Brussels is still sifting through the wreckage of the budget bombshell the European Commission dropped in July. As the dust settles, one question looms large: who wins, and who’s left behind? In this ARC2020 mini-series, we unpack the ripple effects — and collateral damage — of the EU’s radical budget proposal, starting with the regions that risk being sidelined.
Wait – what happened??
If you’re thinking, “Help! What in the MFF-ing hell is this all about?” — you’re not alone.
At the end of July, the European Commission unveiled a sweeping proposal to reshape the EU’s long-term budget (the Multiannual Financial Framework, or MFF, in EU-speak) and its flagship farm policy, the Common Agricultural Policy (CAP). The reforms will shape how Europe’s food system, farms, and rural regions evolve over the next decade.
The CAP gets reformed every seven years, but this revamp is being sold as a balancing act: less red tape, more flexibility for farmers, and sustainability still in sight. In reality, the proposal landed more like an earthquake than a reform; merging funding pots across agriculture, cohesion, migration, and infrastructure into a single, centralized structure.
While it’s far from a done deal, and may even be rejected by the European Parliament, it’s still worth diving into as this is the blueprint Brussels is working from.
Centralisation of power
This single fund structure, the Commission argues, will create a “simpler and more flexible policy framework that enhances synergies and complementarities across sectors”, streamlining administrative procedures. But crucially it also means that member states will have full power over transferring funds as and when they see fit and directing this funding.
As one EU official well versed in rural policy (who spoke on the condition of anonymity) put it, the new Commission proposal writes “a new deal” between the EU and the member states, closing the chapter on the Maastricht-era vision of “a Europe of the regions” and multi-level governance.
Under the Commission’s proposal, Brussels would negotiate directly with national capitals, letting them decide how to interpret and steer EU funds. “It’s a clear change of focus,” said the official, adding that this shifts the relationship from “regions negotiating eye-to-eye with Brussels, to one of compliance.”
For policy analyst Thomas Schwab, this runs a much bigger risk. “We’re losing the European dimension. In the long run, it begs the question: what is the EU about, beyond redistributing money? If you can’t answer that, you have a serious problem justifying the European project at all. It’s a delegation of policy and power to the member-state level,” he said.
Patchwork priorities
This isn’t Brussels’ first attempt at such radical restructuring. Serafín Pazos Vidal, Senior Expert in Rural and Territorial Development at AEIDL, draws parallels with the EU’s COVID-era Recovery and Resilience Facility, which offered an “opportunity to do a real-life experiment”
That facility handed control of spending to member states, with varying results. “It depends on the government of the day,” Pazos Vidal noted. “Some countries, like Spain, are more territorialised. Others, like Germany, much less so.” The result? A patchwork Europe where regional voices are heard — or ignored — depending on domestic politics.
While it’s better in some places now than it used to be, there can be “weak interconnection” between different sources of funding operating in rural areas. “It’s striking that you can have very senior people in a region not knowing what their own national government is doing in their area, with new funds that theoretically were allocated to that country because of that regional level of prosperity,” Pazos Vidal said.
Optimism vs pessimism (or realism?)
This means that “if all things go well, things can actually operate better in a more integrated and responsive way”.
But the reality “depends so much on the domestic context, domestic politics, domestic capacity” as the EU framework is “so general” – or, to put it simply, this structure will “show the cracks” in domestic governance.
For Schwab, this throws up deeper questions of democracy, pointing out that it opens the door for more dodgy dealings and fraud.
Schwab isn’t the only one asking questions: Henrik Maaß of AbL told ARC2020 “There are still many responsibilities unclear, who will be in charge of the plan in total and what is the role of agriculture politicians in the end?” He believes that we might be entering a race to the bottom when it comes to rural and environment, since this new proposal “has no minimum budget for environmental aspects or for rural development in place anymore. It’s only ‘opportunities’.”
Rurality not high on anyone’s agenda
As with the Next Generation EU, a lot of the payments under this new structure would depend on achieving certain outcomes. But herein lies another problem; namely that outputs are often confused with outcomes, while there is a weak system of performance. “So if the Commission already has this level of generality, imagine the Member States interpreting over that,” Pazos Vidal warns.
Meanwhile, the performance framework that is there is “not territorialised” or “doesn’t have a bias towards whatever is necessary to territorialise things”.
With so many other pressures pulling on the budget, this means only countries with “strong territorial politics that force you to territorialise policies and involve them” or a “strong agricultural sector that can influence domestic politics” will get a look-in.
And for those who missed the news, since July, funding for the CAP’s second pillar is on the chopping block – a decision which also raises risks and concerns for the trajectory of rural regions across Europe. Anja Fortuna of Rural Youth Europe insists that the CAP is essential “for the development and vitality of rural communities.” And rather than dismantling the framework needed for generational renewal, “policies must deliver practical, long-term support that enables young farmers and rural youth to stay, innovate, and thrive.”
If the proposed reform is accepted as is, it looks more like an exercise in subsidy allocation, but Fortuna raises the question “what if CAP reform was a strategic investment in food security, climate resilience and social cohesion?”
Simpler – for whom?
As with all of the latest Commission moves, this one is posited under the trojan horse of simplification. But for experts, this begs the question – simpler for whom?
“Maybe it’s easier for the European level, because it’s delegating the nasty stuff to the member states,” Pazos Vidal said, pointing to the trade-offs between different policy fields and priorities.
In Schwab’s view, there’s “no such thing as a non-complex solution”. “We’re facing more issues than ever at the European level. And at the same time, the budget (and it’s still a budget, regardless how it is organised) should get simpler with more issues at hand? It can’t be the case,” he noted.
Geography of discontent
For Schwab, the current budget proposal “reflects a diminishing of importance and policy debate for these areas”, pointing out that while there is a strong farming voice, the cohesion bubble is “quite detached from the real power dynamics”.
But critics warn that sidelining rural Europe at a time of growing discontent is short-term thinking. “Industrial and competitive policies might boost cities now,” Schwab said, “but they drain long-term potential from rural regions. Europe risks wasting its own potential.”
Meanwhile, the EU official added that this risks “weaken[ing] the ownership at local level for the EU”. “Why should a local mayor say, I defend the European Union, but I have no say in it? What’s my interest there?” he warned, adding this comes at a time of “growing Euro-scepticism” and urban-rural divides.
Still all to play for
For now, the proposal remains just that: a proposal. But even in draft form, it signals a seismic shift in how Europe governs its money, its regions, and its future.
Whether this new “simplified” system will hold Europe together — or quietly pull it apart — is the question no one in Brussels can yet answer.
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