In July 2025, the European Commission unveiled its proposal for the Multiannual Financial Framework (MFF) 2028-2034, setting out the EU’s spending priorities for the coming years. For the European Anti-Poverty Network (EAPN), this proposal fails to reflect the reality faced by the 92.7 million people experiencing poverty across the EU. Rather than prioritising poverty eradication and social investment, it places competitiveness, defence and security at the heart of the EU budgetary agenda.

by Jessica Machacova, European Anti-Poverty Network

Following the launch of the first-ever EU Anti-Poverty Strategy by the European Commission on 6 May 2026, EAPN stresses that proper funding is essential for any policy to deliver meaningful results. Poverty cannot be effectively eradicated, or even, reduced, if the policies designed to tackle it are not backed by sufficient financial resources. While the strategy is an important step forward, its potential impact is seriously undermined by the absence of dedicated funding to support its implementation.

The MFF is a crucial instrument for translating the EU’s political commitments into lasting, tangible improvements in people’s lives. Yet without a budget explicitly focused on protecting social rights and reducing inequalities, how can the EU realistically achieve its objective of eradicating poverty by 2050?

This objective was first announced by European Commission President Ursula von der Leyen in her 2025 State of the Union address and later confirmed in the EU Anti-Poverty Strategy. However, it is still not supported by adequate budgetary resources or a clear policy roadmap outlining how poverty eradication will be achieved. 

From EAPN’s perspective, the European Commission’s proposal for the MFF moves in the opposite direction: social rights and social justice barely feature while competitiveness, security and defence are the priorities that dominate the political debate.

These priorities are also reflected in the proposed budget allocations. A threefold increase on the 2021–2027 MFF in funding for migration and border management is proposed, with a fivefold increase in the budget for defence and space.

By contrast, the level of investment dedicated to poverty eradication remains uncertain. No standalone budget has been identified for the European Social Fund (ESF). Moreover, the proposed minimum earmarking of 14% for social objectives within the National and Regional Partnership Plans (NRPPs) is not linked to achieving either the 2030 Porto poverty reduction target or the 2050 poverty eradication objective. It also fails to guarantee targeted support for marginalised groups.

Recent experience shows why such safeguards are necessary. During the mid-term review of the MFF 2021-2027, Member States were allowed to reallocate unused cohesion funds to other priorities. More than three-quarters of these reallocated funds were channelled into competitiveness and defence-related objectives while less than a quarter supported housing, access to water and sanitation and decarbonisation. This illustrates the fact that, when given flexibility, Member States tend to prioritise competitiveness and defence over social investment.

EAPN's analysis shows that marginalised groups will bear the cost of these political choices. Existing earmarking requirements for social inclusion and material deprivation have been removed from the proposed ESF for 2028–2034. The ESF, which currently represents one of the few reliable guarantees of dedicated support for those most at risk of poverty and exclusion, would allocate very little space to targeted funding for marginalised groups. Homeless people, women and Roma communities are mentioned solely in the recitals while undocumented people, migrants, single-parent families, racialised communities and LGBTIQA+ people do not feature at all. Without stronger commitments and robust safeguards, there is a real risk that these groups will receive little or no support from the NRPP funding allocated to Member States.

In short, the MFF 2028–2034 challenges the dominant narrative that the EU can both prioritise competitiveness, defence and security and adequately fund poverty eradication and social investment at the same time. While the former continue to dominate the political agenda, the latter are becoming increasingly invisible.

As negotiations continue, EAPN is engaging with both the European Parliament and the Council of the EU to ensure that sufficient resources are dedicated to poverty eradication, including through stronger ESF earmarking and safeguards for marginalised groups.

Ultimately, how the EU chooses to spend its money in the coming years is a political decision. That decision must place poverty eradication, social rights and the wellbeing of all people at the heart of the European project.

Jessica Machacova is Senior Policy and Advocacy Officer at the European Anti-Poverty Network (EAPN). For the past 14 years, she has worked to advance human rights and social justice at EU level, in both civil society organisations and the EU institutions. Her experience includes roles at Equinet – European Network of Equality Bodies, the Red Cross EU Office, the European Commission and the European Parliament.

By Cillian Lohan

One of Europe's biggest challenges today is tackling the 'triple planetary crisis' – climate change, pollution and biodiversity loss – which is largely driven by increased resource consumption. Despite years of policy effort, the European Union remains off track to meet its circularity targets.

The forthcoming Circular Economy Act offers a unique opportunity to change direction. It must go beyond fine‑tuning and implementing existing rules and instead set a clear course towards an economy that respects planetary boundaries while strengthening Europe’s resilience and competitiveness. Circularity should no longer be viewed as solely environmental policy, but must be considered as economic and geopolitical strategy.

A necessary shift: reducing demand, not just waste

For too long, policy has focused on efficiency: recycling more and producing better. These efforts are necessary, but they are no longer sufficient. If overall consumption continues to increase, efficiency gains will simply be outweighed.

The EESC therefore calls for a fundamental shift: reducing resource use must become a central objective. This means complementing recycling with strong demand‑side measures that directly address overconsumption.

In other words, Europe must move from 'using resources better' to 'using fewer resources'.

Setting clear limits

This transition requires clear direction. The Committee recommends introducing material footprint targets aligned with planetary boundaries, providing a framework similar to climate targets. 

Such targets would offer predictability for businesses, guide investment and ensure accountability — anchoring Europe’s economy within ecological limits.

Making circularity economically viable

Circular solutions will only scale if markets support them. Today, recycled materials often struggle to compete due to price gaps, fragmented regulation and quality concerns.

The Circular Economy Act must create a genuine single market for secondary raw materials. Removing barriers and establishing clear standards will allow circular business models to thrive and deliver both environmental and economic value.

Putting people at the heart of circularity

This transition must work for everyone. Workers, consumers and SMEs will experience the shift differently, and their concerns must be addressed from the outset. This is why the EESC positions civil society as a key actor in designing and implementing circular solutions on the ground.

A circular economy is not just about materials; it is about people. It must create opportunities, support adaptation and ensure that no group is left behind.

A strategic choice for Europe

Ultimately, the Circular Economy Act is about more than sustainability. It is about Europe’s ability to reduce dependence on imported resources, strengthen its competitiveness and build resilience in an uncertain world.

The EESC’s message is clear: the transition must be systemic, ambitious and fair. With the right choices now, Europe can lead the way towards an economy that thrives within planetary boundaries — and delivers lasting benefits for its citizens.

A circular economy is not just about recycling more. It is about using fewer resources, cutting dependence and making the transition work for people and businesses, writes Cillian Lohan, president of the EESC’s Civil Society Organisations’ Group and rapporteur for the opinion Circular Economy Act - Circular economy and responsible resource consumption within planetary boundaries

The European Commission says its proposal for the next long-term EU budget will make EU funding simpler, more flexible and better equipped for the future. But for people with disabilities and other vulnerable groups, it raises a fundamental concern: that simplification is becoming a cover for weakening disability rights and removing elements of social protection, writes EESC member Ioannis Vardakastanis.

By Ioannis Vardakastanis

On 16 July 2025, the European Commission proudly launched its proposal for the EU’s next long‑term budget: the Multiannual Financial Framework. It came with bold claims: a record-breaking EUR 2 trillion for 2028–2034, a simplified budget structure, streamlined funding rules, and the promise of keeping the EU competitive and secure in an unstable world.

The promises aren’t quite all that they seem

It didn’t take long for the public to question these claims. The supposed generosity of this 'record-breaking' budget quickly showed itself to be misleading. Eight percent of the entire budget will go towards repaying COVID‑related debt. And because the EUR 2 trillion figure is expressed in current prices after years of high inflation, the real purchasing power of the budget is essentially unchanged from the previous cycle.

The promised simplification has been delivered, but at a cost. Several long‑standing pillars of EU cohesion policy, such as the European Social Fund, the Regional Development Fund and the Common Agricultural Fund, have been merged into one giant fund. Member State allocations will be planned through new National and Regional Partnership Plans. Meanwhile, the legal texts themselves have been stripped back, raising serious concerns for marginalised groups, including people with disabilities.

What does this simplification mean for people with disabilities?

The first casualties of simplification have been the Enabling Conditions. These currently set out clear eligibility criteria for using EU funds, including the obligation to implement the UN Convention on the Rights of Persons with Disabilities (UNCRPD). In the new proposal, Enabling Conditions have been replaced by a lighter set of Horizontal Principles. And while reference to the EU Charter of Fundamental Rights has been retained, reference to the UNCRPD is no longer explicitly included.

This omission is baffling in view of the EU’s own data. Eurostat shows a decade of stagnation in outcomes for people with disabilities in employment, education and poverty reduction. Eurofound research also highlights a worsening trend of institutionalisation, an area where EU funds could be transformative.

We are already facing the problem of EU money flowing into segregating settings, particularly residential institutions, often due to overly flexible interpretation of the rules. The disability movement has long called for clearer, more explicit safeguards to ensure that EU funds promote inclusion and respect rights. Instead, the new simplified text risks opening the door to even looser controls.

What changes for EU spending on social objectives?

Merging the European Social Fund into the Partnership Plans raises further issues. The Commission has been inconsistent in explaining how much money will actually go towards social objectives. While the regulation states that at least 14% of funding should support social actions, it remains unclear from what amount this 14% will be taken. The Commission has struggled to provide a definitive figure.

The scope of what counts as social investment has also widened. The current ESF+ clearly defines eligible measures, but the new rules allow broader interpretation. Social spending may now include infrastructure projects with a social element, such as housing. While valuable, such projects can absorb large amounts of funding. A social budget that is, in real terms, no larger than today’s ESF+ will now be expected to cover costly building projects previously funded by the Regional Development Fund.

There is a real risk that infrastructure could consume almost the entire social envelope. This is because earmarking – i.e. protected minimum shares for specific objectives – has been removed. Under ESF+, at least 25% of social spending must support social inclusion, including for the most marginalised groups. People with disabilities have relied heavily on this guarantee.

The Commission has now removed these protections, giving Member States far more freedom. Countries already committed to disability inclusion will likely continue to invest, but those lagging behind will likely further underinvest. The gap between Member States will widen, undermining the very purpose of EU cohesion policy.

What are we asking for?

The European disability movement is clear about this: simplification cannot come at the expense of our rights. EU policymakers in the Parliament and Council, who now hold the pen, must reverse the Commission’s decision to downgrade disability rights in the legal texts.

EU funding regulations must provide precision and clarity. There must be no ambiguity about ensuring sufficient investment in the inclusion of people with disabilities, and no doubt that this investment must fully respect the rights set out in the UN Convention.

Ioannis Vardakastanis is a member of the EESC's Civil Society Organisations' Group. He is president of the National Confederation of Disabled People of Greece (ESAMEA) and former president of the European Disability Forum (EDF).

Everybody seems to be talking about the next long-term budget, but one question is missing: who will still be able to see where the money goes and whether it works? For Elena Calistru, president of the EESC’s Section for Economic and Monetary Union and Economic and Social Cohesion (ECO), the real story of the next MFF is not just about figures or priorities, but about a shift that could make EU spending less transparent, less accountable and further removed from the people it is meant to serve.

By Elena Calistru

Most of the conversation about the next MFF has been about numbers – how big it should be and who gets what slice of defence, cohesion, competitiveness or climate. Fair enough; that’s where the money is. But underneath those arguments is a change I find more interesting, and that I hear almost no one discussing: how far the decisions about this money will sit from the people it is meant to reach.

The proposal folds fourteen funds into national plans, with money released as governments hit targets they’ve agreed with the Commission. It is pitched as a turn toward results and on paper it does look tidier – fewer programmes, cleaner reporting, more or less a finance minister’s dream. What it also does is pull the centre of gravity upward, away from regions and local actors and toward national capitals, and further from the places where a renovated school or a retrained worker is the only evidence most people will ever have that Europe did anything for them.

That distance has a cost we tend not to name. The people closest to a project – a city hall, a local NGO, a trade union branch – are usually the only ones who can say whether a target met actually ‘achieved’ or changed anything in real life, or just produced a very persuasive report. Their presence is what keeps the system honest, which matters rather more than the ‘consultation’ box it normally gets filed under. Take them out of the room and Europe doesn’t end up with a clearer view of its own spending; it ends up more sure of itself.

And this should worry the whole Committee, not only those of us who stand for organised civil society. The European project runs on consent – on people half-believing it does something for them where they actually live. A budget that’s harder to see, and harder to check, can be perfectly efficient and still disappear from view in exactly the places that decide whether Europe holds together. By all means, let’s fight over the numbers. I’d just rather we didn’t win that argument and lose the point of it.

Elena Calistru is the president of the European Economic and Social Committee’s Section for Economic and Monetary Union and Economic and Social Cohesion (ECO) and a member of the EESC’s Civil Society Organisations’ Group.

Culture contributes to democracy, social cohesion, health and the economy. But these wider benefits happen only if we support culture for its own sake, Luiza Moroz - Head of Policy at Culture Action Europe - told EESC Info. In the next EU budget, culture must have a clear place, visible identity and dedicated funding.

EU funding in the cultural sector often favours large, well-established institutions with the capacity to handle complex applications. To support emerging artists and first-time applicants, the Culture Action Europe proposal suggests introducing a 'micro-grant fast-track'. How can the next MFF help lower these barriers and ensure that the next generation of European cultural talent can access funding?

First, the issue is one of resources. The Commission has proposed a budget of EUR 1.8 billion for the Culture strand of AgoraEU over seven years. This corresponds to approximately EUR 260 million per year — roughly equivalent to the annual budget of the French National Library. Culture Action Europe is calling for an increase with a concrete proposal: top up AgoraEU with digital fines imposed on big tech under EU digital legislation. For example, the EUR 120 million fine imposed on X for breaching the Digital Services Act could be channelled towards supporting creators.

Second, funding needs to be made more accessible. The European Parliament's draft report on AgoraEU proposes useful tools: operating grants (support the organisation itself rather than a single project), two-stage applications (a full application is developed only after the concept note has been accepted, which saves applicants' resources), more cascading grants redistributed among smaller organisations, and a the possibility of a 100% co-funding rate, under which EU funds would cover the full cost of a project. At present, the requirement for co-financing often disadvantages smaller organisations with limited resources.

Finally, AgoraEU should also make greater use of private funding from foundations and other third parties, as envisaged in Article 12 of the proposal.

A major structural change is the merging of Creative Europe into the new 'AgoraEU' programme, with the aim of increasing efficiency. However, there are concerns that culture could lose its distinct identity or be overshadowed by other priorities. How can the EU ensure that culture remains a visible, standalone priority in future MFFs?

The Culture strand within AgoraEU must be autonomous and clearly visible. In practice, this means a strand with a fixed percentage of the budget for culture (we are calling for at least 25%), its own work programmes, indicators and logo.

The visibility of culture also depends on artistic freedom: the freedom to be unconventional, radical, experimental and uncomfortable. In many Member States, this freedom is being restricted, often under austerity arguments. Culture Action Europe is part of a civil society coalition drafting a Blueprint for the European Artistic Freedom Act. In addition, we are calling for EU funding to national governments to be made conditional on respect for artistic freedom.

Underpinning both demands is a call to support culture's intrinsic value. Of course, culture contributes to democracy, social cohesion, health and the economy. However, these wider benefits can only materialise if culture is supported for its own sake. Only then can culture create space for the unconditional imagination that allows societies to rethink themselves and envision new futures. At Culture Action Europe, we say: Ask, Pay, Trust the Artist. Embrace the unpredictability of the arts. We deliver results, even if we do not always tick every box.

Your analysis highlights that culture is often mentioned only marginally in other major funds. What specific structural changes would you propose to ensure these broader funds actively support the cultural sector, rather than treating it as an afterthought?

We should recognise that the current EU budget includes some good examples of culture mainstreaming: Horizon Europe has a dedicated space for culture under Cluster 2, and the EU  intends to allocate around EUR 5.3 billion for culture from cohesion funds. The first priority is to keep and strengthen these entry points in the next budget.

To make this structural, culture needs a clear place: dedicated policy windows, pillars, calls, budget lines. If culture appears only as a horizontal principle, it is too easy to overlook. This is why our current campaign on Horizon Europe and the European Competitiveness Fund is called ‘Name, Place, Fund’: culture should be named, placed in the architecture, and backed by funding.

Governance is key to achieving this. Culture sector representatives need to be involved in designing and monitoring broader funds. Take the bodies set up under the AI Act: the Scientific Panel, the Advisory Forum, the EU AI Board. Culture has no strong presence in any of them. Nor were cultural experts part of the high-level group shaping the future of Horizon Europe. Perhaps this is why culture is often neglected in AI and research policies. The answer is to include culture in decision-making early on!

The new National and Regional Partnership Plans will determine local spending, yet there is no mandatory requirement to fund culture in these plans. If this remains voluntary, what mechanism would you recommend to guarantee that every region invests in its cultural future?

During the pandemic, the European Parliament and cultural networks called for at least 2% of each national recovery plan to be allocated to culture. While this target was never included in the official regulation, in practice it was met. This time we should not rely on political goodwill. The target needs to be in the National and Regional Partnerships legal base.

If the Commission already proposes to earmark 14% for social objectives, why not 2% for culture? Regional funding is important because it reaches communities directly and makes culture more accessible for Europeans, through local cultural infrastructure and socially engaged arts.

For that to happen, we need pressure from the local level: cultural organisations, communities, mayors, all making the case that culture belongs in these plans. At Culture Action Europe, we are encouraging our members to write to their ministries and municipalities to push for exactly that. 

Luiza Moroz is Head of Policy at Culture Action Europe, a major Brussels-based European cultural advocacy network. She leads the organisation’s advocacy on EU funding for culture, the Culture Compass and artists’ working conditions. Previously, she worked at Ukraine’s Ministry of Culture, where she helped introduce the concept of creative industries into the government agenda and establish the sector’s analytical and statistical framework. A philosophy graduate of Taras Shevchenko National University of Kyiv, she also holds an MA from the College of Europe and has worked on European integration in culture.

Europe’s transport network is facing a squeeze: higher ambitions, tighter budgets and persistent gaps at borders. As the EU prepares its next long-term budget, the question is no longer how much to invest, but how to invest better. José F. Papí – CEO of Etelätär Innovation and author of a European Parliament study on transport funding – tells EESC Info where EU money makes the biggest difference and where it still falls short. 

Your study, Investing in Transport in the new MFF, highlights that the next multiannual financial framework (MFF) period faces a ‘perfect storm’: an urgent need to decarbonise transport and complete the TEN-T network at a time when public budgets are tightening and connectivity gaps remain, especially at borders. How would you characterise the current state of EU transport investment?

EU transport investment is at a turning point: the foundations are solid, but performance is uneven, and the gap between political ambition and real delivery remains too wide. In the 2021-2027 period, the combination of the Connecting Europe Facility (CEF) for Transport, cohesion policy funds, InvestEU, European Investment Bank lending and temporary recovery instruments has mobilised substantial resources, yet results vary significantly between Member States, corridors and modes of transport.

Where there are strong project pipelines, clear TEN-T corridor strategies and a robust cost-benefit analysis, EU support delivers high value for money. But oversubscribed CEF calls, administrative capacity constraints and fragmented governance mean that many high-quality projects go unfunded or face delays, especially in cohesion countries and peripheral regions.

Looking ahead to 2028-2034, the EU faces a ‘perfect storm’: it must accelerate decarbonisation, complete the revised TEN-T core and extended core networks, modernise critical road links for continued safety and resilience and meet heightened security needs under tighter fiscal conditions, while connectivity gaps persist at borders and in less-connected areas.

The main challenge is less putting instruments in place and more ensuring that they are consistent, have good coverage and are focused: good tools are in place, but they need to be better aligned, more predictable for long-term projects and more explicitly geared towards cross-border, green and dual-use priorities.

The proposed budget architecture for 2028-2034 is quite different from that of the past, relying on an enlarged CEF, on transport windows under the new European Competitiveness Fund (ECF) and on redesigned cohesion funds under national partnership plans. In your view, does this new mix of instruments offer a better way to coordinate research, innovation and deployment?

The proposed architecture has the potential to better coordinate research, innovation and deployment, but only if the division of labour is made more explicit and supported by concrete performance frameworks. An enlarged CEF for Transport is positioned as the EU-level backbone for cross-border TEN-T, major nodes, alternative fuels and dual-use infrastructure, while cohesion funds under national and regional partnership plans are intended to support regional links, urban mobility and last-mile connections, particularly in less developed regions.

The ECF and the successor to Horizon Europe can create an innovation-to-deployment pipeline, with mission-oriented calls and large-scale pilots feeding into mature investment pipelines that are then scaled up along TEN-T corridors with CEF, cohesion and ECF support.

In practice, this will only work if several safeguards are in place. First, there must be a clearer division of labour between instruments: the CEF should focus on cross-border or dual-use projects that are unlikely to proceed otherwise, cohesion funding on accessibility and infrastructure modernisation, and the ECF on industrial capacity and enabling infrastructure.

Second, coordinated programming – including shared roadmaps for zero-emission and digital corridors, joint work programmes and aligned calls – must bridge the traditional gap between research and innovation and deployment.

Third, transport-specific, outcome-oriented indicators should complement the horizontal Performance Regulation so that funding decisions across instruments are guided by measurable progress on TEN-T completion, decarbonisation, safety and resilience rather than absorption alone.

Your study warns that transport priorities could be diluted within broader funding allocations, affecting progress on decarbonisation and safety. You highlight three areas where EU-level intervention is most critical: cross-border links, alternative fuel infrastructure and dual-use projects. If the EU must prioritise, which of these is currently most neglected and why is it essential to keep it as a distinct focus area rather than fold it into general regional funding?

All three areas require EU-level intervention, but the most structurally neglected remains cross-border and missing links on TEN-T, especially where they connect less developed regions and external borders. These projects have strong added value for Europe and high socio-economic returns, yet are politically and administratively demanding, involve long lead times and cost overruns and are often the first to be delayed under national budget pressure. Without a dedicated, sufficiently large EU-level budget and clear governance of corridors, the risk is that Member States focus on purely national segments and that physical and interoperability gaps persist at borders, undermining decarbonisation, cohesion and security.

Alternative fuel infrastructure and digital systems (such as the European Rail Traffic Management System, advanced traffic management and charging networks that comply with the Alternative Fuels Infrastructure Regulation) also tend to be under-provided by markets alone, given high upfront costs and uncertain short-term financial returns. Here, modest but well-targeted EU grants and blended finance could unlock substantial private investment and ensure coherent network development.

Dual-use projects are gaining political visibility but still risk being treated as a niche area. They need to remain a distinct priority to ensure that military mobility investments systematically deliver strong benefits for civilians. If these areas are absorbed into broader regional allocations or horizontal industrial funds, short-term, nationally relevant projects are likely to crowd out cross-border, green and safety-critical investments whose benefits are not as obvious but are essential for a truly integrated, secure European transport area.

If you could make one definitive recommendation to the negotiators to ensure the next MFF delivers a truly resilient and green transport network, what would it be?

If I had to make one recommendation, it would be to agree on a significantly higher, clearly ring-fenced CEF for Transport allocation explicitly reserved for a limited portfolio of high-impact, cross-border, alternative-fuels, safety-oriented and dual-use projects, embedded in a transparent, performance-based governance framework at corridor level. Concentrating scarce EU-level grants on projects with clear added value for Europe – backed by robust cost-benefit analyses and clear milestones – would maximise value for money and send a strong, predictable signal to national authorities, investors and industry.

To make this work, the enlarged CEF should be complemented by transport-relevant sections in cohesion and competitiveness instruments, with safeguards such as minimum quotas for transport or conditionalities in national and regional partnership plans, an innovation-to-deployment pipeline under the successor to Horizon and the ECF, and transport-specific indicators to guide flexibility and mid-term reviews. This would allow the next MFF to respond to shocks and new priorities without losing sight of its long-term objective: completing a resilient, green and genuinely European transport network that individuals and businesses can rely on.

José F. Papí is the CEO of Estonian tech company Etelätär Innovation and President of the Smart Transportation Alliance, a Brussels-based platform for innovation in transport infrastructure. With more than 30 years’ experience in European and international transport policy, he has worked with EU institutions, government agencies and industry on devising and implementing mobility strategies. He is the author of the European Parliament study ‘Investing in Transport in the new MFF’, requested by the European Parliament’s Committee on Transport and Tourism, which assesses how the 2028-2034 EU budget can deliver high-value, green and resilient transport investments. The opinions expressed in this interview are those of the author only and should not be considered representative of the European Parliament’s official position.

The next EU budget is shaping up to be one of the most contested in years, with growing pressure on priorities and funding. In an interview with EESC Info, Anna Heckhausen, EU budget expert at Bertelsmann Stiftung, breaks down the key trade-offs – and why they matter for people and policies across Europe.

In your paper The Devil is in the Budget - A Comprehensive Guide to the MFF Negotiations, you show that the next MFF cycle is facing unusually tight political and fiscal constraints. When looking at the five battlegrounds you identify: budget size, priorities, structure, conditionality, and revenues, which one do you see as the most decisive for determining whether this MFF succeeds or fails?

The battlegrounds EU institutions face in the MFF negotiations are deeply intertwined. Priorities depend on budget size; size depends on new revenues; and the more constrained the overall budget is, the more important structural reform becomes.

If I had to single out one battleground, I would therefore point to the budget’s architecture. The chances of a substantially larger budget are very slim – that makes structure crucial: it will determine whether the EU can spend its limited resources more strategically, effectively and flexibly. This is the logic behind the proposed National and Regional Partnership Plans and the European Competitiveness Fund: to simplify and target spending, reduce bureaucracy, increase synergies across policy areas, and respond better to crises and emerging priorities. 

But structural changes can only go so far. New priorities still need to be backed by sufficient money. Ultimately, the question remains who pays – and how much?

Your policy brief Fund or Fumble – How to Make the European Competitiveness Fund Work argues that the EU currently spreads its industrial funding across too many small, complicated programmes, making it hard to focus on big strategic goals. The new proposal tries to fix this by merging 14 different programmes into one large ‘European Competitiveness Fund.’ Do you view this merger as a transformative solution that will make Europe more competitive, or is it merely a rebranding of existing challenges?

At present, EU industrial spending is highly fragmented, complex and rigid. The European Competitiveness Fund (ECF) is the Commission’s response to these weaknesses. More than just adding money, it introduces three reform levers.

The first is consolidation. Replacing silos and overlapping instruments with a more coherent framework could reduce administrative costs. This could make it easier for smaller businesses to access funds, including those in less developed regions.

The second is focus. Rather than dispersing support across too many small envelopes, the ECF would organise funding around strategic priorities through four policy windows. Maintaining a clear strategic focus within these windows should be a central priority in the negotiations.

The third is governance. Funding in the ECF could be more easily adjusted to shifting priorities over time. Moreover, the ECF would bring together different funding modes, such as loans and grants, in a single toolbox to better target industry needs at different stages of the innovation pipeline.

So, yes – the ECF has real transformative potential.

Given that a significant portion of the next budget is already committed to repaying pandemic-era debt, leaving little room for new initiatives, your research suggests major cuts are likely. If the EU must choose between protecting traditional spending on agriculture and cohesion versus investing in strategic priorities like defence and the green transition, which trade-offs do you consider politically feasible?

Both new and traditional spending have their part to play. Europe needs to invest heavily in security, competitiveness and the green and digital transitions. At the same time, cohesion and agricultural support remain important for regional development and the EU’s perceived legitimacy, especially in less developed regions.

Politically, deep cuts to cohesion and agricultural funds are unlikely. They are strongly entrenched, based on pre-allocated national envelopes and backed by powerful interest groups. However, there is scope to make cohesion policy more effective. 

The most feasible compromise will therefore be to change what this money is expected to deliver: linking cohesion and agriculture more strongly to reforms and investment in competitiveness, skills, and climate resilience.

In the end, the divide between old and new priorities is less clear-cut than it may seem. Funding for infrastructure, industrial capacity and the economic transition can also support regional development. The key is to think these objectives together: using the ECF for excellence-based industrial support, while relying on cohesion instruments to ensure that less developed and transition regions can also benefit from Europe’s competitiveness agenda.

If you could make one recommendation to negotiators entering the final phase of MFF talks that would most improve outcomes for European citizens five years from now, what would it be?

My advice would be to make choices – you cannot spend the same euro twice. The EU budget is too small to fund every priority at meaningful scale. Synergies, leverage effects and efficiency gains can help, but they only go so far. 

Negotiators should therefore resist the temptation to give every constituency, programme and objective a small envelope and instead focus resources where EU-level spending can make the biggest difference – for instance, on cross-border infrastructure, international research projects, or a coordinated EU industrial policy. If the EU wants – or needs – to take on new responsibilities in security, competitiveness and the dual transition, it also needs to decide what should give way – or who pays.

Anna Heckhausen works in the Europe’s Future programme at the Bertelsmann Stiftung, focusing on issues relating to the EU budget. Her research focusses on negotiations on the next Multiannual Financial Framework (MFF 2028-34), budget sustainability and the green transformation of Europe’s economy. The Bertelsmann Stiftung is a German non-profit foundation focused on strengthening democracy, society and public policy.