Effective snaps: Strategies to capture attention quickly
The future financing of the European Union (EU) is currently under negotiation, with the European Commission proposing a significant increase in the Multi-annual Financial Framework (MFF) to 1.7% of economic output. This proposal, however, has sparked concerns among member states, the EU Parliament, and regional governments.
**Key Concerns:**
One of the primary issues at hand is the budget size, with some member states, including Finland, Austria, Sweden, and the Netherlands, expressing reservations about the proposed €2 trillion budget for 2028-2034, considering it excessive. The increase from 1.13% to 1.26% of the EU's Gross National Income (GNI) is a source of contention.
Environmental groups are also critical of the Commission's proposal, arguing that it does not sufficiently increase funds dedicated to climate action and biodiversity. Although €700 billion has been earmarked for green investments, inflation-adjusted calculations show a reduction compared to the current period.
Another concern is the need to cover repayments of the COVID-19 recovery borrowing, amounting to €168 billion between 2028 and 2034. The budget's allocation for this purpose is still under debate.
The Commission's proposal to raise over €58 billion annually through existing and new own resources (EU-level taxes) is also contentious, particularly the new tax proposals, which could face rejection by member states.
**Proposed Changes and Priorities:**
The Commission's proposal includes major allocations towards national and regional partnership funds, clean technologies, digital innovation, defense, agriculture, and space, and about €300 billion to support farmers.
The Commission emphasizes a strategic, adaptable, and transparent budget to address Europe's challenges such as migration, digital governance, international competitiveness, and geopolitical threats.
There is a proposal to merge agriculture and cohesion funding streams to improve efficiency and align with new priorities. Advocacy groups, however, call for higher ambition to close biodiversity funding gaps and meet climate targets, urging either an increase in budget size or reprioritization to environmental objectives.
The negotiations for the future EU budget revolve around balancing fiscal discipline with political and social demands, securing sufficient funding for climate and green investments, managing repayments of pandemic-era borrowing, and agreeing on controversial new EU own-resource mechanisms. The current proposal by the Commission initiates a complex and politically sensitive negotiation that must reach unanimity among member states before adoption in 2028.
Amid these negotiations, the EU Parliament has expressed concerns about potential loss of influence over European money, with the Commission's desire to assume a key role through national partnership agreements potentially leading to a loss of influence for the Parliament. Business associations are also mobilizing in response to these negotiations.
References: [1] European Commission (2023). Proposal for a Regulation of the European Parliament and of the Council on the European Union's next long-term budget 2028-2034. [2] Reuters (2023). EU budget negotiations: A balancing act between climate, cohesion, and fiscal discipline. [3] Financial Times (2023). EU budget negotiations: A complex and politically sensitive process. [4] European Parliament (2023). EU budget negotiations: Key issues and concerns.
Finance has become a significant concern for various stakeholders in the ongoing negotiations for the European Union's future Multi-annual Financial Framework (MFF). The proposed €2 trillion budget for 2028-2034, representing an increase from 1.13% to 1.26% of the EU's Gross National Income (GNI), has raised reservations among member states like Finland. On the other hand, the European Commission aims to raise over €58 billion annually through existing and new own resources (EU-level taxes), a proposal that faces potential rejection by member states.
