EU's Proposed Budget Hits EUR 2 Trillion Mark
The European Union (EU) Commission, led by President Ursula von der Leyen, has proposed an increase in the long-term EU budget for the period 2028-2034, aiming to reach approximately 2 trillion euros. This budget is around 700 billion euros more than currently planned for the ongoing seven-year budget period.
To finance this significant increase, the EU Commission has proposed several new own resources. These include the EU Emissions Trading System (ETS), expected to contribute around €9.6 billion annually; the Carbon Border Adjustment Mechanism (CBAM), anticipated to generate around €1.4 billion annually; an E-Waste Levy, expected to generate about €15 billion annually; a Tobacco Excise Duty, expected to generate around €11.2 billion annually; and a Corporate Resource for Europe (CORE), a lump-sum contribution from large corporations operating in the EU, expected to generate approximately €6.8 billion annually.
The Commission also proposes a tax on large companies with an annual turnover of more than 100 million euros and a tax on non-recycled electrical waste as new revenue sources. These measures aim to reduce the burden on national budgets and support the EU's strategic priorities.
The budget proposal aims to earmark less money for specific expenditure programs and finance them from a single large fund instead. This fund will provide resources for EU institutions such as Frontex and Europol, as well as for the EU research funding program Horizon and the education program Erasmus+. Regional authorities are to be involved in creating the National Reform and Investment Plan (NRP) for each EU country, to be used from 2028 to 2034.
Almost half of the budget is intended to flow into member states, benefiting sectors such as agriculture and structurally weak regions. Agriculture and cohesion remain key priorities in the budget, with investments planned for social policies, member states, and regions, and safeguarding farmers' livelihoods. More than 400 billion euros are earmarked for a fund to enhance competitiveness.
The budget proposal includes 131 billion euros for the area of defense and space. It is also planned that a portion of the revenues from tobacco taxes from the capital cities will flow to Brussels. The EU Commission wants to provide 100 billion euros in support of Ukraine, in addition to existing aid programs.
Long and complex negotiations are expected for the approval of the budget by the EU countries and the European Parliament. The German government has not yet responded to the Commission's proposal, but acknowledges its responsibility for making the highest national contributions due to Germany's status as a large exporting country. The European Parliament has criticized the proposed National Reform and Investment Plans, expressing concerns about potential restrictions on its oversight and democratic control over EU expenditures.
To finance the proposed budget increase, the EU Commission sets aside 24 billion euros annually for the repayment of the Corona Recovery Fund, totaling 168 billion euros. The Commission hopes that these new own resources, which could bring in 58.5 billion euros annually, will help address these financial requirements and support the EU's ambitious plans for the future.
The European Commission's budget proposal for 2028-2034 includes new finance resources from various sources to fund the significant increase, such as the EU Emissions Trading System (ETS), the Carbon Border Adjustment Mechanism (CBAM), an E-Waste Levy, a Tobacco Excise Duty, and a Corporate Resource for Europe (CORE).
Moreover, the Commission proposes taxes on large companies and non-recycled electrical waste as new revenue sources to reduce the burden on national budgets and support the EU's strategic priorities.
