EU Budget Proposals: Funding Increases, New Taxes, and Funding Battles

The European Parliament’s Budget Committee has adopted its negotiating position for the European Union’s 2028-2034 budget, initiating a period of significant tension between EU lawmakers, the European Commission, and member states over the future of the bloc’s spending power.

The dispute centers on the ceiling of the central budget, with the European Parliament pushing for a substantially higher spending limit than that proposed by the European Commission. According to reporting from the Financial Times on April 15, 2026, the Parliament has proposed raising the budget ceiling to 1.38 per cent of the EU’s gross national income (GNI), a sharp increase from the Commission’s proposed limit of 1.27 per cent.

The Commission’s Proposal and the GNI Debate

The European Commission, led by President Ursula von der Leyen, has proposed a central EU budget of €1.816 trillion for the seven-year period starting in 2028. This figure would represent a rise in spending power compared to the budget that ran from 2021, increasing total spending to 1.15 per cent of the EU’s GNI, up from approximately 1.1 per cent during the current period.

However, the total figure has become a point of contention. The Commission has claimed that the budget will amount to €2 trillion, a figure that factors in the repayments of the EU’s post-Covid debt and would represent 1.26 per cent of GNI. This accounting method has been criticized by lawmakers across the political spectrum.

Misleading

Siegfried Mureșan, budget negotiator for the European People’s Party

The disagreement over how to calculate the budget reflects a deeper conflict regarding the repayment of NextGenerationEU, the EU’s Covid recovery loans. Carla Tavares, the socialist point person on the budget, has stated that the financing of key priorities must not be compromised by these repayments.

Member State Resistance

While the European Parliament seeks greater financial firepower, several national governments are expected to push for a smaller budget or a shift in priorities. Dutch Finance Minister Eelco Heinen has explicitly stated that the proposed budget is too high.

The process of finalizing the 2028-2034 budget is expected to involve at least two years of negotiations. The final sum must be approved by the European Parliament and the national capitals of the member states, a process often characterized by intense wrangling over funding allocations and contributions.

Context from the 2026 Annual Budget

The current struggle over the long-term framework follows a recent battle over the 2026 annual budget. On November 15, 2025, negotiators from the European Parliament and the Council reached a provisional agreement for the 2026 budget, setting commitment appropriations at €192.8 billion and payment appropriations at €190.1 billion.

In that deal, the European Parliament successfully negotiated an additional €372.7 million in funding beyond the Commission’s initial proposal to support competitiveness, health, and defence. Specific increases secured by MEPs included:

• €20 million for Horizon Europe to boost research.
• €23.5 million for transport and energy networks to improve cross-border infrastructure.
• €3 million for the Erasmus+ education programme.

The provisional 2026 agreement also restored €1.3 billion in commitment appropriations that had been cut by EU governments, returning them to the levels originally proposed by the Commission.

The tension between the Parliament’s desire for increased investment in research, infrastructure, and social programmes and the member states’ preference for fiscal restraint continues to define the EU’s financial trajectory as it moves toward the 2028-2034 cycle.