Introduction to Ursula von der Leyen and the EU Budget Proposal
Ursula von der Leyen, President of the European Commission, has proposed a new EU budget of €2 trillion for 2028-2034. This proposal marks a shift in focus towards economic competitiveness and defense, with plans to revise traditional spending on agriculture and regional development.
Understanding the Proposed Budget
The proposed budget represents 1.26% of the Gross National Income (GNI) of the EU’s 27 member countries, compared to the current budget’s 1.13% over seven years. This increase signifies a more ambitious and targeted approach to addressing European challenges.
Funding Sources
The majority of the budget’s funding will come from member countries’ governments. However, the European Commission has suggested several methods to raise additional funds directly, including a new corporate tax for companies operating within the EU with annual net income exceeding €100 million in one member state.
Key Components of the Proposed Budget
New Fund for Competitiveness
The proposal includes a new €451 billion European Competitiveness Fund, aimed at boosting the EU’s defense industry, encouraging innovation, and supporting the transition of the bloc’s industries to clean technologies.
A significant portion of the budget, €131 billion, is allocated specifically to defense and space, a fivefold increase from the current level, according to the Commission.
Shifting Priorities
The proposal reflects a desire to redirect spending towards new priorities after decades of focusing on agriculture and regional development, known as cohesion policy. The goal of this policy has been to reduce disparities between regions.
Despite this shift, agriculture and underdeveloped regions will continue to receive substantial funding. The proposal allocates €302 billion for farmers and a minimum of €218 billion for less developed regions across Europe, along with €200 billion for global programs.
Support for Ukraine
The European Commission has also proposed allocating €100 billion to Ukraine outside the budget framework.
Key Questions and Answers
- What is the proposed EU budget amount? The European Commission has proposed a budget of €2 trillion for 2028-2034.
- What is the primary focus of this new budget proposal? The new budget emphasizes economic competitiveness and defense, with plans to revise traditional spending on agriculture and regional development.
- How will the proposed budget be funded? The majority of the funding will come from member countries’ governments. Additional funds will be raised through a new corporate tax for large EU-operating companies.
- What are the key components of the proposed budget? The proposal includes a new €451 billion European Competitiveness Fund, with significant allocations for defense and space, agriculture, underdeveloped regions, and global programs. It also proposes €100 billion for Ukraine.
