erasmus Plus. So, when we presented the draft budget for 2026, compared to the estimate that we used for the presentation of the draft budget 2026, we have actually collected €34,000,000 more in recovery.
So, we have collected €289,000,000 for Erasmus Plus. It is important because, you may remember, the amount that was over and above the established amount of about €190,000,000, we have actually adjusted the financial programming in 2027 for Erasmus Plus. But this, we haven't done now, but it is useful for you to understand what the final amount was. And it might also be interesting that, until now, we have already collected more than €200,000,000 in recoveries for Erasmus Plus, which will also be available in 2027. Under heading three, the main change is simply following the decisions of the member states to shift some appropriation between the rural development and the guarantee fund, which they were allowed to do the last time in 2020. So the impact is on EUR 94.7 million. There's also a small impact of the change on the European Chemicals Agency and the European Environmental Agency in this heading.
Moving on to heading 4. For the year 2027, we have a small adjustment between the Asylum, Migration and Integration Fund and the Border Management and Visa Instrument. It is, again, according to Article 26 of the Common Provision Regulation, that the member states may choose to implement parts of the BNBI envelope under AMIF. And following their decision, 9,900,000 was transferred from BNBI to AMIF. And we also have a minor reduction for Frontex in 2027, €600,000, which is the impact of the anti-smuggling regulation that was adopted.
We have already made the first adjustment in the conciliation for the 2026 budget. For 2020, for heading five, there is an impact of some adjustment that we did in 2025, where the European Defense Fund couldn't allocate the full amount because one call for proposal wasn't fully implemented, and therefore, the amount was implemented under the connect secure connectivity line. Therefore, we will reverse this transfer to ensure that the overall allocation remains the same for both programs. As regards heading six, there is no overall change. But of course, for the detailed financial programming, there is the impact of the creation of the new budget line for the Mollova facility, which, as we already did in 2026, we also introduced the impact for 2027.
So there are small shifts within NDK for this Molloba facility line of 71.7 million (71,500,000.0). But overall, it is budget-neutral as well. For heading seven, the changes that you can see for some institutions stem from the changes that we agreed for the 2026 budget; otherwise, overall, that relates to the update of the salary adjustment, which at the moment is the 2% deflator, used by default when we prepare the financial programming as a starting point. But again, we will come back with the draft budget with the latest available information. So, as I said, these explanations are provided in the introduction of the document, plus you have all the annexes that show the detailed line-by-line appropriations available.
Maybe one last element. We also show in the tables the remaining allocation for the specific programs under Article V, which basically allocates the remaining amount that was left available to be allocated for the 2021-2027 period. And there's also a table showing the allocation of the commitments that were agreed in two steps: the first CHF 500,000,000 with the MFF, and then CHF 100,000,000 with the midterm revision. And from that, only EUR 31,700,000 remains available to be allocated in the last year of this MFF. Thank you very much.
Speaker 46
Thank you very much. I pass the floor now to the 27th rapporteur for the budget, Mr. Uzakov. Thank you, Chairman. Thank you, Madam Filipkov, for this presentation, which was, as you said, purely technical.
Speaker 36
But as you would imagine, health members of this committee do care about such technicalities as the size of availabilities. So, we all understand very well that 2027 is the last year of the current financial framework, with amounts having to fit into a very restrictive financial programming. What we see is that the general level of margin available is at its lowest. And we also see less flexibility and a lot more pressure from the euro cost on one side. And now, on the other side, we've also got the pressure from the Ukraine loan borrowing costs.
And the Parliament, what is crucial for this house, is that expenditures covering the financial financing costs must not reduce the number of EU programs or their respective funding. It's also clear that the EU budget should respond to increasing needs, which we see at the moment with limited resources available. We have just experienced an example when we received a couple of days ago a transfer request that was tax six for 2026. It was the first example of mobilization of the emergency aid reserve for this year, and it already represents almost 60% of all the appropriations available. And with this respect, I have certain questions.
One question would be: on behalf of the commission, could you please clarify how the commission will propose to finance the cost of the Ukraine loan and with what type of redeployments? And does the commission plan to use the commitments to finance Ukraine's support loan instrument? The second question would be about the relation you see between the Ukraine loan cascade and the euro cascade. Now, question number three. It will be about the previous financial programming, accompanying draft budgets for 2025 and 2026. The Erasmus budget in 2027 was cut since there had been internal reflows.
So, what can we expect in the '27 draft budget on Erasmus, or any other progress about internal reflows? Could you also tell the members of the committee what to expect as liquidity management costs for 2027? Another question would be about the Commission's intentions and plans regarding monitoring payment developments to avoid any risk of payment backlogs. And could you please also provide an update on the outlook for the payment appropriations? To conclude, apart from being the last budget of the current MFF with extremely limited margins, the budgetary landscape is evolving, as we can see quickly and sometimes unpredictably.
Therefore, we would like to avoid the situation last year, which we had to experience when the Commission made several adjustments towards the end of the year, significantly changing the budgetary outlook for the final conciliation compared to the situation we had when the Parliament adopted its position. Therefore, it is crucial, and I would like to reiterate that it is of utmost importance for our committee and its members to be informed in a timely, accurate, and comprehensive manner of any and all budgetary developments the commission anticipates. Thank you again, Madam Filippo, for this presentation.
Speaker 47
Thank you. Any other shadow wanting to take the floor? Monsieur Sanchez, Alési.
Speaker 18
Thank you.
Thank you very much, Chairman, colleagues. Updating the financial programming for 2027 is in line with some, perhaps, questionable political choices. We have budgetary margins that have been almost exhausted, and SMEs and the agriculture sector are not covered enough. The life commitment obligations are $845,000,000 compared to €113,000,000 in 2026. So, that is a net increase despite significant budgetary restrictions.
Now, when it comes to heading three, the environmental resources have gone down to €45,100,000 in 2027, so there is very little reaction capacity. Farmers are being exposed to significant increases in production costs, and their incomes are being put under pressure, yet they are a driver of the European economy. They need to be able to access stable, predictable funding, and competitiveness and food security aren't covered enough in this. There have been successive revisions of life, and this shows that the programming has been unstable and unpredictable. I have a few questions we would like to ask the commission.
How do you justify the continued increases in commitments of obligations for life under heading three? What specific measures will allow us to see that the €845,000,000 will provide proportional benefits for European taxpayers? And finally, how do you justify the consolidation of funding for Moldova and external action, yet internal budgetary margins are almost zero? We get the impression that the budgetary priorities are far from the economic reality of Europe.
Speaker 1
The other MEP wants to intervene; if not, we go to Ms. Filipkova, thank you for the replies.
Speaker 45
Indeed. Thank you very much for the comments and the questions. So, maybe I'll go in the order in which they were asked. So, starting with Mister Ushakov's. So, on the financing of the Ukraine support loan, as the commissioner explained in the previous session, I think the logic of this sort of cascade is included in the updated MFF regulation, which will enter into force as soon as it is adopted.
And the logic is that we have to look at what we have available. We have to look at the remaining availabilities of the existing special instrument, taking into account, of course, all the agreements reached in the past. So, in principle, there is also a clear reference to the Eiry Cascade, which we need to honor first before we look at the financing of the Ukraine support loan cost. And then, depending also, we obviously have to look at sound financial management and make sure that we don't exhaust everything. And in principle, the idea definitely is not, as it was not for the Eureka cascade, to cut any programs for the financing of the cascade.
Speaker 44
So it is really to look for availabilities. And then, if this is not sufficient, we can resort to the new special instrument. So, I can't tell you now because we haven't started our processes yet. We're only starting the budgetary hearings with the DGs to assess all the needs. So, we don't yet know what the result of this assessment will be because we also don't know the need for every instrument or the final amount for the administrative expenditure that depends on the salary adjustment.
So indeed, in principle, we will honor 50% of the area cascade. We will look very carefully at all the needs of all the programs as a starting point, as explained and shown in the financial programming. Then we also have a look at the reflows because, obviously, if these reflows, as we have done in the Erasmus Plus, are very significant, much higher than in the previous years, then they can be used for the program in that year, and then we can consider whether they replace fresh appropriations to make sure that the program still grows. So, this is what we will do for Erasmus Plus if justified, but I can't tell you now what the result will be because we will need to really assess what the needs are and what the final level of the reflows is. But there was also an external omnibus adopted where there are significant reflows from the EFSD that should go back to the EFSD. Plus, there, again, we can consider whether these additional reflows can replace the planned amounts of fresh appropriations for the provisioning of the amount.
And then, again, without impacting the implementation of the program, we would have different sources of financing. So, without damaging the program and the plans that we have, we might see some savings that would create some space. But again, this is what we will see only once we have the final numbers and when we go through the budgetary programming. So, we will come back with the draft budget and explain all this, and what would then be the last step with the new special instrument? On the liquidity management cost, it is too soon to say.
But as I said in the NGO meeting in April, colleagues will come and inform us on the latest forecast of the needs, but also on how the liquidity management costs are evolving. I wanted to clarify that while we are trying to inform you and always provide the most up-to-date information that we have available, some information simply comes very late in the process. So this is specifically, as I said, for the ERY cascade and the financing of the borrowing cost because, with the new approach where we take into account the cost of all disbursements done until September, we only know for sure in October what the cost for the budget is. Therefore, we put our best forecast into the draft budget, and we inform you in the NGO meetings in April and July. But effectively, the final amount will come only with the amending letter in October.
And then, even worse timing-wise, is the impact of the potential salary adjustment, which was quite significant last year. And then the final input that we received from Eurostat only comes in October. So, unfortunately, if there is a significant impact, it only occurs at the time of the conciliation. And again, we are trying. We are trying with Eurostat, but there are issues with the statistics and member states.
And before we have the final report published by Eurostat on October 31, we simply do not know for sure what the final impact is. So it might be that we will come again with some adjustment at the time of the conciliation. But we will also keep informing you about the possibilities of changes so that even if we can't inform you about the volume of the changes, we can also warn you that the changes will come. But they are, in principle, as discussed last year, very technical because they stem automatically from the final amounts. Similarly, actually, for the guarantee fund for agriculture, the agriculture year finishes in mid-October.
So we basically only know, towards October, what the final amount is. So, while we present the amending letter in October with the best possible forecast that we have, somewhere mid-September, again, we only know for sure in October what the needs are. And there, it is really important that we know because then we really need to know what the final needs of the farmers are and what the payments would be. So what we obviously tend to do is to make sure that we are conservative and that we have enough. And only if we know by October that we have more recoveries, more assigned revenues, or more carryovers because we haven't implemented everything, for example, on the agricultural reserve, then we can still rebalance the final need.
Maybe for heading three, as Mr. Sanchez asked, "So, we have not increased life?" This is how it was planned in the financial programming. The increases in life were approved last year as part of our consultation procedure. So, it was a wish of the budgetary authority.
But also to clarify that even if we didn't use the amounts for LIFE, we wouldn't be able to use them for the Common Agricultural Policy because there is a specific sub-ceiling for the CAP, and LIFE is not part of that ceiling. Also for Moldova, there was an agreement, I think, two or three years ago on the legal basis for the Moldova facility, which also included the financing as part of the agreement. So, the only thing we are doing now is obtaining the agreement of the budgetary authority to show this agreement for Moldova on a specific budget line. We are not changing the financing itself. So with that, I hope I have covered everything on the payments development. Sorry.
Indeed, we are following the payments development very carefully because there is, and clearly, we already saw at 2025 that there was a very substantial pickup of the payment speed, which is good news. After five years, we are finally getting really to cruising speed, which obviously has an impact on the payment needs. So, we will again provide information at the time of our trial log in April on the needs and at the time of the drug budget. And we will see whether we need to increase payments this year or not, and how we calibrate it also with the drug budget for 2027. So, we will keep you very well informed during institutional meetings or dialogues and with our budgetary proposals.
Thank you.
Speaker 1
Thank you. Mr. Uzakrovs, do you want to conclude? No? Then I thank Ms.
Filipkova and all the others who have joined this discussion. This concludes our meeting for today. And for those concerned, we will have the Budget Coordinators Meeting at 11:30, also in this room. Thank you. Enjoy your day.
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