EU sets stage for tough battle over long-term budget

The European Commission is set to unveil its proposal Wednesday for the EU’s next long-term budget, launching two years of tough negotiations over funding priorities, reforms, and rising costs—risking renewed clashes, particularly with farmers.

Commission chief Ursula von der Leyen must balance competing demands: boosting security, enhancing competitiveness against the US and China, tackling climate change, and repaying debts from the €800 billion Covid recovery fund. These repayments, starting in 2028, are expected to cost €25–30 billion annually.

The last 2021–2027 budget totaled around €1.2 trillion, funded mostly by national contributions. This time, the European Parliament insists an increase is unavoidable.

“We believe the Union cannot do more with the same or less,” said Siegfried Muresan, the Parliament's chief budget negotiator.

The Commission is expected to propose new revenue sources, including taxes on large corporations (net turnover above €50 million), higher tobacco duties, and a tax on non-recycled electronic waste. But critics warn these won’t be sufficient or reliable.

Farm subsidy tensions

The biggest flashpoint will likely be farming subsidies, which make up nearly a third of the budget (€387 billion, with €270 billion in direct farmer payments). Brussels plans to integrate the CAP into a broader national and regional fund—a move that has alarmed farmers, who fear reduced support.

Pan-European farming group Copa-Cogeca warned this could “dissolve” the CAP. Hundreds of farmers are expected to protest in Brussels on Wednesday.

Muresan called for maintaining CAP funding, adjusted for inflation, while the Commission insisted direct aid will remain intact. A proposal to cap aid at €100,000 per hectare could also spark resistance.

Wednesday's plan kicks off a long negotiation process likely to culminate, as usual, in intense final talks between EU capitals.