Event at the PresseClub München 19. October 2026

MFF 2028–2034: Who pays, who benefits, who oversees it
– Does the EU need more or less financial autonomy?

 

EU Financial Framework 2028–2034

The European Commission is proposing a Multiannual Financial Framework (MFF) for 2028–2034 of around 2 trillion euros – almost double the amount for the current period 2021–2027. Added to this are new own resources estimated at 58.5 billion euros annually and additional EU-backed lending facilities.

In its justification for the budget increase, the European Commission cites growing demands in the areas of agriculture, cohesion, security and defence, research, innovation, competitiveness, migration, international responsibilities and, above all, the financing of existing debt from the NextGeneration EU recovery fund – intended to tackle the consequences of the COVID-19 pandemic – amounting to around 750 to 806 billion euros.

There is no doubt that these are all important tasks and challenges. However, more responsibilities do not automatically justify an ever-increasing budget. Any comparison with the previous financial framework should be fair and take into account inflation, the timeframe and special instruments. It does not alter the obligation to provide specific justification for every additional item of expenditure.

Our position is this: Europe does not need more money across the board, but rather a demonstrably better use of the money it has. Priority must be given to projects with genuine cross-border added value. We call for a return to the EU’s core values. These include, in particular, the principle of subsidiarity: tasks that Member States, federal states, regions or local authorities can carry out more effectively should not be centralised. Existing programmes, administrative costs and subsidies must be assessed for their impact, overlaps and windfall effects. New tasks require clear priorities and, where necessary, the elimination of less effective expenditure. Furthermore, a comprehensive and transparent regulatory impact assessment must always be carried out.

Any comparison with the previous budget must take into account price trends, the budget’s duration and special funding. We at the Taxpayers Association call for an honest review of expenditure before any budget expansion.

The 2028–2034 European budget ultimately represents a fundamental decision on the direction to take: should Europe first learn to manage its existing funds more effectively – or should it secure new sources of revenue and take on additional debt? Who pays, who benefits, who monitors? As the Taxpayers Association of Europe (TAE), we are deliberately raising these questions at the outset.

Council summit on 15–16 October: no agreement, unresolved funding issues

On 15 and 16 October 2026, the European Council failed to reach an agreement on the Multiannual Financial Framework (MFF). This is the key outcome – or rather, the lack of an outcome – of this summit. Two camps are pitted against one another: Member States pushing for austerity and the so-called ‘Friends of Cohesion’, who want a larger EU budget and more shared debt. Germany, Denmark, the Netherlands, Austria, Finland and Sweden had called for cuts amounting to several hundred billion euros. The Irish Presidency’s so-called ‘negotiating box’ now provided for a reduction of around 159 billion euros; 17 Member States criticised these cuts.

The Council intends to continue the discussions and is urging an agreement by the end of 2026 in order to prepare for the deployment of funds from January 2028. However, there is as yet no political agreement on the scope, priorities and financing.

Despite the entrenched positions so far, the 2028–2034 budget is due to be finalised by early 2027, meaning there is massive, self-imposed time pressure. For us, however, this pressure to act must not be an invitation to rush into a compromise at any cost. After all, the financial framework commits taxpayers for seven years. This is precisely why we first need clarity on responsibilities, savings, impact and liability risks. A negotiated compromise does not, by any means, equate to a sustainable budget.

New EU own resources are not free funding

The Commission is proposing new own resources – in other words, additional burdens – of around 58.5 billion euros per year. Under discussion are a share from the emissions trading scheme, revenue from the Carbon Border Adjustment Mechanism (CBAM), a mechanism for uncollected waste electrical and electronic equipment, tobacco tax-based own resources (TEDOR) and a corporate levy known as CORE. In the European Parliament, discussions are also taking place on, amongst other things, digital services levies, levies on online gambling, an extension of the CBAM, and taxes on crypto capital gains.

Unfortunately, however, the crucial point in the debate is often overlooked: own resources do not materialise out of thin air. They place a burden on businesses, consumers or national budgets. They can reduce national tax revenues, drive up prices and create new bureaucracy. Furthermore, permanent EU revenue mechanisms shift fiscal policy competence to Brussels. The own resources decision requires unanimity in the Council and the approval of the Member States in accordance with their constitutional provisions. This is precisely why national budgetary sovereignty must be protected – rather than being gradually eroded further.

Take CORE as an example: turnover is not profit

The planned EU corporate tax, ‘Corporate Resource for Europe’ (CORE), is intended to be a flat-rate corporate levy based on annual net turnover of 100 million euros or more – and thus explicitly not on profit. Linking a direct tax to turnover rather than to profit is, from an economic policy perspective, entirely the wrong approach. This is because a company may well generate high turnover, yet at the same time make only small profits or even incur losses. A turnover-based additional levy would therefore be payable even where economic viability is lacking, placing an additional burden on the companies concerned. A further effect is that, as a deductible expense, this reduces taxable profit. CORE thus reduces the national tax bases. Anyone wishing to promote investment and jobs should not confuse turnover with profit.

Take the tobacco tax as an example: policy objectives and budgetary planning come into conflict

EU revenue based on tobacco duty is also not a reliable basis for the EU budget. A higher tobacco duty is intended to reduce consumption – yet at the same time, the aim is to firmly budget for rising revenue. Higher tobacco duty rates provoke evasive behaviour in the form of cross-border purchases and illicit trade. Recent studies by KPMG and Eurobarometer clearly highlight the risk of massive tax shortfalls due to excessively high tobacco taxes. A case in point is France, where the massive increase in tobacco duty has led to 53.6 per cent of cigarettes consumed now being smoked without paying tax; 41.4 percentage points of this figure are accounted for by smuggling and counterfeits, with the remainder comprising cheaper purchases from abroad. Experience from the Netherlands also serves as a warning that compensatory behaviour must be taken seriously. It follows that tax increases guarantee neither proportional additional revenue nor the predicted shift in consumption patterns. Before introducing new own resources, a transparent, independent regulatory impact assessment with realistic scenarios is required.

NextGenerationEU: The old bill is still outstanding

Repayment of the joint debt arising from NextGenerationEU is due to begin in 2028, and this will be accompanied by substantial interest charges. An annual burden of more than 25 billion euros for interest and repayment is to be expected. Ironically, it is precisely these legacy liabilities that are now being cited as an argument for further own resources, whilst at the same time additional EU-backed lending facilities of up to around 400 billion euros are on the table. We strongly criticise this contradiction: debt incurred as an exceptional – and promised to be one-off – response to the crisis must not become a permanent, debt-based European financing architecture. We reject further joint debt, debt authorisations held in reserve and the mutualisation of liability risks. This is a matter of financial sustainability.

Control, transparency and competition instead of automatic spending

The European Court of Auditors has reported an error rate of 3.8 per cent in the expenditure audited for the 2025 financial year. Such an error rate does not automatically imply fraud, but it does highlight the importance of effective controls and the proper use of funds. This applies equally to the use of funds from NextGeneration EU. If more than ten billion euros from this fund then end up in the Spanish pension system and are ‘parked’ there, this has nothing to do with the proper use of funds in accordance with the rules. This case must be fully and transparently investigated.

Publicly accessible lists of recipients, clear earmarking of funds, verifiable performance criteria, independent audits and the recovery of funds in cases of misuse will provide a solution for the future.

The Council summit did, at least, set out important common objectives in one area: competitiveness is to be strengthened, unnecessary regulation reduced, and authorisation and planning procedures accelerated. High energy prices and international distortions of competition were also on the agenda. We support this in principle. However, competitiveness is not achieved through a constant stream of new programmes and levies, but through reliable legislation – in other words, better regulation – affordable energy, a functioning single market, investment incentives and lower bureaucratic costs.

The alternative: transparent contributions, clear accountability

For this reason, too, we favour financing the EU budget primarily through contributions linked to the Member States’ gross national income (GNI). This ensures that the financial burden remains transparent and that national parliaments retain responsibility. However tempting it may be for highly indebted countries such as France to shift financial burdens to the EU – through a larger EU budget, more debt, more redistribution and, as far as possible, unchanged national contributions – this does not solve national problems and, in the long term, even jeopardises the cohesion and continued existence of the EU.

Higher taxes, more debt and more bureaucracy are detrimental to growth.

The benchmark and objective must always be to create sustainable growth and, with it, prosperity for all. Growth boosts economic output and, in the long term, also strengthens the Union’s financial base. Combating VAT fraud, removing barriers in the single market and improving the framework conditions for research and development, investment and business are more effective than constantly introducing new special levies.

We want a Europe capable of taking action, but not a fiscal union in which additional revenue and debt are the answer to every new problem. Solidarity requires responsibility; European added value requires measurable results; fiscal policy decisions require democratic scrutiny. That is why the key question is more relevant today than ever: who pays, who benefits – and who oversees it?

Our demands as the European Taxpayers Association

• Significantly overhaul the MFF 2028–2034: prioritise expenditure, eliminate duplicate structures and demonstrate European added value.
• No new EU taxes or additional own resources such as CORE and TEDOR; no creeping erosion of national tax sovereignty.
• No further shared EU debt, no blanket authorisation for debt, and no mutualisation of liability risks.
• Before any new levy or legislation is introduced, a comprehensive, independent and transparent regulatory impact assessment must be carried out, including an examination of the effects on competition, bureaucracy, relocation and circumvention.
• Funding predominantly through transparent GNI-based contributions under democratic budgetary control.
• Ensure transparency in all EU programmes and funding recipients, measure clear objectives and consistently reclaim misused funds.
• Strengthen competitiveness: reduce bureaucracy, speed up procedures, deepen the single market and combat VAT fraud.
• Uphold subsidiarity and ensure that federal states, regions and local authorities are appropriately involved in planning and implementation.