The European Commission presented its proposal for the next MFF on 16 July 2025. Parallel to this, it presented a proposal for a new own resources decision to establish how the EU budget is financed. The Commission’s proposals mark the start of negotiations for the new multiannual financial framework for 2028-2034, which are expected to continue until the end of 2027. The European Council will first consider the negotiation of the MFF on 18-19 December 2025.

Expenditure

The proposed budget for the 7-year period amounts to approximately €1,800 billion. As a percentage of EU GDP, it is slightly higher than in the previous MFF, 1.26% versus 1.13%. Part of the proposed 1.26% (0.11%) is earmarked for the repayment of RRF loans and interest payments.

The Commission has proposed reforming the MFF by reducing the number of budget chapters to 4, merging funds and applying performance-based budgeting, under which agreed goals must be met before payments are made. The Commission wants the MFF to focus more on themes such as competitiveness, security and defence, and asylum and migration. To improve the response to unforeseen circumstances, the proposal also provides for greater budget flexibility.

The Commission has proposed the following 4 pillars:

  • Pillar 1: National and regional partnership plans (45% of resources, €791.9 billion). This pillar is made up of the current structural and investment funds, agricultural funds and migration funds;
  • Pillar 2: Competitiveness, prosperity and security (30% of resources, €515.1 billion). Besides funding for competitiveness, this pillar includes security and defence;
  • Pillar 3: Global Europe (11%, €182.9 billion). This concerns the Union’s external policy and the external aspects of migration.
  • Pillar 4: Administration (6%, €104.4 billion).

Repayment of the RFF loans and interest payments will cost a further €149.3 billion (8.5%).

The table below from the European Parliamentary Research Service (EPRS) shows the financial commitment across the 4 budget chapters in the proposal.

Pillar

title

Commitments in € billion

Percentage

1

Economic. social and territorial cohesion. agriculture. rural maritime prosperity and security

791.9

44.9

1

Repayment of NGEU

149.3

8.5

2

Competitiveness. prosperity and security

515.1

29.2

3

Global Europe

182.9

10.4

4

Administration

104.4

5.9

Margin

19.4

1.1

Total

1.763

100

These proposals would lead to a shift in priorities. In the current period, 70% of resources are committed for the funds in pillar 1, but only about 45% in the next period. More money would be committed to innovation and security (pillar 2). The commitment would rise from 17% of total resources to 30% (source: government assessment of 12 September 2025 of the new MFF).

Pillar 1 broadly follows the performance-based funding structure of the Recovery and Resilience Facility. Member states must prepare investment and reform plans to address the various policy priorities in pillar 1 and a significant proportion of the country-specific recommendations made in the European Semester. Payments depend on the achievement of milestones and targets. The Commission checks achievement after receiving payment requests from the member states. If not all milestones or targets have been met, payments to the member states can be reduced pro rata. Only the member states themselves are affected by payment reductions. They must still make payments to beneficiaries (e.g. subnational authorities, businesses and citizens). This budgetary incentive induces the member states to make reforms and provides assurances to beneficiaries. The Commission has also published an overarching proposal for a regulation to establish a performance framework that would apply to the MFF as a whole.

Revenue

On the revenue side, the Commission has proposed 5 new own resources. They are based on:

  1. Income from part of the EU Emissions Trading System (ETS1),
  2. the Carbon Border Adjustment Mechanism (CBAM),
  3. non-collected electrical and electronic waste (e-waste),
  4. a Tobacco Excise Duty Own Resource (TEDOR),
  5. a Corporate Own Resource for Europe (CORE).

These new own resources are in addition to the existing own resources of customs duties, the VAT-based resource, the non-recycled plastic waste resource and the GNI-based resource. The GNI-based resource is by far the largest own resource and serves to balance the EU budget. At present (2025), the Netherlands contributes 6.4% to the EU GNI-based resource. Since the 2002 own resources decision, however, it has paid less than that percentage because it, like Germany, Sweden, Austria and Denmark, has enjoyed a rebate on the GNI contribution in part-compensation for its position as a net contributor. The Commission wants to eradicate these rebates in the next MFF, which, according to the government, will cost the Netherlands on average approximately €2 billion per annum in additional contributions as from 2028.

At present member states can keep 25% of the customs duties they collect to defray the cost of levying and collecting the duties. The Commission wants to reduce this collection refund from 25% to 10%, which the government estimates will cost the Netherland €0.5 billion per annum.

Government assessment

The government sent its assessment of the Commission’s proposals to the House on 12 September 2025. It welcomed the proposed modernisation of the MFF, with the Commission focusing more on strategic priorities and mobilising more of the EU budget for them. The government agrees with the proposal that agreed conditions or results must be met before payments are made from EU funds. However, it has questions about the administrative burdens imposed by the system and how the proposal will play out in practice. The resultant increase in EU contributions is incompatible with the budgetary frameworks agreed in the framework coalition agreement. The government will therefore seek a reduction in the proposed MFF. The government also thinks the Netherlands’ contribution is too high relative to other member states’ contributions. It believes a reduction in the GNI-based contribution will be necessary to improve the relative contribution. The government will also seek to retain the 25% collection refund at its present level. With regard to the proposed new own resources, the government would like to know what the distributional impact will be. Finally, the government is not in favour of assuming common debt for new European instruments and does not support the proposals to take on loans for a crisis instrument and to increase the budget for pillar 1.

The Court of Audit’s concerns

On 10 September 2025, the Court of Audit sent a letter on the audit of performance-based EU funding to the House of Representatives, expressing its concerns about the use of this funding method. The Court based itself on recent experience with the Recovery and Resilience Facility (RRF). It observed that the instrument gave more prominence to results than funds under direct management did, because results determined payments. The Court raised the following points for consideration:

  1. Choosing existing measures has little added value The Netherlands’ recovery and resilience plan includes measures that were already financially covered. This might be permitted but it has no added value: the measures would have been taken and the results achieved even without EU funding. 
  2. Evaluations should identify policy effects Payments from the RRF are based on activities performed or achievements; they do not provide insight into effects. That would be difficult because effects do not materialise until later. As with national funding, it is important to know whether funds have the intended effect. This is important not only to learn and adapt policy where necessary but also to account for the use of public money. If the EU decides to use performance-based funding in the future, ex-post evaluations should be made at individual project, member state and supranational level. Evaluation of the RRF, however, is not mandatory at member state level. 
  3. Lack of insight into costs As payments are linked to results rather than costs, performance-based funding provides no insight into actual costs incurred for a measure. This is a direct consequence of the decision to adopt this funding method and cannot be resolved without high administrative burdens. 
  4. Some controls are duplicated. The control approach could be streamlined at national and EU level; the administrative burden could be reduced by placing more reliance on national control systems.

House of Representatives’ MFF rapporteurs

The House of Representatives’ Finance Committee appointed rapporteurs in March 2025 to report on the forthcoming MFF. In their final report, published on 29 September 2025, they noted that the Commission’s proposals differed significantly from the Dutch government’s position regarding both the size of the MFF and the Netherlands’ share in the national contributions laid down in the Own Resources Decision. The government’s position and its preferred €1.6 billion reduction in the annual contribution had already been recognised in the multiannual budget estimates and the Budget Memorandum, whereas the Commission’s proposals would increase the annual contribution by between €4.5 and €5.4 billion (in current prices). The Commission’s proposals were closer to the Netherlands’ position on the proposed composition, structure and performance-based architecture of the new MFF. They would modernise the MFF by significantly refocusing funding away from agriculture and cohesion and towards new strategic priorities, such as competitiveness and defence. The government also welcomed the proposed structure to simplify the MFF and make it more flexible and more effective. In principle, the Netherlands is also in favour of the performance-based architecture and its linkage between payments and reforms.

More information