EU Budget Commissioner Piotr Serafin unveiled the largest ever EU long-term €2 trillion budget that covers 2028-2034 in Brussels on July 16.

The so-called Multiannual Financial Framework (MFF) outlines the EU’s spending targets and now faces difficult discussions as the member states lobby for their interests. This budget includes significant increases in spending from the previous €1.1 trillion budget.

Poland the big winner

Poland will be the biggest winner from the proposed plan, the Polish Finance Minister Andrzej Domaňski said. Spending increases in the budget are in areas that are a priority for Poland, he said, including security, cohesion policy, agriculture and innovation.

The proposed EU budget maintains funding for agriculture and regional development — known as “cohesion” — while placing greater focus on boosting economic competitiveness and strengthening defence capabilities. Poland has one of Europe’s largest agricultural  sectors and is a major beneficiary of EU funding.

In Poland, opposition figures have voiced concerns about what they view as reduced financial support for the agricultural sector. At the same time, several other EU countries have pushed back against the current draft of the budget.

As Polityka weekly reported, the European Commission has yet to release detailed figures on how much each member state would receive under the new financial framework. However, initial estimates suggest Poland could be allocated approximately €10bn for cohesion and agricultural policies — a figure broadly in line with allocations from the current budget cycle.

Due to Poland’s rising gross domestic product, its overall contribution to the EU budget would increase, though the country would remain a net recipient.

The budget proposal has received backing from Poland’s pro-European administration, but it has drawn sharp criticism from the opposition Law and Justice (PiS) party. PiS Member of the European Parliament and former government spokesperson Piotr Müller argued that the plan would mean reduced funding for farmers and regional areas — areas where Poland has historically benefited under EU funding mechanisms.

Müller also raised concerns about the growing use of conditionality in EU budget disbursements, portraying it as a method for the European Commission to pressure governments that diverge from its political stance.

Scepticism has also emerged in other member states. Dutch finance minister Eelco Heinen, quoted by Reuters, said the size of the proposed budget was excessive.

Ukraine gets €100bn

Ukraine will also receive €100bn from the new budget, despite not being an EU member. As a candidate country is it entitled to various subsidies as part of its accession process.

EU rebel and Hungarian Prime Minister Viktor Orban has already said that his government will not contribute to the money earmarked for Ukraine.

"Ukraine stands to gain from Brussels' new plan, as the European Commission is allocating huge sums of money to it. The biggest losers will be regular Europeans, including farmers, who may end up in a very tough spot," Orban said in a video address broadcast by M1 TV.

Orban has a point: there are question markets over if the EU can afford to fund Ukraine’s allocation on its own. Brussels is already seeking partners to share in the burden of Ukraine's financial support over the next two years.

Before the new seven-year EU budget for 2028-2034 is adopted, the EU will not be able to fully cover Ukraine's financial needs on its own, so it is negotiating with partners on how to split aid costs, said EU Commissioner for Enlargement Marta Kos, commenting on the details of the Global Europe budget section.

"Ukraine needs about €80bn a year to operate as a state. EU funds will not be enough," Kos acknowledged.

Talks with partners already took place on the sidelines of the Ukraine Recovery Conference in Rome.

"I chaired the ministerial meeting of the donor group, and we have already begun discussing within the group, along with Canada, Japan, and some other countries, including the UK, how we can assist Ukraine during these two interim years," Kos explained.

The official also highlighted that the €100bn proposed by the European Commission for Ukraine in the next seven-year EU budget shows the fallacy of the assumption that European financial aid to Ukraine will decrease over time.

Von der Leyen admitted for the first time that to accommodate Ukraine in the new MFF revisions to the budget will be needed but gave no details. The elephant in the room is that taking Ukraine into the EU will be very expensive as it is such a big country – second in size to Poland from the accession countries since 2003 – and that there is not enough money in the current budget to accommodate it.

The EC president made this point explicitly, "because we will need to negotiate depending on the size of the country joining the EU."

"We will have to agree in the accession treaty on the gradual introduction of payments from the cohesion funds, the gradual implementation of agricultural payments for this country, as well as its gradual contribution to the EU budget," von der Leyen said.

Two years of debate ahead

The new MFF is still only a proposal and the next two years will be filled with difficult debates as the member states fight for their own interests in the distribution of allocations. Farm subsdies will be a particularly fraught topic. 

The next MFF will have only 16 programmes instead of the current 52, meaning it should be simpler for users and deliver better results. It includes major allocations for competitiveness, agriculture, regional development, as well as funds for the long-term reconstruction in Ukraine.

Presenting the plan to Members of the European Parliament, Serafin said the MFF is guided by three principles: simplification, strategic allocation of resources and flexibility.

“Every euro from the EU budget must be easily accessible to the people and projects it is intended to support. This is what we mean by simplification,” he said. “Funds must be allocated to the issues that matter most to Europeans, to where the EU budget can achieve more than national budgets alone. This is what we call strategic thinking.”

The largest item is €865bn intended for the so-called national and regional partnerships, which also cover the common agricultural policy, and the EC has allocated €300bn to support farmers and direct payments for them.

Amongst the proposals is €451bn for a new Competitiveness Fund targeting clean and digital technologies, biotechnology, defence, space and food security. This is the first budget following the report from former Italian Prime Minister and ex-European Central Bank boss Mario Draghi that concluded Europe has lost its competitive edge and needs massive investment to catch up with the US and China.

“I would like to emphasise the importance of investing in defence and space. Under the Competitiveness Fund, we will increase the funds available for these purposes five-fold, reaching €131bn,” Serafin said.

Another €218bn is earmarked for cohesion funding in less developed regions. The Connecting Europe Facility, supporting infrastructure and security projects, will be expanded to €81bn.

The “Global Europe” programme – the EU’s external action funding instrument – will be allocated €200bn. In addition, the Commission proposes a €100bn commitment to Ukraine's long-term reconstruction. “This is a long-term commitment to Ukraine's reconstruction,” Serafin said.

A special crisis mechanism is also planned, allowing for the mobilisation of up to €400bn in loans, contingent on approval from the European Council and European Parliament.

To finance the package, the Commission has proposed a mix of new resources including levies on tobacco and corporations with turnover of more than €100mn, as well as revenues from the ETS carbon market, the CBAM carbon border adjustment mechanism, and electronic waste fees.

“This is a balanced mix of new revenues that does not burden national budgets and is consistent with our policy objectives,” Serafin said.