The European Council and the European Parliament are stepping up negotiations on the 2028–2034 Multiannual Financial Framework (MFF), while Member States remain divided over the size of the budget and spending priorities. There is uncertainly on how the ESF will be shaped.
Negotiations on the next Multiannual Financial Framework (MFF) for 2028–2034 have reached a decisive stage. Following the initial discussions among Heads of State and Government, the European institutions are seeking to establish a negotiating framework that will allow progress towards an agreement before the end of the year.
At this stage, the debate is no longer limited to the overall size of the EU budget. Rather, it reflects two competing visions of the Union’s priorities: preserving the weight of traditional policies (such as Cohesion Policy and the Common Agricultural Policy (CAP)) or allocating an increasing share of resources to defence, security, technological innovation and industrial competitiveness.
Position of the European Council
During the informal meeting held on 23–24 April, Member States agreed on the need to provide the Union with sufficient resources to address its new strategic priorities. The President of the European Council, António Costa, stressed that new own resources will play an important role in financing the future budget, in line with the European Commission’s proposal presented in July 2025. At the same time, he remained open to examining and assessing the alternative proposals put forward by the European Parliament in April.
The European Council meeting of 18–19 June marked a turning point in the negotiations. During the meeting, a first “Negotiating Box” was presented, proposing a 2% reduction compared with the European Commission’s initial proposal. The initiative triggered an immediate reaction from the European Parliament, which firmly rejected the proposal on the grounds that it was incompatible with Parliament’s position calling for a 10% increase in the budget. The Parliament also reiterated the need to make progress on the introduction of new own resources to finance the Union’s growing ambitions.
Division Among Member States
The negotiations have once again highlighted the traditional divide among Member States regarding both the size and the orientation of the EU budget.
On one side, the group known as the “Friends of Cohesion“, including Spain, Italy, Portugal, Poland, Greece and Romania, advocates maintaining -and even strengthening- funding for Cohesion Policy, the Common Agricultural Policy (CAP) and the Common Fisheries Policy. These countries argue that traditional policies remain essential for ensuring economic and territorial convergence across the Union.
On the opposite side are the so-called “frugal” countries -Germany, Sweden, Denmark and Austria- which favour a more restrained budget focused on competitiveness, security and defence. They also oppose the creation of new EU own resources and argue that strengthening the Single Market should rely primarily on regulatory reforms rather than on a permanent increase in public expenditure.
Another key issue under discussion concerns the possible integration of Cohesion Policy and the Common Agricultural Policy into a single financial package. Spain, Germany, France, Italy and Poland have clearly opposed this option, whereas the Netherlands, Sweden and Finland support a restructuring of the current budgetary model.
Position of the European Parliament
The European Parliament broadly supports increasing the level of EU funding.
The Progressive Alliance of Socialists and Democrats (S&D) argues that the European Commission’s proposal is insufficient both to address the needs of the outermost regions and to adequately finance new priorities such as competitiveness, security and defence. The group’s proposal includes increasing funding for Cohesion Policy, agriculture, the European Social Fund and the Competitiveness Fund.
The European People’s Party (EPP) also supports reinforcing the Union’s new strategic priorities but stresses that this should not come at the expense of traditional policies. In the EPP’s view, cohesion and competitiveness are complementary objectives, both deserving adequate financial support.
New Own Resources and opposition to National Recovery and Partnership Plans (NRPPs): The main areas of consensus
One of the issues enjoying the broadest consensus within the European Parliament is the need to establish new sources of revenue for the EU budget. Proposals include revenues from the Emissions Trading System (ETS), the Carbon Border Adjustment Mechanism (CBAM), a future tax on the profits of large corporations, new forms of digital taxation targeting multinational technology companies, and enhanced customs revenues. Taxation of major digital platforms remains one of the most contentious issues among several Member States.
Another point of broad agreement within Parliament is its firm opposition to the proposal to establish 27 separate national plans for managing the MFF. Parliament also supports allocating a dedicated budget of €124 billion to the European Social Fund, in line with its Interim report on the proposal for the multiannual financial framework for 2028-2034, approved in April.
On the future ESF
The European Parliament is currently working on a proposed regulation for the European Social Fund (ESF) in response to the one presented by the European Commission in July 2025. The Committee on Employment and Social Affairs (EMPL), responsible for drafting this proposal, has made clear its commitment to ensuring that the EU’s Multiannual Financial Framework for the period 2028-2034 guarantees that the European Social Fund remains an independent program, with its own budget and sufficient funding to meet its stated objectives. The rapporteurs believe that ESF measures should be designed in accordance with general and specific objectives to better target investments towards priority areas, and that the ESF regulation is the most appropriate instrument for tackling these areas and build the European social model paying attention to the most vulnerable groups.
This same position is reflected in the amendments submitted to the text by various parliamentary groups, which emphasize the defence of the ESF as a fundamental tool for upholding the Union’s social objectives.
Next Steps
Political pressure on the negotiations continues to grow as time becomes an increasingly important factor: if the institutions fail to reach an agreement before the end of 2026, elections scheduled in France, Spain, Italy and Poland during 2027 could significantly delay or even bring negotiations to a standstill. The European Parliament has warned that such delays could jeopardise the entry into force of the new budget on 1 January 2028, with significant consequences for EU programmes, structural funds and project financing across the Member States.
Civil Society Initiatives
Against this backdrop, organised civil society organisations have launched several initiatives aimed at safeguarding the social objectives of the next EU budget, particularly defending a solid ESF regulation.
The EUFunds4Social coalition gathering has published a joint statement entitled Building on What Works: An EU Budget that Delivers for People and Regions supported by T356 organisations overall, including 68 European networks and 288 national organisations. The statement argues that a strong social budget is essential to ensure inclusive and sustainable growth across Europe. It also stresses that maintaining dedicated and adequately funded instruments will enable the EU to respond more effectively to current and future social challenges while preserving its role as a model of a social market economy centred on people’s well-being.
Meanwhile, Civil Society Europe has published an Open Letter to European Leaders: Deliver a Budget that is Up to the Challenge! The signatories call for a broader discussion on how the EU budget is financed, advocating the development of new and genuine own resources. They argue that this would move the debate beyond its current focus on national contributions and net balances. According to the signatories, if the EU is to remain true to its objectives and values, it requires a stronger budget supported by sustainable and diversified sources of revenue.
EURoma Network has also published its own position paper analysing the European Commission’s proposal for the next Multiannual Financial Framework (MFF) 2028–2034, warning that key changes to the EU budget architecture could seriously weaken investments in Roma equality and social inclusion and proposing to assure a strong ESF regulation maintaining current earmarking for social inclusion of vulnerable groups in 25% and specific objectives for most marginalised groups such as Roma.
