EU Proposes €1.98 Trillion Budget for 2028–2034 Focused on Security and Growth

The Commission proposed an EU long-term budget of roughly €1.98 trillion in current prices for 2028–2034, equal to about 1.26% of the EU’s average GNI, with €168 billion of that total reserved to repay NextGenerationEU borrowing beginning in 2028. The package reorganises spending around a streamlined architecture. A first pillar—National and Regional Partnership Plans (NRPPs)—would pool cohesion policy, CAP and several other funds into a single planning framework worth about €865 billion, including around €453 billion for cohesion and close to €296 billion for agricultural income support. An additional EU-level “EU Facility” is proposed to support implementation; Commission materials and sector briefs point to an allocation of about €72 billion for this instrument.

A second pillar—Competitiveness, Prosperity and Security—centres on a new European Competitiveness Fund (ECF) that consolidates programmes spanning clean transition, digital, health and defence. Within this pillar, Horizon Europe would be doubled to €175 billion to finance research and innovation from lab to market, while the Connecting Europe Facility (CEF) would total about €81 billion, including ~€17 billion dedicated to military mobility—roughly a tenfold increase on the current cycle. The proposal also lifts EU defence-related spending more broadly, with multiple analyses highlighting a step-change in support for dual-use and frontier technologies.

A third pillar—Global Europe—channels external action through a revamped Global Europe instrument. Commentary from EU policymakers indicates a dedicated €100 billion window for Ukraine’s recovery and accession-linked support, alongside funding for neighbourhood, development and humanitarian priorities.  Administrative expenditure across institutions is separately budgeted, and the proposal keeps overall spending just under €2 trillion while shifting more resources toward competitiveness and security compared with 2021–2027.

On revenue, the Commission pairs the spending redesign with a broadened Own Resources mix to reduce reliance on GNI-based national contributions and to cover the ~€24 billion per year NGEU repayments. The basket under discussion includes a share of ETS proceeds and CBAM revenues, a per-kilogram levy on non-collected e-waste, a corporate contribution (“Corporate Resource for Europe”), and a Tobacco Excise Duty Own Resource (TEDOR) aligned with a forthcoming excise directive review. Stakeholder notes welcome simplification and the additional scale for competitiveness, research and critical infrastructure, but warn that programme bundling must not dilute policy areas that need tailored approaches, and that several proposed Own Resources—TEDOR in particular—could have uneven market impacts without further calibration.

Bottom line: the draft MFF is larger and more security- and competitiveness-oriented than its predecessor, with clearer through-lines from research to deployment and a stronger external pillar. Key negotiation flashpoints are likely to include the exact sizing of individual envelopes within the pillars (notably the EU Facility under the NRPPs), the final design of the new Own Resources, and safeguards ensuring that consolidated instruments preserve the specificity needed for sectors like agriculture and cohesion.

Source: ZPP Brussels and European Commission.