Special European Council, 1 February 2024

EU leaders greenlit additional funding for the multiannual financial framework 2021-2027 and discussed support for Ukraine.

They also discussed the situation in the Middle East and agriculture, and paid tribute to former European Commission President Jacques Delors, who passed away on 27 December 2023.

• European Council conclusions, 1 February 2024
• Remarks by President Charles Michel at the press conference of the special meeting of the European Council

Main results

Mid-term revision of EU long-term budget 2021-2027

As a follow-up to their meeting in December, EU leaders discussed the mid-term revision of the multiannual financial framework (MFF) 2021-2027. In this context, the leaders agreed to greenlight additional funding for a limited number of priority areas through a mix of new and existing funds.

The additional funding covers support for Ukraine, migration and the external dimension, the strategic technologies for Europe platform (STEP), Next Generation EU interest payments, special instruments, new own resources and elements that reduce the impact on national budgets.

Of the total amount, €33 billion are loans and €10.6 billion are redeployments from existing funding. The extra funding should be distributed as follows:

• €50 billion for the Ukraine Facility (€17 billion in grants and €33 billion in loans)
• €2 billion for migration and border management
• €7.6 billion for the neighbourhood and the world
• €1.5 billion for the European Defence Fund under the new STEP instrument
• €2 billion for the flexibility instrument
• €1.5 billion for the solidarity and emergency aid reserve

Next, the Council of the EU and the European Parliament need to adopt the mid-term revision.

In parallel, they will adopt the Ukraine Facility and the STEP.

• Mid-term revision of the EU long-term budget 2021-2027 (background information)
• Timeline – Mid-term revision of the EU long-term budget 2021-2027 (background information)

Ukraine Facility

To provide stable and predictable financing to Ukraine, the leaders agreed to set up the Ukraine Facility for the years 2024-2027. It is a new EU instrument to help the country in its recovery, reconstruction and modernisation on its path towards EU accession.

Of the total €50 billion available, €33 billion are in loans, and €17 billion are in grants (under a new thematic instrument, known as the Ukraine Reserve).

To ensure Ukraine’s ownership of its recovery and reconstruction, the Ukrainian government needs to prepare a plan that sets out a reform and investment agenda. To obtain the funding, Ukraine must also uphold and respect:

• democratic mechanisms, including a multi-party parliamentary system
• the rule of law
• human rights, including the rights of persons belonging to minorities

In addition, the Commission and Ukraine need to protect the EU’s financial interests, particularly by countering fraud, corruption and conflicts of interest.

The Council will play a key role in the governance of the Ukraine Facility and the European Council will hold a debate every year on the implementation of the facility, on the basis of a Commission report. If necessary, in two years’ time the European Council will invite the Commission to make a proposal for a review in the context of the next MFF.

Migration and the external dimension

To support member states and tackle urgent challenges related to migration and border management, the leaders agreed to reinforce the budget by €2 billion. They also invited the Commission and member states to further explore the possibility of using cohesion funds to address migration challenges.

In the context of extraordinary geopolitical tensions, the leaders also greenlit €7.6 billion to underpin priorities for the EU’s neighbourhood and the world. The funding should help to:

• maintain effective migration cooperation outside the EU
• support Syrian refugees in Türkiye and the broader region
• support the Western Balkans, the Southern neighbourhood and Africa
• ensure enough funding for the EU’s neighbourhood, development and international cooperation instrument (NDICI)

• EU migration and asylum policy (background information)
• EU enlargement policy (background information)

Strategic technologies for Europe platform (STEP)

To ensure the EU’s strategic sovereignty and help make the European Union more competitive, the leaders agreed to set up a new platform for strategic technologies for Europe (STEP).

To finance STEP-related priorities, the platform will make use of existing funding. This will help scale up support and investment opportunities for critical technologies that are relevant for the green and digital transitions,

To boost defence investment capacity, leaders also agreed to allocate an additional €1.5 billion to the European Defence Fund under the STEP.

• European defence industry procurement (background information)

Next Generation EU interest payments

To cover additional costs and fulfil the EU’s legal obligation related to NGEU interest payments, leaders agreed on a cascade mechanism.

If financing for the interest payments cannot be found within the existing EU budget, a new instrument that goes beyond the maximum amounts for the current MFF can be introduced.

As part of the annual budgetary procedure, the Council will assess whether the financing solutions for the NGEU interest payments, including the new instrument and the application of a backstop, are appropriate, before adopting its position.

In this context, the ceiling for the global amount of another instrument – the flexibility instrument – will be increased by €2 billion. The flexibility instrument can be used to finance actions that cannot be funded via other budget sources.

• A recovery plan for Europe (background information)
• Financing the EU budget (background information)

Solidarity and emergency aid reserve

To tackle emergency situations such as natural disasters and humanitarian crises in the EU and worldwide, EU leaders agreed to increase funding by €1.5 billion. They also agreed to split the funding into two separate instruments:

• approximately €1 billion per year for the European solidarity reserve, to respond to emergency situations in Europe
• approximately €500 million per year for the emergency aid reserve for rapid responses to specific emergency situations in the EU and worldwide

The annual amounts not used in either of the instruments can be made available to the flexibility instrument the following year.

New own resources

EU leaders underlined that work will continue on new own resources. Any proceeds of the new own resources introduced after 2023 will be used to make early repayments on Next Generation EU borrowing.

National budgets

To reduce the impact on national budgets, leaders agreed that €10.6 billion from existing EU funding will help finance the priorities identified in the mid-term revision. This amount will be redistributed from existing programmes and instruments, including:

• the neighbourhood, development and international cooperation instrument (NDICI)
• the instrument for pre-accession assistance (IPA)
• Horizon Europe
• the Brexit adjustment reserve
• the European globalisation adjustment fund
• CAP and cohesion funds
• the EU4Health programme

Support for Ukraine

The leaders reaffirmed the EU’s steadfast support for Ukraine. The EU will continue to support Ukraine and its people for as long as it takes, including through political, financial, humanitarian, military and diplomatic means.

The leaders stressed the importance of providing predictable and sustainable military support to Ukraine, notably through:

• the European Peace Facility
• the EU military assistance mission
• direct bilateral support from EU member states

In this context, they invited the Council to reach an agreement by early March on increasing the financial ceiling of the European Peace Facility. They also called on member states to accelerate efforts to deliver ammunition to Ukraine.

The leaders will continue the discussions on security and defence in Ukraine, as well as Europe’s need to further strengthen its own defence readiness, at the next European Council meeting on 21 and 22 March 2024.

The European Council also welcomed the agreement to use financial revenues stemming from frozen Russian assets for Ukraine’s reconstruction, which allows the High Representative and the Commission to prepare the next steps.

• EU solidarity with Ukraine (background information)
• European Peace Facility (background information)

Middle East

The leaders held a debate on the situation in the Middle East.

• Statement of the members of the European Council on the situation in the Middle East (press release, 15 October 2023)
• European Council, 26 and 27 October 2023
• European Council, 14 and 15 December 2023

Agriculture

EU leaders discussed challenges in the agricultural sector, including concerns raised by farmers.

Stressing the essential role of the common agricultural policy leaders called on the Council and the Commission to take work forward as necessary. The European Council will keep the situation under review.

• Common agricultural policy (background information)

 

Compliments of the European Commission