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The timing to discuss the next EU multiannual financial framework, MFF is dreadful: facing a full-blown trade war with the US, tough period in the immigration issues, military conflicts around the world, etc. The budget is currently at €1.2 trillion: hence, all participants are “fighting tooth and nail” to protect their MFF’s share from the Commission’s intentions to various cuts. However, some changes would occur during still two years of intense negotiations between the member states’ governments, the European Parliament and the Council.
Background
The Multiannual Financial Framework (MFF) is the EU-wide long-term spending plan to be applied from 2028 to 2034. The fact that two years have been set aside for negotiations over what the budget contains is a sign that, usually it takes some time with complicated battles among the member states governments (which must unanimously agree on the MFF contents).
Before the 16 July (the starting point of fierce discussions on MFF), the member states, the Commissioners and other EU institutions will have to answer some crucial questions: e.g. How big will the budget be; which taxes will be levied to repay the EU’s debt; will regions still matter, etc. during the coming emergency talks.
For example, the EU has already offered plenty concessions to the US aggressive “trade moves”, including softening the EU digital/AI rules, which all would sacrifice Europe’s sovereignty and expose the EU administration to much internal blowback. For example, a vital point of consensus is the 30 percent tariffs on European goods/services, which are going to be damaging to big European economies (including Italy and Germany, among others); it seems that the EU has no choice but to hit back if these tariffs go into effect.
More on the EU-US trade conflict in (14 July, 2025): https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1816
The Parliament’s opinion: Renew Europe
Different EP’s groups expressed their opinions about the budget’s draft and the positions on EU funds; e.g. Renew Europe demands an MFF which is more European in its shape (no renationalization, more parliamentary oversight); more European in its objectives (EU-public goods only), more European in its response to common challenges such as defence and competitiveness, more European in its financing (stable own resources needed).
Renew Europe adopted two position papers: one, fleshes out Renew Europe’s vision for the next multiannual financial framework (MFF).
In this regard, Renew Europe demands an MFF to be “more European in its shape, with less-renationalization and more parliamentary oversight), as well as more European in its objectives (EU-public goods only), more European in its response to common challenges such as defence and competitiveness, more European in its financing (stable own resources needed), more European in its values (no funding for autocrats), etc.
The other one lays out reform paths to significantly simplify the way to access EU funds. Here, the Renew Europe demands, among other things, “more flat-rate and lump-sum payments for small projects, reducing reliance on invoices, ensure that one trusted audit is sufficient and avoid repeated checks, introduce controls proportionate to the project size and risk; a unified EU funding portal with shared login, EU program comparison tools, pre-filled applications for returning users, using clear, user-friendly language in all guidance materials and templates.
Source and citation from: “A simpler, truly European budget”, by Maxime Jérôme Rolland-Calligaro. July 08, 2025. EP group “Renew Europe”, in: https://www.reneweuropegroup.eu/news/2025-07-08/a-simpler-truly-european-budget
The budget’s size
The main EU-wide point is that in the coming years the EU institutions will have to do more with roughly the same amount of money. Although the final figures are quite confidential until the very last minute, it is already clear that “the available money won’t be enough to cater for the new priorities ― from defense to innovation to climate disasters ― that have kept piling up over the last few years, notes Politico.
Source and citation from: https://www.politico.eu/article/eu-seven-year-budget-ursula-von-der-leyen-taxes-green-spending/
The agro-bloc in the EU wishes “to free up more funding” from the defense and startups and resent the budget department in cutting up to 20 percent from the EU’s farming and regional budgets, which jointly make up two-thirds of the MFF current volume.
For example, Johannes Hahn, the EU’s former budget commissioner notes that “the budget is politics cast in figures”: the ongoing fierce negotiations over the seven-year spending plan from 2028 are proving him right.
The Commissioners are already showing their intentions to attack the president’s programs, and the national governments are sending angry messages. Thus, the European agricultural community has already informed that they are ready “to take to the streets if their demands aren’t met”. The head of European powerful Copa farming lobby, warned about violent response in case of cuts to the EU’s massive farm aid budget.
Source and reference from: https://www.politico.eu/article/eu-seven-year-budget-ursula-von-der-leyen-taxes-green-spending/
Another Commissioner, Teresa Ribera, a Spanish socialist responsible for the climate agenda, is fighting to increase, or at least preserve, the 30 percent climate target to show that the EU is not abandoning its green priorities.
The regional issues
The regional spending presently makes up a third of the EU MFF-budget. Regional policy’s supporters argue that it will make easier for recipients to access MFF money and encourage productivity by incentivizing national reforms.
However, a majority of EU governments are worried that the change would empower central administrations and sideline regions, which currently play a big role in spending EU funds.
There are lingering fears that handing the budget’s money to national governments (as opposed to poorer regions, as is currently the case) could undermine the EU’s goal of reducing disparities among the member states. Presently, the member states’ contributions to the MFF represent about 1,3 percent of their budgets, compared to the expected 5 percent for defence and 3 percent for climate mitigation.
Taxation issues
Although it’s known that “there is no such thing as a good tax”, as Winston Churchill’s maxim sounds, the Commission intends to introduce new EU-wide levies (or transfers from national tax revenues known as “own resources”) to pay back €25 billion to €30 billion per year in joint debt that was issued to finance the bloc’s post-Covid recovery. But finding unanimity on any new tax won’t be easy… notes the Politico.
The member states’ governments are wary of giving the EU institutions “too much power to extract money from the national purses” and generally oppose handing a share of their domestic tax revenue to MFF; however, currently a vast majority of EU-wide budget originate from national governments’ contributions.
Recently, the Commission suggested three new taxes targeting non-recycled electric waste, tobacco products and large companies in the EU member states, with the total turnover of more than €50 million. This comes on top of two separate ideas from 2021 to levy a carbon border tax and to take a share of the revenues generated by the Emissions Trading System.
Financing the “green agenda”
During the latest MFF negotiations, the member states agreed that “at least 30 percent of all the expenditure should be directed toward climate goals” however, “green spending has fallen out of fashion, with right-wing parties surging and competitiveness overtaking the environment on the EU’s priority list”, notes Politico.
Besides, the EU climate chief Teresa Ribera insists to increase, or at least preserve, the 30 percent climate target to show that the EU isn’t abandoning its green agenda.
Though the EU Budget Commissioner Piotr Serafin is pushing in the opposite direction over fears that such a high threshold will make it harder to shuffle funding according to the continental needs and priorities.
The Politico concludes that there is “little time for von der Leyen to make a final decision on the climate target” …Some other experts (e.g. from the Bruegel think tank) suggest that the MFF spending shall be almost doubled to take account of the need for financing the climate transition, defence/military, energy, sustainability issues and paying off the previous Covid-19 debts.
As the Bruegel report notes, the MFF heading 1: Single market, innovation and digital (€150 bn out of 1,3 trillion), includes programs that support research and innovation, such as Horizon Europe, digital transformation and the development of cross-border infrastructure through the Connecting Europe Facility, CEF. The latter projects (energy, transport and digital) also offer cross-border spillovers; however, parts of the Digital Europe Program and InvestEU focus on private goods or national interests, such as support for SMEs, artificial intelligence (AI) development and regional hubs. Finally, notes Bruegel, “the EU budget as currently set up is not big enough to achieve the EU’s climate and digital goals”.
Source, Bruegel think tank, in: https://www.bruegel.org/sites/default/files/2025-07/Bruegel%20Blueprint%2037.pdf
General source: https://www.politico.eu/article/eu-seven-year-budget-ursula-von-der-leyen-taxes-green-spending/