Christian Nasulea // 12 May 2025

An Alternative EU Budget examines whether the EU budget remains aligned with its original purpose of supporting the single market and addressing genuinely cross-border challenges. It evaluates current EU spending and revenue proposals against principles such as subsidiarity, proportionality, fiscal restraint, and democratic accountability.

By analysing the structure of the proposed 2028–2034 Multiannual Financial Framework, the report assesses major spending categories including cohesion policy, agriculture, migration, industrial policy, climate funding, and defence, alongside emerging EU revenue instruments such as carbon levies and tobacco-based own resources.

The publication argues that the EU budget has gradually expanded beyond its founding logic and increasingly finances policies that could be better managed at national level. It proposes an alternative framework centred on a narrower, more focused budget dedicated to preserving free movement, market integration, and limited cross-border public goods.

The main conclusions of the publication are:

• Much of the EU budget no longer focuses on maintaining the single market and instead finances redistributive and income-support policies.
• Many spending programmes do not address inherently cross-border problems and therefore struggle to justify EU-level financing under the principle of subsidiarity.
• Cohesion policy and the Common Agricultural Policy primarily function as transfer mechanisms rather than instruments necessary for market integration.
• The EU’s proposed expansion into industrial policy and strategic autonomy risks increasing market distortion, regulatory complexity, and political centralisation.
• Some areas, such as external border management, trade policy, and aspects of defence cooperation, present a stronger case for EU-level coordination and financing.
• The EU’s revenue system is becoming increasingly complex, with new own-resource proposals raising concerns about transparency, accountability, and the gradual expansion of EU fiscal powers.
• The increasing use of EU-level borrowing following NextGenerationEU risks normalising permanent common debt instruments without sufficient democratic scrutiny.
• The report argues that EU-level taxation should not increase the overall tax burden and that any new EU revenues should be offset by reductions at national level.
• Long-term administrative and pension liabilities within EU institutions require greater transparency and more sustainable funding arrangements.
• The publication proposes an alternative Multiannual Financial Framework capped at approximately 1% of EU GNI, focused on core single market functions and accompanied by the gradual return of non-essential competences to member states.