Europe cannot ask the EU budget to do more with less

The EU’s next long-term budget cannot be reduced to a battle over numbers. At a high-level EESC debate with MEP Siegfried Mureșan, the European Commission, Germany’s Federal Foreign Office and leading researchers, one message was clear: if the EU wants to do more on security, competitiveness and climate resilience, it needs to equip itself with a stronger budget, and to do so without weakening cohesion and agriculture. Just as importantly, spending must work better, with the regions, the social partners and civil society involved from design to delivery.

Europe is asking its next long-term budget to carry an extraordinary load. Security and defence, competitiveness, energy and food security, climate resilience, enlargement, and cohesion and agriculture are only some of the policy areas competing for financial resources in the Multiannual Financial Framework (MFF) for 2028-2034.

The temptation is to reduce the negotiations to a fight over the percentage of the EU’s gross national income (GNI) that the budget should be set at. But that misses the bigger question: what does the EU expect its budget to deliver, and is it prepared to give it the means to do so? 

The European Economic and Social Committee’s position is straightforward. New priorities should not be financed by hollowing out existing ones. A stronger Europe needs a budget ambitious enough to support security and competitiveness while maintaining predictable and sufficient funding for cohesion and agriculture.

The pressure is already visible in the current EU budget’s real purchasing power, which has eroded steadily over its seven-year period. As EESC rapporteur Konstantinos Diamantouros pointed out, the amounts in the current MFF have been adjusted using a fixed 2% deflator, while actual inflation has been considerably higher.

The same applies to the idea that the EU should simply ‘do more with less’. The debate at the EESC showed how far apart the institutions and the Member States remain. Germany and like-minded countries want the Commission proposal reduced by several hundred billion euros, while the European Parliament and the EESC are calling for a substantially larger MFF.

In the EESC’s view, this is not simply a choice between the ‘frugals’ and the ‘friends of cohesion’. The EU’s new priorities and its traditional ones are not mutually exclusive. The challenge is to find a way to finance both.

The next test is delivery

Money alone will not make the next MFF work.

The Commission’s proposed National and Regional Partnership Plans promise a simpler and more flexible way of delivering EU funds. But the experience of the Recovery and Resilience Facility provides a warning. Greater flexibility and performance-based funding can improve spending, but centralisation can also weaken local ownership and make it harder to identify problems early.

CEPS researcher Eulalia Rubio highlighted precisely this risk. If cohesion policy is absorbed into broader national plans and the clear subnational focus is removed, its objectives could become diluted. Regional authorities need a meaningful role where they have the legal responsibility and expertise to deliver investment.

The same principle applies to organised civil society.

Employers, workers and civil society organisations should not be brought into the process only after the national plans are already designed. Partnership needs to run from the design phase through implementation and monitoring. Meaningful participation should be built into the rules of the next MFF, not left to goodwill or guidance.

This is not an additional layer of bureaucracy. It is a safeguard for performance.

If Europe wants results rather than milestones on paper, people close to businesses, workers and communities who see what is happening on the ground need to be able to challenge weak implementation and help correct course.

The EU also needs to change how it pays for achieving its goals

The financing debate is the other half of the equation.

National contributions based on GNI remain the backbone of the EU budget. But relying extensively on them makes the MFF vulnerable to national fiscal pressures and turns every negotiation into a calculation of who pays what and who gets what.

Philipp Heimberger of the Vienna Institute for International Economic Studies argued that this approach also obscures the Europe-wide value of common investment. A road, research programme or industrial investment may be located in one Member State while generating benefits across the single market.

That is why the EESC supports serious work on creating new own resources. But the debate should distinguish between resources that genuinely generate new European revenue and those that only largely transfer existing national revenues to the EU level, as Mr Diamantouros stressed.

Digital taxation as well as levies on financial transactions, aviation, crypto-related activities and other European-level sources deserve consideration where they can provide sustainable revenue while at the same time addressing cross-border economic or environmental challenges.

The choice is increasingly straightforward: governments can either accept significantly higher national contributions, accept substantial cuts, or agree on a stronger European revenue base.

Pretending that the financing problem can simply be avoided will not make it disappear.

A budget is also about trust

The MFF will ultimately succeed or fail not only on its figures, but on whether citizens believe that it works for them.

That makes the social and democratic dimension of the budget inseparable from its economic one. Europe can spend more on competitiveness and defence, but it will struggle to sustain public support if people see investment decisions being made far from the regions affected by them, or if new European priorities appear to come at the expense of social cohesion.

As the president of the EESC’s ECO section Elena Calistru has argued, support for a stronger Europe is real, but fragile. The answer is not better communication after decisions have been taken. It is greater transparency, meaningful participation and investment that people can see delivering results where they live and work.

The EESC therefore enters the next phase of the MFF negotiations with a straightforward message.

The EU should not have to choose between ambition and cohesion, between flexibility and accountability, or between European priorities and citizens’ trust.

The next MFF needs all of those things. And it needs the resources to match its ambitions.

With the timetable already exceptionally tight, the October European Council will be a crucial test. The EESC is ready to continue to bring organised civil society into that discussion, not as an audience to the negotiations, but as one of the players that need to be involved to make the next EU budget work.

Contact: thomas.kersten@eesc.europa.eu