The European Commission proposed the largest long-term EU budget in the bloc’s history Wednesday, merging historically separate farming and regional spending programmes into country-specific national plans and creating a €400+ billion fund to boost ailing industry.

Brussels’ proposed post-2027 Multiannual Financial Framework (MFF) will amount to just under €2 trillion, or 1.26% of the bloc’s gross national income, Ursula von der Leyen told reporters. This is well above the current budget, which amounts to 1.13% of the bloc’s GNI.

“The next MFF will be the most ambitious ever proposed. It is more strategic, more flexible, more transparent, and we’re investing more in our capacity to respond and more in our independence,” von der Leyen said.

However, the total budget falls to just 1.15% of GNI once repayments of the bloc’s pandemic recovery fund, which is financed through common EU debt, are taken into account.

Europe’s Common Agricultural Policy (CAP) and Cohesion Policy, which for decades have consumed a third each of the bloc’s budget by providing subsidies to farmers and development funds to Europe’s poorer regions through some 500 separate funding schemes, should be combined into 27 “national and regional partnership plans”, EU Budget Commissioner Piotr Serafin said. The plans collectively amount to €865 billion, or less than half of the total budget.

“The goal of the next MFF is a modern, more flexible budget that builds on past successes and responds to the challenges of today, but also tomorrow,” Serafin said. “You will see that reflected in overall figures, in new spending categories, and in the changes we have made to the structure and principles of the budget.”

A much-vaunted Competitiveness Fund (ECF), which will also seek to “crowd in” hundreds of billions of euros of private investments in strategic sectors, will merge up to twelve distinct initiatives to bolster the EU’s beleaguered industry and prevent the bloc falling further behind China and the US, he added.

The third pillar of the Commission’s proposed budget is a similarly novel €200 billion “Global Europe Fund”, which will combine previously separate programmes and allocate funds across six regional envelopes, including enlargement and foreign policy initiatives.

In addition, Serafin also confirmed that the budget blueprint will include the previously touted €100 billion off-budget fund to anchor long-term assistance to Kyiv from 2028 to 2034.

This is a developing story.

Alexandra Brzozowski contributed to reporting.

(mm)