EU unveils €2 trillion budget proposal for 2028–2034

The European Commission today presented a sweeping proposal for the EU’s next Multiannual Financial Framework (MFF), setting out an ambitious seven-year budget of nearly €2 trillion (1.26% of the EU’s gross national income on average) for the period 2028–2034. Framed as a transformative investment strategy offering greater flexibility, the budget aims to fortify Europe’s resilience, sovereignty, and prosperity amid ongoing geopolitical, climate, and economic challenges.

“It is a budget that confronts Europe’s challenges and strengthens our independence,” she stated. “A budget that delivers for our citizens, businesses, partners, and our future.”

Key priorities: competitiveness, cohesion, security, and resilience

The proposed MFF radically restructures EU spending and introduces greater flexibility, harmonisation, and responsiveness to crises. It integrates longstanding policy pillars, like agriculture and cohesion, with bold new instruments to tackle today’s emerging realities.

Notable highlights include:

• €865 billion earmarked for National and Regional Partnership Plans, integrating funding across cohesion, agriculture, and social policy for targeted local investment and reform.
• A new European Competitiveness Fund, worth €409 billion, will back strategic technologies across sectors including clean energy, digital transition, biotech, health, defence, and space.
• €200 billion for Global Europe, boosting strategic foreign partnerships, EU enlargement, and humanitarian action, alongside a dedicated €100 billion package for Ukraine.
• A powerful €400 billion crisis mechanism to respond rapidly to unforeseen shocks, from pandemics to geopolitical threats.

Transforming budget delivery: a simplified, unified approach

The Commission proposes a “one-plan-per-country” approach via the National and Regional Partnership Plans, centralising multiple funding streams into a coherent investment and reform strategy. These plans will integrate support for workers, businesses, farmers, urban and rural communities, and tackle cross-cutting issues like housing and skills shortages.

The new model also includes:

• Mandatory social spending targets: 14% of national allocations must go to social inclusion, skills, and employment.
• Ringfenced support: €300 billion for farmers, €2 billion for fisheries, and €218 billion minimum for less developed regions.
• Rule of law conditionality: Continued protection of EU funds via strong compliance safeguards.

Strategic autonomy through innovation and industry

Driven by the Letta and Draghi reports on EU competitiveness, the Competitiveness Fund will prioritise technologies that underpin European sovereignty, supply chain security, and clean tech leadership. It complements a doubled Horizon Europe programme, now valued at €175 billion, and expanded investments in defence and dual-use infrastructure.

The Defence and Space window, with €131 billion, marks a fivefold increase over current allocations—supporting Europe’s ambition to build a robust European Defence Union.

Energy and transport connectivity under the Connecting Europe Facility will also see sharp increases: military mobility spending will multiply tenfold, and energy infrastructure funding will grow fivefold to strengthen Europe’s autonomy.

Responding to crises, boosting resilience

Acknowledging that crises are now a “new normal,” the Commission is proposing a dedicated €400 billion firepower to be used exclusively during major EU-wide emergencies. The fund would provide loans to Member States through the Catalyst Europe mechanism, offering additional resources to invest in shared EU priorities such as defence, energy, and health preparedness.

Modern financing: five new ‘own resources’ to fund the future

To support this bold agenda while easing pressure on national budgets, the Commission proposes a balanced package of new revenue streams projected to generate €58.5 billion annually, including:

• A revised EU Emissions Trading System (ETS): €9.6 billion/year
• A Carbon Border Adjustment Mechanism (CBAM): €1.4 billion/year
• A new levy on non-collected e-waste: €15 billion/year
• An EU tobacco excise duty: €11.2 billion/year
• A Corporate Resource for Europe (CORE): €6.8 billion/year, drawn from large multinationals

Investing in people, values, and the European way of life

The proposal significantly enhances investment in civic, cultural, and educational programmes. The popular Erasmus+ scheme will receive a 50% funding boost, while a newly formed AGORA-EU programme will merge existing civil society, values, and media freedom initiatives under one umbrella.

The budget also reinforces support for migration management with a €34 billion envelope, tripling previous allocations, to help Member States secure borders and implement the new EU Pact on Migration and Asylum.

Global leadership and enlargement

With a 75% increase in external action funding, the EU aims to match its growing global role. Global Europe will provide tailored reform and investment support for enlargement countries, reflecting the EU’s strategic pivot towards deeper integration with its neighbourhood.

EU support for Ukraine’s recovery and reconstruction, meanwhile, is reaffirmed through the new €100 billion Ukraine Facility, alongside continued security cooperation via the European Peace Facility.

Next steps: a negotiation of unanimity and consensus

The Commission’s proposal will now move to inter-institutional negotiations. The European Parliament must give its consent, and all 27 Member States must approve the MFF and new own resources unanimously, some requiring ratification at national level.

“This is a budget for the realities of today, as well as the challenges of tomorrow,” concluded President von der Leyen. “Our new long-term budget will help protect European citizens, strengthen Europe’s social model and make our European industry thrive. In a time of geopolitical instability, the budget will allow Europe to shape its own destiny, in line with its vision and ideals. A budget that supports peace and prosperity and promotes our values is the best tool we can have during these uncertain times.”