Ursula von der Leyen’s Multiannual Financial Framework Gamble

Ursula von der Leyen has thrown down the gauntlet. With her newly unveiled EUR 2 trillion Multiannual Financial Framework (MFF) for 2028–2034, the President of the European Commission is not merely proposing a budget—she’s attempting to redefine the very purpose and priorities of the European Union. By shifting focus from agriculture and cohesion toward competitiveness, defence, and strategic investment, von der Leyen is wagering that a more centralised, agile, and security-conscious EU is essential in an era of geopolitical upheaval and economic rivalry. But this high-stakes gamble is already sparking rebellion within her own ranks—and the real battle is only just beginning.

The Budget

On Wednesday 16th July, President of the European Commission Ursula von der Leyen announced the details of her much-anticipated Multiannual Financial Framework (MFF), the European Union’s (EU) budget for the years 2028–2034. This budget amounts to EUR 2 trillion, which is 1.26% of the EU’s gross national income (GNI), well above the current MFF announced in 2018, which accounted for 1.13% of GNI. The three main pillars of this budget include: (1) Pillar I, the fund for the Common Agricultural Policy (CAP), which includes farming subsidies, alongside border management and cohesion policies; (2) Pillar II, a competitiveness fund to help the EU stay competitive with the US and China, including money for two Competitiveness Funds (ECFs) targeting investments in strategic sectors such as green energy and defence; and (3) Pillar III, for external needs, including Ukraine recovery funding and aspects of defence.

A new and important element of the budget is the funds von der Leyen aims to create, including her EUR 900 billion fund intended to leverage EU-friendly reforms, and EUR 400 billion for the ECFs to invest in industry, with EUR 131 billion specifically earmarked for defence, security, and space. The most serious cuts come from Pillar I — mainly farming and agricultural subsidies — to fund Pillar II’s strategic investment.

Rebellion from the Commission

This budget is by far the most ambitious MFF yet and aims to make funding more flexible, as seen in the ECFs, which cover multiple sectors. This means money can be allocated to different areas depending on the needs of the bloc. However, some commentators believe she has overplayed her hand, trying to centralise the EU project around the Commission while sidelining other actors. As mentioned above, the budget cuts from areas that have traditionally been the focus of the EU, including farm subsidies, agricultural funds, and cohesion funds, and redirects funding toward investment. This will likely please northern and western Europe but upset southern and eastern Europe, with their more agricultural economies. Eastern Europe, in particular, relies on cohesion funds to catch up to the more economically privileged western European states.

Von der Leyen’s move has upset parties across the EU, leading to rebellions from within her own Commission, as negotiations continued throughout the night of the 15th and late into the afternoon on the 16th. These tensions caused delays in the announcement of the budget and culminated in von der Leyen’s absence when the budget was presented. Despite the difficulties Ursula von der Leye has already faced, her troubles have only just begun, as she must now convince the European Parliament and all member states to agree. Negotiations will continue, and the budget will inevitably change, but with Parliament claiming they do not even want to negotiate on these proposals, seeing them as too radical, she faces a difficult road ahead to convince the bloc of her ideas.

Looking to the Future

If she does manage to pass the budget, the MFF outlines a vision for the future of the EU as von der Leyen sees it. With competitiveness and defence taking centre stage, the focus shifts away from the more traditional role of the bloc; especially its key function of supporting the agrarian aspects of some member states’ economies. The heavy emphasis on these two areas is unsurprising considering the current climate, but it does indicate a push toward greater centralisation.

Currently, the EU does not dictate the defence priorities or spending of member states, but with growing Russian aggression, von der Leyen may be envisioning a larger role for the EU in this area. Indeed, she wishes to develop a European Defence Union that can “defend itself, stay connected, and act fast whenever needed,” according to the European Commission. The ECF for defence and space will offer member states the opportunity to voluntarily invest in projects that benefit both themselves and regional security. While these proposals remain voluntary and somewhat vague, they, along with the previously established European Defence Fund, which has a budget of EUR 7.3 billion for defence research and development, show a concerted effort from von der Leyen to place the EU at the centre of European defence. This involves both stronger ties with member states and deeper engagement with the defence industry.

Competitiveness also takes centre stage in this MFF, as the EU attempts to respond to US tariffs and ongoing economic difficulties in the post-COVID era. The budget allocates around EUR 24 billion per year for COVID debt repayment; an important factor driving up the overall cost of this MFF compared to the previous one. Again, von der Leyen is placing the tools for economic recovery in the hands of the Commission, especially through the ECFs, which give the EU significant power to direct investment across the bloc. This favours modern technological development over traditional industries such as manufacturing or agriculture.

Now von der Leyen must take these proposals to the member states and MEPs. While it is impossible to predict how negotiations will unfold, it is clear that the future of von der Leyen’s EU is more centralised. This may be necessary to combat the growing threats the bloc faces, but it will also be a hard sell to many member states that see themselves as sovereign and politically distinct. This challenge will be especially acute for those outside western Europe, who will likely see this budget as sidelining their needs.

Lauren Mason is an Europe Regional Policy Fellow at the Sixteenth Council