The European Council emerged as the dominant institution in the special legislative procedure that led to the adoption of the European Union’s Multiannual Financial Framework (MFF) Regulation for 2014–20, even though it is not mentioned in Article 312(2) TFEU as an actor in the procedure and Article 15(1) TEU states that it ‘shall not exercise legislative functions’. This article assesses the role played by the European Council in the MFF process for 2014–20 in light of the post-Lisbon Treaties and draws attention to the legal ambiguities that persist, as well as the practical challenges that will face the other Union institutions, notably the European Parliament, in seeking to counter that dominance in future MFF procedures.

On 8 February 2013, the European Council agreed on the EU’s multiannual financial framework for 2014–20. The agreement includes a reduction of the overall spending level and significant reprioritisations. This paper asks how this agreement has been reached. Scharpf’s actor-centered institutionalism is applied, including the concept of the joint-decision trap. The paper finds that the outcome was made possible by compensating the member states that were worst affected by the policy changes. A coalition of net contributors, centered on Germany and the United Kingdom, was influential regarding the overall spending level. In addition, the external environment with the fiscal and economic crisis created a momentum for reduced expenditures. Those against the reduction, the member states in favour of agriculture and cohesion, were not able to avoid cutbacks. Member states in favour of the cohesion policy faced hard conditions for maintaining unity in their coalition, whereas member states in favour of agricultural spending could more easily negotiate for their common interests.