EU heads of state or government are discussing the bloc’s 2028–2034 long-term budget in Cyprus, with financing, competitiveness and future policy priorities at the centre of the debate.
EU leaders are using an informal summit in Cyprus to discuss the European Union’s next long-term budget, as the bloc faces competing demands over defence, competitiveness, energy, Ukraine support, enlargement and debt repayment.
The meeting of heads of state or government is taking place in Lefkosia and Agia Napa on 23–24 April. According to the European Council agenda, leaders are focusing on the geopolitical environment and the EU’s response, as well as the Multiannual Financial Framework for 2028–2034.
The MFF is the EU’s seven-year budgetary framework. It sets spending ceilings and allocates funding across the bloc’s main policy areas, including cohesion, agriculture, competitiveness, external action, migration, security and administration. The next framework will replace the current 2021–2027 budget and is expected to shape the EU’s financial capacity for most of the next decade.
The Cyprus discussion is not expected to produce a final agreement. Instead, it marks an early political stage in a negotiation that will continue through 2026. The European Council says leaders will discuss the issue regularly during the year in order to secure a timely agreement.
The central question is whether the EU’s stated ambitions can be matched by the level of financing available. The Council agenda says leaders will focus in particular on “new own resources”, the revenue sources that finance the EU budget, and on how the next MFF can contribute to the EU’s long-term competitiveness agenda.
That framing reflects a broader fiscal constraint. The EU is under pressure to fund new priorities without substantially weakening existing programmes. Defence readiness, industrial policy, energy security, Ukraine support, migration management and future enlargement all require financial planning, while traditional spending areas remain politically sensitive among member states.
The European Parliament has already set out a higher budgetary position. In a press kit for the Cyprus summit, Parliament said its Budget Committee had adopted a draft interim report proposing a €1.78 trillion budget in 2025 constant prices, equivalent to €2.01 trillion in current prices, for the 2028–2034 period.
That proposal represents a nominal increase of €175.11 billion compared with the Commission’s July 2025 proposal, or €197.30 billion in current prices. Parliament says this would set the long-term budget at 1.27 per cent of EU gross national income, with debt servicing for the NextGenerationEU recovery fund placed over and above the MFF ceilings.
The treatment of NextGenerationEU debt is likely to be one of the most consequential issues in the negotiation. The EU borrowed jointly to finance the recovery fund after the Covid-19 pandemic. Repayment costs will fall during the next budget cycle, raising the question of whether they should be absorbed within existing spending ceilings or handled separately.
Parliament’s position is that recovery fund debt servicing should not reduce funding for core EU programmes. MEPs argue that the proposed increase should be directed to key EU programmes, not to additional administrative expenditure or decentralised agencies.
Member states are likely to approach the negotiation from different fiscal and political positions. Net contributors will scrutinise the overall size of the framework and the case for new revenue streams. Net recipients will seek to protect cohesion and agricultural funding. Governments with stronger defence, industrial or enlargement priorities will press for budgetary flexibility in those areas.
The Commission’s 2025 proposal remains the formal basis for the negotiation, but the final budget will require unanimity among member states in the Council and the consent of the European Parliament. This gives Parliament significant leverage, although the main political bargaining will take place between national capitals.
The timing of the Cyprus summit gives the MFF debate added weight. Leaders are also discussing the situation in the Middle East, the conflict involving Iran, freedom of navigation in the Strait of Hormuz, fossil fuel prices and Ukraine. These topics are not separate from the budget debate: they all point to the same question of whether the EU has the financial tools to respond to crises while funding long-term priorities.
Defence is expected to remain one of the most politically sensitive areas. The EU budget cannot replace national defence spending, but it can support industrial capacity, research, infrastructure, military mobility and joint procurement-related instruments. The war in Ukraine has increased pressure to align budget planning with security requirements.
Competitiveness is another central theme. The next MFF will be assessed against the EU’s capacity to support investment, simplify funding structures and reduce gaps with other major economies. In practice, this may require decisions on research, digital infrastructure, clean technology, industrial policy and strategic supply chains.
The debate over new own resources is equally significant. Without additional revenue sources, the next budget risks becoming a competition between established programmes and new priorities. Previous discussions have included revenue linked to carbon border measures, emissions trading and corporate taxation, although agreement among member states has often proved difficult.
The European Parliament is expected to debate the next long-term budget on 28 April and vote on its negotiating position on 29 April. Once adopted, Parliament will be ready to enter negotiations with the Council after member states agree their own common position.
For now, the Cyprus summit gives leaders an opportunity to define the political boundaries of the negotiation. The choices made over the coming months will determine whether the EU’s next budget is mainly an adjustment of existing spending patterns, or a broader attempt to align the bloc’s finances with its strategic agenda.
