Europe Cannot Be a Power Without Choosing Its Priorities

Europe has spent the last four years saying that geopolitics has returned. Now it has to decide whether it is willing to pay for it.

That is the real question behind negotiations over the European Union’s next Multiannual Financial Framework, the seven-year budget for 2028–2034. The debate may appear technical: percentages of gross national income, agricultural allocations, cohesion funds, own resources and spending ceilings. In reality, it is becoming one of Europe’s most consequential political confrontations.

Because budgets reveal priorities more clearly than declarations.

The European Commission originally proposed a framework worth €1.76 trillion in 2025 prices, equivalent to 1.26 per cent of the Union’s gross national income. In June, the Cypriot Presidency of the Council put forward the first negotiating compromise with concrete figures, reducing the total by €32.8 billion to approximately €1.73 trillion, or 1.23 per cent of GNI. EU leaders want negotiations to advance with the ambition of reaching an agreement before the end of 2026.

Yet the dispute is much larger than a €32.8 billion adjustment.

Germany, the largest net contributor to the EU budget, has demanded much deeper cuts, while the Netherlands has also taken a restrictive position. On the other side, the European Parliament wants a larger budget. In April, MEPs backed a framework equivalent to 1.27 per cent of GNI before NextGenerationEU debt servicing, while calling for new money for defence and competitiveness without sacrificing agriculture and cohesion.

The disagreement exposes the central contradiction of European politics.

Almost everybody agrees that Europe faces new strategic responsibilities. Far fewer are willing to decide which old priorities should make room for them.

A Budget for a World That No Longer Exists

The traditional architecture of the European budget was designed for a different continent.

For decades, agricultural support and cohesion policy formed its two great pillars. The Common Agricultural Policy protected food production and rural communities, while cohesion funds reduced disparities between richer and poorer regions.

But Europe’s strategic environment has fundamentally changed.

The war in Ukraine has brought large-scale conventional conflict back to the continent. The United States increasingly expects Europeans to assume greater responsibility for their own security. China is simultaneously a commercial competitor, an industrial power and a strategic rival in critical technologies. Energy security has returned to the centre of sovereignty. Migration has made control of external borders an issue affecting the entire Schengen area.

Meanwhile, European industry faces high energy costs, weak productivity growth and an investment gap in strategic technologies.

The Commission has attempted to respond by changing the composition of the next budget. Its proposal creates a new European Competitiveness Fund focused on clean technologies, digital transformation, biotechnology, defence and space. Horizon Europe would receive €175 billion. Defence, security and space would receive €131 billion, while funding for military mobility would rise sharply. Another €34 billion would go to migration management, external borders and internal security.

This shift is necessary.

But it leads immediately to an uncomfortable question: if these are genuinely new strategic priorities, what is Europe prepared to deprioritise?

The Cypriot compromise illustrates the difficulty. After pressure from member states, the Presidency sought to protect traditional areas such as agriculture and cohesion while trimming programmes linked to defence, competitiveness, research and external action.

Europe wants the priorities of tomorrow without fully giving up the expenditure structure of yesterday.

Priorities only become priorities when something else ceases to be one.

Where Scale Matters

The argument for a stronger European role begins with a reality that national governments sometimes prefer not to acknowledge: in several strategic sectors, even Europe’s largest states no longer possess sufficient scale to compete independently.

No European country can match the United States or China alone in technological investment, defence-industrial capacity or control of global supply chains. Twenty-seven separate military procurement systems produce duplication and smaller production runs. Fragmented energy and research policies reduce Europe’s ability to build continental infrastructure and globally competitive companies.

Sovereignty cannot simply mean retaining formal authority over a policy. It must also mean possessing the material capacity to exercise it.

A country that formally controls its defence but depends overwhelmingly on foreign industrial capacity for essential weapons is not fully sovereign. The same applies to energy, critical raw materials, semiconductors and digital infrastructure.

There is therefore a legitimate case for concentrating European resources where scale produces measurable strategic power: defence procurement, military mobility, major transport corridors, energy interconnections, advanced research, space infrastructure, critical technologies and external border protection.

This is not an argument for transferring every national competence to Brussels. It is an argument for distinguishing between areas in which common action multiplies national power and areas in which centralisation merely transfers political authority.

Strategic integration and political centralisation are not synonyms.

Europe may need more common power without needing more uniform government.

Energy Before Regulation

Energy illustrates the distinction particularly well.

European competitiveness cannot be restored simply through subsidies. Industry requires reliable and affordable power. The Commission’s proposal recognises the strategic importance of cross-border energy infrastructure by reinforcing funding for energy and transport connections.

But infrastructure must be accompanied by technological pragmatism.

Member states have different energy mixes and industrial structures. A European strategy should therefore focus on security of supply, affordability, lower dependence on unreliable suppliers and greater domestic production rather than imposing uniform technological choices.

Renewables, grids, storage and interconnections will all be essential. Nuclear power should remain available to countries that choose it, including investment in new technologies and European industrial capabilities.

A European manufacturer cannot indefinitely compete against American or Chinese rivals while paying significantly higher energy prices and absorbing heavier regulatory costs.

Competitiveness is not another item on the European policy menu. It is the economic condition that makes every other ambition affordable.

Borders as a European Public Good

The same logic applies to external borders.

The Italian border in the Mediterranean, Poland’s eastern frontier, Greece’s Aegean border and Spain’s borders in North Africa remain national borders. But in an area built around free movement, their security inevitably has European consequences.

This makes border protection one of the clearest examples of a genuine European public good.

The Commission’s proposed €34 billion for migration, border management and internal security reflects the recognition that the external frontier cannot be treated solely as the responsibility of whichever state lies at Europe’s geographical edge.

European resources can strengthen Frontex, surveillance, border infrastructure, returns and agreements with countries of origin and transit.

That does not require Brussels to determine every aspect of domestic immigration or integration policy.

The objective should be to Europeanise what is genuinely common, not to use common challenges as a justification for absorbing competences that can be exercised more effectively at national level.

The Centralisation Trap

This distinction becomes particularly important in another part of the new budget: the proposed National and Regional Partnership Plans.

Under the Commission’s model, each member state would organise a wide range of European spending through a comprehensive partnership plan bringing together sectors currently managed separately.

There are obvious advantages to simplification. European funding has become notoriously bureaucratic and fragmented.

But simplification can also conceal centralisation.

The experience of NextGenerationEU established a model in which European funds are tied to agreed milestones, targets and reforms. Applied systematically across a growing part of the ordinary EU budget, this could gradually transform the relationship between the Commission and national governments.

Brussels would increasingly move from administering common resources to influencing domestic reforms through financial conditionality.

This is where subsidiarity becomes essential.

A policy should be exercised at European level when there is a demonstrable reason why common action is more effective than twenty-seven separate actions — not because European administration is inherently superior to national government.

The ECR Group has made a similar distinction in the budget debate, arguing that the next framework should concentrate on genuine European public goods such as defence, border protection, energy resilience and cross-border infrastructure, while opposing further centralisation and defending agriculture and targeted cohesion spending.

The broader principle is more important than any parliamentary group: European power should be measured by results, not by the number of competences exercised from Brussels.

The Politics of Scarcity

There is also a second temptation: solving every conflict over expenditure simply by making the budget larger.

The European Parliament has largely chosen this approach. Its negotiating position argues that defence and competitiveness require significantly more resources while agriculture, cohesion and established programmes should also remain strongly financed.

The Commission has also proposed five new own resources, including revenues linked to the Emissions Trading System and the Carbon Border Adjustment Mechanism, electronic waste, tobacco and a new corporate contribution.

There is a legitimate debate over how the Union should be financed. But permanently increasing revenue cannot substitute for political choice.

A government that declares every ministry a priority does not have priorities. The same is true of the European Union.

If defence matters more than it did ten years ago, the budget should show it. If securing borders has become an essential European responsibility, resources should reflect it. If technological and industrial decline is considered a strategic threat, Europe should spend accordingly.

And if these priorities are genuinely existential, institutions must also have the courage to identify programmes that matter less.

The EU cannot become a geopolitical power simply by placing geopolitical expenditure on top of every policy accumulated over the previous forty years.

Fiscal responsibility and strategic ambition are not contradictory. Strategic ambition requires discipline.

The Real Divide Is Not More Europe Versus Less Europe

For years, the European debate has been trapped in an increasingly unhelpful opposition.

On one side stands the call for “more Europe”, often understood as the progressive transfer of authority to European institutions. On the other stands the demand for “less Europe”, expressed as the defence of national sovereignty against Brussels.

The emerging geopolitical environment makes both formulas inadequate.

Europe needs more capacity in some areas and less interference in others.

It needs greater defence cooperation but not uniform social policy. It needs continental energy infrastructure but not Brussels choosing every country’s energy mix. It needs effective external border protection but not every aspect of migration policy becoming identical.

It needs common technological investment and a stronger single market, while allowing nations to retain political control where their different historical, social and economic circumstances genuinely matter.

This is not an ideological compromise between federalism and nationalism. It is a hierarchy based on subsidiarity and strategic necessity.

Europe should act where Europe adds power.

Nations should govern where European action adds bureaucracy rather than power.

A European Power Built on Nations

This is the paradox at the centre of the next budget.

Europe’s nations are individually too small to exercise some of the forms of power that will determine their future. Yet an EU that attempted to replace those nations rather than strengthen them would weaken the political foundations on which European cooperation depends.

The solution is therefore neither a European superstate nor a return to entirely autonomous national strategies.

It is a clearer division of labour.

A Europe strong enough to protect its borders, but disciplined enough not to govern what can be better governed nationally, would be stronger, not weaker.

A Europe capable of financing military infrastructure, supporting strategic industries, connecting energy networks and investing in advanced technologies would possess more real sovereignty than one that measures integration primarily by the number of rules it produces.

Respecting national responsibility in social, cultural and territorial questions would not diminish Europe’s ability to act internationally. It could strengthen its legitimacy by demonstrating that integration has limits as well as purposes.

That is why the battle over the 2028–2034 budget matters far beyond its final figure.

Germany wants substantial cuts. Parliament wants substantially more. Governments benefiting from cohesion and agricultural spending will defend those resources, while others demand a greater shift towards competitiveness, defence and security.

But underneath those numbers lies a much larger decision.

The European Union must decide whether its budget will remain primarily an instrument for distributing resources among established policies or become capable of financing the strategic power that the new international environment requires.

And it must do so without confusing the capacity to act together with the ambition to govern everything together.

Europe does not need to become a state in order to become a power.

But it does need to decide which battles none of its nations can still win alone — and have the courage to spend accordingly.