Europe’s Budget Deadlock Threatens Its Sovereignty
The EU needs a budget that matches its ambitions on cohesion, competitiveness and defence. A smaller settlement would leave the continent more exposed. A commentary by Marco Buti, and Luca Jahier
Marco Buti will speak at the IEP Bocconi Annual Event, “At the Table or on the Menu? Europe, Middle Powers and International Order”, on 18 November 2026 in Milan. He will join the panel on technology, industrial policy and digital sovereignty.
by Marco Buti and Luca Jahier
In July 2025, the European Commission presented its proposal for the next Multiannual Financial Framework (MFF), covering 2028–34.
Implementing the decisions underpinning the MFF takes many months: a political agreement between the Council and the European Parliament must be followed by several pieces of implementing legislation.
We are therefore already in the danger zone. After more than a year of unproductive discussions, there is still no agreement within the Council, while Parliament established its negotiating position last April.
True, decades of budget negotiations have accustomed us to last-night brinkmanship and bitter disputes between “frugal” countries and advocates of a more ambitious budget, between net contributors and the rest, and between traditionalists and reformers. Yet this time the deadlock looks far more serious, as we regrettably anticipated in our commentary of 9 June.
The future of our continent is at stake. Amid systemic crises in our development model and the rise of nationalist and authoritarian forces in Europe and elsewhere, there is a very real risk that nationalists will turn the European Union into a colony of other powers.
The Commission’s proposal was already modest in scale, despite the impressive-sounding headline figure of €2 trillion spread over seven years. It has since been followed by three “negotiating boxes” from successive rotating Council presidencies, all deeply disappointing and all unsuccessful. The latest, from the Irish presidency, managed to displease everyone, to the point that some astonished observers regarded it as a deliberate provocation.
We now wait to see whether European Council President António Costa, fresh from a tour of national capitals, can do any better before the end of the year.
Little is expected from the extraordinary leaders’ meeting in late November; the decisive moment will come just before Christmas, once Parliament has gone into recess. There is good reason for doubt, given how far apart and polarised the positions remain.
An even deeper divide than in previous negotiations has emerged between the “friends” of the EU’s traditional priorities, including territorial and social cohesion, the Common Agricultural Policy and fisheries, and those who want a budget pared to the bone and concentrated on a handful of new priorities related to competitiveness and defence.
The frugal countries, led by Germany, are demanding a €400 billion cut that would effectively bring the next budget well below current levels.
The European Parliament has voted by a majority for a more ambitious budget than the Commission proposed, as have the European Committee of the Regions and the European Economic and Social Committee.
A previous version of this article was published by Il Sole 24 Ore
IEP Bocconi does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
