As political discussions and institutional negotiations on the next European Union budget— the Multiannual Financial Framework (MFF) for 2028-2034 — proceed, civil society is also questioning the potential consequences and risks of a potential revolution in the management and allocation of European funds.

Once again, inevitably, the issue revolves around the national and regional Partnership Plans, which, according to the proposal by the European Commission, should combine cohesion policy funds with many others, from agriculture and fisheries to migration, border management, and internal security.

Yet, the risks are primarily linked to changes to a well-established framework based on objectives to be achieved, minimum funding quotas to be allocated to specific policies, and the active involvement of local authorities and monitoring organizations throughout the funding process.

“Since taking office, this Commission has deregulated many policies, and now, in our opinion, it is doing the same with the funds,” warns Chiara Catelli, advocacy officer at PICUM, a European network of organizations working for the rights of undocumented migrants, in an interview with OBCT.

How will the EU budget change with the Commission’s proposal?

The main point is that the new Multiannual Financial Framework 2028-2034 introduces a completely different funding architecture than in the past.

I am referring in particular to the cohesion funds.

We are moving to a new model that offers Member States greater freedom and considerable leeway in using the European budget according to their own interests.

The Commission wanted to increase flexibility and simplify the funds, an understandable goal considering the events of recent years, from the Covid-19 crisis to the war in Ukraine.

In the end, however, the decision was made to pursue a path of deregulation within European funds as well.

How?

If we examine the regulations governing the cohesion funds — but also agriculture, migration, and other sectors — we find short texts that contain little guidance and therefore leave a lot of room for maneuver.

The new system will require Member States to develop national plans, which will include chapters on various topics and sectors.

All previously existing programs at the national, and especially regional and local levels —particularly important for the cohesion funds — will disappear and be replaced by a single program for each Member State.

There are few details when analyzing what the new regulation provides for the national and regional partnership plans. According to this proposal, the European Union will only provide a general framework, with broad and specific objectives, and nothing more.

By comparison, the AMIF [Asylum, Migration and Integration Fund] regulation provided a list of measures that Member States could use to access the funds. It wasn’t exhaustive, but it provided a framework within which to operate.

This list will no longer exist.

The only slightly more precise provisions are contained in the Performance Framework regulation, which aims to simplify the reporting system. Here, it’s somewhat clearer what the European Commission expects in terms of the use of the funds.

However, we have many doubts about how they are attempting to address what has always been a major problem for all European funds.

So, are we moving toward centralization of the funds?

Yes. Another major difference from the past is that the managing authorities will be the national governments, who will then decide whether to transfer the funds to the regions.

This is a procedural change.

Until now, the regions negotiated the programs directly with the Commission. Now, there will be a further step.

This change has also been strongly criticised by the European People’s Party’s rapporteur in Parliament. There will be major political battles on this point, given the challenges it has received from various social, political, and institutional stakeholders.

What is the risk for local authorities and civil society organizations?

The risk is that they will be excluded, especially in countries where there may be political divergences between the local level and the central government.

Abandoning the established tradition, particularly in cohesion funds, of involving all directly affected stakeholders could be very problematic.

According to the existing legislation, civil society and fundamental rights bodies must be consulted during the program development phase and then included in the monitoring committees to oversee implementation.

We wonder how this can be maintained and how easy it will be to exclude these bodies from the entire process.

The Commission’s proposal provides for at least one monitoring committee for each of the 27 national plans, covering all the chapters within them. This solution risks weakening the oversight of the funds by competent organizations, as only the largest and most structured ones will be able to participate.

However, the involvement of monitoring bodies is not an end in itself; it is essential to the effectiveness of the funds. These organizations are closest to vulnerable and marginalized populations, or may themselves apply for funding. Involving them in the process is a way to ensure that priorities reflect what is happening on the ground.

What will happen to the European Social Fund+?

The regulation for the European Social Fund+ was added at the last minute by the Commission under pressure from the Progressive Alliance of Socialists and Democrats.

In effect, it will constitute one of the chapters of the National and Regional Partnership Plans.

However, the risk is that the European Social Fund+ will become nothing more than an empty shell, as there is neither a dedicated budget nor clear priorities. The funds will be channeled through national plans according to predefined but much less stringent objectives than in the past.

This is why we have signed a joint letter together with over 350 social organizations across Europe calling for a truly separate Social Fund with clear objectives.

For example, one of the main objectives of the European Pillar of Social Rights is to reduce the number of people at risk of poverty or social exclusion by 15 million by 2030, particularly 5 million children. The ongoing review has shown that this objective is among those not yet achieved and still requires considerable effort.

At the political declaration level, the objective remains, but what has disappeared — and this, in our view, is another serious problem with the new budget — are the earmarking requirements, that is, the requirement for national programs to allocate a certain percentage to specific objectives.

What could this imply?

An example is the Child Guarantee [the European guarantee scheme for vulnerable children, ed.], where the requirement was 5% for countries above the European average.

In the proposed new financial framework, however, the minimum thresholds have disappeared. The same has happened with the minimum funding to combat material deprivation among the most disadvantaged.

This is a significant problem because, when a minimum requirement exists, states tend to commit resources. When this requirement does not exist, they often do not.

The only spending constraint remaining in the new budget in the social sector concerns the earmarking of funds for social policies. National plans must dedicate at least 14% to social objectives, excluding agricultural policies. Until now, the 25% requirement for social inclusion has been limited to the European Social Fund+.

At first glance, this 14% spending constraint might seem positive.

But when comparing the activities that Member States will be able to include in calculating the percentage, it becomes clear that it is essentially a much lower spending target than the previous European Social Fund+, where less money was used to finance many more activities.

Is there anything positive in this budget proposal?

Much will depend on implementation. At PICUM, we work with undocumented migrants and focus closely on the details, because it is usually the details that exclude these people from the benefits of EU-funded actions, as the current AMIF definition demonstrates.

With the new proposal, integration objectives are based more on needs rather than categories of people. This could potentially be a positive development.

However, it should be kept in mind that the new financial framework will give Member States considerable leeway.

The risk is that, in practice, nothing will change in terms of details. Or, conversely, that without a minimum allocation, there will be far less funding dedicated to integration, particularly for migrants.