The European Commission has published its final plans for the 2028-2034 budget – the so-called Multiannual Financial Framework (MFF), including a proposal to reform the Common Agricultural Policy.
The new MFF amounts to almost EUR 2 trillion (or 1.26% of the EU’s gross national income on average between 2028 and 2034).
The Commission says the Budget rises to the increasing number of challenges the EU faces in areas such as security, defence, competitiveness, migration, energy and climate resilience.
A ‘fundamental redesign’ of the EU budget will make it more streamlined, flexible and impactful, significantly enhancing the EU’s capacity to deliver on core policies while addressing new and emerging priorities.
Key features of the new MFF are:
- More flexibility across the budget, so Europe has the capacity to act – and react – fast when circumstances change unexpectedly or when new policy priorities need to be addressed;
- Simpler, more streamlined and harmonised EU financial programmes, so that citizens and companies can easily find and access funding opportunities;
- A budget tailored to local needs, with National and Regional Partnership Plans for investments and reforms, for targeted impact where it matters most and ensuring a faster and more flexible support for more economic, social and territorial cohesion across our Union;
- A powerful competitiveness boost, for Europe to secure supply chains, scale-up innovation and lead the global race for clean and smart technology;
- A balanced package of new own resources that ensures adequate revenues for our priorities while minimising pressure on national public finances.
New to the EU Budget is the inclusion of a ‘European Competitiveness Fund’ (ECF) which would merge activities currently running under 14 different budget lines, spanning a broad range of topics from defence, health, digitalisation and space to circular economy and the energy transition.
A key part of the Commission’s draft proposal is the spending of 410 billion euros for a European Competitiveness Fund. This would will invest in strategic technologies, operate under one rulebook, and offer a single gateway to funding applicants, simplifying and accelerating EU funding and catalyse private and public investment. It will focus its support on clean transition and decarbonization; digital transition; health, biotech, agriculture and bioeconomy; defence; and space.
Environmental groups point out, however, that the Fund would absorb the EU’s LIFE programme, which has been exclusively dedicated to protect nature, climate and the environment. Instead more money would be allocated to polluting industries instead. This, it is also pointed out, comes at a time of biodiversity and climate crises when funding and public support for adequate action to fulfil the EU’s environmental goals are urgently needed.
Responding to Russia’s war against Ukraine, the defence and space window of the European Competitiveness Fund will allocate EUR 131 billion to support investment in defence, security and space, five times more funding at EU level compared to the previous MFF.
Another key part of the Commission’s proposal is that it eliminates the ‘second pillar’ of the CAP, which currently funds environmental measures and rural development programmes.
Income support to farmers and fishermen will be ringfenced, including environmental measures, on-farm investments, support to young farmers and risk management tools. Funding rules for agriculture and rural communities will be simpler, says the Commission, including on payments, controls and audits.
However, the Commission’s plan means that agri-environmental and climate measures become one of many objectives, without their own dedicated funding or minimum spending requirements for the EU Member States. The CAP, which is linked to some of the EU’s most damaging public subsidies, would mainly continue to support an industrial food system that degrades ecosystems and accelerates the climate crisis.
