The Social Pillar in the Next Multiannual Financial Framework
The EU’s proposed budget overhaul risks diluting social spending, weakening accountability and leaving vulnerable groups with less protection. A commentary by Rosalba Famà
This commentary follows Rosalba Famà’s presentation on social spending in the next EU budget at “Anti-Poverty Strategy: Policies for an Effective Implementation”, organised by IEP Bocconi and the European Commission’s DG EMPL in Milan on 9 October 2026.
In July 2025, the European Commission presented its proposal for the next Multiannual Financial Framework, the Union’s long-term budget, which allocates resources for the 2028–2034 period. Several factors have strongly influenced the content of this proposal: the current geopolitical and security scenario, the search for flexibility, and the Covid-19 pandemic experience.
The Commission’s proposals envisage a far-reaching remodelling of EU expenditure, reducing the number of programmes from 52 to just 16. It also proposes to double the overall size of the budget to €2 trillion.
As is well known, the Commission’s Anti-Poverty Strategy makes reference to EU funding as a key enabler.
However, we warn that the proposed overhaul of the EU budget could weaken the EU’s social spending rather than strengthening it.
This commentary will first look at the main changes in EU social spending in the 2028–2034 period; it then focuses on the absorption of the European Social Fund Plus and its potential adverse effect on the future of EU social spending.
First, the Commission proposes the creation of a new €865 billion “mega-fund”, bringing together cohesion funding, the Common Agricultural Policy and the European Social Fund Plus.
Resources would be disbursed to Member States upon the achievement of agreed objectives, including investments and reforms, set out in National and Regional Partnership Plans modelled on the National Recovery and Resilience Plans experienced during Covid-19. Out of this “mega-fund” the current Commission proposal has set a 14% target in social spending, without detailed indications. As such, likely, with a system of ‘labelling’ the Member States are requested to earmark part of the overall envelopes as ‘social spending’.
Second, the Commission has launched a new European Competitiveness Fund (ECF) for industrial policy, a programme worth €234 billion.
The ECF would be organised around four thematic windows: security, which would receive the largest allocation of €125 billion; the green transition and decarbonisation, with €67 billion; digital technologies, with €51 billion; and health and biotechnology, with €20.4 billion.
Importantly, the ECF would not be financed through additional resources. Instead, it would result from the merger of 11 existing spending programmes. The ECF will also dedicate some money to the reskilling of the workforce in view of strengthening these prioritised industrial sectors.
Third, the Commission has proposed to increase the amounts devoted to the Erasmus+ Programme, up to €49 billion, thus transforming Erasmus into the most relevant programme of EU social spending in the following 7-year term.
One of the most controversial aspects of the proposed MFF architecture concerns the future of the European Social Fund Plus (ESF+), currently worth 88 billion euros (in 2018 prices).
Under the Commission’s proposal, the ESF+ would no longer operate as a stand-alone programme. Instead, social expenditure would be incorporated into the much broader National and Regional Partnership Plans, alongside cohesion policy, agriculture, migration, security and other priorities.
This integration may simplify the formal structure of the EU budget, but it also risks weakening the ESF’s identity and the advantages associated with its established operational model.
The current ESF+ strand is implemented mainly under shared management by the Commission and the Member States.
The existing framework ensures a close connection between EU reimbursements and identifiable social interventions, so-called ‘eligible costs’.
This strengthens accountability by making it possible to verify not only whether general policy objectives have been achieved, but also whether European resources have financed eligible social expenditure.
The proposed architecture would move further towards performance-based financing, under which payments are linked primarily to milestones and targets included in national plans.
This approach may give Member States greater flexibility, ownership, and coherence, but it also makes the quality and enforceability of those milestones particularly important.
If targets are framed too broadly, a government may formally comply with them without demonstrating that resources have reached the intended beneficiaries.
The proposed requirement that at least 14% of the resources allocated through the National Regional Partnership Plans be devoted to social objectives is problematic.
The target applies globally across the “Mega Fund” and encompasses a broad range of objectives, from employment and skills to education, poverty reduction, housing, inclusion and equality.
Such vagueness may allow the social dimension to be diluted through lenient enforcement. Sadly, the experience of green earmarking under the current MFF does not offer a great precedent.
Moreover, the 14% target would replace thematic concentration in the current ESF+. At present, Member States must allocate at least 25% of their shared-management ESF+ resources to social inclusion and at least 3% to addressing material deprivation.
Member States with child-poverty levels above the EU average must devote at least 5% to measures tackling child poverty. These safeguards direct funding towards clearly identified social needs and vulnerable groups.
Their removal in favour of a single aggregate target could leave politically less visible priorities - such as child poverty, homelessness or material assistance - competing with broader and more attractive expenditure categories.
A related concern involves co-financing and additionality. Requiring Member States to contribute national resources alongside ESF+ funding has helped to increase the total volume of social investment and encourages national ownership of the interventions.
Within a more flexible and fungible “Mega-fund”, however, it may become harder to determine whether EU resources are supplementing domestic social expenditure or merely replacing it.
A Member State could comply with the overall 14% requirement while reducing expenditure previously financed from its national budget. In that case, the target could be reached without producing additional social investment.
The aggregate nature of the target also creates a territorial problem. Compliance with the 14% targets would be assessed at the level of the overall ‘Mega-fund’ rather than at the level of each National Regional Partnership Plan.
As such, higher social expenditure in prosperous States could compensate for limited investment in regions facing the most serious employment, poverty or social-exclusion challenges.
At the same time, concentrating negotiations of National plans at the level of governments and the Commission risks weakening the participation of regional authorities, social partners, civil-society organisations and specialist social-service providers.
Governments would enjoy greater discretion in reallocating resources among competing priorities, while actors with direct knowledge of local social needs could lose influence over programming and implementation.
These concerns have also led the European Economic and Social Committee and the European Social Network to call for preserving the ESF’s distinct structure and strengthening the involvement of regional and social stakeholders.
Finally, the reform raises a broader constitutional and institutional question. Article 162 TFEU expressly establishes the European Social Fund and assigns it a distinct role in improving employment opportunities, facilitating workers’ mobility and supporting adaptation to economic and industrial change.
Yet, the current architecture that entails a “Mega-Fund” coupled with national planning covering numerous unrelated policy fields sits uneasily with the Treaties. Additional concerns arise regarding the governance of social spending within the Commission.
If management of social expenditure shifts away from the specialised expertise of DG Employment and moves towards a centralised structure responsible for the Partnership Plans within the Commission Secretariat-General, as was the case for the ‘Reform and Investment Task Force’ for the RRF, social objectives may receive less structural and targeted institutional support.
The central question is therefore not whether simplification is desirable, but what may be lost in achieving it, which Steiert calls ‘the EU social legacy’.
A simpler budget should not come at the price of weaker accountability on social spending, reduced additionality, diminished territorial participation or the dilution of the Union’s social commitments.
The shift towards a more ‘geopolitical’ budget is understandable, given the current security scenario. Yet, the EU social model should be part of the EU geopolitical posture. Indeed, a more cohesive society is a key component for a stronger geopolitical union.
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.
