The MFF is the wrong answer to the right question
Europe’s age of innocence ended with Russia’s full-scale invasion of Ukraine and President Trump’s re-election. The EU is now confronting a radically different world – defined by geopolitical confrontation, state-led competition and accelerating transitions. How Europe finances collective action is crucial. Yet the Multiannual Financial Framework (MFF) is set to remain an outdated and insufficient response.
The Union faces massive investment requirements to stay competitive, enhance security, deliver the green transition, manage demographic change and master technological shifts. Yet the MFF process will once again be dominated by distributional bargaining and special pleading. Such debates turn strategic choices into a zero-sum game.
The MFF is also ill-suited to today’s realities: It offers limited tools to exclude member states that block progress or undermine shared principles, and few pathways to involve non-EU partners whose participation is essential, notably in security and defence.
Europe must reverse the order of its thinking. The starting point should be collective political objectives – not budget lines. Only then should the instruments be assembled to deliver them. The MFF is part of the mix, but it should be complemented by a broader and more flexible toolbox: EU-level borrowing; national spending; European Investment Bank-based and similar financial instruments; private and blended finance; off-MFF financing through coalitions of willing states (including non-EU); financial and capital market innovation and integration; and conditional investments from beyond Europe.
Only by treating the MFF as one instrument among many can EUrope mobilise the resources needed for its strategic agenda.
Fabian Zuleeg is Chief Executive and Chief Economist at the European Policy Centre.
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