Negotiations over the EU’s long-term budget, the Multiannual Financial Framework (MFF), are often portrayed as a defining moment. In practice, they rarely produce major change. The European Commission usually proposes an updated version of the previous framework; the European Parliament (EP) calls for higher spending, while frugal Member States argue for restraint; and net beneficiaries seek to protect cohesion and agricultural funding.
There have only been a few exceptions to this pattern, due to either strong unity around a shared objective, like completing the single market, or in response to a major crisis, like in 2020 with the NGEU package.
Alas, it’s looking more likely that the next MFF won’t be one of the exceptional ones.
A budget that promises transformation, but…
But an exceptional MFF was certainly the Commission’s ambition when it presented its post-2027 MFF proposal in July 2025. Whatever one’s assessment, the proposal undeniably envisages far-reaching changes, in the structure of the budget, the composition of EU spending and the way EU funds are planned and delivered.
Yet negotiations have progressed slowly and amid widespread scepticism. In the Council, several net contributors reacted almost immediately by questioning the budget’s overall size, while major recipients warned against potential cuts to the Common Agricultural Policy (CAP) and cohesion funds.
In the EP, the main political groups opposed the idea of merging all shared-management funds into centralised National and Regional Partnership Plans (also called ‘single plans’) and have already forced the Commission’s hand to amend parts of the proposal.
Admittedly, several criticisms are justified. There’s room for improving the legal bases of some newly created programmes, as some appear to have been drafted very quickly. There are also conceptual weaknesses in parts of the proposal’s design.
As cohesion policy experts have pointed out, the proposed ‘single plans’ regulation (which would merge cohesion and CAP funds into single national plans) doesn’t guarantee that Member States will get behind cohesion objectives. The role of sub-national authorities in implementing these new single national plans is also a source of concern as concentrating excessive power at the national level could be problematic – for efficiency and political reasons.
The claim that merging funds will deliver genuine simplification remains debatable. The Commission´s impact assessment assumes a 40 % reduction of administrative costs from integrating existing programmes and adopting a single rulebook. However, the expected benefits may be overstated, partly to align with Member States’ current focus on deregulation.
Shifting from a cost-based to a new performance-based delivery approach is also challenging. It will impose important adjustment costs for national and regional administrations and, as already seen with the Recovery and Resilience Facility, it won’t automatically translate into simplification if controls and audit requirements imposed on managing authorities remain unclear.
Finally, more built-in flexibility in the EU budget is much welcomed. A significant share of EU resources will remain ‘unprogrammed’, available to provide crisis support or respond to new policy needs as they arise. EU funds are also expected to be better aligned with EU priorities and national spending decisions through a new ‘political steering mechanism’, which will inform the EU’s annual budgetary procedure. However, it’s still unclear how this steering mechanism will work and, in many programmes, budget flexibility results into too much discretion for the Commission, without the appropriate accountability and oversight.
More priorities, less predictability
Beyond these specific issues, the limited enthusiasm for the proposal reflects a deeper structural problem. The Commission intends to reduce funds pre-allocated to Member States for cohesion and agriculture — distributed through predictable eligibility rules — from 66 % to 46 %, while expanding the share of spending managed directly by the EU institutions and awarded mainly through competitive calls.
In principle, this could make the budget more strategic, better aligned with EU-wide priorities such as competitiveness, reducing critical dependencies and Europe’s defence readiness, while also increasing flexibility to adjust spending as needs evolve.
Unfortunately, the political economy isn’t favourable. Once NGEU debt repayments are excluded, the overall financial envelope increases only marginally – and when the EU budget and NGEU grants are factored in, the total available resources fall by around 5 % in constant prices. This means a substantial reduction in predictable national allocations for cohesion and CAP net beneficiaries.
Understandably, this is difficult to accept. It might be politically manageable if there was stronger confidence in the EU’s ability to deliver on its strategic objectives through a major reorganisation of spending. But reallocating funds alone won’t secure Europe’s competitive position or technological sovereignty.
Without additional EU resources, bold complementary reforms – such as completing the Savings and Investment Union – and much deeper coordination of national economic and budgetary policies, EU-level spending alone cannot deliver what’s expected of it.
No shared vision, no strategic budget
The lack of a shared EU-level vision on how to advance these strategic goals makes the situation even more difficult. As we’ve repeatedly seen, Member States remain divided on fundamental issues: how far to confront the Trump administration, how to respond to China’s unfair trade practices, how much priority to give to the EU’s Green Deal agenda or how best to support Ukraine.
In short, it’s difficult to build consensus for a ´policy-driven´ budget when the policy objectives remain unclear.
Some claim that there is a common vision, outlined in the Draghi and Letta reports. But looking closely, many key questions remain unanswered. Draghi doesn’t clarify how competitiveness and cohesion should be reconciled. How can the EU compete with the US and China without reproducing their highly unequal and geographically imbalanced growth, or without dramatically increasing public interference in the economy? How should cohesion policy be rethought in an era of strategic rivalry and trade tensions?
These are all central issues for the future MFF but they remain largely unaddressed. Letta offers more concrete guidance, particularly by emphasising the ‘freedom to stay’ principle and by mitigating the geographic concentration effects of industrial policy – but even these suggestions haven’t yet crystallised into a shared political vision capable of fundamentally overhauling the EU budget.
There’s no beating around the bush – building this common vision won’t be easy. But without this, the risk is that Member States settle on a smaller, politically convenient, yet largely inconsequential MFF, while having to rely on ad hoc, issue-specific intergovernmental arrangements to address urgent needs.
This would reveal, more than anything else, the EU’s limited willingness to act together… during a deeply unsettled time when cohesion and shared investment capacity are most needed.
