The negotiations on the MFF 2028-2034 have moved beyond the first battle over headline figures. The updated Irish Presidency Negotiating Box, the emerging European Parliament position (with votes on the key reports ongoing and due to end in December) and the latest European Council conclusions are beginning to reveal how the future budget could actually be delivered across Europe’s territories.
One of the most important developments is the gradual correction of a major weakness in the Commission’s original architecture: the limited visibility of territorial targeting within both the National and Regional Partnership Plans (NRPPs) and the new Performance Framework.
The European Council keeps the timetable alive
Following the presentation of the updated Negotiating Box by the Irish Presidency, the European Council discussed the elements required for a balanced compromise and invited its President to take the negotiations forward.
The Irish Presidency Negotiating Box reduces the Commission’s proposed MFF by 8% in constant 2025 prices, from €1.763 trillion to €1.622 trillion, but the cuts are distributed unevenly. Heading 1, covering economic, social and territorial cohesion, agriculture, rural and maritime prosperity and security, is comparatively protected, falling by 3.4%, while the NRPP envelope declines by 3.2%. By contrast, the competitiveness, prosperity and security heading is cut by 12.8%, Global Europe by 17.4%, and administration by 8.8%. The figures therefore confirm a recognisable Council compromise: cohesion, agriculture and territorial expenditure absorb relatively limited reductions, while the largest adjustment falls on external action and the Commission’s proposed competitiveness instruments.
In other words, if for the previous Cyprus EU Presidency Negobox protecting Cohesion was key, so it is Agriculture for Ireland. The European Competitiveness Fund, Von der Leyen landmark proposal for the next MFF, amounting of a quarter of the total budget, remains vulnerable, from established policy communities, including those around research, which are pressing for parts of ECF to move to the successor of Horizon Europe, FP10.
Again, no progress on own resources (i.e. Member States agreeing to “EU taxes”) without which the proposal put by the Commission to finance new priorities entirely rests, as it amounts to 21% of the proposed MFF.
Territorial targeting returns to the architecture
The original NRPP proposal raised concerns that the Commission NRPP proposal could centralise programming at national level while weakening the territorial logic that distinguishes cohesion policy from other EU investment instruments.
The Irish Negotiating Box continues moves to address this, following the requests from local and regional stakeholders, Committee of the Regions, European and Social Committee and indeed the correspondence and supplementary material from the Commission.
It confirms that at least 10% of the resources of the NRPPs, excluding the minimum allocations for the Common Agricultural Policy, Common Fisheries Policy and Social Climate Fund, should be dedicated to rural areas (circa 47bn according to the Commission´s estimates). It also expects NRPPs to devote 43% of their relevant resources to climate and environmental objectives and establishes a 14% social target across the broader Fund.
Territorial differentiation also enters the allocation methodology. The Negotiating Box sketches the Regional Prosperity Gap, calculated for every NUTS3 region whose GDP per capita is below 75% of the EU average. The calculation takes account of the distance from that threshold and the population of the territory concerned.
This is more than a statistical adjustment. It moves towards acknowledging that national and even NUTS2 averages can conceal substantial territorial disparities. Economic decline, demographic change, industrial transition, housing pressures and access to services frequently emerge at smaller territorial scales.
NUTS3 is therefore moving from the margins of the debate, mostly argued by municipal and provincial organisations, towards the financial architecture itself.
Parliament pushes stronger NUTS3 from allocation to delivery
This development coincides with a stronger territorial agenda in the European Parliament.
Marcos Ros Sempere, Rapporteur for the ERDF 2028-2034 to be voted in November, is advocating dedicated allocations of 13% of ERDF for urban development, and the crucial novelties of 10% for rural areas and 10% for housing. Together with co-rapporteur Pascal Arimont, he is also introducing amendments to the vote in late October pressing for provinces, counties and equivalent NUTS3 territories to be formally recognised as a core delivery structure of the future NRPPs.
The proposal responds to a longstanding governance gap. National authorities may be too distant from local realities, while individual municipalities often lack the scale and resources to manage integrated investments. NUTS3 territories can occupy the space between them: sufficiently large to coordinate strategic investment, but close enough to understand the needs of communities, businesses and local authorities.
Territorial chapters and regional authorities
The Irish text also opens the NRPP architecture to more explicit territorial governance.
Plans may contain national, sectoral, regional and territorial chapters, or combinations of these. Member States may establish several regional or territorial chapters, while ensuring multi-stakeholder involvement. Two versions of the NRPP template have been circulated to civil servants, the last one in early October.
Member States may also designate managing authorities at regional level. These authorities could participate directly in the management and implementation of the plans and negotiate and interact directly with the Commission. The text encourages Member States to build on existing governance structures to preserve continuity and cost-effectiveness. This is still not enough by regions as showed in the recent EU Week of Regions and Cities. The German Länder have particularly been in force in Brussels around the institutional implications of the new NRPP architecture.
At this stage the provisions on the table by Member States do not guarantee meaningful decentralisation. This is why the Parliament draft Report on the NRPP Regulation, which equates the respect of the Partnership Principle, Multilevel Governance and the competences of local and regional governments to the Rule of Law mechanism can be crucial to ensure that NRPP do away of existing policy silos without altering the territorial governance within Member States.
The missing link remains performance
The Irish Negotiating Box supports the proposed horizontal expenditure-tracking and performance framework intended to measure results, reform progress and the effects of EU spending. The Commission’s proposal also seeks to reduce the administrative burden on authorities and beneficiaries, and enhance transparency of what is being spent, where and for what across all funds and programmes within the NRPP.
However, territorial targeting is not yet firmly embedded in that framework.
This is where the official Degree of Urbanisation, or DEGURBA, classification could become crucial. Reintroducing in the legislation a common classification distinguishing cities, towns and suburbs, and rural areas (accepted by MEPs in the Garcia-Van der Valle report) would make it possible to track where investment is delivered and compare its effects across different types of territories. While imperfect, it would introduce a degree of predictability and accountability of the spatial targeting of NRPP funding.
Without such a classification, the rural earmark could become difficult to monitor consistently, while investments labelled as territorial could remain invisible in EU-level reporting. At the moment the Commission correspondence and complementary fiches have not been endorsed by Member States. Without this the 10% might simply act as a follow up of the European Agricultural Fund for Rural Development where not more than 8% of CAP was dedicated to non-agricultural expenditure.
The same applies to urban development, housing, demographic change and access to essential services. If territories matter for allocating resources, they must also matter for measuring performance.
Next steps
The stated objective remains to reach agreement before the end of 2026. This particularly concerns the European Council of 17-18 December. Parliament is holding the key votes end November and December.
This calendar would allow the sectoral regulations to be adopted during 2027 following negotiations between the co-legislators and funding to reach beneficiaries without interruption from January 2028. Still, with the chain of elections (Spain, Italy, Finland and crucially France) the calendar remains as optimistic as in previous cycles.
Serafin Pazos-Vidal
For a previous update on the MFF negotiations see HERE.
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