Brussels – While the overall design of the future EU budget may raise some doubt – though not necessarily criticism – the proposed allocations fall well short of what is required to finance EU enlargement. The 2028-2034 MFF (Multiannual Financial Framework) is only just entering its legislative phase, making this an opportune moment to assess its potential economic implications.
“There is a great deal of uncertainty about the overall allocation,” notes Peter Tabak, former EBRD Regional Lead Economist for the Western Balkans, as he outlines to The New Union Post the initial estimates of what the new Global Europe Instrument may provide for the enlargement priority, following the absorption of the current Instrument for Pre-Accession Assistance (IPA III) into a single funding envelope.
What to expect from the 2028-2034 MFF
The Hungarian economist’s “very crude” estimate – based on the previous allocation rules for the Growth Plan for the Western Balkans – is the first concrete calculation to appear, and may serve as an initial reference point as the negotiations within the Parliament and the Council start.
Of the €43.2 billion assigned to the “Europe: Enlargement and Neighbourhood East” pillar, €3.2 billion is assumed to be set aside for non-candidate European countries and administrative costs. The remaining €40 billion is to be distributed among the Western Balkans, Türkiye, Ukraine, Moldova and Georgia, “according to population size and GDP per capita,” mirroring the current methodology used in the Growth Plan for the Western Balkans.
According to preliminary assumptions, the Western Balkans would receive around €11.7 billion – a nominal increase close to 50% compared with the €7.8 billion estimated under IPA III. Yet with consumer prices in the EU expected to rise by 34% between 2018 and 2028, this amounts to a less than 12% increase in real terms, or even less, at 5%, when compared with the average 42% increase in domestic prices in the partner region over the same period. However, if we also take into account the €2 billion in grant funding available between 2024 and 2027 from the Growth Plan, the available funding is expected to decrease by over 10% in real terms.
Despite the €100 billion Ukraine Reserve financed above the 2028–2034 MFF ceilings, Ukraine may still receive part of the Global Europe Instrument – an estimated €8.8 billion for “general preparation and the adaptation of legislation and institutions,” Tabak forecasts. However, if Ukraine were excluded from the €43.2 billion envelope, or if candidates like Georgia and Türkiye were sidelined due to democratic backsliding, “the allocation for the Western Balkans could rise significantly.”
Is this enough?
Given the ongoing war in Ukraine and the scale of future reconstruction, the pressures on the next EU budget “will be significantly increased,” Tabak warns. Yet the €43.2 billion proposed for the European pillar of Global Europe “will most likely not be enough” to meet the enlargement priority in the 2028–2034 MFF – although, he cautions, “the final impact will depend heavily on how the allocation is structured.”
Even once the definitive allocations for each candidate country are agreed, a key question remains: if new members join the EU during the next budget cycle, what becomes of the pre-accession funds originally assigned to them? Will these resources be redistributed among the remaining candidates, or redirected elsewhere?
A further challenge, the former EBRD Regional Lead Economist for the Western Balkans notes, concerns the way funding is currently deployed. Much of current pre-accession support (e.g., half of the Growth Plan funds) flows through the Western Balkans Investment Framework, which primarily finances large-scale infrastructure projects – many of them in transport. Yet “the most acute gaps are now in human capital, communal infrastructure, green economy, the rule of law and corruption,” leaving open the question of whether future pre-accession funding will pivot even more towards these priorities.
While political appetite to increase the Global Europe envelope appears limited during the upcoming negotiations between Parliament and Council, Tabak argues that “changes in the structure of the allocation of pre-accession funds could still make a difference.” This matters even more, he adds, as it is becoming “increasingly important” to use EU funding to leverage greater investment by the private-sector and international financial institutions.
