EU budget deal still a long way off: what does this mean for the major EU funding programmes?
Expert insight by Hager Bassyouni • 4 min read
Last week, at the EU summit, heads of government discussed the European Union’s new long-term budget, the Multiannual Financial Framework (MFF), for the period 2028–2034. An agreement still appears to be a long way off, with member states sharply divided over the size of the budget. This may sound like a matter for Brussels insiders, but almost all of the major EU funding programmes used by organisations across Europe are financed from this budget. So what exactly is going on, and what would a delayed agreement mean for organisations that rely on EU funding?
What happened at the EU summit
The European Commission proposed a new long-term budget of almost €2 trillion, equivalent to an average of 1.26% of the EU’s gross national income (GNI) over the 2028–2034 period. Negotiations often work with a figure of €1.76 trillion (in 2018 prices) as the core of that proposal. The Irish Presidency then tabled a counter-proposal cutting €140 billion from that amount, bringing the total to around €1.62 trillion. That is 8% less than the Commission’s proposal, but still roughly 30% more than the current MFF budget of €1.2 trillion. For a considerable number of member states, the so-called “frugal” countries (a group of net contributors), even this reduced figure is too high.
Sweden and Germany, both major net contributors to the EU budget, are the most strongly opposed. Swedish Prime Minister Kristersson described the proposal as too large and too expensive, noting that it would increase Sweden’s net contribution by almost 60%. German Chancellor Merz stated that no member state could bear contributions at this level. On the other side stands a bloc of seventeen countries, the “Friends of Cohesion”, which are determined to protect agricultural and cohesion policy: together, these account for around two-thirds of the entire budget. The European Commission has warned that the proposed cuts would undermine the EU’s ability to act collectively.
The aim was to reach an agreement by the end of 2026, but that will not happen. European Council President António Costa is taking over the negotiations and will chair follow-up talks at the end of November and a year-end summit in mid-December. Should that also fail, there is still time until early 2027, although the budget must ultimately be approved by all 27 member states and the European Parliament for funding to actually start in January 2028. Elections in France, Italy, Poland and Spain during this period could further complicate negotiations, as new governments may reopen any compromise already reached.
Which major EU funding programmes depend on this
The long-term budget is the source from which almost all major EU funding programmes are allocated their budgets. A delay or a smaller budget therefore directly affects the programmes that organisations across the EU rely on most:
| Programme | Focus | Typical applicants |
| Horizon Europe (and its successor from 2028) | Research and innovation | All types of public and private organisations |
| ERDF | Regional development | Regional partnerships (all organisations) |
| Just Transition Fund | Supporting regions and sectors through the energy transition | Industry transitioning to climate neutrality |
| InvestEU | Guarantees and loans to support investment | Large-scale investment and infrastructure projects |
| LIFE Programme | Environment, nature restoration and climate action | All types of public and private organisations |
| Digital Europe Programme | Digital transformation, AI, cybersecurity | All types of public and private organisations |
| Connecting Europe Facility (CEF) | Cross-border infrastructure: transport, energy and digital networks | All types of public and private organisations |
What does this mean for applicants
For current applications, nothing changes for the time being: the current programming period (2021–2027) continues as normal, and existing schemes, budgets and deadlines remain as planned. The risk lies in the period that follows. Without a timely agreement on the 2028–2034 budget, the successors to Horizon Europe and the other programmes may be delayed, with a transitional period in which budgets and conditions remain uncertain: a scenario that also arose around the previous budget round in 2020.
This is particularly relevant for organisations that are already planning multi-year R&D projects or investments that partly depend on EU co-financing from 2028 onwards. It is worth factoring a possible delay or revised conditions for the successor programmes into your planning. It is also worth following how the debate on the allocation of the budget unfolds: a shift of resources towards defence and support for Ukraine could, over time, reduce the scope for innovation and sustainability programmes.
Conclusion: stay alert, but don’t be alarmed
For now, continue to make use of the current EU funding schemes as planned, as they will run unchanged until the end of 2027. At the same time, it is sensible to keep following the negotiations, particularly the follow-up summit at the end of November and the year-end summit in December, and to build flexibility into multi-year plans that rely on EU co-financing from 2028 onwards.
Do you have questions about the EU budget? Or would you like to discuss your projects and EU funding with our grant specialists? Contact us at info@hezelburcht.com, call 088 495 20 00 or complete our contact form to arrange an introduction:
About the author:
Hager Bassyouni, MSc, has been with Hezelburcht since 2018, where she helps organisations make the most of EU funding by connecting them with the right partners, building strong multinational consortia and representing their interests in Brussels. Her years in policy and implementation at EU and UN institutions and in the public and private sectors give clients an insider’s view of how EU programmes are shaped.
