Bridging the Gap: Matching Europe’s budget with its strategic transformation needs

The EU’s next long-term budget is a defining test of its strategic direction. Is the EU willing to make the choices required to secure its relevance and legitimacy? This policy brief makes the case for a bold new European Multiannual Financial Framework (MFF) that reflects the scale of today’s intertwined climate, social, and geopolitical challenges.

About

This brief argues that without significantly increased and better-targeted public investment, the EU risks deepening divides, falling behind in global competitiveness, and losing public trust. The upcoming budget negotiations offer a rare opportunity to align Europe’s resources with its priorities: a green and inclusive economy and democratic resilience. The brief lays out key principles and choices needed to deliver a budget fit for Europe’s future. With political momentum shifting and economic realities evolving, the moment to act is now.

A transformative EU budget must substantially increase in size, commensurate with the Union’s strategic goals. This will require expanding financing tools, through a combination of higher Member State contributions, new own resources (NORs) and joint borrowing. It must also grow in purpose, through ensuring the green and digital transitions – and their social dimensions – are central and protected as key elements of Europe’s economic roadmap. But a more capable EU budget must also be governed with clarity, discipline, and democratic legitimacy. To ensure effectiveness and accountability, the following principles should be applied:

• Policy mainstreaming and earmarking;
• Emphasising social justice;
• Avoiding zero-sum trade-offs;
• Strengthening conditionalities.

Europe has the facts and data, the institutions, and the public support to lead through transformation. But it lacks a budget that matches its ambition. A forward-looking, adequately resourced, and strategically governed EU financial framework is essential; not only to navigate today’s crises but to shape a stable, green, and inclusive future.

This GEF Policy Brief was written with expert contributions from the independent climate think tank E3G.

Authors

• Alba Berhami Sintomer is a Policy Advisor and a research lead at the climate change think tank E3G,
• Sandra Tzvetkova is a Senior Policy Advisor at the climate change think tank E3G,
• Taube van Melkebeke is GEF’s Head of Policy. For further information, contact her at taube.vanmelkebeke@gef.eu.

Published by the Green European Foundation with the financial support of the European Parliament to the Green European Foundation. The European Parliament is not responsible for the content of this publication. The views expressed in this publication are solely those of the authors and do not necessarily reflect the views of the European Parliament or the Green European Foundation.