The European Commission has unveiled huge and controversial proposals for a new total budget of €2 trillion to cover the period form 2028 to 2034.
The President of the European Commission, Ursula von der Leyen, called it a larger, smarter and sharper budget for a more unpredictable era.
Member states, including Ireland, will together contribute the same as they do now, she promised. To find more money, the European Commission proposes allowing the EU itself to raise up to €400 billion.
That money will be raised through a carbon tax on imports from outisde the EU and on a new EU tax on e-waste.
There will also be an EU duty on tobacco and the largest companies in Europe with a turnover of more than €100 million will be forced to make an “annual lump sum” contribution to the European Union.
Agriculture and regional funding – so-called cohesion funding – remain “at the heart” of EU spending, von der Leyen insisted.
But for the first time farming and fisheries will be merged together with other funds. There will no longer be a stand alone European Common Agricultural Policy nor a Common Fisheries Policy.
But €300 billion would be ring-fenced for farmer income support, von der Leyen promised.
Another €200 billion will be dedicated to fisheries.
Farmers and fishermen will now have to compete for regional development and other sustainability funds.
Altogether, that new pot, with a total of €865 billion will now be called the National and Regional Partnership Plan.
Other types of funding such as the money for science and research has been merged into a separate fund.
Horizon Europe, which currently has a budget of €95 billion will be doubled and now part of what the EU is calling the European Competitiveness Fund.
President von der Leyen said this pot of money would help Europe invest for the future especially in new technologies such as AI.
In education, Erasmus will remain largely a stand alone fund as it is now, though with some new elements and a 50 percent increase to the budget, von der Leyen said.
There will be a target for 35 percent of all EU funds to be spent on projects which benefit the climate and biodiversity.
Ursula von der Leyen said that could amount to €700 billion.
Seperate to the budget will be a new emergency mechanism with up to €400 billion. This will not be available for ordinary spending, but to use in case there is another emergency such as the covid crisis or war in Ukraine.
The crisis instrument will require EU governments including Ireland to agree with unanimity.
“It gives us a shortcut to enable the funding needed for this [unknown and unexpected] crisis” because crises are part of the new normal, she added.
The budget proposals have already come in for criticism from the European Parliament.
President von der Leyen’s own political group, the EPP, said it was “disappointed” by the proposals.
“Key red lines set by the European Parliament have been ignored. In its current form, we cannot give the long-term budget a green light,” said EPP Vice President, Siegfried Mureșan.
António Costa, the President of the European Council which represents the 27 governments of the EU sounded more upbeat.
“A budget is not just about numbers— it is the ultimate political decision, a choice about our future, and we need to approach this debate with an open mind and spirit of collective responsibility”, he wrote on social media.