EU Cohesion Policy: New Multiannual Financial Framework Debate Opens with High Stakes

As EU leaders prepare for the 2028-2034 MFF negotiations, the future of cohesion funds for Central and Eastern European member states is at the centre of divisive debates.

The EU's Budget Battle: Cohesion Funds, Defence, and the Fight for the Next MFF

Preparations for negotiations over the next EU Multiannual Financial Framework — the seven-year budget that will govern EU spending from 2028 to 2034 — have moved from background technical work to active political debate, with the fundamental tensions of European fiscal politics re-emerging in sharper form given the new demands the EU faces. The competing pressures are familiar in structure but unprecedented in scale: existing commitments to cohesion funds for less developed member states, agricultural support, and climate investment now compete with demands for substantially increased defence spending, strategic autonomy investments, and the financing of EU enlargement to Ukraine, Moldova, and the Western Balkans.

Central and Eastern European member states — the primary recipients of EU cohesion funding, which redistributes resources from wealthier to less developed regions — face an uncomfortable dilemma. Many of them are simultaneously the strongest advocates for increased EU defence spending (which they need to sustain their own military build-up) and the most dependent on cohesion funds that would need to shrink if defence spending expands without a commensurate budget increase. Poland, which receives both significant cohesion funding and faces enormous defence investment requirements, is the most prominent example of a country navigating this contradiction.

The net contributor countries — Germany, the Netherlands, Austria, the Nordic states — are simultaneously being asked to accept higher total EU budget contributions and to accept that more of those contributions go to defence rather than cohesion. The political sustainability of this in domestic terms varies significantly: Germany's new government has made defence investment a political priority, creating somewhat more flexibility on EU defence spending, while Dutch and Swedish domestic politics remain sensitive to EU budget increases perceived as funding transfers rather than genuine investments in common goods.