Panorama 05.09.2025

Euranet Plus Panorama is a weekly news review that showcases our network’s wide-ranging coverage of EU-related stories.

Radio România Internațional, 05.09.2025, 17:07

Fighting over money

As the Commission sets out the remainder of its thinking on its big budget rebuild, Brussels braces for a fight.

Established for a seven-year period, the EU’s multiannual financial framework (aka the MFF or long-term budget) aims to ensure that the bloc’s spending is orderly and remains within its financial limits. It sets spending ceilings for broad areas of focus – the most important of which have traditionally been the Cohesion Policy, which aims to reduce economic and social disparities between member regions, and the hefty Common Agricultural Policy.

A cloak-and-dagger operation

The Commission chose to present its proposals for the next MFF – which is due to run from 2028 to 2034 – in two instalments: the first came on 16 July, controversially just a day before Parliament closed for its summer recess; and the second followed this Wednesday (3 September).

Jorge Braga de Macedo, a former Portuguese finance minister, tells Renascença that the president of the European Commission came in for a lot of criticism about how she handled the process of drawing up the main budget proposal – something that took place entirely behind closed doors among a close circle of confidants. Even many of her own commissioners were caught off guard the day it was unveiled.

Jorge Braga de Macedo, Portugal’s Former Minister of Finance (in Portuguese):
“The news reports on this budget say that the Commission President did not ‘cheat’ as such, but she acted in an extremely autocratic manner. Practically no one knew what was going to happen, and now those who are seeing the results are not happy. The commissioners themselves think the way in which [this budget] was drawn up by the Commission was too closed. This is a bad start. The commissioners were the first to express discontent with the way the Commission president chose to act.”

Back in July, Ursula von der Leyen stated that the budget would rise to two trillion euros – representing 1.26 per cent of the bloc’s GNI (up from 1.11 per cent currently).
Virginijus Sinkevičius, who was a commissioner in the previous VDL cabinet, is now the vice-chair of the Greens/EFA group. In an interview with Žinių Radijas, while expressing his broad satisfaction with the proposed MFF, he cautions that exaggerated claims should be avoided – specifically this “two trillion” that keeps being bandied around.

Virginijus Sinkevičius, Member of the European Parliament – Greens/EFA, Lithuania (in Lithuanian):
“Obviously, there’s hype in the presentation. The two trillion is a very inflated figure. I understand that they want to speak in round numbers, but I think it would probably be more useful to be honest with ourselves, with the public and with national governments and look at the actual figures; at the numbers we will end up with if we can’t agree on something more ambitious. We might be talking in the region of 1.7 to 1.8 trillion. That’s quite different from two trillion.”

The current Portuguese Minister of Agriculture, José Manuel Fernandes, was keen to point out, too, that the much-touted “increase” in the long-term budget is really a case of smoke and mirrors. And also that, whatever the precise figure, it is not high enough to deal with the number of crises and challenges faced by the EU.

José Manuel Fernandes, Portuguese Minister of Agriculture (in Portuguese):
“GDP is increasing and therefore so is the budget, and people are claiming that the budget has really gone up. Either way, it is still only [around] 1 per cent of the European Union’s GDP. The US federal budget is 20 per cent of GDP. And with 1 per cent, we want to do everything! It is not enough. We should be throwing our weight behind common projects, and 1 per cent is very little indeed.”

Indeed, when you consider that the vast majority of the supposedly ‘extra’ budget being made available over the coming seven-year period is to be used to repay the money borrowed to finance the post-Covid recovery scheme NextGenerationEU, there really isn’t so much to shout about.

As budget commissioner Piotr Serafin explains, though, the budget structure itself will be hardly recognisable. Radio România shares his comments.

Piotr Serafin, European Commissioner for Budget (in English):
“The next MFF will be organised around three core functions of the EU budget: support to member states via national and regional partnership plans, support to beneficiaries and businesses via the competitiveness fund and support to partners via Global Europe.”

That’s right. Nearly half of the shiny new budget will be allocated to so-called “National and Regional Partnership Plans”, which will encompass, among other things, agriculture and cohesion. Just over 20 per cent will go to the European Competitiveness Fund, covering research and innovation, security and preparedness. And around 10 per cent is earmarked for the new Global Europe Fund, a tool to support Ukraine, sustainable development and stability in third countries, and the EU’s global role more generally.

Streamlining and simplification?

The advent of the national and regional plans represents a radical overhaul of the MFF. The Commission’s goal is to simplify the long-term budget and make it more flexible by consolidating more than 540 programmes into a mere 27 plans. However, Parliament views this move with suspicion, considering it a form of renationalisation.

In an interview with BNR, Bulgarian MEP Andrey Novakov from the European People’s Party expresses approval for many of Ursula von der Leyen’s proposals, which he feels are heading in the right direction. The sticking point, for him, is this idea of amalgamating funding streams.

Andrey Novakov, Member of the European Parliament – EPP, Bulgaria (in Bulgarian):
“What worries me is that the Commission has presented a proposal that combines different funds into one, creating regulations that should be responsible for diametrically opposed things. For example, a fund that is simultaneously responsible for agriculture, for regional development and for supercomputers. But these are things that I believe we will iron out over time.”

Keit Pentus-Rosimannus, a member of the European Court of Auditors, takes a different view. She tells Kuku Raadio that the proposed streamlining should make applying for EU funds significantly more straightforward in the future.

Keit Pentus-Rosimannus, Member of the European Court of Auditors (in Estonian):
„The current proposal brings together many previously fragmented programmes. In other words, those who apply for EU funding will no longer need to work through dozens and dozens of different programmes, combine them from several places, and end up submitting dozens of reports. It should all be much easier. But it already has a number of critics. For example, member states where a very large proportion of EU money is linked to agriculture are not happy that money going to agriculture has been merged into the same fund as cohesion money. So there are both supporters and opponents of this simplification. We at the Court of Auditors see this as a sensible way forward.”

Farmers and fishermen

There has been a great deal of noise around agriculture. Let’s return to Commissioner Serafin on this subject.

Piotr Serafin, European Commissioner for Budget (in English):
“The plans will not forget our farmers and fishermen. We will ensure that their income is protected by ring-fencing of 300 billion euros for farmers, two billion euros for fishermen.”

Yet while farmers’ income support will be ring-fenced, yes, Europe’s agriculture industry as a whole is facing a cut of around ten per cent in real terms. Cohesion is being downsized further still, although the bloc’s poorest regions will also be safeguarded by a ring-fenced sum.

But aside from the ring-fenced funds, under the new structure, national governments will have the power to decide where most of the money goes. In many ways, this flexibility makes sense – they are surely better placed to decide such things than Brussels. Yet there is a fear that the system could be open to abuse, with certain regions at risk of losing out if they are politically at odds with their central government.

This policy of so-called ‘nationalisation’, not to mention the proposed cuts to agricultural funding and cohesion funding, are already casting a shadow over the upcoming negotiations. Andrey Novakov gives BNR the European People’s Party take on this.

Andrey Novakov, Member of the European Parliament – EPP, Bulgaria (in Bulgarian):
“One of the red lines is that the EPP will not allow the centralisation [of decisions]. The regions will have to be part of the equation when it comes to how and where the money is spent. The cohesion policy is being put to increasingly severe tests. It seems that we will have to fight hard to ensure that funding for the poorest regions remains in place. Note that much of the criticism came from EPP colleagues. […] The EPP will stick to this position: regions, mayors, and people in towns should be involved in deciding where money should go. And when money is given for cohesion – whether for roads, educational infrastructure, environmental protection, tourism, and so on – it should actually go there, and not be open to redirection by some minister.”

It is, as yet, unclear who will be monitoring how member states are using their funds.

One area that is certainly not facing cuts is that of defence. And MEP Sinkevičius, who we heard from earlier, defended the enhanced focus on this field in the new budget, reminding Lithuanian listeners that we are only talking about non-military defence spending here.

Virginijus Sinkevičius, Member of the European Parliament – Greens/EFA, Lithuania (in Lithuanian):
“You need to understand that this is the European Union’s budget. It is very strictly regulated and cannot be used to buy F16s or other defence systems. But the fact that the defence innovation fund, for the promotion of the defence industry, has increased ten-fold is really an achievement. This sends a very clear signal to the market that the EU is determined to invest in the defence industry. In my view, this is clearly very positive.”

In fact, European citizens are seemingly keen for the EU to take a more active role in new policy areas such as defence, as revealed in the latest Eurobarometer survey, published this week.

Own resources

The MFF’s new headline figure – the more-or-less two trillion – is to incorporate income from five new revenue streams known as ‘own resources’: the emissions trading system, the carbon border adjustment mechanism, and taxes on electronic waste, tobacco and large companies operating in the EU (those with an annual net turnover exceeding 100 million euros).
Even these proposals are ruffling feathers in some quarters, though. In Luxembourg, for instance, says 100,3, which enjoys a thriving tobacco market as tobacco prices remain lower there than in most neighbouring countries.

Under the new proposals, EU countries will have to transfer to Brussels a proportion of the revenue from their tobacco excise duty. Luxembourg’s finance minister, Gilles Roth, is not best pleased, as he made clear to MPs in a debate in the national parliament.

Gilles Roth, Finance Minister of Luxembourg (in Luxembourgish):
“As finance minister, I have to say that I will not be able to replace 1.3 billion euros in income from cigarettes and tobacco overnight. If anybody has any ideas on this, I’m all ears.”

Now that the Commission’s proposals are out on the table, it is over to the European Parliament and the member states in the Council to negotiate. And one thing MEPs will be very keen to secure is a sense that they will retain a meaningful role in decision-making going forward.

Because there is a suspicion that, in the Commission’s efforts to simplify and add flexibility to the system by channelling much of the money through national plans, the Brussels executive is gaining power at the expense of Europe’s parliamentarians. And this is something that EU citizens would strongly disagree with, at least based on the aforementioned Eurobarometer survey, in which 91 per cent of respondents said it was important for the bloc’s elected representatives to dispose of all the necessary information and means to properly control EU spending.