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Is an agreement on the EU’s long term budget in sight?

/ European Union / By

By Pieter Cleppe

EU member states are seeking to reach agreement by the end of this year on the European Union’s next long-term budget, formally known as the Multiannual Financial Framework (MFF). The proposed framework would cover EU expenditure from 2028 to 2034. Negotiations are proving more complex than in previous cycles, partly because interest payments on a recently agreed EU loan to Ukraine will also have to be financed from the budget. Estimates suggest these costs could exceed €3 billion per year. Should the war continue, additional joint EU borrowing may be required, further increasing pressure on the MFF.

Controversial financing for NGOs 

Debate over the structure and priorities of the next budget has intensified. Writing for Brussels Signal, Rafael Pinto Borges argues that “the idea—currently being discussed behind closed doors in Brussels—appears to be the Europeanisation of what was once the global activist machine of American liberalism. As US funding dries up, the European Commission wants to step in as the new central banker of international wokery.” According to his analysis, the Commission intends to pursue this approach through the next MFF, which includes plans for a significant expansion of EU-level funding for non-governmental organisations (NGOs), media outlets, and advocacy groups under a proposed new programme called AgoraEU.

Borges notes that “the MFF includes plans for a massive expansion of EU-level funding for NGOs, media outlets, and advocacy groups under a new umbrella programme known as AgoraEU.” He adds that, “with a proposed budget of up to €8.6 billion, this scheme would multiply existing funding streams several times over.” In his view, “if approved, it will give Ursula von der Leyen’s European Commission a truly formidable propaganda tool.” He further claims that, “under AgoraEU, NGO funding is set to increase by a stunning 600 per cent,” concluding that, “this is a democratic scandal: European taxpayers will be forced to bankroll political activism that actively campaigns against their interests, traditions, and, more often than not, electoral choices.” Borges also argues that, “at a time of stagnant growth, collapsing public services, and relentless tax pressure, Brussels is preparing to shovel billions into NGOs whose main achievement is lecturing ordinary citizens on how they’re wrong to be concerned.”

The proposed expansion of the EU budget has met with resistance from a group of so-called ‘frugal’ member states. Austria, Sweden, Germany, the Netherlands, Finland, and Ireland—traditionally cautious about EU spending—have been joined by France and Belgium, both net contributors to the EU budget, and potentially Denmark from January onwards. This group is calling for savings and restraint in the overall size of the next MFF.

The role of NGOs in shaping EU policy, including in areas such as public health and taxation, has in particular been coming under scrutiny. Some observers point out that NGOs retain significant influence in the legislative process, as proposed EU policy amendments are sometimes adopted word for word. Dutch Members of the European Parliament Sander Smit and Dirk Gotink of the European People’s Party have called for greater transparency in the public funding of NGOs. In a letter responding to attempts by NGOs to exclude him from work on the dossier, Gotink referred to alleged confidential contracts between the European Commission and NGOs that reportedly include lobbying instructions. He stated that “the only reason these contracts are not made public is that the NGOs themselves are blocking this. The Commission would like to make these documents public, but cannot do so legally without your consent.” Supporters of greater transparency argue that the resistance encountered even at this level highlights the sensitivity of the issue as negotiations over the next EU budget continue.

Resistance against TEDOR and EU “own resources”

Current plans envisage that final decisions on the budget will be taken at a European Council summit in December 2026. One of the European Commission’s key objectives in the negotiations is to increase the EU’s “own resources,” meaning new revenue streams or tax-raising powers at EU level. Proposed measures have included ideas such as the “Corporate Resource for Europe” (CORE) and the “Tobacco Excise Duty Own Resource” (TEDOR). These initiatives have faced significant opposition from member states.

Swedish Finance Minister Elisabeth Svantesson has described the tobacco-related proposal as “completely unacceptable.” She warned that the Commission’s plans would extend beyond traditional tobacco products to include alternatives, stating: “What’s more, the Commission wants the tax revenue to go to the EU and not to Sweden.” Sweden has long pursued a harm-reduction approach to tobacco policy, allowing less harmful products such as snus. This policy is widely credited with reducing smoking rates and smoking-related illnesses. Critics argue that the Commission’s preference for higher taxes and stricter regulation reflects a more paternalistic approach and risks encouraging black-market activity.

A specific problem in this regard is precisely that the Commission’s proposed tax hikes  would also cover “tobacco-related products”, even when they do not contain any tobacco, as for example vaping products. The European Commissioner responsible for this, Dutchman Wopke Hoekstra, thereby continues to equate traditional tobacco products, like cigarettes, with new alternatives. He has been calling those alternative products “also extremely harmful”. This flies in the face of the UK government’s health department, which has pointed out that “best estimates show e-cigarettes are 95% less harmful to your health than normal cigarettes.”

Conclusion

As negotiations over the EU’s next Multiannual Financial Framework intensify, the prospects for a swift and broad agreement remain uncertain. Rising financial obligations, including the cost of servicing joint borrowing for Ukraine, are colliding with divergent views among member states on spending priorities, fiscal restraint, and the future scope of EU action. Proposals to expand funding for NGOs and to introduce new EU-level revenue sources have further sharpened political divisions, particularly between the European Commission and a growing group of budget-conscious governments.

With final decisions not expected until late 2026, the coming months are likely to see continued debate over transparency, democratic accountability, and the balance of power between EU institutions and member states. Whether a compromise can be reached will depend on the ability of governments to reconcile calls for budgetary discipline with the Commission’s ambition to expand EU programmes and financial autonomy. The outcome will shape not only EU spending between 2028 and 2034, but also broader questions about the Union’s priorities and governance in the years ahead.

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