Agreeing the Multiannual Financial Framework (MFF), the EU’s long-term spending plan, remains one of the bloc’s thorniest political challenges. Talks have reached a decisive stage: member states are arguing not only over how much each will pay from 2028 to 2035 but also over what they will get in return.
For the European Commission, the budget is also a question of external autonomy. As Commission President Ursula von der Leyen put it when unveiling the proposals, “In a time of geopolitical instability, the budget will allow Europe to shape its own destiny, in line with its vision and ideals.”
The European Parliament recently voted to raise the total amount, but the 27 member states have the final word. Disagreements were on display during an informal summit in Cyprus. The Commission proposed an inflation-adjusted envelope of €1.76 trillion; the Parliament pushed for an even larger figure.
Member states are split. Germany and the Netherlands have publicly opposed the Commission’s proposed increases. German Chancellor Friedrich Merz argued in Cyprus that “at a time when nearly all member states are undertaking the most rigorous fiscal consolidation efforts at home, a massive increase in the EU budget, as proposed by the Commission, does not fit the picture.”
By contrast, many net-recipient countries—those receiving more from the EU than they contribute—say the proposed pot is too small for the tasks ahead. A study by the German Economic Institute identified Greece, Poland, Romania, Spain and Hungary as net recipients in 2024. The biggest net contributors—Germany, France, Italy, the Netherlands and Sweden—have a clear interest in limiting their payments.
Under the Commission’s plan, traditional items such as agriculture and cohesion (regional development) funding would be trimmed and made more flexible, while more money would be steered toward competitiveness, defense and external action, including increased support for Ukraine. Nils Redeker, acting co-director of the Jacques Delors Center, warns that cutting agricultural and regional funds may prove politically unrealistic: many member states accept the need to invest in defense and industry but will resist losing long-established funding streams.
Janis Emmanouilidis of the European Policy Center observes that, during these negotiations, both small and large states tend to focus on what their citizens will tangibly receive from the EU budget; maximizing the collective European benefit often takes a back seat.
The Commission also proposes new own resources to reduce the bloc’s dependence on national contributions. It wants five new revenue streams, including a levy on large companies, a tobacco tax and higher revenues from the EU Emissions Trading System. The European Parliament has lobbied for a digital tax on big tech firms. Reaching agreement on new own resources will be difficult: the long-running debate over using EU revenues to help repay the €750 billion COVID-19 recovery fund is still unresolved, and some capitals fear the economic consequences of new levies.
Another flashpoint is the timetable and mechanism for repaying recovery-era debts. French President Emmanuel Macron called immediate repayment “idiotic” and has advocated more joint borrowing, such as Eurobonds, while Germany opposes taking on more shared debt.
Negotiations at member-state level are expected to be hard and will be shaped by domestic politics. Elections are due in several major countries next year, including France, Italy and Poland; Emmanouilidis says the possibility of a nationalist victory in France in particular is adding pressure on leaders to seal a deal by the end of 2026.
EU leaders are due to continue talks at their next meeting in June, when concrete numbers are expected to be tabled for the first time.
This article was translated from German.