The MFF for 2028–2034 is not a panacea for all of Europe’s investment needs. It should not be viewed in isolation, but rather in conjunction with the many other EU actions and initiatives with which it is closely linked.

By Professor Danuta Hübner 

The new MFF, although slightly larger than usual, will remain modest in size. Yet it has the potential to become a truly unprecedented European multiannual financial framework. Given the scale of Europe's investment needs, efforts have long been under way to identify and mobilise additional sources and models of financing. The well-known 1% taboo, the divide between net beneficiaries and net contributors, the controversy surrounding juste retour, national envelopes that allow for the avoidance of cross-border projects and European public goods, and the lack of a European capital market have all traditionally constrained Europe's investment ambitions. Today, however, there is an opportunity to transform the next MFF into a genuine financial lever. At the same time, there is a risk of reverting to national reflexes and short-term self-interest precisely when Europe needs to move in the opposite direction.
 

Europe needs private investment at a time when the European capital market remains a work in progress. This is why negotiating the new MFF provides an opportunity for it to become a lever for attracting private capital, and a catalyst for the crowding-in process. This would be an important step towards developing public-private financing models based on a new approach to risk-sharing between the public and private sectors. The budget also offers an opportunity to take a hard look at research and development financing at both national and European level, opening the door to a rebalancing of responsibilities between the two.

The MFF can serve not only as a strategically sound financial framework, but also as an ecosystem for new sources and models of financing and an opportunity to reduce the cost of capital, provided it acts as a lever for funds whose effectiveness relies on competitive calls. This is viewed as a challenge by those Member States that have so far benefited primarily from funding allocated through national envelopes. If public investment succeeds in catalysing private capital and public-private financing models become the norm, this could help ease pressure on public debt at a time of fiscal constraints.

This MFF provides an opportunity to harness the potential of regions and cities, thereby broadening Europe’s base of innovation and competitiveness. Ensuring that regions and cities are not sidelined is important not only for Central and Eastern European countries. Redirecting cohesion funding towards European public goods such as competitiveness and security need not undermine the core objective of cohesion policy. Indeed, for decades, convergence has been driven and supported by innovation

 

At the same time, a more coherent ecosystem is taking shape within the Single Market, accompanied by a new approach to competition policy that allows the emergence of large European firms capable of competing globally, alongside a more flexible application of state aid rules.

I also hope that we will seize this last opportunity to anchor European competitiveness firmly in sustainability, particularly through clean technologies and clean industry. Another important element of the emerging ecosystem is the recognition of investment in human capital as a key component of competitiveness. This shift is reflected in the new approach to the European Semester. Another important new element of the new ecosystem is the proposed regulation EU Inc., establishing a single harmonised set of corporate governance rules, which will replace the need to navigate multiple national systems and unlock the potential of the Single Market. 

In my view, assessing the MFF in the context of the broader transformation of the ecosystem underpinning Europe’s long-term ambitions highlights the potentially groundbreaking nature of the new EU budget. The ability to begin repaying the debt incurred in response to the COVID-19 crisis from 2028 onwards will depend on Member States reaching agreement on new own resources. Failure to do so would place significant constraints on the EU budget and could weaken the political willingness to take on new debt.

It would be good to see a budget adopted on time, fit for the future and capable of delivering more and better Europe. 

Danuta Hübner was a Member of the European Parliament until 2024. From 2014 -2019, she was Chair of the Committee on Constitutional Affairs. From 2009-2014, she served as Chair of the Committee on Regional Development in the European Parliament. From 2004-2009 she was a Member of the European Commission with responsibility for regional policy. During the period 2001-2004, she was involved in the negotiation process for Poland's membership of the EU and served as the Minister for European Affairs in the Polish Government, where she was often referred to as Madame Europe. She was the winner in 2002 of the European of the Year Award from The European Voice. In 2014 she was awarded the Officer of the Legion of Honour (Officier de la Légion d'honneur), the highest honour awarded by the French state, and in 1997 she was presented with the Grand Cross of the Order of Merit, the highest distinction awarded by Portugal.