The Policy Challenges Committee at the European Parliament advocated new income sources for the budget, and call for an end to all rebates, exceptions, and corrective mechanisms. The committee also wants regional policy and agriculture funding to remain at current levels, but increases in investment in energy infrastructure. It also acknowledges that further savings could possibly be made on EU administration.

According to the Policy Challenges Committee, freezing future budgets at the 2013 level, as demanded by some Member States, is not a viable option because the budget structure must clearly reflect the EU 2020 sustainable growth strategy. MEPs call for an increase of at least 5% over the 2013 level for the next long-term budget, known as the Multi-annual Financial Framework (MFF). They note that even such an increase would make only a small contribution towards achieving the aims to which Member States and Parliament are already committed.

The committee voted that the budget structure should be brought into line with the EU 2020 sustainable growth strategy, by giving the future MFF the following headings:

1. Europe 2020 with knowledge for growth, cohesion for growth and employment, management of natural resources and sustainable development (including agriculture) and citizenship, freedom, security and justice.
2. Global Europe
3. Administration

MEPs want to ring-fence a special place in the budget for large strategic investment projects such as Galileo (satellites) and ITER (nuclear fusion). On the duration of the MFF, the Committee suggest one more 7-year cycle as a transitional solution. This should then be followed by 5-year-cycles or 5+5-year cycles, starting in 2021, so as to bring the MFF's duration into line with the European Parliament's 5-year mandates. If budget cycles are to exceed 5 years, then the EU should have a mandatory mid-term review, with a fixed date.

In addition, one problem with the current MFF is the lack of flexibility it allows within annual budgets. If something new or unexpected comes up, it is hard to adapt the budget to accommodate it. Therefore, MEPs would like to create a "global MFF margin", which can be drawn upon in the context of the annual budgetary procedure. They also advocate creating an additional "reserve margin" to accommodate risks relating to loan guarantees from the European Financial Stabilisation Mechanism and the Facility for non-euro area EU Member States.

The committee text will be voted in plenary session in June. Parliament will thus become the first EU institution to set out its position on the next long-term budget. Next month, the Commission is to table two proposals, one on the next MFF and the other on own resources. Negotiations will then begin. The current multi-annual financial framework ends in 2013.