As was to be expected, right before the holidays of the European bubble, Brussels empties itself on the Belgian National Day—the European Commission—after marathon days and not a few internal battles and external mobilizations. On July 16, the European Commission presented (first Commissioner Serafín in the European Parliament —with farmers demonstrating at the entrance— and almost simultaneously President Von der Leyen visibly exhausted in the Berlaymont press room) its proposal for European finances 2028-2034.
This is an urgent analysis aimed at answering some of the questions that this week were raised in Agenda Pública.
“In Brussels everything is relative, and the budget in particular”
We must begin by warning that in Brussels everything is relative, and the budget in particular. The budget is annual, as in the Member States, but given the scale of interests and challenges facing the EU, a Multiannual Financial Framework with ceilings for a range of years is agreed. That process in the EU’s multi-level, consociational system takes at least two years of negotiation, with at least another year to launch the programs, which is why the negotiations are already being opened in mid-2025.
And, even so, given experience, the most probable outcome is that the new funds will not begin to be spent until 2029. Especially if we take into account that almost half of the extraordinary funds mobilized after COVID-19—the Recovery Plan, NextGenerationEU and its Recovery and Resilience Facility—which nearly doubled the EU’s finances overnight, remain unspent, despite having been raised through debt in the financial markets and needing to be executed before the end of 2026. Not to mention the ordinary budget 2021-2027, where, in the case of the Cohesion Policy (one third of the current budget), only 7% has been fully executed (with 57% still to be spent).
Moreover, when doing the calculations, one can measure them using 2018 prices (the year the current 2021-2027 budget was presented) updated to current prices. Also, as these are multiannual funds, they can be calculated in terms of commitment appropriations or payment appropriations. These details are not minor, because in the coming days one or the other value will be used—sometimes strategically—in the ongoing political struggle that has only just begun.
Let us at least acknowledge the obvious. The president, Ursula von der Leyen, announced before her investiture a year ago that she wanted a radical restructuring of the budget, and on paper she has achieved it.
From fifty instruments and funds we move to about a dozen. The structure of the new budget would pivot around the European Fund for Competitiveness (a macro fund of 362,000 million that integrates all programs that the Commission itself manages), associated with FP10, the successor to the current European research fund Horizon Europe, which is maintained and would rise from 89,000 to 154,000 million — at least on paper, under pressure from the scientific and business lobby— remaining separated from the aforementioned macro fund for competitiveness (or, more precisely, the “reptile fund,” as the Parliament openly calls it, very unhappy with the Commission and its perception that it seeks to reduce Parliament’s budgetary authority).
EPP, S&D, Renew and Greens/EFA joint statement on MFF.
Leaders call for an ambitious MFF with increased genuine own resources, with rule of law conditionality, respecting Parliament’s prerogatives, and share concerns with National and Regional plans.
We can’t do more with less. pic.twitter.com/Gox3pu7WdE
— Iratxe García Pérez /❤️ (@IratxeGarper) July 16, 2025
On the other hand, funds managed jointly with Member States (and, where applicable, regional or local administrations) are grouped into National and Regional Partnership Plans [National and Regional Partnership Plans (NRPP)]. This means moving from 540 regional, rural, social, or agricultural development programs to only twenty-seven NRPP, one per Member State, plus the INTERREG cross-border cooperation program. However, if you look at the structure (still to be detailed in dozens of regulatory proposals), the NRPP is the ceiling under which many of the current funds fit; they do not disappear.
In itself, this is not new, as in the past there have been attempts—more or less successful—to get ministries and directorates to collaborate vertically and horizontally on shared problems, avoiding duplications. This new attempt is the most ambitious yet, as it seeks to merge the Common Agricultural Policy with the Cohesion Policy (and the vested interests around each of these funds). In the face of strong opposition from the agricultural sector as well as EU institutions and governments, the Commission has announced that within this structure around 300,000 million are guaranteed for agricultural subsidies. The other pillar of the current CAP, rural development, is re-integrated with the Cohesion Policy. The total of the twenty-seven NRRP, clearly inspired by the Recovery Plan, would represent, at best, around one trillion euros managed by the Member States.
Also, all external action, enlargement and neighborhood instruments are consolidated into a single instrument of 215 million. The Commission’s administrative costs would continue to account for 6% as now.
Thus, we could say that the scale of the future budget —also seven years, like the current one— is of a similar magnitude, around one trillion euros when comparing this proposal for 2028-2034 with the ordinary budget 2021-2027 plus the 800,000 million of the Recovery Plan.
And that is not counting a still not very detailed series of emergency instruments outside the community budget, which could potentially mobilize several hundreds of billions of euros more and with which Von der Leyen openly seeks to avoid renegotiating the current funds to face the latest of the policy crises that have shaken the EU.
However, the aim is to do much more with the same (for example, 115,000 million partly for Defense, and unspecified amounts for housing).
In addition, there is the need to begin repaying the Recovery Plan loan to the financial markets at around 24,000 million per year from 2028 and for two decades.
“The aim is to do much more with the same”
Just as Member States (by far the biggest contributors to the EU’s ordinary budget) are not willing to put more funds on the table, the thorny question of “new own resources” must be reopened, or in other words European taxes totaling about 44,000 million (that is, 18% of what the EU will need annually): the known Emissions Trading System (ETS1), the Carbon Border Adjustment Mechanism (CBAM), uncollected electronic waste, a share of the tobacco tax in each Member State, and about 6,000 million as a fixed annual quota for large multinationals operating in Europe. Many Member States are against it, and if that agreement is not reached, the most likely outcome is that the final budget returns to the traditional size of the EU’s ordinary budget, which amounts to just over 180,000 million per year for the entire EU.
The other front is domestic, since the Commission itself admits that traditional policies like Cohesion and CAP will move from representing two-thirds of the total, as they have for decades, to 43%.
Expressed, roughly, in terms of magnitude, the CAP agricultural subsidies, even without counting inflation since 2021, amount to 291,000 million in the current budget and would seem to drop to only 261,000 million at 2025 prices (though the Commission prefers using current prices, which would equal 295,000). That is, counting that fishing funds are now included, it implies a freeze or a reduction.
Regarding Cohesion or regional policy, including rural development, which is currently considered part of the CAP, we would move from about 466,000 million currently to at most around 412,000 million in the new budget.
Yet, to finish on a Spanish note, the main challenge is political and in terms of (co)governance. The new national plans of the new budget represent a decisive step toward centralizing decisions on European funds (and, therefore, the bulk of Spain’s investment spending) within the ministries and, specifically, within the now-stronger after COVID Secretariat General for European Funds, the true ministry within the Ministry of Finance.
Similarly, the ministries that for the first time have tasted the sweetness of European Funds thanks to the Recovery Plan will want to keep doing so, relegating the autonomies to executing bodies of initiatives designed from Madrid, even in their own competences. These attempts are not new: when Spain exceeded 90% of the European income median and could not receive more of the Cohesion Fund created by Delors at the request of Felipe González, the Zapatero government invented a Technology Fund that has since been managed by Madrid on its own and with little coordination, at least according to autonomous regions opposed to the Moncloa.
Therefore, whoever governs the State in 2027 has the unique opportunity to effectively centralize all the economic policy of the autonomous communities.
Or, in other words, with the new EU budget and Spain’s weak governance culture, we run the risk of a de facto constitutional reform of our Autonomous Community State in 2027.
“With the new EU budget and the weak governance culture in Spain, we risk a de facto constitutional reform of our Autonomous State in 2027”
Conversely, the continuity inaugurated with the Recovery Plan of linking spending to reforms has been decisive in unlocking many structural changes such as labor reform, administration, and justice. An integrated approach will also help reduce excessive autonomous discretion when applying European policies, or even ignoring them.
That said, there are still many unknowns to be cleared when hundreds of pages of proposed regulations are published: the hierarchical relationships between the different instruments, between the Commission and the Member States, between these and the territories; or issues that remain unclear, such as whether all these billions will be grants, repayable subsidies, or loans, and in what proportion. A substantial and demanding summer reading and tough negotiations await once the holidays are over.
