Here are six key takeaways from Ursula von der Leyen’s newly proposed €2 trillion EU budget (Multiannual Financial Framework 2028–34):
1. Budget Boost & Ambition
The proposal marks a significant increase from the current ~€1.2 trillion framework to nearly €2 trillion. Framed as “a budget for a new era,” it underscores the EU’s ambition to confront mounting global challenges, from defense and climate change to economic competitiveness.
2. Three Strategic Pillars
- National & Regional Partnerships (€865 bn): Consolidates the Common Agricultural Policy, cohesion funds, and social programs. About €300 bn is allocated to direct farmer payments.
- Competitiveness Fund (€410 bn): Focuses on research, defense, innovation, and green technology—with defense and space spending increasing fivefold.
- Global Europe (€200 bn): Includes support for global development and a new €100 bn fund for Ukraine.
3. Flexibility & Crisis Preparedness
The number of EU-funded programs will be streamlined from 52 to 16. A new €400 bn loan-based crisis reserve is being introduced, allowing the bloc to respond faster to emergencies and shocks.
4. New Revenue Model
While contributions from member states will remain around 1.15–1.26% of gross national income, the EU proposes introducing new revenue sources. These include levies on large corporations, carbon emissions, e‑waste, and tobacco, aimed at generating approximately €58.5 bn annually.
5. Rule of Law Conditionality
EU funding will be conditional on member states adhering to governance standards, democracy, and the rule of law. This mechanism is expected to limit funding for countries seen as drifting from EU values.
6. Political Resistance & Debate
Several wealthier member states are skeptical of the budget’s size and scope, warning of potential funding shortfalls and questioning the feasibility of the new revenue streams. Critics also argue that some areas, like agriculture and environmental funding, may face unjustified cuts.
Conclusion:
Ursula von der Leyen’s €2 trillion EU budget proposal reflects an ambitious attempt to modernize the Union’s finances for a changing world. However, it now faces tough negotiations among EU members with divergent priorities.
