The EU needs a bigger budget to spend more on defence in the face of the growing threat from Russia, European lawmakers demanded on Wednesday.“Defence spending cannot come at the expense of nor lead to a reduction in long-term investment in the economic, social and territorial cohesion of the union,” said a text approved by EU lawmakers during a plenary session in Strasbourg, France.The parliament’s vote is a clear message to the European Commission as the EU’s executive arm prepares a proposal for July on the next multiannual budget.It will cover the period 2028-2034, setting spending limits on the bloc’s priorities including support for farmers and subsidies to the poorest regions.EU lawmakers have called for “increased resources” and breaking with the usual limit that the budget is one percent of the 27 member states’ gross national income.Russia’s 2022 invasion of Ukraine and the need to ramp up defence spending against a more belligerent Russia has strained the EU budget.It is also straddled with a loan of 800 billion euros ($909 billion) taken out after the Covid pandemic to revive the economy, which the EU will have to pay back by 2058.The bloc’s focus on the green transition and building up its competitiveness will require massive investment at a time when weak economic growth in Europe is straining resources. Some states, like France and Italy, are already over-indebted.The two countries are pushing for Europe to take on more common debt to fund the bloc’s priorities but it is a red line for frugal states, including Germany and Sweden — major net contributors to the EU budget.On top of member states’ contributions, the budget is funded by tariffs on imports and a portion of the VAT collected inside the bloc but in the future, more money could come from a carbon border tax — which is being phased in gradually — or via a possible digital services tax.“Without fresh revenue, EU programmes will face cuts, or taxpayers will have to bear the burden,” said Siegfried Muresan, a lawmaker for the conservative EPP, the largest political group in the parliament.The debate on the future budget framework will be heated. It must be adopted unanimously by EU states and given the green light by lawmakers before 2027 ends.
