Brussels shakes the money tree
20 February 2025
"The status quo is not an option" is the damning verdict the European Commission gave on the EU's next seven-year budget last week, also known as the Multiannual Financial Framework.
Basically, the Commission believes the EU should have more money than before to distribute in a simpler way. From 2021 to 2027, the EU will have spent a good one trillion euros – equal to around 1% of the bloc's gross national income – topped up by some €750 billion borrowed in response to the Covid-19 pandemic.
For 2028-2034, the Commission wants to increase its budget (by how much we don't know yet), either by having member states pay up or through their so-called "own resources" (read: European taxes). That can include levies on carbon emissions and taxes on the profits of multinational corporations, which would both be new measures as they have been agreed to but not implemented yet.
In addition to this increased funding, the EU executive proposes to streamline its 50-plus spending programmes into fewer, bigger, more flexible pots, including a "Competitiveness Fund" to support "strategic sectors and technologies", as well as a dedicated fund for foreign policy. Interestingly, the Commission suggests that disbursements to member states should be conditional on a series of pre-agreed reforms and respect for the rule of law.
The publication marks the opening salvo in what is expected to be a heated battle over the EU's finances, with commissioners, member states, and members of the European Parliament all vying for influence over the EU's spending. Member state ministers and Commission representatives are meeting in Warsaw tomorrow to discuss the proposal.
 | Anton Koninckx If you ask me, the Commission's ideas kind of make sense. Government budgets in EU member states, on average, amount to some 45% of gross national income, making the EU's 1% budget look rather meagre. Sure, the EU itself is not responsible for handing out unemployment benefits or providing health insurance – those remain firmly within the prerogative of member states – but as the bloc is facing (as it's phrased in the report) "challenges of unprecedented magnitude", its budget should keep up. With Donald Trump ditching Europe to play nice with Vladimir Putin, the world on the brink of breaching 1.5°C of global warming, and the EU industry in an ever-deeper rut, the continent arguably is better off by braving the storms ahead together. That probably also means putting its money where its mouth is. |
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