EU Budget Negotiations: What The Next MFF Means

EU budget negotiations for 2028-2034 are beginning in earnest this week as EU ministers for European affairs meet in Brussels to start preparations for the June European Council. The stakes are enormous. The MFF determines how much every EU member state pays into the European budget, what priorities receive funding, and how the bloc responds to the defining challenges of the coming decade including defence, climate, enlargement, and economic competitiveness.

For the Netherlands, one of the EU’s largest net contributors, the MFF negotiations will directly affect public finances, regional development funding, agricultural subsidies, and the country’s relationship with Brussels for years to come.

What Is the Multiannual Financial Framework

The Multiannual Financial Framework is the EU’s long-term budget, setting spending limits and priorities across all policy areas for a period of seven years. The current MFF covers 2021 to 2027 and totals approximately €1.2 trillion in commitments. The next MFF will cover 2028 to 2034.

Unlike national budgets which are set annually, the MFF provides long-term certainty for EU institutions, member states, and the beneficiaries of EU spending including farmers, regions, research institutions, and infrastructure projects. Every euro the EU spends, from Erasmus student exchanges to cohesion funds for poorer regions to agricultural subsidies, flows from the MFF.

The European Commission is expected to present its formal proposal for the 2028-2034 MFF in the second half of 2026. Negotiations between the Commission, the European Parliament, and the EU Council will then follow, typically taking one to two years to conclude.

Why This MFF Is Different From Any Before

The 2028-2034 MFF faces a fundamentally different set of demands than any previous budget cycle. Several major factors are reshaping what Europe needs to spend money on.

Defence. The NATO commitment to 5 percent of GDP by 2035 requires massive investment in European defence capability. The ReArm Europe plan, which mobilised €800 billion in defence spending across the continent, already pushed the limits of EU fiscal rules. The next MFF will need to incorporate a significant European defence spending component.

Enlargement. If Montenegro joins the EU by 2028 and other Western Balkan countries and potentially Ukraine follow during the MFF period, the budget will need to absorb new member states with very different economic profiles from the current 27. Ukraine in particular, with its large agricultural sector and need for reconstruction funding, would fundamentally reshape EU spending patterns.

Climate and energy transition. The EU’s commitment to climate neutrality by 2050 and 55 percent emissions reduction by 2030 requires sustained investment in clean energy, grid infrastructure, and industrial decarbonisation. The current MFF allocated around 30 percent of spending to climate-related measures. The next is likely to go further.

Competitiveness. The Draghi Report, commissioned by the European Commission and published in 2024, called for €800 billion in additional annual European investment to close the competitiveness gap with the United States and China. While not all of this would flow through the EU budget, the report has shaped the agenda for what the next MFF needs to prioritise.

Repaying NextGenerationEU. The EU’s post-pandemic recovery fund borrowed approximately €800 billion on capital markets. Repayment of this debt begins in 2028 and runs to 2058. The MFF will need to incorporate these repayment costs, which will either require new EU own resources or higher member state contributions.

The Netherlands and the EU Budget

The Netherlands is a net contributor to the EU budget, meaning it pays in more than it receives back in EU spending. This has been a source of political tension in Dutch politics for decades, with various governments negotiating rebates and corrections to reduce the Dutch net contribution.

The Dutch net contribution has grown in recent years as the EU budget expanded. According to Rijksoverheid, the Netherlands contributes around €10 billion annually to the EU budget while receiving back approximately €3 billion in agricultural subsidies, cohesion funds, and other spending, a net contribution of around €7 billion per year.

For the 2028-2034 MFF, the Netherlands faces a difficult position. The demands on the Dutch economy are growing, the repayment of NextGenerationEU debt adds new costs, enlargement would shift cohesion funds away from existing member states, and the defence agenda requires new spending. All of this points to higher contributions for net payers like the Netherlands.

The Jetten minority government has indicated it will push for strict conditionality on EU spending, particularly on rule of law compliance by recipient member states, and will resist automatic increases in the Dutch contribution without corresponding reforms to EU spending priorities.

The Key Debates

How big should the budget be? The European Commission and Parliament tend to push for a larger budget. Net contributor member states including the Netherlands, Germany, Austria, and the Nordic countries push for restraint. The current MFF at €1.2 trillion represented about 1.1 percent of EU GNI. Whether the next MFF grows significantly above this level is the central political question.

New own resources. To fund NextGenerationEU repayments and new spending priorities without raising member state contributions, the EU has been developing new own resources, essentially EU-level taxes. These include a carbon border adjustment mechanism levy, a share of corporate tax revenues, and potentially a financial transactions tax. The Netherlands has generally supported new own resources as an alternative to higher GNI contributions, but the details matter enormously.

Cohesion funds and poorer regions. The EU’s structural and cohesion funds, which channel spending to less developed regions, account for around a third of the EU budget. As Eastern European economies have grown, they are becoming less eligible for cohesion funding. EU enlargement would bring in new, poorer member states that would qualify for large cohesion transfers. Existing recipients like Poland and Hungary are lobbying hard to protect their allocations.

Agricultural subsidies. The Common Agricultural Policy remains the EU’s single largest spending programme at around a third of the total budget. Dutch farmers, already under pressure from the nitrogen crisis, have a significant interest in how agricultural subsidies are structured. Reforms to make CAP payments more conditional on environmental outcomes have been proposed but face fierce resistance from farming lobbies across Europe.

The Hungary problem. Hungary’s repeated use of its veto to block EU decisions, including on Ukraine support and enlargement, has accelerated discussions about changing EU decision-making rules. Several proposals are on the table to reduce unanimity requirements. Whatever is agreed on governance reform will shape how the MFF itself is negotiated and how disputes are resolved.

Timeline

The negotiations will unfold over the next two to three years:

2026: The European Commission publishes its formal MFF proposal, expected in the second half of the year. Initial political debates begin among member states.

2027: Intensive negotiations between Commission, Council, and Parliament. The current MFF expires at the end of 2027, creating pressure to conclude by then.

2028: New MFF enters into force, ideally from 1 January 2028. Delays are common in MFF negotiations. The current MFF was not agreed until December 2020, seven months into the period it was supposed to cover.

What It Means for Expats

For expats in the Netherlands, the MFF negotiations may seem abstract but they have real practical consequences.

EU research funding through Horizon Europe affects universities and research institutions that employ thousands of international researchers. If the Netherlands’ share of research funding changes it affects job opportunities and institutional capacity.

Agricultural subsidies affect food prices across the EU. Changes to the CAP affect Dutch farmers, which in turn affects the nitrogen crisis and housing construction timelines that directly affect expats trying to find homes.

Cohesion funds affect infrastructure investment in the countries many expats come from. Reduced cohesion funding for Eastern European countries could slow economic convergence and affect migration patterns to the Netherlands.

And ultimately, a larger EU budget means higher Dutch contributions, which affects public spending choices and potentially impacts the cost of living in the Netherlands.

Summary

The EU budget 2028-2034 negotiations beginning this week will shape European spending, priorities, and governance for the next seven years. Defence, enlargement, climate, competitiveness, and NextGenerationEU debt repayment are all competing for space in a budget that faces pressure to grow while net contributors like the Netherlands push for restraint. The negotiations will be long, complex, and politically charged. For the Netherlands, the outcome will directly affect public finances, agricultural policy, research funding, and the country’s relationship with Brussels for the rest of the decade.