I. Introduction

The Multiannual Financial Framework (MFF) sets out the maximum annual amounts that the EU can spend each year in various policy areas, over a period of at least five years (until now the duration of MFFs was 7 years). This sets the limits for fiscal planning and fiscal discipline, while ensuring that EU spending is predictable and remains within agreed limits. It also allows the EU to implement common policies over a period long enough for them to become effective, while giving Member States the opportunity to plan their spending over time.

The current MFF, for the period 2021-2027, foresees a long-term budget of €1.074,3 billion for the EU-27 in 2018 prices, including the integration of the European Development Fund. Together with the Next Generation EU recovery instrument of €750 billion, it will allow the EU to provide an unprecedented €1.824,3 trillion of funding over the coming years to support the recovery from the COVID-19 pandemic and the EU's long-term priorities across different policy areas.

Under the MFF, EU funding will be geared towards new and reinforced priorities across the EU's policy areas, including green and digital transition. The Cohesion Policy and the Common Agricultural Policy will continue to receive significant funding and undergo modernisation to ensure that they best contribute to Europe's economic recovery and the EU's green and digital objectives.

II. Cyprus and MMF

The Directorate General Growth (DGG), Ministry of Finance, in coordination with the relevant Ministries, is the responsible authority for the preparation of national positions in relation to the MFF negotiations and the review of the regulatory and legislative framework of the Cohesion Policy. The primary objectives of the DGG are:

a) On the one hand, securing the most favorable Financial Portfolio for the Republic of Cyprus, especially in the context of the Union's main investment policies - such as the Cohesion Policy, the Common Agricultural Policy (CAP) and the Asylum and Migration Policies - (which provide for pre-allocations for the Member States), taking into account the particularities of Cyprus as an island Member State and

b) On the other hand, the effort to ensure, as far as possible, more favorable provisions for the implementation of the relevant funds, with the ultimate goal of their effective absorption/ utilization by the competent authorities of the Republic (and especially by the DGG, as regards the Political Cohesion funds).

In this context, and after intensive negotiations and consultations which lasted more than two years, DGG managed to secure for the Republic of Cyprus a significantly increased financial envelope for the period 2021-2027. Specifically, funds totaling €2,7 billion (in 2018 prices) have been allocated, of which €1,5 billion from the main body of the MFF 2021-2027 and €1,2 billion in the context of Next Generation EU.

From the main body of the MFF 2021-2027 and specifically from the two main investment policies of the Union (Cohesion Policy and Common Agricultural Policy), the Republic of Cyprus secured funds of €1,3 billion (€853 million for the Cohesion Policy and €490 million for the CAP, respectively). Also, €50 million was secured for the Home Affairs Funds and €37 million from the European Maritime, Fisheries and Aquaculture Fund.

It is noted that the results of Cyprus' efforts were particularly important in the Cohesion Policy, where an increase of €200 million was achieved in relation to the initial proposal of the President of the European Council, raising the number of resources for Cyprus from €653 million to €853 million. It is of particular importance that the specific amount has been allocated to Cyprus in recognition (once again) of its peculiarities as an island Member State and due to the related challenges, it faces in terms of development and competitiveness.

Finally, within the framework of the Brexit Adjustment Reserve, Cyprus, through consultations, secured €52 million.