The proposal indicates how big the future EU budget should be, how it should be filled, and what the main priorities for future funding should be.
The final figure on what is known as the multiannual financial framework (MFF) will only be determined after talks with Parliament and member states.
The executive, however, said it was a budget for “a Europe that protects, empowers and defends.”
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The details were outlined to MEPs at the start of the mini plenary in Brussels.
The executive admitted that the UK’s departure from the EU will leave a “sizeable gap” in the budget.
Even so, Commission President Jean-Claude Juncker said it was proposing a “pragmatic, modern, long-term budget” and an “honest response to today’s reality.”
The communication says that €123bn, representing approximately 10 per cent of the total EU budget, is allocated to external action while the new proposal sets apart 25 per cent of the EU budget for climate action.
This falls well short of French President Emmanuel Macron’s plea for a 40 per cent share of the next EU budget to be dedicated to climate action.
While the current budget for the period 2014 to 2020 has a 20 per cent climate action spending target, the new proposal sets apart 25 per cent of the EU budget for climate action. This is a five per cent increase compared to the current climate spending of €320bn.
In his speech to MEPs, Juncker said that Europe is “expected to play a greater role in providing security and stability in an unstable world, at a time when Brexit will leave a sizeable gap in our budget.
“Today's proposal responds to this twin challenge through cuts to expenditure and through fresh resources in equal measure.
“Funding for the Union’s new and main priorities will be maintained or reinforced, which inevitably means some cuts in other areas. With the stakes so high, it is time to act responsibly. Today’s budget proposal is therefore both focused and realistic.”
Juncker said, “Today is an important moment for our Union. The new budget is an opportunity to shape our future as a new, ambitious Union of 27 bound together by solidarity. With today’s proposal we have put forward a pragmatic plan for how to do more with less. The economic wind in our sails gives us some breathing space but does not shelter us from having to make savings in some areas.”
He added, “We will ensure sound financial management through the first ever rule of law mechanism. This is what it means to act responsibly with our taxpayers’ money.”
He went on, “The ball is now in the court of Parliament and Council. I strongly believe we should aim to have agreement before the European Parliament elections next year.”
Further comment came from European budget and human resources Commissioner Günther Oettinger, who said, “This budget proposal is truly about EU added value. We invest even more in areas where one single member state cannot act alone or where it is more efficient to act together - be it research, migration, border control or defence.
“And we continue to finance traditional - but modernised - policies, such as common agricultural policy and cohesion policy, because we all benefit from the high standard of our agricultural products and regions catching up economically.”
On the next MFF, Parliament’s EPP group leader Manfred Weber said, “The money that is being used in the EU budget is money well-invested. It is about investing in the future, about showing solidarity, about shaping a good future for young Europeans. The Commission’s proposal of a measured but ambitious budget is a good starting point for the discussions.
“For us it is clear that new tasks require new resources. The EU makes a difference in so many aspects of peoples’ lives. We have more and more tasks ahead of us, for example on defence, strengthening Frontex, and building a brighter future for young Europeans.”
His S&D group counterpart, Udo Bullmann, was critical of the Commission’s budget proposals, saying the executive “has not taken the courageous step forward. This proposal completely overlooks sustainable development and the SDGs.
“Is this really the proposal of the ‘Commission of the last chance’? Is this the answer to the challenges of today and tomorrow? I have my doubts. This MFF budget proposal lacks the money and the vision to urgently protect European workers, and to support young people and help low-income households.”
ALDE group MEP Jean Arthuis, who chairs Parliament’s budgets committee, was also critical of the proposals, saying, “We welcome the effort to clarify the budget and the elimination of the discounts and rebate because of Brexit, but we regret the mere doubling of Erasmus+ instead of being tripled as requested by Parliament.”
The ECR group spokesperson on the budget Bernd Kölmel said, “Proposing an increase in the EU’s budget despite Brexit is disappointing but entirely predictable. From new EU taxes to common defence funds to policing ‘values’, this budget is all about more centralisation and more Brussels meddling.
“EU taxes that replace money currently collected and spent by member states isn’t new money. It’s robbing Peter to pay Paul. Countries will end up with a shortfall, forcing them to choose between raising taxes to make up for it or cutting spending. It's a simple as that and once this door is opened, it will never close.
“There are elements we can welcome. Increasing funding for research and innovation is essential, as is more money for border protection. It’s long overdue but certainly a step in the right direction as we step up our efforts to increase border security and genuinely protect the most vulnerable.”
Reacting to the announcement, Jordi Solé, Greens/EFA group shadow rapporteur for the MFF, said, “We need a budget that meets the needs of Europe’s citizens. The big boost to research programmes and Erasmus+ will give young people a good start and create the jobs they’ll need for the future.
“The EU has often proved ill-prepared to respond to the crises facing its citizens. The Commission has built greater flexibility into its plans so that the EU will be better able to respond to the next crisis.
“We are disappointed the Commission has not shown the same ambition on the overall size of the budget. If we want to tackle our common problems together, then we need a budget that is equal to the task.”
While welcoming increased spending in research, education and training through the Horizon and Erasmus+ programmes, Liadh Ní Riada, a member of Parliament’s GUE/NGL group, expressed concerns with the overall direction of the Commission’s proposals for the EU’s seven-year budget.
She said, “It is scandalous that the Commission is increasing spending to bolster ‘Fortress Europe’ and harden external borders at a time when traditional programmes are being cut. One of the founding principles of this union are the promotion of peace and stability, so what kind of message does this send?
“At a time of tentative economic recovery, a recovery that many in Europe are yet to benefit from, the Commission has proposed cuts to both the CAP and cohesion policy. This is just not good enough,” she said, pointing to the need to reform the CAP as the current system favours wealthy farmers and agribusiness at the expense of small farmers and rural communities.