2 minute read / July 2, 2025
The current Multiannual Financial Framework (MFF) was designed for stable times. But that era is gone, and with it, the EU budget as we know it. The stakes are now higher as Europe faces an investment gap of at least €750 billion a year, and is ramping up its defence capabilities with a new €800 billion rearmament plan.
The Commission is set to present the bulk of its new budget proposal on 16 July, kicking off more than two years of difficult negotiations. The outcome is likely to radically redefine both the bloc’s spending priorities and its sense of what matters.
Here are the five main debates that will shape the next MFF.
From 2028, EU countries will begin repaying the bloc’s €650 billion COVID-19 recovery fund at a rate of around €30 billion per year, or roughly one-fifth of the annual budget. That risks undermining the EU’s ambitions, especially for countries already struggling to balance their books at home. Austria, Belgium, France, Italy, Malta, Poland, Romania, Slovakia, and Hungary are all running deficits large enough to warrant EU sanctions.
Overall, von der Leyen wants fewer budget lines with more flexibility within and between them, and possibly a five-year budget cycle instead of the current seven. But money that is not pre-allocated is often seen as politically unreliable, especially for long-term priorities like fundamental research.
At the same time, EU countries may also see the proposed overhaul as a power grab, and MEPs are set to fight for full oversight on future spending decisions. There is a broad consensus that the EU needs a leaner, more agile budget to address new priorities like defence and competitiveness. But the EU is a heavy machine – and always at risk of taking the path of least friction.
