Former Italian Prime Minister Mario Draghi was enjoying his retirement when his phone rang. It was September 2023, and Ursula von der Leyen's office asked him if he would accept another mission on behalf of Brussels - to outline the path to restoring Europe's competitiveness.
"I thought for a few days... before finally saying "yes". "The task seemed so daunting, so difficult," Draghi later said as he presented his report on the revival of the European economy.
On Wednesday, Draghi's ideas will be in the spotlight again when von der Leyen presents her vision for the EU's next seven-year financial framework - a key moment in her mandate as head of the European Commission, writes Tim Ross in his analysis for Politico.
The so-called Multiannual Financial Framework (MFF) will cover the period 2028-2034. The very fact that two years are set for negotiations shows how difficult they will be - as always, every member state will have to approve the budget for it to be adopted unanimously.
EC officials spent the weekend in long meetings to finalize the proposal, with work continuing late into Monday night - over pizza, Coke and mineral water.
The stakes could not be higher
The draft budget must provide the means to deal with unprecedented challenges - including a possible trade war with America under Donald Trump, a real war with Russia, growing competition from China, tensions in the Middle East, climate change, migratory pressure and the rise of the far right with its anti-European rhetoric.
In the words of Draghi, the wise elder of European economics: "We have reached a point where, if we do not act, we will have to we sacrifice either our well-being, our environment or our freedom."
The current EU core budget is around €1.2 trillion - an impressive sum, but it represents just 1% of the Union's total GDP. By comparison, Germany's budget is 48% of GDP and France's is 57%.
According to many experts, including Draghi, the EU's public investment is woefully inadequate to meet the challenges ahead.
And how much bigger should Brussels' budget become? The answers vary dramatically depending on who you ask.
Some countries want no increase at all, while others insist on doubling the budget, explains Jan Strasky, a senior economist at the OECD.
"The range is from zero to a double increase. "I think even a 20-30% increase, if the funds are used wisely, would have a serious impact," he told Politico.
"Low-hanging fruit"
In addition to a larger volume, the OECD also recommends redirecting some of the existing funds to defense and better integration of energy markets - which would reduce prices and stimulate economic growth.
The organization also suggests strengthening Brussels' role in managing cross-border projects - for example, in energy and defense.
"We are not looking for the perfect solution - it is important to reap the benefits first-hand," Strasky says.
Some analysts believe that the ambitions should be even bolder. According to Zsolt Darvas of the Bruegel think tank, the budget needs to almost double to cover the costs of the climate transition and the repayment of debts accumulated during the pandemic.
"The EU is under increasing pressure to take responsibility on issues that are no longer confined to individual countries", the Bruegel report says. "Climate, digitalization, competitiveness, security, defense, migration, foreign policy - all these challenges require well-funded, joint action. But the EU budget remains outdated and ill-adapted to these realities."
Darvas suggests the budget should reach around 2% of GDP - roughly in line with the need for 800 billion euros per year in additional investment that Draghi also spoke about.
France supports the idea of a larger budget. Germany and the Netherlands, however, are opposed.
"Sweden does not automatically accept the argument that since we have new challenges, we should increase the budget", says the country's European Affairs Minister Jessica Rosenkrantz. "Prioritizations need to be reviewed within the existing budget."
Sweden is pushing for more money for defense and security - although some lawyers question whether EU treaties allow direct financing of military spending through the budget.
"It is not yet clear how exactly this will be shaped", Rosenkranz admits. "But it is clear that defense, security, support for Ukraine and competitiveness are areas that the new budget must address."
Dragi also proposes a major simplification of the budget - an idea that von der Leyen has embraced, planning to merge the Common Agricultural Policy and the Cohesion Fund into one massive mega-package.
The second main pillar in the new MFF will be the European Competitiveness Fund - with investments in key industries and research. The third - a new external action fund that will combine development aid and the EU's diplomatic efforts.
But already some countries and politicians are deeply concerned about these changes - especially in the part about financing farmers and poorer regions.
EU taxes?
So much for spending. The more difficult question is: where will the money come from?
The debate over the EU's so-called "own resources" - whether and how the Union should raise revenue through its own taxes or mechanisms - is gaining momentum again.
An argument in favour of such resources is that it avoids disputes over so-called "net balances" - how much each country contributes and how much it receives. Countries such as Germany, the Netherlands and Sweden are traditionally among the biggest donors - and this is a politically sensitive issue at home.
Budget Commissioner Piotr Serafin has promised an "ambitious package of own resources" that would increase the EU's financial capacity and be socially and politically acceptable.
But Sweden disagrees.
"We see no need for new resources and we are categorically opposed to European taxes," says Rosenkranz. "There is a debate about using funds from the Emissions Trading Scheme, the Carbon Border Adjustment Mechanism and other sources. But we insist on looking for internal redeployments of funds within the existing budget."
Rule of law
One way to save, she says, is to "not a single euro goes to a country that violates democratic standards". This coincides with the Commission's efforts to strengthen the so-called conditionality mechanism - a financial sanction against countries like Hungary accused of violating the rule of law.
But because the budget requires unanimity, Hungary can block anything. This highlights the fundamental question:
What is the European Union for anyway? How much should we do together - coordinated by Brussels - and how much should we leave to the national level?
The scale and priorities of the new budget will be the answer to this very question.
"If you look at the history of the negotiations for the previous MFFs, you will see that the changes between them were minimal", says Bruegel's Darvash. According to him, the biggest risk that the EU will not successfully meet the challenges is that the requirement for unanimity among 27 countries severely limits the possibilities for reform.
"We have enormous inertia and rigidity", he says. "And I am personally skeptical that there will be much change this time."