La Collection du Plan

Making the European Budget fit for purpose

"Le Plan has always been a forum. It publishes its own research but also channels stimulating ideas from outside, by authors who are free to defend their viewpoint. This is the purpose of La Collection du Plan, with this collective contribution on the European budget. Reformed governance, a strengthened borrowing and investment capacity, a sovereign fund, new own resources…: far from the logic of ‘juste retour’ and a narrow budget, here are some concrete ideas for a strong European ambition, which must be reflected in the future budget."

Clément Beaune, High Commissioner for Strategy and Planning

Published on : 13/11/2026

Temps de lecture

4 minutes

Download the contribution of Shahin Vallée and the group of economists

"The EU’s next Multiannual Financial Framework must […] enable a Union capable of acting geopolitically, rather than remain primarily oriented towards the status quo.[1]"

The European Commission’s first formal proposal for the EU’s long-term budget for 2028–2034 is significant insofar as it represents not just a financing exercise but an attempt at modernising budget governance. This attempt at reform has been justified by the need to match the challenges which the Continent faces. With a new proposal for the period 2028-2034 standing at €2 trillion in current prices (about €1.76 trillion in real 2025 terms, or roughly 1.26% of EU gross national income (GNI) per year), this Multiannual Financial Framework (MFF) seeks to equip the Union with sustained fiscal capacity to support European public goods – from competitiveness and defence to cohesion and climate action. By comparison, the 2021–27 MFF amounted to around €1.2 trillion in current prices, or about 1.13% of EU GNI (excluding the NextGenerationEU recovery instrument). The GNI ratio for 2028–34 rests on the Commission’s own projections of nominal GNI, and the increase is less impressive than it looks: once NGEU repayments are excluded, the European Court of Auditors puts the proposal at about 1.15% of GNI, barely above the current framework.

The 2028–34 budget was broadly endorsed by the European Council on 16 December 2025, determining the balance between traditional spending (agriculture and poorer regions) and new priorities (competitiveness, defence, industrial policy). The meeting locked the path for a final deal, most prominently whether the budget will see a large increase in defence and industrial policy spending, and if national governments get more power over spending versus regions as a quid-pro-quo for more Commission intrusion. Since then, negotiations have progressed apace with clear demands to reduce the overall size of the budget by a number of frugal countries led by Germany. In addition, given a heavy political agenda ahead and elections in Spain, France, Italy and Poland planned in the coming months, there has been renewed urgency to try and finalise an agreement between the end of 2026 and the beginning of 2027. The Irish Presidency’s revised negotiating box of 10 October 2026 (see Box 1) already reflects this pressure: it trims the overall envelope by around 8% relative to the Commission proposal, leaves the revenue side largely undecided and confines new borrowing to an emergency instrument.

[1] Excerpt from the coalition agreement entitled Verantwortung für Deutschland signed on 5 May 2025 by the CDU, CSU and SPD, led by Friedrich Merz.