The next one will cover 2028-2034. This time, the European Commission has proposed important changes: more money and more targeted spending on the economy, the energy transition and defence.
That would mean less funding for agriculture (a third of the budget at present) and regional development (35%), which aims to build infrastructure and help the economy in poorer or more remote regions.
The Commission has asked for nearly €2 trillion from 2028 to 2034, equivalent to 1.26% of the EU's average gross national income. That's a big jump from the €1.2 trillion available between 2021 and 2027, which was 1.02% of the EU's gross national income in 2025 prices.
Member states are aiming to agree on the budget by the end of this year. If that's possible; tempers are running high, and there's no agreement on how large the budget should be and what, if anything, should be cut.
Last week, several governments said the most recent proposal by Cyprus, which leads talks between EU countries that suggested only a 2% trim to the Commission figure, was too high.
Jessica Rosencrantz, Sweden's minister for European affairs, said “the volume needs to come down, big time.” Dutch finance minister Eelco Heinen said it was “far too high at a time when fiscal space is limited across Europe, and difficult choices are unavoidable.”
Both countries pay more into the EU budget than they get back. Germany, France, Italy, and Spain are the largest contributors in absolute numbers; Poland, Romania, Belgium, Hungary and Greece are the largest net receivers.
16 EU countries, including Poland, Italy and Spain, pushed back against cuts to farm and regional funding that “are the most visible EU policies for the EU citizens.”
Adding to the dispute, while some EU countries want to spend less, the European Parliament voted by a large majority for a budget 10% larger than the Commission's proposal to avoid any cuts.
The divide between countries tracks an age-old European split: richer, often western and northern European countries that object to paying more to poorer, southern or eastern nations.
There is less disagreement about the challenges the EU faces. Across the bloc, people are, on average, getting older and increasingly relying on governments to pay their pensions and healthcare costs. The economy isn't expanding enough to cover those increased costs.
And then there's defence: EU countries are spending more on their militaries to counter a potential Russian threat and a US pullback. It doesn't help that the US-Israel war on Iran has pushed up energy prices, adding billions of euros extra to EU energy import bills this year.
The International Monetary Fund has warned that EU public debt will more than double by 2040 unless governments make changes. Some politicians interpret that as cutbacks to pensions and public services, which Belgium is pursuing, and France is struggling with.
To grow, the EU economy needs investment. Former European Central Bank president Mario Draghi, who wrote an influential report on how to turn the economy around, said the EU now needs €1.2 trillion a year.
The Commission doesn't have anything like that to spend; its plans involve projects that could also add money from private sources, such as banks and pension investors.
It thinks it can leverage what it has to help boost strategic industries that could generate wealth. Continuing the shift toward more homegrown renewable energy could reduce expensive imports.
Governments back those things too, but they're having trouble putting extra money on the table when they're under pressure at home, either from ballooning costs or political opponents who want to reduce how much cash goes to the EU.