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European Commission Proposes €2 Trillion Budget with Strong Focus on Territorial Development

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On 16 July 2025, the European Commission presented its proposal for the next Multiannual Financial Framework (MFF) for the period 2028–2034. The proposal outlines a budget of nearly €2 trillion, equivalent to 1.26% of the EU’s Gross National Income (GNI). A key innovation in this budget is the introduction of National and Regional Partnership Plans (NRPPs), giving Member States a more prominent role in shaping and implementing EU investment priorities.

A Unified Approach to EU Funds

The NRPPs aim to bring together funding from key EU policies, including the Common Agricultural Policy (CAP), Cohesion Policy, and social and regional development instruments. Around €865 billion will be allocated through these Partnership Plans, allowing Member States to programme EU funds in a more integrated and flexible way.

This new approach marks a significant shift from the previous structure by streamlining more than 50 funding programmes into a single, coherent planning framework at national and regional levels.

Territorial Development at the Core

The European Commission has placed territorial development at the heart of its proposal. The Partnership Plans must address the needs of all types of regions—urban, rural, and intermediate—through a balanced and place-based strategy. Key priorities include:

  • Supporting the integrated development of urban and rural areas to enhance territorial attractiveness and uphold the right to stay in one’s place of origin

  • Improving living standards and quality of life in rural areas by expanding access to services, infrastructure, and quality employment opportunities

Each Plan must demonstrate how it responds to the specific challenges and opportunities of different territories, ensuring that no region is left behind.

Reinventing the Common Agricultural Policy

The CAP will be fully embedded into the NRPP framework, moving away from its traditional two-pillar structure. Approximately €295–300 billion will be allocated to income support for farmers, environmental measures, and rural development.

A dedicated “Unity Safety Net” will be introduced to stabilise farm incomes in times of market shocks, while environmental and climate priorities will remain a core part of the funding conditions.

Social Investment and Governance

The Commission’s proposal includes a binding social spending target of 14% within the NRPP envelope. This will ensure investment in education, health, social inclusion, and equal opportunities—aligned with the European Pillar of Social Rights.

Member States will be required to prepare their Partnership Plans in close cooperation with local and regional authorities, civil society, and other relevant stakeholders. This multilevel governance approach aims to ensure that investments are closely aligned with the realities and needs of local communities.

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