European Union leaders are examining today a new negotiating framework with concrete figures for the Multiannual Financial Framework for the period 2028-2034, presented by the Cyprus Presidency of the Council of the EU, ieu-monitoring.com reported.
The European Commission has proposed a budget of almost 2 trillion euros (around 1.8 trillion euros for operational programmes and additional funds for NextGenerationEU debt repayment. This represents an average of 1.26% of the EU's gross national income.
The structure is being reduced from the previous seven to just four main budget lines in order to reduce bureaucracy and respond more quickly to crises. The number of individual programmes has also been greatly reduced. It is proposed to merge the cohesion funds, the common agricultural policy and home affairs in single National and Regional Partnership Plans.
The European Competitiveness Fund brings together 14 existing instruments with an estimated budget of €234 billion. Together with the “Horizon Europe“ programme (for which €175 billion is foreseen) it will invest massively in decarbonisation, digitalisation, biotechnology, defence and space technologies.
The “Global Europe“ instrument has been earmarked with €200 billion for external action, humanitarian aid, migration partnerships and support for the enlargement of the Union.
The financing of the defence industry and military mobility is being significantly increased due to the complicated geopolitical situation.
MEPs have already rejected the initial draft of the Member States due to a “lack of ambition“.
Parliament insists on 10% increase the budget to 1.27% of GNI (around €1.79 trillion in 2025 prices). They require that the cost of paying off the pandemic debt be calculated outside the MFF ceiling.
The Parliament and the Commission are proposing new own resources – including a digital tax, a tax on cryptocurrencies and online gambling, as well as levies on companies with a turnover of over €100 million. However, businesses and countries such as Germany are opposed to new fiscal burdens.
Net contributors such as Germany and the Netherlands are pushing for spending cuts. Conversely, recipient countries (including Poland, Portugal and Bulgaria) want the budgets for agriculture and regional policy not to be cut.
The leaders of the member states, the Council of the EU and the European Parliament are aiming to reach a final political agreement by the end of 2026. This is a critical deadline for sectoral legislation to be adopted in 2027 and funds to start being disbursed without interruption from 1 January 2028.