The European Parliament approves its position on the Financial Framework: more spending, new own resources and rejection of the Commission's centralized model

The European legislature is heading towards one of the major turning points in community negotiations. Each of the teams designs its strategy with the caution that a detail does not end up blowing up all the conversations about the design of the Multiannual Financial Framework (MFF). This is the European Union's budget for the coming years, and in the corridors of Brussels they are aware of the pressure on this file.

This Tuesday, the European Parliament has definitively ratified its position on the two-trillion project that the President of the European Commission, Ursula von der Leyen, proposed last June. Despite being consultative and not entirely binding in the final analysis, the approved document does offer an outline of the main discrepancies between the two major European political families, as well as those of the States.  

While the European Commission initially proposed a more conservative scenario last summer, Parliament has raised the stakes to request that the budget be equivalent to 1.27% of the Union's Gross National Income (GNI).

This increase, which represents approximately 10% more than projected by Von der Leyen, responds to a logic of "maximums" in the negotiation. Parliamentary sources suggest that this ambitious stance is a strategic necessity. Entering the table with a robust budget position is the only way to ensure that, after inevitable concessions, the final amount remains sufficient to face the climate, digital, and defense challenges, they explain in the European Parliament.

The architecture of income: Own resources

To sustain this level of ambition without drowning national finances, Parliament proposes a "basket of new own resources". The objective is ambitious: to raise at least 60 billion euros annually. This money would have a specific and urgent mission: to cover the interest and repayment of the debt incurred for the Next Generation EU funds without this meaning a blow to the Union's flagship programs.

One of the points of greatest friction between Parliament and the European Commission of Von der Leyen is the management structure of the funds. The Commission has suggested a national "single plan" model, similar to that used for post-pandemic recovery funds, where money is given to states under strict conditions and centralized objectives. However, the report approved by MEPs frontally rejects this merger of policies. The reasons put forward by the Populars and Socialists are explained by the uncertainty that a centralized model could generate, which would lead to greater bureaucracy for access to aid for farmers and SMEs, as well as the fear that regions would lose influence in favor of national capitals. There is also the risk that the policies will cease to be perceived as EU aid and will be seen as internal government transfers.

"We do not like the model of national plans. Cohesion policies cannot lose their European identity," stated Isabel Benjumea, negotiator for the Spanish delegation of the People's Party, to Demócrata. This stance underscores the demand that autonomous communities and regional administrations maintain a leading role in spending execution.

The Shielding of the CAP and Fishing

The Common Agricultural Policy (CAP) remains the financial heart of the Union. Parliament proposes allocating 385 billion euros to this sector. What is new here is the division of spending:

1. Direct aid (€261,000 million): To guarantee producers' income.
2. Rural development (€48,000 million): To curb depopulation and promote modernization.
3. Mercosur Fund (€45,000 million): A specific item to compensate for the possible effects of international trade agreements.

For its part, the fishing sector, often forgotten in the big numbers according to parliamentary sources, receives a boost with a proposal of 6.5 billion euros, flatly rejecting any attempt at cuts.

Cohesion, Society and Competitiveness

The cohesion policy, aimed at reducing the gaps between the richer and poorer regions, would receive 274 billion euros. Added to this is a vital reinforcement for the European Social Fund (110 billion €), focused on employment and training.

A significant achievement for Parliament is the demand to reinstate the program for the Outermost Regions (POSEI) with 6.5 billion euros, a program that Brussels had threatened to eliminate and which is vital for territories such as the Canary Islands.

The “pro-European” majority

In the European Parliament, the report was approved in plenary with 370 votes in favor, 201 against, and 84 abstentions. From the socialist side, Sandra Gómez emphasizes to Demócrata that European sovereignty begins with food: "If we want to talk about strategic autonomy, that means taking care of the CAP." The socialists agree with the popular party that intermediate administrations (autonomous communities) must have direct dialogue with Brussels, preventing funds from being "lost" in state bureaucracies.

Both political formations share the vision that the budget is the "backbone of solidarity". It is not just about spending more, but about ensuring that new priorities — such as defense or cutting-edge technology — are not financed by cannibalizing the traditional policies that have kept Europe united for decades.

The Council aims before shooting

Time is the most relentless enemy in Brussels. Although the new framework must enter into force in 2028, the negotiation process is so complex that lawmakers are already showing signs of nervousness. After having proposed it during previous councils, the informal summit of the Twenty-Seven in Cyprus last week was the first time that Member States decided to start discussing their budget for the next seven years "seriously".

In the presidency of the Council, they maintained that it was important to open the conversation at this time in order to prepare the ground for the Cypriot delegation to present the first negotiation draft in June and before reaching an agreement by the end of the year.

Sources present at the discussions maintain that the need for new own resources has been “widely shared” by the heads of government, who have shown themselves open to continuing to work on the basis of the proposal of two trillion euros put forward by the European Commission. “Some leaders did not rule out considering additional options. There is a lot of work ahead on this issue, but the atmosphere was constructive,” says a European official.

The President of the Council, Antonio Costa, believes that these debates confirm that the new own resources "will have to play an important role in financing the budget", despite acknowledging that "there is still work to be done".

While it is true that in the negotiation room some leaders would have expressed their willingness to reduce the size of the budget, while “others want a size that is up to the ambitions of the European Union”, the same diplomatic sources maintain.

At this point, the Spanish delegation is critical of what Brussels has proposed. It considers that the proposal does not contain the “ambition” necessary for the current context. From President Pedro Sánchez's circle, they insist that Europe needs to take a significant leap in funding. “It is necessary to accelerate the intensity of the discussions if we want to arrive on time”, they point out. The Spaniards also question the scope of the new own resources, considering that they fall short. The underlying idea is clear: without more money, there will be no more Europe.

The step taken this Tuesday constitutes the position of the Eurochamber, pending the start of negotiations between the legislators. The regulation of the Framework itself requires the final approval of the parliamentarians once these have concluded.