What's at stake in the new EU long-term budget?

Euronews

7 days ago

Think of any EU policy you care about or benefit from, as a citizen, politician, or stakeholder.
Whether it's funding Ukraine's reconstruction, boosting the continent's competitiveness, or maintaining farm subsidies, all of it ties back to one foundational element: the EU's long-term budget.
That process begins in earnest this Wednesday, when the European Commission presents its first proposal for what is known in Brussels jargon as the Multiannual Financial Framework (MFF), covering the period from 2028 to 2034.
Behind almost every major fight in Brussels, there's a battle over money. And this is the mother of them all.
Commission President Ursula von der Leyen has promised a comprehensive overhaul of the EU budget to make it simpler, more effective, and better aligned with strategic priorities.
Translating that ambition into actual numbers—especially when it comes to funding areas like defence, which the treaties currently prohibit—will be the start of many difficult negotiations with EU leaders and MEPs.
Meanwhile, traditional programmes that may no longer be viewed as top priorities could face deep cuts, sparking fierce resistance.
A masterclass in secrecy
The lead-up to this MFF proposal has been marked by an extraordinary level of secrecy. Few details have leaked, most of them deliberately and only at a very final stage in the process.
This cloak of confidentiality is one of the most successful examples of von der Leyen's consolidation of power and a testament to the control wielded by her powerful chief of staff, Bjoern Seibert.
Commission insiders describe a system of 'compartmentalisation' akin to methods used in intelligence operations, where individuals only have access to the information strictly necessary for their tasks.
Within the Commission, this has meant that discussions about the budget have taken place in isolated groups, particularly in high-level 'chef' meetings involving Commissioners' cabinets and directorate-generals.
A senior EU source told Euronews that most of these discussions occurred in silos, with each group unaware of what others were working on, and especially in the dark about the figures for each fund.
'The truth is: numbers will go directly to the College of Commissioners [tomorrow]. Only like three people know about them,' the source revealed.
While Commission staff have been working on structure and governance issues of the funds, which couldn't prevent these from being leaked, details on actual funding levels remain tightly guarded.
Two key elements
The current MFF for 2021–2027 stands at €1.2 trillion, equivalent to about 1% of the EU's GDP (not including post-pandemic recovery funds). Few expect this figure to change dramatically.
Instead, the focus will be on spending smarter and prioritising better.
Initially, the Commission considered structuring the next MFF around three major pillars: one for national envelopes covering agriculture and cohesion funds; another for competitiveness, innovation, and strategic investment; and a third consolidating all external instruments.
While insiders suggest that some adjustments have been made since then, the drive for radical simplification remains intact. 'Still, expect surprises,' one Commission source said.
The current 7-year budget has already reduced the number of funding programmes from 58 to 37 in the name of streamlining.
Yet the Commission still sees room for further consolidation, and one major question is how drastic this simplification will be.
The other is how far the Commission can go in increasing its flexibility to reallocate funds.
Today, the vast majority of the EU budget is pre-allocated to specific programmes, leaving little room for rapid response or discretionary spending. The EU does have mechanisms to address emergencies and unforeseen events, but their size is limited: around €21 billion, just a small fraction of the total MFF.
The Commission cannot unilaterally shift large sums from one policy area to another without formal revisions, which require the approval of both the European Parliament and the Council.
That rigidity is something the new budget proposal will try to address, as enhancing the EU's ability to course-correct in real time has become a top priority (as shown by the mid-term review of the current MFF).
Funds to watch
Among the most hotly debated issues will be how to fund Ukraine, how to address defence spending despite legal constraints, and whether to introduce new common debt instruments (considering the EU still has to repay its pandemic borrowing).
Nordic countries, for example, have pointed out that if von der Leyen avoids debt-based solutions, some member states may push to introduce it anyway.
But what will really draw attention this week are the proposed funds themselves.
Leaks suggest that a new European Competitiveness Fund will consolidate into a single instrument up to 12 existing programmes, including: Horizon Europe, the EU's flagship research fund; the recently created EU4Health programme; and the LIFE programme for environmental and climate action.
Another innovation appears to be something called 'National and Regional Partnerships,' a working title that has surfaced in multiple drafts, and that will be supported by a single "European Economic, Territorial, Social, Rural and Maritime Sustainable Prosperity and Security Fund."
This would group together the funds under shared management, namely the agricultural subsidies and the policy to tackle the socio-economic gap between the EU's poorest and richest regions, known as cohesion.
With these two funds accounting for the bulk of the EU budget, the expected merging of their structures could have profound implications—not only for governance and oversight, but also for how money is distributed across member states.
A tangle of joint programmes will be replaced with 27 national plans specific to agriculture and cohesion, each reflecting EU-wide priorities while tailoring implementation locally. But this raises thorny questions about who controls the funds and how priorities are set.
One thing that's likely to remain intact is the European Social Fund, which supports anti-poverty efforts and vulnerable groups.
Socialists in the European Parliament claimed this as a key win in exchange for backing von der Leyen's bid for a second term—though in truth, the fund is enshrined in EU treaties and was never really in danger of being scrapped.
This week's proposal is only the beginning of what promises to be a long, complex, and politically fraught negotiation process. Member states, the European Parliament (which appears sidelined in the delivery of the EU budget from some leaked drafts), and the Commission will all bring different priorities and red lines to the table.
The Danish presidency of the EU Council aims to present the 'nego-box', the first compromise on the Commission's proposal, before the EU summit in December.