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EU Commission Proposes €2 Trillion Budget, Opens Two-Year Negotiations

The plan outlines record funding for Ukraine, agriculture, defense and green transitions as lawmakers and capitals prepare for intensive talks.

European Commission president Ursula von der Leyen delivers her speech during a statement on the preparation for the EU–China Summit, Tuesday, July 8, 2025 at the European Parliament in Strasbourg, eastern France. (AP Photo/Pascal Bastien)
The EU has to balance a growing list of priorities in the budget including bolstering security, while avoiding a new fight with farmers
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Overview

  • On July 16, the European Commission formally proposed a €2 trillion multiannual financial framework for 2028–2034, marking an €800 billion increase over 2021–2027 levels.
  • It earmarks up to €100 billion for Ukraine’s recovery, €300 billion for the Common Agricultural Policy and a €451 billion competitiveness fund covering clean tech, digital, biotech, defense, space and food.
  • Defense and space spending would rise fivefold to €131 billion, while energy infrastructure funding through the Connecting Europe Facility would jump from €6 billion to €30 billion.
  • To finance the boost without raising member contributions, the Commission proposes new levies on large corporations, tobacco products and electronic waste, and plans to start repaying €800 billion of post-COVID debt from 2028.
  • The unveiling triggers a two-year negotiation process with the European Parliament and 27 member states, as MEPs, national capitals and farming unions prepare to debate contributions, priorities and CAP reforms.