EU's budget plan proposed for a significant boost to reach an estimated two trillion euros - EU Commission Suggests Doubling EU Budget to 2000 Billion Euros
The European Commission has unveiled a significantly increased long-term budget of €2 trillion for the period 2028-2034, marking the most ambitious financial framework ever proposed by the EU. The proposed budget aims to address contemporary challenges such as overseas competition, Russian aggression, climate change, and social needs.
Key Impacts Across Sectors
Agriculture and Fisheries: The budget includes over €300 billion to support farmers and fishers' income, with a doubled agricultural reserve to protect livelihoods. A minimum of €2 billion is secured for fisheries to support the sector.
Regional Funding and Cohesion: The package includes €865 billion for National and Regional Partnership Plans, prioritising investment and reforms at local levels. At least €218 billion is safeguarded for investment in less developed regions to promote balanced economic growth.
Competitiveness and Innovation: A dedicated €451 billion competitiveness fund will pool investments in promising sectors like clean technology, digital innovation, biotechnology, defense, space, and food systems.
Defense and Security: The budget for defense and space will rise fivefold to €131 billion, reflecting Europe's push to enhance security amid geopolitical tensions. Funding for military mobility infrastructure will increase tenfold, facilitating rapid deployment and strategic transport within the EU. Investment in migration and border management will triple, underscoring a commitment to shared responsibility for external borders. The Solidarity Fund will also triple, improving the EU’s capacity to respond quickly and decisively to disasters and crises.
Social Policies: For the first time, the budget introduces a target for social expenditure at 14%, with mechanisms to monitor social funding throughout the entire framework, reflecting an integrated approach to social investment.
The Parliament has criticized the budget proposed by the Commission as insufficient to cover both the repayment of the Corona economic recovery program and the adequate funding of new priorities. The proposals are the basis for negotiations between the 27 EU countries and the European Parliament over the next two to three years.
The Social Fund and funds for migration and internal security will be allocated to the new fund for National and Regional Partnerships. The Commission plans to innovate in funding sources to support this expanded and strategic agenda, with new revenues including a fee on e-waste, a reform of the tobacco tax, and an annual levy for large companies with an annual turnover of more than €100 million.
The temporary, debt-financed economic stimulus program NextGenerationEU is worth up to €800 billion. The higher expenditure is partly due to the European loans from the Corona pandemic, which need to be repaid from 2028 onwards. The EU budget draft proposes a reduction from 52 to 16 programs for distributing funds. The proposed budget would mean higher expenditure for EU member states, corresponding to 1.26% of the European gross national income.
[1] European Commission, "Proposal for a Regulation of the European Parliament and of the Council on the next multiannual financial framework," 2023. [2] European Parliament, "Draft budget 2028-2034," 2023. [3] Council of the European Union, "Proposal for a Regulation of the European Parliament and of the Council on the next multiannual financial framework," 2023.
Businesses in EC countries might find opportunities for cooperation in the dedicated €451 billion competitiveness fund, which focuses on promising sectors such as clean technology, digital innovation, biotechnology, defense, space, and food systems. In the realm of politics and general news, the proposed budget aims to foster cooperation with third countries, including those of Central and Eastern Europe, as well as Eastern Europe, by dedicating funds for investment and reforms at local levels. This could potentially lead to increased finance and economic growth, while addressing contemporary challenges and social needs.
