On July 16, 2025, the EU Commission submitted a proposal for the Multiannual Financial Framework (MFF) 2028–2034. Since then, this proposal has been the subject of lively debates and criticism. Issues such as the MFF ceiling and the use of funds are frequently raised. While funding for competitiveness, defence, research and innovation is set to increase, social objectives are likely to take a back seat. The EU budget's financing is receiving less focus.

The financing of the EU budget to date

The traditionally largest source of revenue for the EU budget is made up by national contributions, which account for 70 per cent of total revenue. These are own resources based on the gross national income (GNI) of the Member States. A uniform call rate is applied to each Member State’s gross national income according to the financing needs of the EU budget; however, this rate is limited with reference to the EU GNI. In the wake of trade tensions with the US, another important source of funding has come into focus, namely customs duties  on imports from outside the EU. The EU budget also receives revenue from value-added tax.

New own resources have been under discussion for a long time

Plans to introduce new sources of revenue to finance the EU budget have been around for some time. There are good reasons for this, such as reducing the share of national contributions and thus the burden on Member States. Another argument is that own resources should also be directly linked to the EU's responsibilities, objectives and priorities. In summary, it is essential to prioritise proportionality and fairness when developing own resources. The aim is to have a stabilising effect on the EU budget while taking into account fluctuations in the economic cycles of the Member States. The debate on own resources has resurfaced following the joint debt issuance to fund NextGenerationEU  under the MFF 2021–2027. In fact, non-recycled plastic packaging waste was used as a new revenue source. However, suggestions were also made to use own resources from the EU Emissions Trading System (EU ETS), the carbon border adjustment mechanism (CBAM) and temporary statistical own resources based on corporate profits. In reality though, the legally binding implementation of these proposals has yet to materialise.

Significant challenges drive substantial financing needs

The high planned expenditure under the European security and defence policy, to safeguard competitiveness, and necessary investments in the green and digital transition will generate massive financing requirements under the future MFF. Simultaneously, NextGenerationEU will expire in 2026, with €25 billion in debt repayments due. If there are to be no significant cuts in other areas and the national contribution should not continue to increase, the introduction of new own resources is unavoidable. In its opinion on the multiannual financial framework, the European Economic and Social Committee (EESC) also concludes that ‘without the introduction of new EU-level revenue sources, including instruments based on common debt issuance, the Union will lack the financial means to deliver on its strategic objectives.’

The Commission's proposals

The EU Commission seems to share this view. It proposes that a total of €65.6 billion per year be generated through new own resources and simultaneous adjustments to existing own resources within the framework of the upcoming MFF. In this context, the EU Commission  once more references own resources derived from the EU Emissions Trading System (ETS), anticipating average annual revenues of €9,6 billion. Targeted adjustments to revenues from the Carbon Border Adjustment Mechanism (CBAM) are also to be made, which could generate average revenues of €1.4 billion per year. Additional revenue is to be generated on the basis of non-collected electrical and electronic equipment waste by applying a uniform rate to the weight of non-collected e-waste, which is expected to generate an average of €15 billion in revenue per year. Additional own resources are scheduled to be generated from excise duties on tobacco products, with projected average annual revenues of €11,2 billion. This will be achieved by applying a fixed rate to the minimum excise duty established by Member States and levied on tobacco goods. Furthermore, companies with at least €100 million in annual net turnover operating or trading in the EU will be subject to a yearly flat-rate corporate contribution (CORE). This is expected to generate average revenues of €6,8 billion per year.

Debates and further proposals

The EESC addressed these proposals in a separate opinion. It emphasises that the EU's common priorities in the EU budget should also be financed fairly and in a spirit of solidarity. Similarly, a clear roadmap should contribute to reducing the EU budget's dependence on GNI contributions. According to the EESC, further objectives include fair burden sharing and sufficient flexibility to respond to crises. Particularly controversial was the assessment of the CORE corporate contribution. However, the earlier firm rejection was softened to reach a compromise. The European Trade Union Confederation (ETUC) supports CORE and insists that all parts of society (including businesses and the wealthiest individuals) must bear a fair share of the financial burden. However, if no consensus can be reached on CORE, ETUC advocates credible alternatives such as a digital services tax or a windfall profits tax.

On 28 January, the European Parliament also held a debate on new own resources. Reference was made to further options, such as a framework for corporate taxation in Europe  (BEFIT). In 2023, the Parliament proposed a financial transaction tax and a digital services tax, which AK generally welcomed. Other proposals relate to a tax on cryptocurrencies and so-called statistical own resources based on the gender pay gap or linked to organic or food waste. Possible new own resources based on aviation and shipping or on the taxation of (high) net wealth were also mentioned.

Further reading:

EU Commission: The next generation of EU own resources
EU Commission: EU budget 2028–2034 explained
EU Parliament: Own Resources for the future: critical review & opportunities
ETUC: A Multiannual Financial Framework 2028-2034 which protects workers and promotes investment, social justice and just transition
EESC: Own resources – 2025 proposal
AKEUROPA: New EU budget from 2028. A difficult agreement process lies ahead
AKEUROPA: The future of Cohesion Policy: Will the next EU-Budget mean less Funding for Social matters?