Von der Leyen wants to overhaul and renationalise EU budget rules

The European Commission is working on plans for a major revision of the European budget rules, which will result in the current system of EU agricultural subsidies being abolished. This will also involve returning some of the Brussels powers to the Member States, the so-called renationalisation.

President Ursula von der Leyen is apparently working on a fundamental financial reform of the EU, as shown by (deliberately) leaked Brussels documents on the next financial period (2028-2034). They list the consequences of the structural report of former Italian Prime Minister Draghi ('the EU must become more competitive and economically stronger') and of the Strategic Dialogue on agriculture ('EU subsidy from hectares to farmers' incomes, separate pot for sustainability').

These two reports are in addition to the annual political-administrative procedures for the adoption of the annual budget (2025) and the associated multi-annual forecast. In addition, once every five years a newly formed Commission can look ahead to the multi-annual period. 

One of the variants that is now being discussed (on the basis of official preparations) is the partial remerging of the more than 500 European subsidy pots. Among other things, the large (regional) structural funds, the fund for the common agricultural policy and the fund for rural development would be merged. 

The payment would then be made partly dependent on the political good behaviour of the individual Member States ("reforms"). In doing so, Brussels intends to use the methodology already applied to the national strategic plans (NSPs) in agriculture in many more policy areas. The Dialogue recommendations of the Strohschneider Commission also advocate the abolition of all kinds of binding Brussels rules.

The EU leadership apparently no longer wants to deal with such 'nonsense'. Brussels then leaves many details and national fuss to the EU countries, but wants to use disbursements to bind the EU countries to priorities for 'competitiveness', 'innovation', 'resilience' and 'defence capability'.

According to the now leaked document, future agricultural subsidies are to be linked to the promotion of organic farming by member states; this probably reflects the view that current CAP subsidies would be largely absorbed by Ukraine's proposed accession.

In Von der Leyen's trial balloon, a much smaller agricultural fund is returned to the 27 EU countries, and member states are given more powers to spend that money at their own national discretion, albeit after approval by Brussels. 

Theoretically, it is still conceivable that the EU member states will fragment von der Leyen's budget package in the usual way across the many hundreds of expenditure items. The European Parliament can also attach all sorts of conditions to it when adopting the multiannual budget (MFF).