European Commission has proposed a fundamental redesign of the E.U. budget, which will be more streamlined, flexible and impactful
The European Commission has proposed a sweeping € 2 trillion (U.S. $ 2.31 trillion) budget for the 2028–2034 period, marking a significant focus on economic competitiveness, defense capabilities, and plans to overhaul traditional spending on farming and regional development.
Europe faces an increasing number of challenges in numerous areas such as security, defense, competitiveness, migration, energy and climate resilience. These are not temporary but reflect systemic geopolitical and economic shifts that require a strong and forward-looking response.
The European Commission therefore proposes a fundamental redesign of the European Union (E.U.) budget, which will be more streamlined, flexible and impactful. It will significantly enhance the EU’s capacity to deliver on core policies while addressing new and emerging priorities. This budget will continue to support people, business, Member States, regions, partners, and – above all – the E.U.’s collective future.
The proposed budget represents 1.26% of the E.U.’s Gross National Income, up from the current 1.13% allocation. While most funding would still come from contributions by the 27 member states, the European Commission outlined plans to introduce new revenue sources, including a levy on large corporations operating in Europe with annual net turnover above € 100 million.
Taking it to X, the President of the European Commission – Ursula von der Leyen, tweeted,
Today we present the EU budget for 2028-2034.
— Ursula von der Leyen (@vonderleyen) July 16, 2025
It's a budget for a new era, that matches Europe’s ambition.
That addresses Europe’s challenges.
That strengthens our independence. pic.twitter.com/C9OmCJt91U
She further tweeted,
Today we present the EU budget for 2028-2034.
— Ursula von der Leyen (@vonderleyen) July 16, 2025
It's a budget for a new era, that matches Europe’s ambition.
That addresses Europe’s challenges.
That strengthens our independence. pic.twitter.com/C9OmCJt91U
Central to the proposal is a newly envisioned € 451 billion European Competitiveness Fund. This fund aims to bolster the bloc’s defence industry, accelerate innovation, and support industries in transitioning to clean technologies. A record € 131 billion has been earmarked for defence and space, representing a 5-fold increase over current allocations.
Though the proposal shifts focus from traditional budget areas, it still preserves significant support for agriculture and regional development. Farmers would receive € 302 billion in funding, while at least € 218 billion is set aside for the E.U.’s least developed regions. An additional € 200 billion is proposed for global engagement programmes. Outside the formal budget structure, the Commission has also proposed € 100 billion in dedicated financial assistance for Ukraine.
Going ahead, the proposal marks the start of years of intense negotiations before a final budget is agreed by all member countries and signed off by the European Parliament.
