She sent Budget Commissioner Piotr Serafin before the parliamentary committee with very little information to provide, but almost at the same time it was she, Ursula von der Leyen, who took the stage in front of journalists and presented the EU Commission's new budget proposal. After a morning of internal clashes within the College of Commissioners and the majority that supports German policy, the first plan for the Multiannual Financial Framework 2028-2035 was finally produced from Berlaymont Building. A proposal worth 2 trillion. And the item that is grabbing the headlines is one in particular: Defense funding quintupled.

"Today, the College adopted the Commission's proposal for the Multiannual Financial Framework, the budget for 2028-2034," the President began."This is a $2 trillion budget for a new era and matches Europe's ambition, addresses Europe's challenges, and strengthens our independence. It is bigger, smarter, and more impactful," so that it can "deliver results for our citizens, our businesses, our partners, and our future." It is also "the most ambitious ever proposed," while being "more strategic, more flexible, and more transparent." But she specified that "Member States' contributions to the EU budget will remain constant, as we propose a quantum leap in the new own resources," i.e., the funds that the executive intends to channel independently through hyper-sectoral levies.

Competitiveness Objective

One of the major building blocks of the Commission's proposal is the" Competitiveness Fund," which "will be proposed with a budget of €410 billion because we believe it is essential to support the strategic technologies of tomorrow," explained von der Leyen. “This fund will double Horizon Europe, already a major international program and the best-known in the world for science and research. We will quintuple investments in digital to build a safe and innovative ecosystem. We will give a major boost to clean tech, the bioeconomy, and decarbonisation, with EU resources multiplied sixfold. There will also be a climate and biodiversity spending target of 35%, meaning approximately €700 billion allocated to the EU's six environmental objectives.” These elements will strengthen EU supply chains, boost innovation, and lead the global race for clean and smart technologies, continues the President of the EU executive. In short, he adds, the Competitiveness Fund"is the response to the appeal of Mario Draghi and Enrico Letta regarding the need for a strong industrial base and an integrated single market." This large block includes the €131 billion for defense and space, the doubling of transportation spending, and the tenfold increase in military mobility.

All-in on weapons

The major change compared to the previous seven-year budget is undoubtedly the one regarding the Defense appropriations. What is considered the main objective of this mandate of the new von der Leyen Commission, namely strengthening internal security and Europe's armies, will, as mentioned, benefit from funds fivefold increased compared to the previous MFF:"We are proposing €131 billion for the Defence and Space section within the Competitiveness Fund. This is five times more than what we have today. Because we know that security is a major concern for citizens and governments. And it will strengthen our industrial base and our capabilities," the Commission President stated."In addition to the Competitiveness Fund, there is the CEF. We are doubling the Connecting Europe Facility for transport. And we are multiplying military mobility by ten. So our armed forces can move faster, better, and together. We are multiplying spending on energy infrastructure by five. This strengthens energy independence and accelerates the clean transition. And we are significantly increasing investments in cybersecurity." and dual-use infrastructure. This is about European defense. European connectivity. And European readiness.”

€400 billion for crises

The budget presented amid protests from the EU Parliament, assures the head of the Berlaymont, is"a budget built for resilience and agility. This is the theme of crises. We have seen crises, at least I have since the beginning of my mandate. It started with the coronavirus. Then we had a serious energy crisis, then the Russian war in Ukraine , and each time it was extremely difficult to react. Rapid financial firepower is needed. Because, as you know, our current budget is structured in such a way that 90% is fixed. This budget was structured for 2018 and 2019, but today we live with this 90% fixed." Thus, the Commission President introduced the topic of the emergency fund to be included in the next seven-year EU budget:"What we did was try to use Article 122, which is not optimal," she continued, recalling the controversial decision to exclude the European Parliament from the adoption process of the European rearmament plan, RearmEU."It is not the best tool to have for such a serious crisis. That's why we are creating a dedicated crisis mechanism with a firepower of up to almost €400 billion, because rising prices are no longer the exception, they are the norm. And we have learned our lesson. Let me be very clear: this is not about spending or outgoings. It is the possibility, with solid guarantees, to access this additional funding in the event of an unforeseen crisis. So it is an option we have, but not to be used in normal times. It is available only for times of crisis, with a clear mechanism for how to negotiate it."

The war over CAP funds

The conflict that has put the Commission in the crosshairs of trade associations, the European Parliament, and individual member states concerns the single fund for cohesion and agriculture , which, according to critics, would lead to significant cuts to two historically among the largest items in the EU budget. The German leader responded to these concerns:"Agriculture and cohesion remain at the heart of these partnership plans," she said."They are the central pillars of European solidarity and investment in the European model. For example, we are preserving €300 billion for farmers' income support. This includes a doubled agricultural reserve, so that the living conditions of our farmers are protected."

The core of the plan's first pillar, however, is the national and regional partnership plans, a spending item worth €865 billion out of a total of €2 trillion, von der Leyen explains. This involves the consolidation of a series of crucial funds, including the Common Agricultural Policy (CAP), which farmers fear will be cut. But those funds, von der Leyen responds,"mostly function as watertight compartments, poorly connected to each other; they can work together and integrate more, so that the European objective is better achieved locally." This optimization, she argues, will therefore not lead to reduced resources. This argument is currently unconvincing trade associations and a large segment of the European Parliament."On the subject of cohesion," he added,"we are preserving at least €218 billion for the less developed regions. Here, for the first time, there is a social spending target of 14%, adopted as a general principle. And, also for the first time, we will monitor social funding across the entire MFF," he explained.

A €100 billion fund to support Ukraine

The other item announced in recent weeks, but which continues to spark discussion, especially among countries like Hungary that are opposed to extending support for Ukraine, is the €100 billion fund for Kiev :"We are allocating €100 billion for Ukraine," von der Leyen announced."You know, we have the Fund for the reconstruction of Ukraine. Initially, with the mid-term review, it was allocated €50 billion, but the amount is slowly but surely decreasing. And so we propose to replenish the Fund for the reconstruction of Ukraine with €100 billion to support recovery, resilience, and, of course, the path to EU accession."

Another issue on which von der Leyen is placing significant emphasis, given that it enjoys the support of a majority of European states, is the fight against immigration. She announced that the Berlaymont Palace proposes to"triple investments in migration and border management because Europe's borders are a shared responsibility. We are tripling solidarity funds so that we can act quickly and decisively when disasters strike." Here too, as with agriculture, the main innovation is the merging of various funds into"partnership plans" that each Member State "develops according to European priorities, integrating the different funds more efficiently. Today, we often see different funds overlapping for the same objective, but with different criteria, timelines, and requirements. It is extremely difficult to find, among these different funds, the right one for every need. This redundancy leads to a waste of potential that we are unable to unlock for the regions and Member States."