Commission haggling over €1.717 trillion EU budget plan goes to the wire

BRUSSELS ― The European Commission is zeroing in on a proposal for a central budget of €1.717 trillion for the seven-year period from 2028, as arguments over the final number continued Wednesday morning.

That figure ― contained in a document seen by POLITICO and being fought over by senior Commission officials in Brussels just hours before the plan is publicly announced ― would represent an increase in the EU's spending power compared with the last budget that ran from 2021.

If the members of the Commission, led by President Ursula von der Leyen, settle on this number over the next few hours it would mean total spending would rise to 1.23 percent of gross national income for the seven years from 2028, compared with around 1.1 percent over the current period.

The sum was confirmed by multiple EU officials and diplomats but, proving how sensitive the final figure remains, it was still being negotiated by the heads of Cabinets of the EU’s 27 commissioners Wednesday morning. Commissioners are expected to meet later to approve the final agreement.

In a sign of how difficult the negotiations are proving to be, the EU’s Budget Commissioner Piotr Serafin postponed his presentation of the spending proposal in the European Parliament’s budget committee from 12:30 p.m. to 2 p.m. on Wednesday.

“We have still not received any official proposal to analyse. Given the importance of this file, this form of inter institutional cooperation is unsatisfactory,” Siegfried Mureșan, the budget negotiator for von der Leyen’s own European People’s Party, wrote on X Wednesday morning.

In a significant development, top officials provisionally agreed on Tuesday night to allocate a share of funding to less developed regions across the bloc, according to a draft text seen by POLITICO. This was a key demand from the EU’s Cohesion and Reforms Commissioner Raffaele Fitto, but the details might still change during the negotiations.  

The overall total is expressed in 2025 prices and compares with a budget of €1.2 trillion between 2021 and 2027 in current prices. A planned large increase from the previous seven-year period is not unusual at this stage because national governments would be expected to chip away at it before giving their final approval before the end of 2027.

Most of the budget is formed of contributions from the EU's 27 governments, with smaller revenue streams such as customs duties and a plastic tax topping up the final total.

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.

The EU budget, known as the Multiannual Financial Framework, covers all EU spending from farmers’ subsidies to aid to developing countries, cultural projects and transport infrastructure.

Less agriculture, more defense

Faced with slow growth and a growing list of expenses, von der Leyen told commissioners earlier Tuesday that they will face funding cuts for programs across the board.

Her 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.

Wednesday will fire the starting gun on over two years of fraught negotiations between governments and the European Parliament. The EU’s 27 governments 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. On Tuesday, French Prime Minister François Bayrou announced a national budget to save €43.8 billion ― and immediately came under threat of being toppled by parliament.

The Commission is set to allocate €946 billion to “Europe’s social model and quality of life,” which might include regional policy and the Common Agricultural Policy, which currently make up two-thirds of the EU budget.  If the figures are confirmed, 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.

If the figures seen by POLITICO are confirmed, the Commission is also set to allocate €522 billion to “competitiveness, prosperity and security,” €190 billion to “Global Europe,” which includes development aid and assistance to neighboring countries, and €107 billion to a pot called “administration” which covers the salaries of EU employees.

A dedicated off-budget fund for Ukraine will be worth €88 billion over the next seven years.

Separately, the Commission will propose three new taxes targeting electric waste, tobacco products and companies in the EU with a turnover exceeding €50 million to repay its post-Covid common debt. Repayments are expected to cost from €25 to €30 billion each year starting from 2028.

Camille Gijs contributed to this report. This article has been updated.