REINVENTING THE EUROPEAN FINANCIAL FRAMEWORK: FOUR PILLARS FOR A UNION OF PROJECTS AND RESPONSIBILITIES
Mathieu Gitton
Former Director of representative office in Brussel with expertise in corporate strategy and lobbying
At the dawn of the next seven-year budgetary period, the European Commission is charting an ambitious path: reorganizing the multiannual financial framework around four major pillars and increasing common spending to two trillion euros, or 1.26% of the collective gross national income. This unprecedented architecture combines accounting simplicity and political conditionality; it seeks to provide the Union with a project-based budget, not a counter-based one, while responding to the geopolitical instability that has become, according to Ursula von der Leyen, "the new norm." The bet is on strengthened mutualization of strategic investments and a reserve mechanism outside the ceiling to face future shocks. The challenge remains to convince the Member States and the Parliament, guarantors of a delicate balance between solidarity and sovereignty.
PARTNERSHIP PLANS: A UNIQUE TERRITORIAL CONTRACT
From now on, nearly half of the budget will be disbursed through twenty-seven national and regional plans, heirs to the "Next Generation EU" logic. Each State will have to present an integrated program around the green transition, social cohesion, agricultural modernization, and local resilience. The Commission promises the end of administrative proliferation: five hundred and forty budget lines merge into a single framework, with harmonized indicators and quarterly milestones. But this simplification masks a requirement for results: in case of drift, payments will be suspended, and the general rule of law clause will be applied without delay. For the capitals, the sovereignty of execution is expanding; for Brussels, the power of sanction is strengthening.
THE COMPETITIVENESS FUND: TECHNOLOGICAL AND INDUSTRIAL AMBITION
With nearly six hundred billion euros, the Competitiveness Fund becomes the cardinal instrument of economic sovereignty. It merges Horizon Europe, InvestEU, and several sectoral programs to support artificial intelligence, semiconductors, green hydrogen, digital health, and future skills. By placing R&D alongside loans for energy infrastructures and defense, the Commission aims to break down the barriers between civil and dual financing, a necessary condition to rival American and Chinese plans. Companies with a turnover exceeding one hundred million euros will contribute to this pillar through an annual fee, establishing a direct link between domestic profit and common investment.
EUROPE IN THE WORLD: PARTNERSHIP DIPLOMACY AND STABILITY PROJECTION
Endowed with more than two hundred billion euros, the new external fund consolidates development aid, neighborhood policy, and the investment instrument for Africa. The objective is twofold: to secure critical supply chains and disseminate a cooperation model based on just transition, green connectivity, and democratic resilience. Ukraine will benefit from a privileged place in this pillar, with a window dedicated to reconstruction and regulatory convergence. By aligning external financing with internal priorities, the Union hopes to transform its financial weight into geostrategic influence.
EUROPEAN PUBLIC ADMINISTRATION: EFFICIENCY, ATTRACTIVENESS, EU AGORA
Three percent of the MFF will finance the functioning of the institutions, the Erasmus+ program, and the new AgoraEU fund, dedicated to culture, media, and civil society. By investing in the training of European talents and citizen dialogue, the Commission wants to reaffirm the human dimension of integration. Erasmus+ sees its envelope grow by twenty percent, while AgoraEU will offer lines of credit to independent media platforms and transnational cultural hubs, strengthening the Union's informational resilience against foreign interference.
THE CRISIS MECHANISM: A NATIONAL FINANCIAL GUARD
Above the budgetary ceiling, a reserve fund of four hundred billion euros will be mobilizable by the unanimous decision of the Council and Parliament. These guaranteed loans will mutualize the response to natural disasters, energy shocks, or security crises. Inspired by the SURE model but with a broader firepower, this mechanism institutionalizes crisis solidarity; it translates the lesson of pandemics and neighboring wars: emergency can no longer depend on ad hoc negotiations.
NEW OWN RESOURCES: THE QUEST FOR AN AUTONOMOUS BUDGET
To finance this program, the Commission stabilizes national contributions and relies on five new revenues: the extension of the carbon market, the carbon border adjustment mechanism, a fee on uncollected electronic waste, a harmonized excise duty on tobacco, and a corporate contribution calculated on net turnover. In total, forty-four billion euros per year should free the Union from repeated calls on national treasuries. In a Europe fractured between net contributors and beneficiaries, this fiscal innovation could break the deadlock of ceilings while aligning budgetary policy with climate and health objectives.
POLITICAL ISSUES: BETWEEN RENATIONALIZATION AND CONDITIONALITY
The Parliament sees in the partnership plans a risk of state withdrawal; the Commission replies with conditionality and control, arguing that local execution will be framed by binding European priorities. This arm-wrestling match prefigures the negotiations of the next two years: the Twenty-Seven will defend domestic flexibility, Brussels and Strasbourg will defend community orthodoxy. By the horizon of 2027, the final agreement will have to reconcile fiscal discipline, crisis solidarity, and strategic projection, otherwise, it will delay the entry into force of the programs on January 1, 2028.
CONCLUSION
By rethinking its budget around four major pillars, the European Union is attempting to make common spending a lever for power and resilience. Structural simplification, the crisis fund, and new own resources respond to the dual requirement of efficiency and autonomy. But success will depend on the collective ability to convert these instruments into transformative, measurable, and shared projects. It is at this price that Europe will move from a reaction reflex to a prevention posture, forging a future where public action will be as rapid as crises are sudden, as ambitious as challenges are vast, and as solidary as peoples express the need.
For information, link to the budget proposal: https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/eu-budget-2028-2034_en
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