BRUSSELS ― The European Commission has proposed a central EU budget of €1.816 trillion for the seven-year period from 2028 after days of fraught internal negotiations.
That figure would represent an increase in the European Union’s spending power compared with the current budget that has run from 2021.
Members of the Commission, led by President Ursula von der Leyen, finally settled on this number on Wednesday, meaning that total spending would rise to 1.15 percent of the EU’s gross national income, compared with around 1.1 percent over the current period.
“It is a budget that matches Europe’s ambition, that confronts Europe’s challenges and that strengthens our independence,” von der Leyen told reporters. “The budget is larger, it is smarter, and it is sharper.”
The Commission claimed that its budget will amount to €2 trillion. This factors in repayments of the EU’s post-Covid debt and would represent 1.26 percent of GNI. Siegfried Mureșan, the budget negotiator for von der Leyen’s own center-right European People’s Party, described this method as “misleading.”
His criticism was echoed by lawmakers from across the spectrum.
Smaller budget, different priorities
The announcement fires the starting gun on at least two years of ― probably bad-tempered and tortuous ― wrangling with the European Parliament and national capitals, all of whom must approve the final sum.
“The proposed budget is too high,” said Dutch Finance Minister Eelco Heinen.
Many governments are likely to push for a smaller budget, or one with different priorities, than the Commission is proposing. By contrast, much of the Parliament wants the EU to have greater firepower.
In a signal of the battles to come, Carla Tavares, the socialist point person on the budget, said: “We will not allow the financing of our key priorities to be compromised by the repayment of NextGenerationEU [the Covid recovery loans].”
The overall €1.816 trillion figure is expressed in 2025 prices and compares with a budget of €1.2 trillion between 2021 and 2027, also in current prices. A planned large increase from the previous seven-year period is not unusual at this stage.
Commissioners approved the spending plan after their heads of cabinets ironed out the most sensitive issues during two days of almost non-stop negotiations in Brussels.
The Commission will allocate €865 billion to “National and Regional Plans,” which might include regional policy and the Common Agricultural Policy, which currently make up two-thirds of the EU budget, according to EU budget commissioner Piotr Serafin, who presented the plan to the European Parliament.
Farmers’ subsidies and payments to poorer regions ― which have been the bread and butter of the EU budget for decades ― will make up a significantly lower share of total spending in the next years to come.
The Commission will allocate €410 billion to the “European competitiveness Fund,” €200 billion to “Global Europe,” which includes development aid and assistance to neighboring countries, and €292 billion to “other” programs including nuclear decommissioning and justice and €49 billion for the Erasmus+ study exchange program.
The debt repayments will service the EU’s loans on capital markets and will not be spent on priorities such as agriculture or defense.
“Now we understand the secrecy,” said Kata Tüttő, the president of the Committee of Regions, which represents Europe at local levels, in a post on X. “From behind the simplification smoke a MONSTER plan emerges to swallow cohesion policy and crack its backbone by nationalising and centralising.”
New taxes
Serafin presented three new taxes targeting electric waste, tobacco products and companies in the EU to repay the post-Covid debt, which is estimated to cost €25 to €30 billion per year.
He confirmed proposals from 2021 to levy a carbon border tax and a take share of the revenues generated by the emissions trading scheme (ETS) among other things. This revenue is expected to add up to €58 billion per year.
Several countries, including Germany, the bloc’s largest and most powerful economy, have already warned against expanding the EU’s money pot at a time when voters across Europe are increasingly turning to populist and anti-EU forces.Von der Leyen’s big idea is to steer funding away from how EU money has traditionally been spent ― on agriculture and regional development ― toward new priorities such as defense and innovation.
The EU’s 27 governments and the Parliament have to unanimously approve the plan.
It will be a tough sell for von der Leyen. Alongside Germany’s reservations, France, the second-biggest economy, is also unwilling to increase its contributions, squeezed as it is by a soaring deficit and ballooning debt.
This article has been updated.
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