Overview

• The European Commission’s proposal raises the seven-year budget to roughly €2 trillion—about €700 billion more than the current 2021–27 framework—to boost defense, competitiveness and repay pandemic debt
• It would introduce new own resources including levies on large companies, non-recycled electronic waste and a share of tobacco taxes to help finance the expanded spending
• Agricultural, regional and social funds would merge into one partnership model under national reform and investment plans tied to rule-of-law conditionality
• The German government publicly rejected the draft as unjustifiable during domestic fiscal consolidation, while major EP faction leaders warn against any reduction in parliamentary oversight
• The plan now enters lengthy interinstitutional negotiations and must secure unanimous Council approval and a majority vote in the European Parliament