10 questions on the next EU budget

With defence now a top priority for the European Union, plus the repayment of the post-pandemic recovery funds on the horizon, the next EU budget 2028-2034 is under growing pressure.

As the European Commission prepares to unveil its radical budget on Wednesday (16 July), here are 10 questions set to dominate talks in the upcoming months (and years).

Beyond the 1 % of GNI, but how much bigger?

The current budget allocates about €1,200bn over seven years — approximately €180bn per year, or around one percent of the EU’s gross national income (GNI). The annual budget is similar to the Danish national budget, which serves 5.6 million people, compared to the EU population of 450.4 million people.

The European Parliament and a dozen member states, including Spain and France, want a bigger budget. Denmark, typically frugal, would also be open to an increase, arguing that new challenges demand more resources. But opposition remains among traditional frugal net-payer states, including Germany, the Netherlands, Austria and Sweden.

“We cannot do more with less,” socialist Portuguese Carla Tavares, one of the lead MEPs on this file, said on Tuesday (15 July). 

With the debt repayment starting in 2028 and without an agreement on new streams of revenues in time, Draghi argued in his eponymous report on competitiveness that the EU’s spending power will shrink. To keep spending at the current level, he said that member states would need to pay more or some programmes would face cuts.