The EU's 2028–34 budget: the fight is over size, not shape

The EU's next seven-year budget has reached the stage where the architecture is mostly settled and the size is not. The Commission's proposal would replace dozens of programmes with national plans and a single competitiveness fund, and would multiply EU spending on defence. Governments have argued about the details but not about the design. The fight is over how much, and the first attempt at a compromise shows who is likely to pay for a smaller total: research and defence rather than farmers and poorer regions.

What the Commission proposed

The Commission presented its proposal for 2028–34 on 16 July 2025. It amounts to almost €2tn, about 1.26 per cent of EU gross national income on average. It cuts the number of programmes from 52 to 16. Its main instruments are these.

• National and Regional Partnership Plans: one plan per member state, financed from a €865bn fund that absorbs farm payments, cohesion policy and several smaller funds, with at least €300bn ring-fenced for farmers' income support.
• A European Competitiveness Fund of €409bn for strategic technologies, with a €131bn window for defence and space, which the Commission says is five times the EU-level funding of the current period.
• Horizon Europe, the research programme, at €175bn.
• Global Europe, the external instrument, at €200bn plus a €15bn reserve for crises.
• Up to €100bn for Ukraine over 2028–34, held in a reserve outside the main spending ceilings.

On the revenue side the Commission proposed five new own resources, including shares of emissions-trading and carbon-border revenue, a levy on e-waste, a tobacco excise resource and a corporate resource paid by companies with turnover above €100m. Part of the new money is needed to repay the debt raised for NextGenerationEU.

Reading the numbers

Budget figures in this negotiation come in several versions, and they are easy to confuse. The Commission's headline figures are in current prices; much of the Council's work is also expressed in 2025 prices, which are lower. Scope differs too. Global Europe appears as €200bn in the Commission's summary, as €215bn in Agence Europe's reading of the negotiating box, which adds the €15bn crisis reserve, and as €190bn in 2025 prices in New Union Post's. The Ukraine reserve of up to €100bn is €88.8bn in 2025 prices. Agence Europe puts the competitiveness fund at €450bn against the Commission's headline of €409bn; we could not reconcile the two precisely, and the difference probably reflects which programmes are counted. Comparisons below use like with like.

The shift to national plans, and who gains

The most radical change is the merger of shared-management funds into single national plans. Each government would agree one plan with the Commission, covering cohesion, agriculture, migration and security. Opposition to this centralised, national-plan approach emerged early in both the European Parliament and several member states.

The allocation formula also moves money between states. The agricultural economist Alan Matthews compared national envelopes under the proposal with what each state receives from the five current shared-management funds. The EU total barely changes in current prices, €749bn against €745bn. Within it, Czechia would lose 8.3 per cent, Slovenia 5.8 per cent and Portugal 5.1 per cent, while Belgium would gain 7.6 per cent and Bulgaria and Romania 5 per cent each. Because the plans must also fund new priorities such as defence, the effective squeeze on cohesion and farm spending is larger than those figures suggest.

The first compromise protected land and regions

The Cyprus presidency published its negotiating box on 11 June 2026. It cut the total by about 2 per cent, or €32.8bn. The cut was not even. The heading for cohesion and agriculture fell only from €1,062bn to €1,057bn, with farm income support unchanged, fisheries doubled from €2bn to €4bn and an extra €5bn for states with GDP per head below 90 per cent of the EU average. Competitiveness and external action took a horizontal cut of 3.9 per cent: the competitiveness fund fell by €16bn, Horizon Europe by €8bn to €167bn, the resilience, security and defence line from €130bn to €125bn, and Global Europe by €9bn. The Ukraine reserve was left unchanged.

The reaction split along the familiar line. Poland, Romania, Portugal, Greece, Czechia, Croatia, Slovakia and Bulgaria, members of the Friends of Cohesion, welcomed the protection for poorer regions and agriculture. Germany's Europe minister, Gunther Krichbaum, called the proposal clearly unacceptable and said that if the EU were designed today it would not start with the common agricultural policy. Sweden's minister, Jessica Rosencrantz, expressed frustration, and Belgium said a 2 per cent cut was too small. The budget commissioner, Piotr Serafin, criticised cuts to defence and competitiveness. France and others renewed calls to abolish the rebates that Germany, Sweden, Austria, Denmark and the Netherlands receive; France's Benjamin Haddad called them archaic.

Net payers name a direction, not a number

On 27 August Chancellor Friedrich Merz hosted the leaders of Austria, Denmark and Finland in Berlin, with the Netherlands and Sweden joining by video. Their joint statement said the proposal of nearly €2tn must be cut by several hundred billion euros. Merz said the six finance around 40 per cent of the EU budget. They did not agree a figure. Germany has floated a total of €1.6tn, about €400bn below the Commission, while Sweden wants contributions held to 1 per cent of GNI, according to Euronews.

The arithmetic matters for the east. A cut of €400bn could not come from competitiveness and external action alone without gutting the defence and research lines that the same net payers say are their priorities. It would have to reach the national plans, and so the cohesion and farm money the first compromise protected. The net payers have not said where their cuts would fall. That silence, more than the headline number, is what the Friends of Cohesion will test in the autumn.

What to watch

The Irish presidency has to produce a compromise proposal before the European Council in mid-October. Three things will show the direction. First, whether the defence and space window survives at close to €125bn or becomes the reserve from which cuts are found. Second, whether the Ukraine reserve stays outside the ceilings, which makes it cheaper for net payers to accept. Third, whether a deal on new own resources lets the total fall less than net payers demand. On the evidence so far, the likeliest outcome is a total well below €2tn, with the Friends of Cohesion defending their share of a smaller budget.

Sources

• European Commission — EU budget 2028–2034
• eucrim — Commission proposal on Multiannual Financial Framework 2028–2034
• European Commission, DG AGRI — Questions and answers on the CAP post-2027 proposal
• CAP Reform (Alan Matthews) — Which countries gain or lose from the National and Regional Partnership Fund?
• Agence Europe — MFF 2028–2034: Cyprus presidency unveils negotiating box with figures clearly leaning in favour of Friends of Cohesion
• Agence Europe — Frugal countries appear isolated around EU Council table on topic of MFF 2028–2034
• New Union Post — The Council's 2028–2034 MFF nego box also cuts Global Europe
• Euronews — EU payers push for cuts but can't agree on how much as budget talks enter key phase