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The European Council has reached an agreement on the Multiannual Financial Framework (MFF) for the period of 2021-2027. The MFF is the EU`s long-term budget plan and outlines the financial allocations for the EU`s different policies and programs.

The agreement was reached in July 2020 after prolonged negotiations, and it is worth €1.8 trillion. This budget will fund vital programs such as research and innovation, climate action, and border control, among others.

One of the most significant changes in the new MFF is the allocation of funds towards the EU`s COVID-19 recovery plan. €750 billion has been set aside for the Next Generation EU program, which will provide grants and loans to member states that have been hit hardest by the pandemic. The funds will be available from 2021 to 2024 and will be used to support investments in areas such as healthcare, digitalization, and climate action.

Another notable feature of the new MFF is the allocation of funds towards climate action. The EU has set itself ambitious targets to reduce greenhouse gas emissions, and the MFF reflects this commitment. The new budget includes a dedicated climate section, which will receive 25% of the overall funding. This will amount to €320 billion, making it the largest financing plan for climate action in the world.

The MFF also includes a more substantial allocation of funds for the EU`s external action. The EU intends to increase its presence and influence globally, and the MFF includes €79.5 billion for actions outside of the EU`s borders. This funding will include development aid, humanitarian aid, and security and defense measures.

The agreement on the MFF was not without its challenges, as different member states had different priorities and concerns. However, the final agreement reflects a balanced approach that takes into account the EU`s priorities while also considering the needs of individual member states.

Overall, the agreement on the MFF is a significant achievement for the EU, and it will ensure that vital programs and policies are adequately funded for the next seven years. As the EU faces both internal and external challenges, this budget is a crucial tool to help the EU tackle them effectively.