The European Commission proposes a structural overhaul of the 2028–2034 EU budget

Last week, the European Commission presented its proposed budget for the 2028–2034 period, aiming for a total of almost 2 trillion. The new Multiannual Financial Framework (MFF) — which shifts emphasis from regions to Member States and prioritises areas such as R&D&I, defence, digitalisation, the green transition and health — must now be negotiated with national governments and the European Parliament, with a view to final adoption by the end of 2027.

The design reorganises the EU budget around four major chapters (spending categories), reduces the current 52 programmes to 16, and proposes replacing over 500 regional instruments with 27 national and regional plans — one for each Member State. These structural changes are aimed at simplifying budget implementation and improving alignment with the EU’s strategic priorities.

Chapter 1: National and Regional Partnership Plans

The European Commission proposes a major administrative simplification through the creation of 27 Partnership Plans — one for each Member State — which will integrate funding for cohesion, agriculture, fisheries, and social policies. This new budgetary architecture would pool around €1 trillion under a single operational framework.

Although aligned with the EU’s shared priorities, these plans will be adapted to the specificities of each country and its regions. The model will allow Member States to develop national, sectoral and even territorial chapters, depending on their constitutional structures.

This is a more flexible and less prescriptive approach to the means of achieving objectives, but more demanding in terms of results, always respecting the principle of subsidiarity. In addition, the plans will be able to provide rapid responses to urgent challenges, such as those faced by eastern border regions most affected by the war in Ukraine.

This category also includes a new instrument, Catalyst Europe, which will offer loans backed by the EU budget for up to €150 billion. It will focus on mobilising investment in sectors deemed strategic: key technologies, energy infrastructure, and industrial defence capacities.

Chapter 2: European Competitiveness Fund and Horizon Europe

With a total allocation of €589,6 billion — including resources from Horizon Europe and the Competitiveness Fund — this chapter aims to drive research, development, and innovation as engines of economic growth.

The Competitiveness Fund will concentrate EU public investment in strategic technologies, strengthening the continent’s industrial base and economic autonomy. It will replace the current fragmentation of overlapping programmes and will be governed by a single regulation designed to streamline and simplify processes, especially for small businesses.

Following the recommendations of the Draghi report, the fund will focus on five key areas: green transition and decarbonisation; digital leadership; resilience and security, including defence and space industries; health and biotechnology; and sectors linked to agriculture and the bioeconomy.

In addition to grants and loans, the fund will provide a financial toolbox to mobilise private capital, including investment instruments and public contracts. Through InvestEU, investments will be channelled into priority sectors in cooperation with the European Investment Bank and other national development banks. It will also support Important Projects of Common European Interest (IPCEI) and public–private partnerships.

In parallel, the Horizon Europe programme will maintain its role as the main EU funding instrument for science and innovation. It will remain autonomous but closely linked to the Competitiveness Fund, with joint work programmes and common rules. It will be organised around four pillars: Excellent Science, Competitiveness and Society, Innovation, and the European Research Area. The European Research Council and the European Innovation Council will both be strengthened, while the Euratom programme will continue to fund nuclear research and initiatives such as the ITER project.

Chapter 3: Global Europe and the Common Foreign and Security Policy (CFSP)

This chapter restructures funding for the EU’s external action, with an allocation of €215,2 billion. Under Global Europe, each macro-region will receive an indicative financial allocation, ensuring predictability for the EU’s international partners while allowing flexibility to reallocate resources in response to emerging priorities or crises.

Global Europe will also include a pillar for global-scale actions, such as initiatives within the United Nations framework or in areas such as counterterrorism, global health, cybersecurity, the fight against disinformation, or climate and ocean governance.

This chapter will be complemented by other external action programmes financed separately due to legal constraints, such as support for Overseas Countries and Territories (OCTs) and Common Foreign and Security Policy (CFSP) actions.

Chapter 4: European public administration

The final category of the almost two trillion budget will cover the operating costs of the EU institutions. This heading will remain stable and represent 6% of the total Multiannual Financial Framework.