The European Commission on Wednesday proposed a 2 trillion euro ($2.31 trillion) EU budget for 2028 to 2034, with a new emphasis on economic competitiveness and defense and plans to overhaul traditional spending on farming and regional development.
"It is a budget that matches Europe's ambition, that confronts Europe's challenges and that strengthens our independence," Commission President Ursula von der Leyen told reporters in Brussels, Reuters reported.
"The budget is larger. It is smarter and it is sharper. It delivers for our citizens and our business, our partners and our future."
The Commission said its proposal amounted to 1.26% of the 27-nation European Union's Gross National Income - a measure of the size of the economy - compared to 1.13% for the current seven-year budget.
Most of the funding for the budget comes from the governments of the EU's member countries.
But the Commission proposed several ways to raise more funds directly, including a new tax on companies doing business in Europe that have an annual net turnover exceeding 100 million euros in an EU country.
The proposal marks the start of years of intense negotiations before a final budget is agreed by all member countries and signed off by the European Parliament.
The proposal includes a new 451 billion European Competitiveness Fund focused on boosting Europe's defense industry, fostering innovation and supporting the transition of industry across the bloc to clean technology.
The proposal allocates 131 billion euros specifically to defense and space - a fivefold increase over the current level, according to the Commission.
Those proposals reflect a desire to boost spending on new priorities after decades in which the vast bulk of the budget went on agriculture and regional development, known as cohesion policy, as it aims to reduce disparities between regions.
But farmers and regions would still receive substantial funding, according to the proposal.
It sets aside 302 billion euros to support farmers and a minimum of 218 billion euros for Europe’s least developed regions, as well as 200 billion euros for global programmes.
The Commission also pitched dedicating 100 billion euros for Ukraine outside of the budget's structure.
