The EU multiannual budget for 2028-2034 – Key points and the Dutch position

On Wednesday 15 July, the European Commission presented the first package of the Multiannual Financial Framework (MFF), the European Union’s multiannual budget. This package covers the budget for the period 2028-2034, setting out how resources will be allocated across EU priorities and how much each Member State will contribute. Whereas the budget for 2021-2027 amounted to €1,074.3 billion, the budget for the next seven years will rise to €1,816 billion. Due to the significant financial interests involved, negotiations on the MFF are often lengthy and involve intense lobbying. In this blog, colleagues Adriane Schultz and Valérie Mendes de León analyze this first package and discuss the most striking proposals.

Is €1,816 billion enough?

Europe faces major challenges and must respond to issues such as climate and security, the energy transition, and defense and trade challenges. The ambition of the new budget is to implement the investment agenda proposed by Mario Draghi in 2024, but researchers are already indicating that the current budget will not be sufficient. Brussels think tank Bruegel recently demonstrated in a report

that the MFF budget needs to be doubled: “challenges including the climate and digital transitions, competitiveness, economic resilience, defense, migration management, and foreign policy go beyond national borders and demand coordinated and well-resourced responses. But the EU’s main financial instrument, its budget — or Multiannual Financial Framework (MFF) — remains stuck in the past.” According to these researchers, the budget should be increased to 2% of European GDP, instead of the 1.26% currently proposed. In the budget debate with European Commissioner Serafin, MEPs also argued that this proposed budget is not sufficient to meet current and future European challenges.

This is a politically sensitive issue: member states have mixed views on this, with France as a strong supporter and Germany, Sweden, and the Netherlands—known as the frugal four together with Austria—opposed.

Major shift in budgets: competitiveness takes priority

One of the changes in this budget concerns restructuring and simplification. Whereas the previous budget was known for its many programs and funds, the Commission has reduced the number of programs 52 to 16, in line with its recent efforts to make policy less complex. In addition, the Commission has not yet filled in all the details of the budget in order to build in flexibility and agility to respond to changes in the world. We highlight three major plans below.

National, Regional and Partnership plans

The Common Agricultural Policy (CAP) and cohesion policy are two pillars that originally accounted for two-thirds of the European budget. In the 2028-2034 budget, these pillars are merged into the ‘National, Regional and Partnership Plans’ section, which accounts for 48% of the budget, €865 billion. €300 billion will go to agricultural policy and €218 billion to less developed regions. This means that there are cuts in the budgets for agriculture and cohesion policy. As a result, national governments will be given more responsibility in these areas. For many member states and farmers, this change in the budget is a sensitive issue, and it is expected that these groups will push hard for a substantial increase in the negotiations over the next two years.

European Competitiveness Fund (ECF)

New to the budget is the European Competitiveness Fund, which accounts for 23% of the budget at €410 billion. The ECF aims to implement the Draghi and Letta Reports on competitiveness. This Fund finally provides us with a definition of this: “the EU’s capacity to raise productivity growth, high living standards, and strategic autonomy in a rapidly evolving global landscape.” The fund aims to boost a number of areas: 1) a clean transition and industrial decarbonization, 2) digital leadership, 3) health, biotech, and the bioeconomy, and 4) resilience, the defense industry, and space. The latter component involves a fivefold increase in the budget to €131 billion. This money will mainly go towards further developing the defense industry, military mobility, and strengthening the energy infrastructure. Whereas defense policy has always been a national competence, the Commission wants to organize and coordinate cooperation in certain areas more centrally.

Global Europe Instrument

Europe wants to invest more in its place on the world stage; the budget proposes €200 million to carry out Europe’s external responsibilities, which is an increase of 75%. This Instrument covers humanitarian aid, strategic partnerships, and EU enlargement.

The latter in particular has been identified as a priority: without European enlargement, there can be no stability and prosperity, Von der Leyen said in her speech. This fund also allocates €100 million to support Ukraine—a doubling of the budget to invest in Ukraine’s recovery, resilience, and future EU accession.

Enlargement of the Union remains a politically complex issue. The message from the College of Commissioners to allocate more funds to this is clear – but now it is also up to them to get the member states and Parliament on board.

Who will pay for this budget?

Commission President Ursula von der Leyen was adamant: no additional financial effort will be asked of member states. To finance the additional plans, the Commission is introducing a number of new levies targeting electronic waste, tobacco products, and companies with an annual turnover of more than €50 million. European Commissioner Serafin also confirmed that revenue will come from the carbon border tax and the emissions trading scheme.

There has been much talk about a tax on digital services with a significant footprint in the EU, particularly social media and tech companies from the US. Since the start of the tariff negotiations, this discussion has been put in a different light and the levy has not been adopted.

Despite the additional taxes, there still appears to be a budget shortfall of €400 billion. The Commission did not provide any real answers to questions from journalists and MEPs on this issue, thus the coming days will showcase how the Commission intends to pay for this.

Two years of negotiations

After the Commission presents the MFF in the form of a regulation, both the European Council and the Council of the European Union will play a central role. The heads of government of the member states provide guidance on the budget in the European Council, after which the Council (of the European Union) can determine its position.

Member States raise national interests here, which concern who will ultimately pay the bill. This part of the negotiations often takes the longest, partly because the Council must vote unanimously in favor of the proposal. The Parliament’s approval is then also required before it can be ratified in the Member States.

The Netherlands’ commitment to the MFF

In March 2025, the Dutch government shared its position to the MFF for 2028-2034 in a letter to the Parliament. First and foremost, the Netherlands reiterated the importance of budgetary discipline. In advance, the government stated it cannot agree on new own resources and is even committed to limiting the increase in Dutch contributions to the EU.

The government’s main priorities for the MFF are 1) strengthening European competitiveness with a strong internal market and a commitment to research and innovation as a foundation, 2) a robust migration and asylum policy, and 3) security and defense.

During the Council negotiations, caretaker Minister of Finance Eelco Heinen is likely to emphasize that EU budget resources should be used where they offer the greatest added value for the Union as a whole. Heinen will possibly argue that the European Union should focus on its core tasks, invest in strengthening Europe’s competitiveness, and do all this within the existing budgetary frameworks.

Next steps

The announced budget clearly indicates which policy plans will or will not make it through the next seven years, where Member States will have to prioritize the allocation of their funds and manage its stakeholders. The next two years will be crucial for the budget negotiations and also the moment for organizations to make their voices heard. If you are curious about how the budget will impact your organization, please contact our colleague Valérie at vmendesdeleon@publicmatters.nl.