WIREDGOV

The EU Commission recently (17 July 2025) unveiled its vision for the European Union's future with the announcement of the next Multiannual Financial Framework (MFF). The €2 trillion budget plan aims to steer the bloc through 2028 to 2034. President Ursula von der Leyen described the proposal as “the most ambitious ever” and a transformative push to match Europe’s aspirations and challenges. 

The budget which aims to strengthen the EU’s independence, competitiveness, and capacity to address both ongoing and emerging issues focuses on the following key areas.  

Investing in People, Regions, and Member States

The National and Regional Partnership Plans allocate €865 billion for investment and reform, consolidating a range of funds that previously operated in parallel to ensure a more integrated and efficient approach. Within this framework, €300 billion is dedicated to safeguarding farmers’ income support, while a minimum of €218 billion is reserved for less-developed regions, underscoring the EU’s commitment to agriculture and regional cohesion.  

For the first time, a 14% target for social expenditure has been established, accompanied by comprehensive tracking across the entire Multiannual Financial Framework.  

In addition, there will be a tripling of investment in migration management, border controls, and disaster solidarity, reinforcing shared European responsibility in these key areas.  

Further supporting common objectives, the new Catalyst Europe facility will provide loans of up to €150 billion to enable member states to enhance investments in vital European priorities, including defence, energy infrastructure, and strategic technologies. 

Competitiveness Fund

Arguably the most important fund for the digital and tech sector, the competitiveness fund aims to be the answer to the calls made under the Draghi and Letta reports.  

The fund will allocate close to €410 Billion in order to “back the strategic technologies of tomorrow”. The fund contains a doubling of the Horizon Europe research programme, a fivefold increase in digital investment, and a sixfold boost for clean tech, decarbonisation and the bioeconomy.  

The competitiveness fund was highlighted as part of “an agenda for European sovereignty” which will enable Europe to “secure supply chains, scale-up innovation, and lead the global race for clean and smart technology” 

Under the fund, Defence and Space will see itself allocated a €131 billion budget, a fivefold increase compared to the previous budget aiming to strengthen europe’s industrial and security capabilities.  

Connecting Europe

The Commission will double the Connecting Europe Facility for transport, increase the budget for military mobility tenfold, and increase fivefold the budget for energy infrastructure, reinforcing energy independence and cyber resilience. 

Global Europe

€200 Billion for Global Action: A 75% boost for external action, uniting Global Gateway, humanitarian aid, and EU enlargement support. 

Ukraine Facility: €100 billion ringfenced for Ukraine’s reconstruction, resilience, and accession pathway. 

Accession Clause: Provision for MFF revision in case of new EU accessions, mirroring previous accession protocols. 

Crisis Readiness

Crisis Mechanism: Nearly €400 billion in dedicated firepower for swift response to emergencies, a lesson learned from recent health and energy crises. 

Flexibility: Designed for agility, the new budget includes mechanisms aimed at providing more flexibility to quickly adapt to unforeseen challenges.  

Rule of Law, Accountability, and New Revenue

All European Union funding, particularly that allocated through the partnership plans, will be firmly conditioned on adherence to rule-of-law standards and fundamental rights. At the same time, the EU aims to introduce innovative “own resources” revenue streams, a move designed to keep national contributions stable while ensuring the repayment of collective borrowing from its recovery programs 

Investments in Youth, Civil Society, and Media

Erasmus+: A 50% increase in funding for the flagship youth program. 

Civil Society & Media: Launch of the new Agora EU program, merging existing initiatives to support democracy, civil rights, media freedom, and cultural diversity. 

Next steps

The EU Commission will now bring this budget proposal to the EU Member States in the Council where the MFF will require unanimity, following the consent of the European Parliament.  

We will continue to monitor developments, especially when it comes to understanding what increased funds mean for programmes that the UK is associated with (such as Horizon Europe)