The governance of the European Union’s (EU) budget is entering a critical phase as preparations advance toward the next Multiannual Financial Framework (MFF) for 2028-2034. Reflecting on lessons learned from the current 2021-2027 period, the EU is reshaping its budgetary approach with emphases on sustainability, inclusivity, and the empowerment of cities and regions. This shift points to a broader understanding that effective budget management goes beyond mere fund distribution—it hinges on performance metrics, local engagement, and strong alignment with climate and social priorities.
A central theme in the evolving EU budget landscape is the adoption of performance-based budgeting principles. Historically, EU expenditures were monitored largely by the size of the budget allocations—input metrics—rather than through evaluating concrete outcomes or impact. However, recent research and policy discussions highlight a strategic pivot toward frameworks that prioritize tangible results and accountability. This transition aims not only to ensure that public monies are spent responsibly but also to optimize their effect by linking funding directly to measurable progress against EU priorities. The 2021-2027 budget period already saw a growing emphasis on transparency and impact assessment, serving as a testbed for such approaches. Looking forward, embedding performance-oriented budgeting promises to fine-tune spending decisions, drive efficiencies, and elevate the overall effectiveness of the EU’s investments.
Equally significant is the recognition of cities and regions as indispensable players in the EU’s budgetary and policy fabric. These local authorities are at the forefront of implementing initiatives across sustainability, social cohesion, and economic development, yet until recently, they often felt marginalized in budget design and allocation processes. Coalitions such as Eurocities and the Local Alliance have vocally advocated for a deeper and more participatory role for municipal and regional governments. Their stance is clear: achieving strategic EU goals—whether combating climate change, fostering resilient local economies, or enhancing social inclusion—requires empowering these actors as full partners rather than mere recipients of funds. Decentralizing budgetary decision-making is not only a democratic imperative but also a practical strategy. Cities and regions are proven incubators of innovation and offer granular insights that national-level budgeting may overlook. Strengthening their voices in shaping and deploying EU funds can unlock more targeted, adaptive, and community-sensitive policies that accelerate the bloc’s ambitions.
Climate considerations have become a defining force, reshaping the contours of EU budget deliberations. The intensifying climate crisis demands that the EU budget acts as a robust instrument fueling the transition to a net-zero economy. While roughly one-third of the current 2021-2027 budget focuses on cohesion policies—a crucial mechanism for balancing regional disparities and advancing environmental goals—critics point out a persistent gap between these investments and the ambitious targets set by the European Green Deal. This has spurred calls for the broad adoption of green budgeting practices, which integrate environmental priorities into every stage of fiscal planning and execution. Green budgeting is more than a buzzword; it represents a comprehensive method to ensure that financial resources directly contribute to energy efficiency, sustainable infrastructure, and climate-resilient economic development. By mainstreaming these environmental lenses, the EU budget can better safeguard the planet’s future while promoting cohesion and innovation.
Social justice and economic resilience also remain pivotal in shaping future EU budgets. The COVID-19 pandemic, rising social inequalities, and uneven regional economic performance have underscored the necessity of a budget framework that balances growth with fairness. Cohesion policy, the budget’s largest instrument—earmarked at around €392 billion for 2021-2027—embodies this ethos, targeting employment, competitiveness, and improved quality of life across Europe’s diverse regions. Yet, local and regional leaders urge a more nuanced application that empowers both urban centers and rural areas, preventing marginalization and ensuring equal access to support. This approach also seeks to address concerns voiced by several Central and Eastern European countries about potential funding reductions, emphasizing solidarity and targeted investment for lagging regions. The challenge lies in crafting policy mechanisms that not only drive economic recovery and innovation but also do so equitably, reinforcing the social fabric of the Union.
Finally, the architecture of the upcoming MFF must evolve to respond to unprecedented and complex challenges such as digital transformation, demographic trends, and climate adaptation. There is growing consensus among EU institutions and regional networks on the necessity of innovative financing models. Traditional budgetary methods alone cannot match the scale required to address these multifaceted demands. Therefore, the integration of new funding sources and modalities—complementing existing budget lines—is gaining traction. The European Commission’s open call for public input on the 2028-2034 budget highlights a democratic and inclusive approach to the budget’s evolution, ensuring that citizens, local governments, and stakeholders help shape its priorities and frameworks. Such expansive engagement is essential to bolster resilience, adaptability, and public trust in EU financial governance.
In essence, the future EU budget heralds a transformation toward a more dynamic, inclusive, and outcome-focused framework. Anchored by performance-based budgeting, it promises greater rigor and transparency in tracking the use and impact of funds. Empowering cities and regions emerges as a strategic necessity to localize priorities and enable innovation on the ground. Embedding climate goals throughout budgetary processes aligns financial resources with urgent environmental imperatives, while a reinforced cohesion policy aims to bridge social and regional divides. Coupled with innovative financing and broad citizen participation, these interconnected elements offer a roadmap for an EU budget capable of underpinning a sustainable, socially equitable, and competitive Europe over the next decade and beyond.