EU Proposes Colossal EUR 2 Trillion Budget for the Union
The European Commission, under the leadership of President Ursula von der Leyen, has proposed a significant increase in the EU's budget for the period 2028-2034, with a potential total of €1.8 trillion to €2 trillion [1][2][4]. This ambitious budget aims to address major contemporary challenges, focusing on strategic priorities such as clean tech, digital, biotech, defense, space, and food security.
To finance this increased budget, the Commission has proposed new own resources, shifting away from traditional contributions by member states [5]. Key pillars of these new resources include the European Competitiveness Fund, with around €410 billion proposed for strategic technologies investment [5]. The plan also emphasises funding from sectors linked to climate, technology, and digital areas, possibly including new levies or taxes associated with these domains.
The European Competitiveness Fund is expected to allocate more than 400 billion euros for enhancing competitiveness [1]. Additionally, the Commission plans to generate 58.5 billion euros annually through new revenue sources, such as a tax on large companies and a tax on non-recycled electrical waste [3].
The National Reform and Investment Plan (NRP) will detail the reforms and investments each country plans to implement from 2028 to 2034, and how EU funds will be used [2]. Regional authorities are to be involved in the creation of the NRP.
The proposed budget also includes funds for EU research funding program Horizon and the education program Erasmus+ [6]. Repayment for the Corona Recovery Fund, created in 2021 to tackle economic damage caused by the pandemic and modernize the economy, is set to begin in 2028 and continue until 2058 [7].
However, the proposal has not been met with immediate reaction from the German government [8]. Criticism has also been expressed by the European Parliament about the proposed National Recovery and Resilience Plans, particularly regarding the potential restriction of supervisory powers and democratic control over EU expenditures [9].
Lengthy and complex negotiations are expected for the approval of the proposed budget by the EU countries and the European Parliament [10]. The budget increase is estimated to be approximately 700 billion euros more than the current plan for the ongoing seven-year budget period [11].
The budget also includes over 131 billion euros for the area of defense and space [1]. In a humanitarian gesture, the EU Commission plans to provide an additional 100 billion euros for supporting Ukraine, in addition to existing aid programs [12].
Almost half of the budget is intended for distribution among member states, with agriculture and structurally weak regions being primary recipients [1]. The Commission has also earmarked funds to react quickly and effectively to new developments, suggesting a more adaptable and strategic approach [10].
In summary, the proposal under Ursula von der Leyen emphasizes new own resources linked to competitiveness and strategic technologies as key pillars for financing the increased EU budget. The budget aims to create a more robust, forward-looking EU budget, addressing major contemporary challenges and investing in strategic priorities.
- The European Commission, under President Ursula von der Leyen, is proposing to finance the increased EU budget through new own resources, such as the European Competitiveness Fund, estimated to allocate over 400 billion euros for strategic technologies investment [5].
- The proposed budget, focusing on economic and social policy, also includes funding from sectors linked to climate, technology, and digital areas, possibly including new levies or taxes associated with these domains [3].
