The new multiannual financial framework (MFF): A future vision for the EU

Currently, negotiations are under way on the European Union's new Multiannual Financial Framework (MFF) for 2028 to 2034.

The Commission's proposal one year ago charted a new course. In the wake of the Draghi and Letta reports on boosting the EU's competitiveness and future viability, the MFF has been realigned in order to use funds more efficiently.

Overall, the proposed new structure is welcome, as it opens up future prospects and offers the chance to respond more flexibly to crises and challenges.

But this restructuring brings not only opportunities; it also entails major cuts.

Many social projects in Germany are funded solely by the EU

Social, cohesion and agricultural support programmes such as the European Social Fund Plus (ESF+) and the European Regional Development Fund (ERDF) are to be grouped together in the so-called first pillar.

Because funds are no longer firmly earmarked for individual programmes, a battle over distribution is looming.

The detailed allocation will then lie with the member states under their National and Regional Partnership Plans (NRPP).

Although the Commission has already proposed a quota of 14% for the social field, this is where most is at stake. Many, particularly social, projects in Germany are financed exclusively by the EU.

The German budget cannot plug this gap if EU funding is not continued. Once such structures have been dismantled, they will not easily be rebuilt. That is why we are calling for a minimum quota of 20% for social projects.

If this cannot be agreed at European level, our goal is at least to enshrine it for the German NRPP in a federal-state ordinance.

Fortunately, Germany has already reached agreement that tried-and-tested federal allocation structures will be maintained and that the EU's preference for centralised national allocation will not be followed.

Future industries: Using funding to narrow the global gap

The biggest innovation lies in the second pillar with the Competitiveness Fund.

Its purpose is to support innovation and investment in the single market. It should not be overlooked that the EU, and Germany in particular, remain key industrial locations.

In future industries and artificial intelligence, however, we are currently lagging far behind on the global stage.

Targeted funding now gives us the chance to reduce this deficit. If we want to strengthen our European resilience and drive forward the transformation of the economy, we must now be bold and take a major step forward.

New MFF: Sanctions mechanisms as an additional tool

Europe's responsibility in the world is reflected in the third pillar. This will place a stronger focus on the common foreign and security policy, but also on European development cooperation.

Both within Europe and in our relations with international partners, the new MFF offers the chance to set the course.

Not only through innovation guidelines, but also through sanctions mechanisms when countries turn away from the rule of law.

A clearer distinction from extremist and terrorist organisations when allocating development aid would also be welcome as a supplementary guideline.

The best-known EU programmes are Horizon and Erasmus, in which non-member states can also participate. Joint research and education programmes are a European strength, because they build networks and encourage people to look beyond their own horizons.

By placing them in the second pillar, there is an opportunity to give them even greater weight and to promote their links with the economy in a meaningful way.

This enables Europe's innovative power to unfold across the board through targeted cooperation between young people, new ideas and investment.

That is precisely what we must keep bringing to the fore in times of ever-growing challenges and economic as well as geopolitical pressure: this is about Europe's future.

A Europe in peace and prosperity, offering diverse opportunities and bringing its citizens ever closer together. An EU that also continually reaches out to its neighbours.

If no MFF is adopted by 2028, funding will expire

It is therefore wrong to regard the EU budget from a national perspective as a necessary evil.

Recently, however, Germany has joined the "Frugals" (Editor's note in German: "die Sparsamen" meaning Germany, Austria, the Netherlands, Sweden, Denmark and Finland) in calling for cuts of around €200 billion.

In its proposal, the Irish Council presidency likewise spoke of €141 billion. The single market and European cooperation are our greatest assets. Every euro paid to Brussels returns many times over.

Despite all the tensions surrounding the German budget, paying in less would restrict Germany's options.

Chancellor Merz has already threatened a European shutdown (in German: "Haushaltsperre", that is, a budget freeze) if the member states cannot agree on radical cuts. Unlike a national budget that has not been adopted, the MFF does not move into provisional budget management.

If no new MFF is agreed by 2028, funding simply comes to an end.

Cutting agricultural subsidies is not 'sacrosanct'

If cuts do ultimately prove unavoidable, it is essential that they are applied horizontally, contrary to the proposal from the Irish Council presidency.

That means reductions are made evenly across all areas. Agricultural subsidies under the Common Agricultural Policy (CAP) are still often treated as sacrosanct, even though that is no longer appropriate.

Twenty-first century funding programmes must adapt to the realities of the time. The CAP cannot be exempt. Modern agricultural support must be targeted, not sprayed everywhere like water from a watering can, simply to avoid slurry being dumped in front of the European Parliament.

Here too a perspective could be created, namely that of sustainable, climate-friendly farming which guarantees Europe's food security. This would again create opportunities for research, innovation and cooperation.

There is no question that rural areas will continue to receive support through the LEADER programme (Editor's note: EU funding instrument for the autonomous and sustainable development of rural areas), but this too must no longer be distributed blindly on the basis of land area; it has to be awarded with a focus on innovation.

Only in this way can we address the real problems on the ground and increase the attractiveness of rural regions.

A digital tax would send a signal to the USA

Another challenge is repaying the Next Generation EU Covid support instrument and the interest arising from the borrowing, which comes on top of the new MFF.

To repay it, the EU wanted to introduce new own resources. That has still not happened.

Yet only own resources can act as an effective lever for stable financing, because there can be no fresh borrowing.

On NextGenerationEU (Editor's note: NGEU is the EU's temporary recovery instrument to tackle the economic and social impact of the COVID-19 pandemic) Germany's Federal Constitutional Court has taken a clear position, stating that it is a one-off.

New own resources would also offer a dual opportunity, as they could serve as instruments of political steering.

For example, a digital tax would send a clear signal to the USA. Without agreement among EU finance ministers on new own resources, or a willingness on the part of the member states to channel more money from their national budgets to Brussels, European funds will remain scarce.