The strategy for the next EU Multiannual Financial Framework
The European Union is entering a new era, and with it comes a shift in how funding, research, and innovation are structured. As the next Multiannual Financial Framework (MFF) for 2028-2034 begins to take shape, the message from the Commission is clear: competitiveness is at the heart of European funding strategies.
But what does this mean in practical terms for businesses, researchers, and policymakers alike?
According to early indications, the next Multiannual Financial Framework (MFF) for 2028-2034 could significantly change the way EU funds are managed. The European Commission is considering an approach that includes national plans for each Member State, inspired by the Recovery and Resilience Facility (RRF) model used for the National Recovery and Resilience Plans (NRRPs). This would grant national governments *more discretion in allocating resources, with funding conditional on reforms and specific objectives. Additionally, the overall budget is expected to increase by at least €200 billion, with a strong focus on defense in response to the war in Ukraine and growing security needs. These potential changes have sparked concerns among various stakeholders. Regional authorities worry that a centralized approach to fund management could weaken the role of cohesion policy, potentially undermining efforts to reduce regional disparities. Some Member States, particularly Germany and the Netherlands, may resist a significant budget increase, raising concerns about financial sustainability and the effectiveness of higher spending.
**Official discussions on the new MFF will begin in July 2025, to reach an agreement by 2027. In the meantime, the European Commission has launched public consultations to involve citizens and stakeholders in shaping the priorities of the next budget. In summary, the next MFF could mark a turning point in EU fund management, with a focus on competitiveness, defense, and flexibility. However, balancing these new priorities with regional needs and Member States’ concerns will be crucial to ensuring a stronger and more cohesive European Union.
Competitiveness as the new guiding principle
The concept of European competitiveness has always been a topic of discussion, but the upcoming MFF solidifies it as the primary driver of funding decisions. The shift is unmistakable: exploitation strategies will now play a central role in European projects. Gone are the days when research proposals could thrive solely on theoretical advancements. Today, the key to securing EU funding lies in demonstrating real-world applications and market impact. For businesses and consortia aiming for EU grants, this means that proposals must not only showcase innovation but also clearly outline pathways to market deployment. Whether in AI, green technologies, or digital transformation, the Commission’s stance signals an expectation that research efforts lead to tangible economic benefits, job creation, and global positioning. Companies must therefore prioritize clear exploitation strategies in their proposals to remain competitive.
Lump Sum Model: focus on simplification and results
Another notable change in the upcoming MFF is the increased reliance on the lump sum model for funding allocation. Traditionally, EU projects have been subject to complex financial reporting, requiring beneficiaries to meticulously track expenses and administrative costs. The shift toward lump sums, more, however, changes the game entirely. By focusing on results rather than cost-driven accounting, the Commission aims to simplify access to funding, reduce bureaucratic burdens, and ensure that more organizations—especially SMEs—can participate in EU projects. But this also means that accountability is shifting: instead of justifying every euro spent, project leaders will now need to demonstrate the impact and completion of agreed milestones. Businesses must adapt to this model by strengthening their project management approaches to focus on deliverables rather than cost-tracking.
The growing role of private companies
It is no secret that the EU wants to position itself as a global leader in key industries such as digital innovation, energy transition, and health. And in this new framework, private companies are no longer mere beneficiaries of funding—they are the engine of European competitiveness.
European programs will likely prioritize initiatives where businesses are active drivers of research and innovation, ensuring a direct link between R&D and economic growth. While universities and research institutions remain crucial, purely academic research with no clear exploitation strategy may find itself at a disadvantage. Companies must therefore strengthen public-private collaborations, forging partnerships with universities, startups, and other stakeholders to create consortia that can demonstrate both scientific excellence and market feasibility.
Is this a shift away from research for research’s sake?
This raises an important question: will fundamental research, with no immediate competitive application, struggle to find funding? There is a growing concern among the scientific community that projects without a clear link to industrial impact may be deprioritized. While basic research remains essential for long-term breakthroughs, policymakers seem increasingly inclined to fund initiatives that deliver faster, measurable benefits to the European economy.
The ongoing consultations on Framework Programme 10 (FP10) reflect this debate. The discussions emphasize the need for a better balance between curiosity-driven research and applied innovation that strengthens Europe’s industrial leadership. Researchers and companies alike must stay informed about these developments to align their proposals with emerging funding priorities. Keeping track of EU policy discussions and positioning research within strategic sectors such as AI, health, and green energy will be essential for securing funding under FP10 and the MFF 2028-2034.
Knowledge sharing and the global competitiveness race
In a world where the US, China, and other global powers are pushing aggressively to dominate strategic industries, Europe must rethink how it fosters collaboration and knowledge-sharing. As highlighted by former ECB President Mario Draghi, competitiveness is not just about economic performance but also about health, sustainability, and technological leadership. The Cancer Free Europe initiative, digital sovereignty, and decarbonization efforts all fall within this broader vision of European competitiveness.
The EU is now exploring new frameworks for collaboration, ensuring that knowledge exchange happens more efficiently across industries and disciplines. This means more digital platforms, stronger partnerships between private and public entities, and possibly new funding instruments to encourage cross-border cooperation. Companies must prepare for this shift by investing in competitive sectors and actively participating in European knowledge-sharing initiatives.
Timeline and ongoing debate
The next MFF is still under discussion, and the political landscape is evolving rapidly. Some advocate for a stronger role for private investors in funding programs, while others warn against over-commercializing European research. The balance between fostering innovation and maintaining EU values of inclusivity and sustainability remains a key topic of debate. One thing is certain: the coming months will be crucial in shaping the final framework, with adoption expected between 2026 and 2027. Businesses and research entities must start preparing now to align with this new strategic direction and maximize funding opportunities.