European Parliament Members Criticize EU Budget as 'Unbeneficial to Portugal'
The European Union (EU) has unveiled a proposed budget for the period 2028-2034, marking a significant increase compared to the current 2021-2027 budget. The new budget, totalling approximately €2 trillion (around $2.3 trillion), represents 1.26% of the EU's gross national income (GNI) over this period.
### Key Features of the Proposed Budget
The proposed budget is set to boost funding for various sectors, with a focus on cohesion and social convergence policies, competitiveness and innovation, global Europe (foreign policy), and administration, justice, and climate objectives.
- **Cohesion and Social Convergence Policies:** Around €1.04 trillion is allocated to support regional development and social funding, aiming to reduce disparities among EU regions. - **Competitiveness and Innovation:** Approximately €573 billion is earmarked, notably for programmes such as Horizon Europe, InvestEU, and digital transition initiatives. - **Global Europe (Foreign Policy):** Around €209 billion is allocated for foreign policy instruments, doubling funding for Ukraine aid and defense support. - **Administration, Justice, and Climate Objectives:** Approximately €118 billion is allocated for these areas.
### Ukraine Facility and Defense and Security
A dedicated Ukraine Facility is included in the proposed budget, with funding roughly doubled to about €108 billion in grants and loans over seven years to support Ukraine amid ongoing conflicts. Defense-related investment is set to increase fivefold compared to the previous budget, reflecting growing EU security priorities amid geopolitical pressures.
### National Contributions and Fiscal Considerations
Member states contribute to the budget mostly based on their GNI. The proposal expects unanimous approval from all 27 EU member states, but negotiations may be protracted, with net contributors generally reluctant to raise their contributions. About €168 billion is set aside for repayment of debt incurred from previous emergency borrowing efforts, including Next Generation EU.
### New Taxes and Revenue Sources
The EU is exploring new revenue streams to fund the ambitious budget while responding to resistance from some member states. Proposals include potential new taxes on digital services and tariffs on small packages entering the EU. Joint borrowing is favoured by countries like France and Italy but opposed by more fiscally conservative states. Emergency financial mechanisms allowing rapid borrowing or grants during crises are under discussion but have seen fluctuating support during negotiations.
### Political Context
The proposal is seen as the largest EU budget in history, reflecting increased priorities on support for Ukraine, defense, climate action, and innovation. However, consensus remains a challenge, and the budget may be altered significantly before its final adoption, expected only after intensive negotiations in 2027.
### Impact on Portugal
Portuguese Member of the European Parliament, Carla Tavares, expressed concerns that the proposal does not serve Portugal, particularly given the weight of agricultural funds and cohesion in the country, with the latter responsible for 90% of public investment. The budget includes additional national contributions and three new taxes.
The European Parliament will exercise its competencies in terms of budgetary authority, although it is open to negotiation on the proposed budget.
- The proposed EU budget for 2028-2034, amounting to around €2 trillion, includes a focus on policy-and-legislation in various sectors, such as taxation, as the EU explores new revenue streams to fund this ambitious plan.
- The politics surrounding the approval of this budget are complex, with Member states expected to contribute mostly based on their GNI, and the EU considering new taxation policies like digital services taxes and tariffs on small packages, which have garnered resistance from some member states.
