EU Commission Raises Defense Budget Fivefold, Unveils 'Largest Ever' Budget Plan… 3,230 Trillion Won

[Financial News] The European Commission unveiled on the 16th (local time) the largest medium- to long-term budget plan ever, amounting to 2 trillion euros (about 3,230 trillion won) for 2028-2034. This represents a significant increase compared to the 1.21 trillion euros (about 1,956.7636 trillion won) approved in 2020.
Ursula von der Leyen, President of the European Commission, stated, "This will be the most ambitious plan proposed so far," adding, "It has become more strategic, more flexible, and more transparent."
According to the EU Commission's press release, this budget is the 'Multiannual Financial Framework (MFF)' for 7 years starting from 2028. The proposed scale is 1.26% of the EU's total Gross National Income (GNI), significantly exceeding the current 1.13%.
The Commission's blueprint restructures the budget according to three key priorities.
△865 billion euros (about 1,398.69635 trillion won) for agriculture, fisheries, integration, and social policies △410 billion euros (about 662.9659 trillion won) for enhancing competitiveness, including research and innovation △200 billion euros (about 323.482 trillion won) for external activities, including 100 billion euros (about 161.725 trillion won) for Ukraine.
President von der Leyen added, "This budget takes into account both current situations and future challenges," stating that "about 35% of the budget will be used for climate and biodiversity projects."
131 billion euros (about 211.79294 trillion won) are allocated to defense, security, and space sectors, which is five times the current budget. The large allocation for defense and security is seen as a result of the rapid spread of the 'European Self-Reliance' concept, which emphasizes the need to ensure security without relying on the US, following the election of US President Donald Trump.
Additionally, the Commission proposed ways for the EU to secure additional funds independently without changing member states' contributions. This includes imposing taxes across the EU on electronic waste, tobacco, and corporate profits.
△96 billion euros (about 15.523776 trillion won) annually from the EU Emissions Trading System (ETS) △14 billion euros (about 2.263884 trillion won) annually from the Carbon Border Adjustment Mechanism (CBAM) △150 billion euros (about 24.2535 trillion won) annually from electronic waste △112 billion euros (about 18.111632 trillion won) annually from tobacco excise duties △68 billion euros (about 10.997436 trillion won) annually from the Corporate Contribution for Europe (CORE) are expected to be raised.
Among these, CORE is designed to be paid annually in a lump sum by companies operating and selling in the EU, excluding small and medium-sized enterprises, with an annual net sales of over 100 million euros (161.727 billion won).
Meanwhile, this financial plan requires unanimous approval from the European Parliament and the 27 EU member states, and adjustments are likely during this process.
whywani@fnnews.com Hong Chae-wan Reporter