The new EU long-term budget: what to expect from the Commission’s MFF proposal

On 16 July, the Commission released its long-awaited proposal for the new Multiannual Financial Framework (MFF) – in other words, the new EU budget for 2028–2034.
The proposal announced a budget of almost €2 trillion for the next seven-year period – that is, 1.26% of the EU’s gross national income (GNI). While this is technically an increase compared to the current budget (€1.3 trillion or 1.13% GNI), the proposal also includes the repayment of the “NextGenerationEU” fund created during the pandemic and will be subject to negotiation by co-legislators over the next two years.

Beyond its size, the proposal outlines a significant reorganisation of the budget, in an effort to offer a simplified and more flexible version. The proposed structure goes as follows, with three main pillars or headings:

• Pillar 1: the National and Regional Partnership Plans (NRPPs), which merge previously separate programmes like the Cohesion Policy and the Common Agricultural Policy (PAC) into country-specific national plans. Payments will be linked to reforms and respect for the rule of law, therefore strengthening conditionalities compared to the current MFF.

• Pillar 2: Competitiveness. The new Competitiveness Fund (ECF) will merge several smaller initiatives and, in conjunction with Erasmus+, will seek to enhance the EU’s industrial capacities. It will focus on securing supply chains and scaling up innovation, with a view to attracting private investment in strategic sectors.

• Pillar 3: Global Europe, which will cover humanitarian aid and the enlargement process, supporting reforms in countries seeking EU accession.

Why does this matter?

The shape and content of this MFF proposal will have a significant impact on where and how funds are allocated, affecting the future of the Cohesion Policy and the PAC, for instance.
By merging existing programmes into the National and Regional Partnership Plans (NRPPs), this proposal offers more flexibility and discretion to Member States in allocating financial resources. While we acknowledge the need for increased flexibility, this also brings significant uncertainty regarding funding allocations for certain priorities. This is particularly worrying for the Cohesion Policy and the European Social Fund (ESF), which primarily invest in social inclusion, regional economic development, employment, or skills and training.

Despite a declared 14% minimum allocation to social policies in the NRPPs, these two funds have lost crucial earmarks, leaving cooperatives and social economy organisations without guaranteed support from national and regional authorities. We are therefore calling upon the Commission and co-legislators to guarantee protected minimum allocations for the social economy and the incorporation of strong social conditionalities.

The strength of our European model lies in its ability to combine competitiveness and social cohesion — two objectives that go hand in hand and which are pursued by cooperatives in their daily operations.

Regarding the second heading, Competitiveness, we welcome the establishment of a Competitiveness Fund. Introducing a single rulebook and a single gateway for applicants will simplify access to the fund. However, it is essential to ring-fence funding for all SMEs and to create specific SME earmarks in other funding instruments as well. Supporting SMEs must not be restricted to key sectors and start-ups only.

What are the next steps?

The decision on the future long-term EU budget will be discussed by Member States in the Council, acting by unanimity, with the consent of the European Parliament.
Cooperatives Europe will follow the negotiations closely and will share regular updates with its members on the topic.