Last Wednesday, July 16th, the European Commission finally presented its proposal for a multiannual financial framework (MFF). While it contains some good ideas and elements of real discontinuity, it has also raised considerable doubts and concerns.

This reflects the current climate, which is not conducive to teamwork and transparency, and the difficult and contradictory nature of the debate, even among the Commissioners. Appearing before the European Parliament and the press without the formal accompanying documents, Ursula Von der Leyen and Budget Commissioner Seraphin stumbled over the figures. Without concrete documentation to support them, they caused considerable confusion and some free-for-all with figures, starting with the central claim of the Commission's communication: has the budget increased or not?

In its 16 July 2025 proposal for the Multiannual Financial Framework (MFF) for the period 2028–2034, the European Commission set the EU's budget for the next seven years at €1.763 trillion in commitments (at constant 2025 prices). This figure represents 1.26% of the EU's gross national income (GNI) and includes the repayment costs of Next Generation EU (NGEU). The current MFF (2021–2027) had an initial spending target of 1.13% of GNI. However, the addition of an extra 0.11% to cover NGEU repayments (approximately €25 billion per year) indicates that there has been virtually no significant increase in funding for EU priorities overall.

It should be remembered that the EU budget, representing just over 1% of the total GDP of the 27 member states, is the subject of intense disputes and petty calculations every seven years. National governments have little or no ability to consider anything other than who gets the most and how much. Combined with the Council's requirement for unanimous decision-making, a series of ideological and propaganda barriers make any strategic and collective discussion extremely difficult and decision-making very challenging. There are now two years to decide on the Commission's proposal, given that the new financial perspectives must cover the period 2028–2034, and an agreement must be reached between the European Parliament (EP) and the Council. It will be interesting to see what remains of Ursula Von der Leyen's original proposal in the coming years, given that it was met with almost unanimous, albeit very diverse, criticism. This is nothing new, but it is much more significant this time because the proposal contains innovations that affect virtually all interests and practices that have been established over the years. It also raises real concerns about procedures and the roles of institutions, particularly the EP and regions: it highlights the Commission and national governments as the 'masters' of decision-making and management. The rapporteurs on the budget in the EP, Siegfried Mureșan of the Romanian People's Party and Carla Tavares of the Portuguese Socialist Party, immediately noted this absolutely crucial issue; that was reiterated in diplomatic but clear terms in an unusual letter sent yesterday and signed by the four groups that make up the so-called 'Ursula 2' majority.

The documents arrived little by little in the hours following the presentation, and I would like to comment on the sections on climate and energy. The starting point is the decision to incorporate the central element of the PNRR model into the MFF. National and regional partnership plans with a total budget of €865 billion (€50 billion of which comes from the Climate Social Fund), integrating 14 existing funds — particularly the CAP and cohesion policy. The choice to leave governments with very broad powers to decide how and to whom these funds will be allocated, behind the 'fig leaf' of the need to abide by European priorities. Besides, as the EP, authoritative commentators and the EU's financial control bodies have repeatedly pointed out, the ability to assess whether the money spent by the EU is indeed going where it should are very limited and will be even more in case of a consistent renationalization of EU funds management.

The second central element of the Commission's choices is that the second chapter, entitled 'Competitiveness, Prosperity and Security', includes, merges and reshuffles important programmes and initiatives, such as LIFE, which will no longer have a dedicated programme. Horizon, the Innovation Fund; the priority focus will be on “competitiveness”, as well as on the selection of technological and industrial sectors defined as strategic. Naturally, defence is among these these sectors. This will have a significant and, according to many, entirely negative effect on beneficiaries and initiatives that have been established for years, such as LIFE.

The entire chapter combines the Competitiveness Fund (€243.5 billion), Horizon (€175 billion) and the Innovation Fund (€41 billion), providing ample flexibility and scope for intervention by the Commission. The Competitiveness Fund will allocate around €26 billion to the Clean Transition, to which the Commission has somewhat arbitrarily added €41 billion from the Innovation Fund. However, the lion's share of funding, totalling €125.2 billion, will go to defence, security, space and resilience. The strategic choices are clear.

But what will happen to the 'green' priorities in this budget? At this stage, some important preliminary considerations can be made.

In short, the proposal is for an overall spending target of at least 35% of the total budget for climate and the environment. This amount is earmarked for the six EU environmental objectives (climate change mitigation and adaptation, biodiversity, water, pollution and the circular economy) and will be legally binding, including a correction mechanism and regulated targets. Clearly, before we can consider this a positive choice, we will need to carefully re-examine what is included in “climate and environmental spending”, as well as the tools used to verify that these targets are being met. For example, we already know that substantial funds may be allocated to nuclear power, carbon capture technologies and certain gas and hydrogen infrastructure. The logic appears to be prioritising industry over biodiversity and nature. As for verifying the 'green' level of spending — another model copied from Next Generation EU — it is already possible today to double or even triple count the same expenditure, or to pass off non-green projects as green. With a massive renationalisation of European spending, these risks will become even more real and likely.

In any case, according to the European Commission, the following funds are expected to contribute the following shares:

National and regional partnership plans: 43%

European Competitiveness Fund: 43%;

Framework Programme for Research and Innovation: 40%

Connecting Europe Facility: 70%.

Global Europe instrument:

Contributions to climate action will also come from programmes such as Erasmus+, Creative Europe and the Union Civil Protection Mechanism. The total estimated expenditure is around €700 billion. The implementing regulation provides for the “simplified” application of the “do no significant harm” (DNSH) principle, which will give rise to inaccuracies and “flexibility” that must be carefully monitored. The Commission is expected to provide clear guidelines on the exclusion of activities and on activities that are always compliant, as well as on derogations from the application of the principle in the event of crises and natural disasters. These will need to be examined very carefully and in detail. Another important point is that defence and security are exempt from the application of DNSH en bloc. It should also be noted that no roadmap has been provided for phasing out fossil fuel subsidies under the Multiannual Financial Framework (MFF).

In conclusion, this budget proposal centralises the Commission's functions, despite it already seeming incapable of working collegially. It shifts power towards national governments, weakening the role of the European Parliament and jeopardising the meaning of many European policies. The rhetoric and some pro-green instruments clash with insufficient resources, unreliable controls and too much leeway to finance choices that have little to do with the ecological transition, including military and defence spending with no constraints or obligations to truly go European. While there are some interesting and positive aspects, the Commission is opening the door to a renationalisation of spending that risks reducing transparency, coherence and ambition. If Parliament, civil society and some forces within the Commission itself do not react strongly — including making the best use of remaining instruments and their power to mobilise and raise awareness — the EU risks missing the opportunity to equip itself not only with a budget, but also with instruments and policies that address the challenges it faces, including those relating to climate, democracy, society, economy and security.

Monica Frassoni

this article was published in Italian GreenReport https://www.greenreport.it/editoriale/56857-bilancio-ue-due-anni-per-cambiare-rotta-la-proposta-della-commissione-e-piu-centralizzata-piu-nazionale-e-senza-reali-risorse-in-piu-coi-fondi-green-che-si-fermano-al-35