The adoption of the Multiannual Financial Framework (MFF), the EU’s long-term spending plan, is one of the bloc’s most sensitive political issues. Negotiations have entered a critical phase: the debate concerns not only how much member states will pay from 2028 to 2035 but also what they will receive in return.
For EU institutions, the budget is also about external autonomy. “In a time of geopolitical instability, the budget will allow Europe to shape its own destiny, in line with its vision and ideals,” said European Commission President Ursula von der Leyen when she unveiled the Commission’s proposals.
On Tuesday the European Parliament voted to increase the budget, but the 27 member states have the final say. Last week, EU leaders met at an informal summit in Cyprus and signs of disagreement were already apparent. The Commission had proposed a budget of €1.76 trillion (adjusted for inflation), and the Parliament opted for an even larger sum.
Member states are divided. Germany and the Netherlands have spoken out against the Commission’s increases. “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,” said German Chancellor Friedrich Merz in Cyprus.
By contrast, many net recipient countries—those receiving more from the EU than they contribute—believe the budget is too small given the tasks ahead. A study by the German Economic Institute listed Greece, Poland, Romania, Spain and Hungary among net recipients in 2024. At the same time, the largest net contributors—Germany, France, Italy, the Netherlands and Sweden—have an interest in keeping their payments as low as possible.
Under the Commission’s plans, funding for agriculture and regional development would be reduced, with payments made more flexible. The budget would shift more money toward competitiveness, defense and external action, for example increased aid to Ukraine. Nils Redeker, acting co-director of the Jacques Delors Center, doubts the political feasibility of cutting agricultural and regional funds, noting that while member states recognize the need to invest in defense and industry, many will resist losing traditional funding streams.
Janis Emmanouilidis of the European Policy Center said that during negotiations both small and large states focus primarily on what their citizens will actually get from the EU budget; the question of how to maximize collective benefit is less prominent.
The Commission also proposes new own resources to reduce reliance on national contributions. It calls for 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 pushed for a digital tax on big tech firms. Reaching agreement on new own resources will be difficult: the debate over repaying the debts from the €750 billion COVID-19 recovery fund using EU own resources lasted years and has yet to be resolved. Some member states fear the economic burden of new levies.
Another contentious issue is the timetable and method for repaying recovery-era debts. French President Emmanuel Macron recently called it “idiotic” to repay the funds immediately and has advocated more joint borrowing, such as Eurobonds; Germany opposes increasing debt.
Negotiations are expected to be tough at the member-state level and are influenced by domestic politics. Elections are due in several major countries next year, including France, Italy and Poland. Emmanouilidis said the prospect of a nationalist victory in France in particular is increasing pressure on leaders to conclude budget talks by the end of 2026.
EU leaders will continue negotiations at their next meeting in June, when concrete numbers are expected to be presented for the first time.
This article was translated from German.