On 16 July 2025, the European Commission presented its proposal for the next Multiannual Financial Framework (MFF) – the EU’s long-term budget covering the years 2028 to 2034. This budget will determine how much money the EU has at its disposal and what priorities it sets for the next seven years.
The size of the new budget
The Commission proposes a MFF of EUR 1,984 trillion (in current prices). The current MFF (2021–2027) amounts to EUR 1,211 trillion, not counting the extraordinary recovery instrument “NextGenerationEU” (EUR 806.9 billion). At first sight this thus looks like a very large increase. However, once corrected for inflation, the difference is smaller. Expressed in relation to the EU’s economic output, the new MFF would represent around 1.26% of the EU’s gross national income (GNI), compared to 1.13% under the current framework.
Where the money goes
The Commission proposes to simplify the structure of the budget, reducing it to just four main spending areas (compared to seven in the current MFF).
The largest share – over half the total (EUR 1,062 billion) – goes to “Economic, social and territorial cohesion, agriculture, rural and maritime prosperity and security.” This covers the EU’s two most expensive policies: the Common Agricultural Policy and cohesion policy, but also includes the repayment of NextGenerationEU loans, which will start in 2028. “Competitiveness, prosperity and security” is the second biggest area (EUR 590 billion), with a new European Competitiveness Fund making up the bulk. “Global Europe” (EUR 215 billion) will fund the EU’s action outside its borders, such as development aid and neighbourhood policy. Finally, EUR 118 billion is foreseen for the EU’s institutions and administration.
Streamlined budgeting, uncertain safeguards
A major innovation in the new MFF is the way EU funds are organised. From 2028 onwards, many programmes and funds in the CAP and cohesion policy area will be merged and Member States will have to write only one “National and Regional Partnership Plan” to be agreed with the Commission to access funding. This should cut bureaucracy and overlaps. More flexibility is also introduced: funds can be shifted across programmes, and a larger share will remain unallocated at the start to react quickly to crises.
Yet this streamlining also raises concerns. Trade unions warn that merging funds without clear “ring-fencing” could dilute traditional priorities, particularly in the social sphere. Under the current MFF, the European Social Fund Plus (ESF+) has fixed allocations enshrined in its regulation, guaranteeing dedicated resources. In contrast, the draft 2028–2034 MFF no longer sets explicit shares; funding will instead depend on the broader partnership plans. Without strong safeguards, there is a risk that social policies may be sidelined in practice.
How the EU will pay for it
Until now, the EU budget has been financed mainly through national contributions from Member States, customs duties and a share of VAT. The new MFF proposes to strengthen the EU’s “own resources” – meaning sources of revenue that do not directly come from national budgets. These are the EU Emissions Trading System, the Carbon border adjustment mechanisms, non-collected e-waste, a tobacco excise duty and contributions from large corporations operating in the single market. According to the Commission, the new system could generate around EUR 58.5 billion per year, easing the pressure on Member States’ finances.
What happens next?
The Commission’s proposal of 16 July 2025 is only the start of a long negotiation process. Talks between the Member States, the European Parliament and the Commission will take place over the coming two years, covering both the overall size of the budget and the way resources are allocated. The decisive moment will come in late 2027, when all 27 Member States in the Council must unanimously agree on the final package, with the European Parliament giving its consent. If this agreement is reached on time, the new MFF will enter into force on 1 January 2028 and guide EU spending until 2034.