The European Commission’s proposal foresees a Multiannual Financial Framework (MFF) for the period 2028–2034 amounting to €1.98 tillion in total for the seven years. This equals 1.26% of the EU’s Gross National Income (GNI), or €280 billion annually. Which falls two thirds short of Draghi’s figure of €800 billion a year to revive European competitiveness and to face new priorities. 

To address these emerging priorities, the Commission is proposing an unprecedented shift in budget headings. Agricultural and regional funds, which currently make up around 62% of the total budget, would represent 44%. In turn, a new heading on competitiveness (energy, technology, research, defence) would rise 30%. 

This Policy Brief examines the Commission’s proposal and draws on the budgetary reforms needed to address the EU’s current social and economic transformations. EsadeGeo also formulates a set of recommendations for the upcoming MFF:

• Reviewing the proposal for National Plans. Conditioning each Member States’ spending flexibility on long-term objectives to avoid the risks of fragmentation and short termism.
• Achieving an agreement at the European Council granting the Commission a firm mandate to accelerate the completion of the Capital Markets Union (Savings and Investments Union).
• European Commission’s proposal for the creation of a European debt asset to finance transformations and European Public Goods.
• Opening new sources of fiscal revenue at EU level (new own-resources) capable of financing European public investments (in disruptive technologies, electrical infrastructure, energy, defence).
• Preventing the adverse effects of fragmented, ineffective, and distorting State Aid through greater supervision capacity of EU institutions.
• Increasing in the use of financial instruments in public spending and within the MFF: raise the share of loans, grants, and productive investments from 8% to 20% in the coming MFF.

This report is the continuation of a workshop held in Madrid by EsadeGeo, in collaboration with the Ministry of Foreign Affairs and European Union (MAEC). The discussion featured international experts Béatrice Dumont (College of Europe) and Nils Redeker (Jacques Delors Center) and was moderated by Juan Moscoso del Prado (EsadeGeo). The conversation is also available on our DoBetter Podcast.

Activity co-financed by Spanish' State Secretariat for the European Union / Reference: 117-032471

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