The EU’s budgetary coup

The Commission is using the bloc’s new multiannual budget for yet another power grab

The Multiannual Financial Framework. Even for a body as jargon-prone as the European Union, the phrase feels almost bewilderingly dull. Perhaps that’s the point. For hidden amid the technical language of the EU’s new budget is a kind of technocratic coup — one that promises more power for the Commission, less for member states, and which would ultimately make Brussels even less accountable than it already is today.

Over the past decade, the EU’s institutional balance has already tilted heavily towards the Commission, which has extended its reach into areas once considered the preserve of national governments — from fiscal policy and public health to foreign affairs and defence. The mechanism has been consistent: each crisis — the sovereign debt crisis, Brexit, the Covid-19 pandemic, the Ukraine war — has served as a pretext for the Commission to assume more authority, make “emergency” decisions and lock in permanent changes to the exercise of EU power. None of this has required formal treaty changes. It has occurred surreptitiously, outside the arena of democratic debate, through what scholars have called “integration by stealth”. The result has been a creeping “Commissionisation” and supranationalisation of European decision-making, with a corresponding erosion of national sovereignty and democratic accountability.

Now the Commission is using negotiations over the EU’s next seven-year budget — the aforementioned Multiannual Financial Framework (MFF) for 2028-2034 — to push this process further still. And precisely for this reason it is keen to wrap up a deal by the end of the year. Brussels insiders are acutely aware that the French presidential election of April 2027 could produce a government led by Jordan Bardella of the National Rally — a party hostile to the integrationist agenda underpinning the new MFF. Since the framework requires unanimous approval in the Council, a Eurosceptic France could strangle the budget at birth. The unstated but operative goal is to seal the deal before that risk appears. That this is never said openly only underscores the contempt for democratic deliberation that now pervades the process.

What, then, is the package that the Commission is so keen to sign into law? It is a framework totalling almost €2 trillion, equivalent to around 1.26% of EU gross national income (GNI) over the seven-year period. The European Parliament, never shy about spending other people’s money, wants to push that to 1.38% of GNI. But neither institution really admits the structural tensions buried in the figures. The EU must service roughly €750 billion in bloc pandemic debt, the repayment of which is now being permanently integrated into the regular EU budget. The Commission’s own proposal earmarks €149.3 billion for repaying the so-called “NextGenerationEU Recovery” and “Resilience Facility” funds — a sum that amounts to nearly 10% of total MFF commitments.

This matters because of what it reveals about the true nature of NextGenerationEU (NGEU). What was sold to European publics as an exceptional, one-off response to the Covid crisis is now the fiscal template for the Union’s future. The pandemic fund set the precedent: the EU can borrow on capital markets, distribute grants to member states, and then embed the repayment into the general budget for decades to come — all without anything resembling a proper democratic mandate. This is arguably what the “unprecedented” EU fiscal response to the pandemic was always about: normalising common debt as a mechanism for tilting the institutional balance of power decisively in favour of the Commission, downgrading member states and locking in a structural shift in European integration. Indeed, the EU has since repeated the trick with a €90 billion package for Ukraine, again funded through joint debt backed by the common budget. The “historical exception” has quietly become the norm.

To repay its vast debts, the Commission has proposed a package of new levies on companies. But if the new taxes fall short, as is likely, the fallback is a compulsory levy on member states. The existing “Own Resources Decision” — another wonderful piece of EU lexicon — already empowers the Commission to call on national governments for additional GNI-based contributions to cover NGEU repayments, on top of regular programme spending. In other words, if the new revenue streams underperform, the bill lands automatically on national treasuries, decided not by sovereign parliaments, but by the remorseless logic of the EU’s debt repayment. At any rate, EU debt now functions as a de facto tax on member states, bypassing the normal channels of democratic budgetary control.

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Thomas Fazi

Website: thomasfazi.net

Twitter: @battleforeurope

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