European Commission President Ursula von der Leyen has unveiled a sweeping proposal for the European Union’s next long-term budget, worth €2 trillion for the 2028–2034 period. The plan significantly increases the EU’s financial framework from the previous €1.21 trillion agreed upon in 2020 and aims to make the bloc’s finances more adaptable to crises and more aligned with strategic priorities.
Key Highlights of the New Budget Proposal:
- Total Value: €2 trillion
- Timeframe: 2028–2034
- New Focus Areas: Flexibility, crisis response, independence, and transparency
Budget Structure – Three Strategic Pillars:
- National and Regional Partnerships – €865 billion
- Consolidates the Common Agricultural Policy (CAP) and Cohesion Funds
- Supports agriculture, fisheries, social programs, and regional development
2. European Competitiveness Fund – €410 billion
- Invests in research, innovation, and cutting-edge technologies
- Aims to boost the EU’s global competitiveness, especially against the US and China
3. Global Europe – €200 billion
- Includes a dedicated €100 billion fund for Ukraine’s recovery and reconstruction
- Supports the EU’s external action and foreign policy
Flexibility and Crisis Preparedness
In response to recent global crises—including the COVID-19 pandemic, Russia’s invasion of Ukraine, inflation, and natural disasters—von der Leyen proposed reducing the number of EU programmes from 52 to 16. This consolidation allows for faster reallocation of funds when new emergencies arise.
Additionally, the Commission is introducing a €400 billion crisis reserve in the form of loans for member states, which will only be activated in the event of unforeseen emergencies.
New Revenue Streams and Rule of Law Conditions
To finance the increased budget, von der Leyen proposed a mix of:
- Direct contributions from member states
- New EU-wide taxes on:
- Electronic waste
- Tobacco
- Corporate revenues
All funding allocations will be conditional on compliance with rule of law standards, targeting democratic backsliding concerns in countries like Hungary.
Continued Support for Ukraine
The proposal dedicates €100 billion for Ukraine under the “Global Europe” pillar, building on the €50 billion Ukraine Facility approved in 2024. This move ensures steady, predictable EU support despite growing US retrenchment and internal EU political tensions.
Additional Allocations:
- Erasmus Programme: €49 billion
- Other administrative and policy areas: €292 billion
- COVID-era debt repayment: €24 billion per year
Challenges Ahead
Von der Leyen’s proposal now enters a politically sensitive phase of negotiations between EU member states and the European Parliament. Disputes are expected, particularly over the reduction in CAP and cohesion funding, which may face resistance from southern and eastern EU countries.
Meanwhile, wealthier northern and western states are likely to support the budget’s modern focus on innovation and competitiveness.
President von der Leyen’s proposed budget marks a bold departure from traditional EU spending structures, offering a flexible, strategic, and crisis-ready financial framework. However, its approval will require navigating complex political dynamics and resistance to new revenue mechanisms and spending conditions.
