The 2028-2034 MFF: From Budgetary Accounting to Strategic Purpose –

The current negotiations over the EU’s 2028-2034 Multiannual Financial Framework (MFF) have settled into a familiar script: a zero-sum battle over the figures. “Frugal” member states are pushing for a smaller budget, net recipients are seeking to shield cohesion and agricultural spending from cuts, and others – notably the European Parliament – try to square the circle by proposing new EU own resources. While the headlines obsess over the size of the pie and who gets the biggest slice, a much more consequential issue is being sidelined: what the money will be used for, whether it makes sense to spend more together in certain areas (for economic or geopolitical reasons) and whether the mechanisms of delivery are fit to translate financial resources into tangible strategic outcomes for the EU and its citizens.

Questions about better spending are relevant in every MFF negotiation, but they are particularly important this time. The Commission has proposed far-reaching changes not only to spending priorities and programme architecture, but also to the way EU funds are planned and delivered. Looking across the MFF proposal, a common pattern emerges: an ambition to consolidate multiple programmes into fewer, strategically framed ones, much more flexibility to allocate funds and greater emphasis on simplification and performance. These are all welcome and much needed developments in the context of rapid technological, political and economic changes. Yet, the reform will also result in a reduction in predictable national envelopes, at a moment when many member states will be confronted with the NGEU “cliff edge” effect. Not surprisingly, this creates resistance to change. At the same time, bundling funds and increasing flexibility does not automatically lead to a more strategic or transformative use of EU funds. For this to happen, reforms should be accompanied by appropriate governance arrangements and robust accountability mechanisms.¹

The challenge for MFF negotiators is to steer between Scylla and Charybdis: avoiding both a retreat to business as usual, with rigid national allocations, and an embrace of flexibility and consolidation without the necessary governance and accountability safeguards, opening the door to unchecked discretion and political capture. Consolidation is, in principle, a victory of common sense. The National and Regional Partnership Plan reform will replace eight partially overlapping EU funds and instruments that are currently implemented through more than 500 different national and regional programmes into one single EU programme implemented through 27 national plans.² Similarly, the European Competitiveness Fund (ECF) streamlines 16 instruments into four thematic windows, with InvestEU acting as a horizontal delivery arm.

A common rulebook is attractive from an efficiency logic. But consolidation is not just about simplification. Breaking down existing silos should make it easier to adjust the use of EU funds to changing circumstances and needs. The MFF proposal provides greater scope for reallocating funds “in normal times”, while also strengthening the capacity to react to crises, through new or reinforced crisis reserves and cushions. Greater flexibility, however, comes with a trade-off. Less earmarking means reduced predictability for final beneficiaries, making some safeguards essential. Dedicated allocations for those most in need and minimum spending targets to protect key policy objectives can help preserve continuity and ensure that political priorities are not crowded out by short-term pressures. Yet there is also a risk that, in seeking to preserve existing allocations, different stakeholders push negotiators towards a proliferation of new restrictions that undermine the flexibility the reform is intended to achieve.

A more strategic use of EU funds will not emerge from consolidation and flexibility alone. It also requires governance arrangements capable of setting priorities, allocating responsibility and ensuring accountability. Across the EU spending headings, the underlying question is: who defines “strategic” once the big number is fixed? The negotiation of the ECF provides the clearest illustration.³ The Commission proposes using the advisory procedure to adopt work programmes to bypass member state obstruction. This can help shield funding decisions from short-term political pressures and fragmented industrial interests. But it risks making decisions overly technocratic.

The alternative proposed by the Council – using the examination procedure for all ECF work programmes – raises a different concern. While it can strengthen political ownership, a member state’s right to decide the specific project eligibility rules and award criteria inevitably increases the risk of political capture. The core governance challenge is therefore to combine Commission steering capacity with a structured, well-informed and transparent process to set priorities without reverting to “business-as-usual”, member state-centric comitology. Similar tensions arise in the negotiations of the Global Europe Instrument, where both the Council and Parliament propose changes to reduce the Commission’s discretion in planning the use of resources. These are not technical details. They will determine whether “strategic” spending reflects a coherent EU-level assessment of where value is created while remaining politically accountable, or rather a patchwork of national capture, excessive technocratic discretion and business as usual under a new label.

Another key change of the next MFF will be the delivery mode: a shift towards a more performance-based approach, with greater emphasis on outputs and outcomes. This is a sensible change that can help focus EU spending towards what it has actually achieved and reduce administrative burdens by giving beneficiaries greater flexibility over how agreed objectives are delivered. Yet, as already seen with the Recovery and Resilience Facility, performance-based funding does not necessarily translate into simplification for every part of the process. In practice, moving from input controls to output and outcome requirements can create new layers of complexity in terms of measurement, monitoring and verification. This can be avoided by providing guidance on definitions, control and audit requirements but above all by ensuring adequate technical support for administrations with more limited capacities.

A more fundamental tension between simplification and performance should also be recognised. Simple rules can accelerate spending and reduce administrative costs, but excessive simplification may weaken safeguards against fraud and circumvention, undermine fair competition and compromise the achievement of increasingly complex policy objectives. The challenge is therefore to pursue “smart simplification”, cutting red tape and unnecessary administrative burdens while preserving the safeguards and procedures needed to ensure accountability, protect the EU’s financial interests and deliver effective policy outcomes.

The final Council agreement will inevitably be framed as a story of winners and losers. But the more consequential decisions are being made in parallel tracks on how priorities are set, how resources are allocated and reallocated, and how performance and accountability are built into the new architecture. Hence the issue is not simply how much money is available, or how it is divided between headings and member states, but whether the architecture through which it is delivered is fit for purpose. If flexibility is not matched by accountability, performance requirements by sufficient capacity, and consolidation by effective governance, the potential benefits of the reform may not materialise. Getting this architecture right will be essential if the EU budget is to deliver value for money while retaining the flexibility and strategic capacity needed to invest in Europe’s future.