Source: European Parliament
The ceilings of the Multiannual Financial Framework (MFF) for 2021-2027 are expressed in 2018 prices and the adjustment to current prices is done based on a fixed annual deflator of 2% (Article 4(2) of the MFF Regulation[1]).
This long-standing adjustment mechanism, in use since 2007, has the advantage of providing predictability for the EU programme resources over the duration of the MFF.
The Commission has assessed the impact of the high inflation on the real value of MFF expenditure in the context of the Mid-term revision of the MFF proposed in June 2023[2] based on the forecast at that time, as discussed in the Staff Working Document accompanying the MFF revision (SWD(2023) 336 final[3]).
The impact of inflation is being assessed together with all the other features of the MFF.
The current MFF has instruments over and above the MFF expenditure ceilings that provide flexibility to address unexpected needs, including inflationary pressures.
These instruments were reinforced in the MFF revision, with an increase in the flexibility instrument and the Solidarity and Emergency Aid Reserve and the introduction of the EU recovery instrument. The design of any future flexibility tool remains to be decided in the context of the next MFF.