Europe’s Next Budget: what works and what needs fixing

In January 2026, the EESC adopted an Opinion on the next Multiannual Financial Framework (MFF) 2028-2034. This budget proposal comes at a time when the EU is facing extraordinary geopolitical, security and socio-economic challenges ranging from a deteriorating competitive position to an increasingly polarised trade environment which is undermining the rules-based order.

While Europe’s role in the world will ultimately depend on its ability to undertake the necessary reforms to make its economy more competitive – such as less regulatory burden, more affordable energy prices, a full integration of the Single Market and the completion of the Banking and Capital Markets Union, – the MFF is still a crucial investment tool to reach the EU's policy objectives. This is why in our Opinion we welcome several proposals under the new MFF.

What works

First of all, the new MFF has a strong competitiveness dimension and this is an important milestone in shaping a European strategy that places industrial development, research and innovation at the centre of growth.

The creation of the European Competitiveness Fund (ECF) and the strengthening of HorizonEurope are important steps in this regard and we call on EU lawmakers, and in particular the Council of the EU, to uphold these ambitious funding commitments in the forthcoming negotiations.

At the same time, we stress the need for a strong involvement of social partners in overseeing the Competitiveness Fund and ask for a balance between the different pillars of the Fund to ensure that important priorities, such as decarbonisation, receive adequate funding.

In addition, in the new MFF there is a welcome proposed increase in the money allocated to the Connecting Europe Facility. This recognises the critical need for better transport and energy interconnections to improve multi-modal transport connectivity and to reduce energy prices in the EU.

When it comes to the National Partnership and Regional Plans (NRRPs), we welcome a performance-based approach that builds upon the experience of the Recovery and Resilience Facility, but policymakers should draw lessons also from its shortcomings and, in particular, ensure that indicators measuring performance are clearly linked to the policy objectives. This will avoid the pitfall of procedural compliance. However, we strongly oppose any form of macroeconomic conditionality in the NRPPs and stress that the ‘investment for reforms’ model must be strictly linked to the specific objectives of cohesion policy and the need of regions.   

As regards external actions, the proposed funding increases in Global Europe are also positive steps as this will enable the EU to affirm its role as global player, diversify its value chains and ultimately enhance its security. This also implies a better coordination between the EU’s external and internal policies as such, so we need greater consistency of trade and development policies with the Euroopean Competitiveness Fund to ensure a strategic and coherent approach that strengthens the EU’s global position in sustainable growth and economic resilience.

What needs fixing

Despite these positive proposals, the new MFF raises also some concerns.

For instance, we oppose the proposed merger of cohesion policy, ESF+, the Common Agricultural Policy (CAP), fisheries, migration and security into one single fund, because social and rural development objectives risk being crowded out by short-term security and migration priorities. Against this backdrop, we recommend a structural revision that ensures predictable financing for the different priorities.

In addition, regarding the proposed new EU own resources, we express our strong reservations concerning the Corporate Resource for Europe (CORE), a proposal under the new MFF that involves a lump-sum contribution from large multinational companies with high EU turnover. We do not support this proposal, firstly because it is based on companies' turnover instead of profits; and secondly because it is a flat-rate levy which would hit some businesses harder than others. Any new own resource must not undermine the competitiveness of the EU which is already under significant pressure.

Overall, the new MFF goes in the right direction, but ensuring meaningful involvement of social partners, protecting cohesion and rural development, avoiding harmful conditionality, and designing fair and competitiveness-friendly sources of EU revenue will be essential. The upcoming negotiations offer a crucial opportunity to build a long-term budget that not only strengthens Europe’s economy and global role but also delivers tangible benefits for businesses and citizens across the EU.

Konstantinos DIAMANTOUROS, EESC Employers' Group member and Rapporteur of Opinion ECO/682 Multiannual financial framework 2028-2034.