Europe
Von der Leyen unveils €2 trillion EU budget plan for 2028-2034
European Commission President Ursula von der Leyen has presented a record-breaking long-term budget plan, announcing that the 2028-2034 budget will be €2 trillion.
As announced by von der Leyen in Brussels yesterday, the EU budget for 2028-2034 (the Multiannual Financial Framework) will reach approximately €2 trillion. This figure represents 1.26% of the EU’s gross domestic product (GDP), significantly more than the 1.1% of GDP allocated by Brussels for 2021-2027.
“This budget is more strategic, more flexible, and more transparent. We are investing more in our capacity to react and in our independence,” the European Commission President stated on Wednesday afternoon.
Von der Leyen’s plan reshapes the budget’s structure around three main pillars: €865 billion for agriculture, fisheries, cohesion, and social policy; €410 billion for competitiveness, including research and innovation; and €200 billion for external actions, of which €100 billion is allocated to Ukraine.
Although direct contributions from member states will cover most of the budget, von der Leyen also envisions introducing new EU-wide taxes on electronic waste, tobacco, and the revenues of large corporations so that Brussels can generate additional income on its own.
The main plan is to consolidate the EU’s central spending into three main budget lines. This will allow the Commission to respond more quickly to crises and conflicts, but also to control member states more than before under headings such as the “rule of law.”
The Commission also plans to establish a “Global Europe Fund” for an ambitious global policy.
The plans to radically change the structure of the EU budget are explained by the European Commission’s desire to act more “flexibly and effectively” in the future, while also allocating more funds for foreign policy activities and the improvement of member states’ defense capabilities.
Agriculture and cohesion funds are being merged
According to the Commission’s statement, approximately 90% of expenditures are typically fixed in the multiannual financial framework. The multiannual financial framework determines the EU’s seven-year spending; this long period was chosen to avoid having to enter into lengthy budget negotiations every year.
According to Brussels, this framework should be designed in the future so that the Commission can draw on more comprehensive resources in the event of a crisis or war, and for this purpose, the current budget structure will need to be changed.
This structure allocated about one-third of spending to farmers and another third to regions. The official purpose of the share allocated to regions was to bring the standard of living in the EU’s poor regions up to the level of more prosperous regions. There were also numerous small EU programs for different purposes.
Now, the Common Agricultural Policy (CAP), which covers subsidies to farmers, and the cohesion funds are being merged and will cease to be separate entities, both being grouped under the first pillar, National and Regional Partnerships, worth a total of €865 billion.
The two budget items appear to be significantly downsized compared to the current budget, where CAP and cohesion funds account for more than 60% of allocations.
A new approach is now planned. According to this approach, funds for farmers and regions will be combined in a previously non-existent budget item called “European social model and quality of life.”
Tensions will rise between the ‘poor’ south and the ‘rich’ north
On Wednesday, various figures regarding the exact volume of this budget circulated after clearly contradictory information was leaked from the Commission meeting, which lasted much longer than planned, into the afternoon.
According to the latest information, €865 billion—almost half of the total budget that Ursula von der Leyen wants to increase to €2 trillion—has been allocated to this budget item.
Unlike in the past, this money will be transferred directly to the member states, which will sign “national and regional partnership agreements” with the Commission. In these agreements, member states will set targets for their spending and commit to making “reforms.”
The deep cut will be the scene of a fierce debate between the southern countries, which are anxiously watching for any reaction from the agricultural sector, and the eastern countries, which are dependent on cohesion policy to close the gap with wealthier member states.
At the same time, this reduction will be welcomed by the western and northern countries, which have consistently argued for a greater focus on today’s priorities, such as climate action, defense, security, research, innovation, and advanced technologies.
According to the announcement, these reforms may particularly relate to the protection of the “rule of law.” Under this rhetoric, the EU has been “disciplining” governments with which it has fallen into contradiction for years, such as Viktor Orbán’s in Hungary.
Brussels’ control is increasing
In addition to the massive fund for farmers and regions, the European Commission is planning a new budget item: the European Competitiveness Fund (ECF).
This fund will bring together more than a dozen previously independent programs. The Commission officially states that it wants to reduce “complexity” and “bureaucracy.”
At least initially, the supervision of the ECF was planned to be delegated to the Commission. This would have given the Commission more flexibility to use the funds at its discretion and to distribute them more effectively, for example, in the event of new crises and conflicts.
On Wednesday, a figure of €410 billion was circulating, slightly less than initially planned. However, the ECF has faced serious criticism, especially from the European Parliament (EP), from those who feel deprived of their say and thus their authority, as with the agricultural and regional budgets.
The ‘Global Europe Fund’ will tie non-EU countries to the EU
In addition to these two budget items, the European Commission’s budget plan includes a third item, currently called the “Global Europe Fund.”
This fund was created to bring together programs affecting countries outside the EU. This will allow the Commission to use funds for the EU’s global influence policy in a more targeted way than before.
The programs of the Global Europe Fund will be strictly separated by region, and according to preliminary statements, this will make it much easier to “use development cooperation as a tool of EU foreign policy.”
The size of the Global Europe Fund was announced yesterday as approximately €200 billion. In addition to the official budget, a Ukraine fund is also planned, which von der Leyen wants to equip with about €100 billion.
Tax protests from the German business community
The restructuring of EU spending is accompanied by a restructuring of revenues. This figure is also higher than before, as debt repayments of between €25 billion and €30 billion will be made each year from 2028.
Von der Leyen has already shelved the plan to use revenue from a possible new digital tax on US digital giants to consider the fundamental interests of the Trump administration. Instead, she wants to tax unused electronic waste and take a share of national tobacco taxes.
In addition, a tax is planned for EU-based companies with an annual revenue of over €100 million. This is already causing strong protests from the German business community, particularly because a large proportion of the affected companies (up to 40% according to some estimates) are based in Germany.
Observers predict that the draft budget will cause serious disagreements in the EU for at least two years and will further exacerbate existing differences.
Europe
Outgoing UK PM Starmer to boost defense spending by £1 billion to secure legacy
Outgoing British Prime Minister Keir Starmer is pledging to secure at least £1 billion in additional funding for the defense sector, according to people familiar with the matter.
The move is being viewed as an effort by Starmer to cement his political legacy in the prime minister’s office before stepping down, the Financial Times reported.
Sources said Starmer aims to publicly present the defense sector investment plan on Tuesday, June 30, following multiple prior delays to its publication.
Under the plan, the total funding volume for the armed forces over the next four years is expected to rise approximately £14.5 billion to £15 billion above previously projected levels.
The Starmer-led government had previously proposed providing £13.5 billion in additional resources for defense needs.
However, former Defence Secretary John Healey opposed the prime minister’s proposal, viewing the amount as insufficient, and subsequently resigned from his post in June.
Healey had insisted on an £18 billion increase in the defense budget. In his resignation statement, the outgoing secretary called on the head of government to commit to raising military spending to 3% of gross domestic product by 2030.
Healey noted that the prime minister’s existing plan would only maintain this ratio at 2.68%.
Following these developments, newly appointed Defence Secretary Dan Jarvis reshaped the budget plan and made several difficult decisions, according to sources.
The new program drafted by Jarvis reportedly places a higher priority on the combat readiness of the military and the deployment of autonomous technologies—including unmanned ground vehicles—across all military units compared to the proposals put forward by the departed Healey.
A government official indicated that in the event of potential last-minute disruptions, the ultimate deadline for the announcement would be July 6, immediately ahead of the NATO summit to be held in Ankara.
The Financial Times pointed to the obligation to demonstrate to allied countries, most notably US President Donald Trump, that the United Kingdom is making serious investments in defense as a key source of pressure on Starmer.
According to assertions in the report, Starmer could hand over prime ministerial authority to Andy Burnham, who is seen as his strongest successor, as early as July 20.
Sources familiar with the process noted that Burnham has already begun receiving briefings on government operations.
Furthermore, sources stated that Burnham has privately agreed with arguments that the spending plan should be approved before the NATO summit rather than being delayed.
Conversely, one source did not rule out the possibility that the incoming prime minister could face more intense pressure, which could lead to a reassessment of defense funding.
Commenting on the position of the military leadership, the source remarked: “The military wing has adopted an attitude of ‘it is better than nothing,’ but we will have to renegotiate this issue with the new Prime Minister, Andy Burnham, in any case.”
Keir Starmer announced in June that he would resign following pressure from within his own party.
Starmer has led the British government for approximately two years.
Europe
Europe faces 15-year low in winter gas reserves as June storage targets fall short
European Union member states risk entering the upcoming heating season with their lowest natural gas reserves in 15 years, according to industry assessments.
A report by consultancy firm Wood Mackenzie, published by the Financial Times, warns that if current trends persist, energy markets could face a new wave of price spikes ahead of the winter period.
Analysts project that European underground gas storage facilities may reach a fullness level of only 76% by the end of the injection season, which typically runs from April to October.
After a harsh winter left storage facilities at a mere 28% capacity at the start of the season, EU nations are struggling to rebuild their reserves to historical norms.
According to data from Gas Infrastructure Europe (GIE), the current average storage fullness level stands at 48.29%.
June, traditionally the highest-volume month for filling underground storage facilities in the European energy sector, failed to deliver the targeted efficiency this year. Industry officials note that above-normal temperatures expected in July and August will drive up electricity consumption for cooling, making it even more difficult to direct gas into storage.
Having severely depleted its reserves during the past two harsh winters, Europe must store approximately 70 billion cubic meters of natural gas to prepare for the upcoming winter.
However, the storage injection rate failed to accelerate in June, falling 14.7 percentage points behind the five-year average. In the final week of June alone, this deficit widened by an additional 0.2 percentage points.
Renewable energy sources are also proving insufficient to bridge the supply gap. According to WindEurope data, the share of wind energy in electricity generation averaged approximately 14% in June.
This is down from 15% recorded during the same period last year, with the share of wind-generated electricity dropping to as low as 9% in the second half of June. A heatwave sweeping the region, with temperatures hovering two degrees Celsius above seasonal norms, represents another key factor driving up energy demand.
Multiple global geopolitical developments underpin the natural gas shortfall confronting Europe. Disrupted shipments of liquefied natural gas (LNG) through the Strait of Hormuz due to hostilities between the US and Iran, combined with production declines in Qatar and the United Arab Emirates (UAE), have tightened global supply.
Meanwhile, in line with decisions by the Kyiv administration, the transit pipeline carrying Russian natural gas to Europe through Ukrainian territory has been completely shut down. The EU must now secure gas not only for its own domestic consumption but also to supply facilities in Ukraine.
In an effort to bypass this halt in Gazprom’s pipeline gas through increased LNG imports, EU countries purchased 109 million tons (approximately 142 billion cubic meters) of LNG last year, representing a 28% increase over the previous year.
However, LNG imports in June fell by approximately 17% compared to the same month last year, dropping to 7.8 million tons—the lowest level in 10 months.
Another critical factor squeezing supply in the European market is the EU’s strategy to phase out Russian energy products entirely.
Russia currently supplies 14% of Europe’s total LNG imports.
According to a phased embargo plan approved by the European Council, LNG imports from Russia will be completely banned starting January 1, 2027.
The import ban on Russian pipeline gas is scheduled to take effect on September 30, 2027. While a transition period is provided for existing contracts, member states have been tasked with the obligation to verify the country of origin for all imported natural gas.
Despite these market uncertainties, the “day-ahead” spot gas price at the Dutch TTF hub—Europe’s benchmark gas trading platform—declined to $475 per thousand cubic meters at the end of June, down from an average of $565 in May.
With a total active gas storage capacity of 109 billion cubic meters, Europe maintains its position as the largest importer in the global LNG market.
Europe
Buckingham Palace updates King’s official role to focus on securing faith in multi-faith Britain
The official job description of the British monarch has been formally revised to state that the King’s role is to “secure the environment for faith” within a multi-faith nation, according to a newly updated definition of the Crown’s responsibilities published by Buckingham Palace.
Under the rewritten description, the King, who holds the title of “Supreme Governor of the Church of England,” is tasked with preserving a supportive space for religious practice.
The adjustment was disclosed in the 2025–26 Sovereign Grant report, the annual financial and administrative review of the royal household. It modifies the definition of the King’s role as “Head of the Nation,” which last year described the monarch as the “Head of the Church of England and Defender of the Faith.”
This year’s report details the role with greater specificity: “His Majesty is Supreme Governor of the Church of England and secures the environment for faith in a multi-faith nation.”
Prior to his coronation, intense public debate centered on whether King Charles III would break with his Christian predecessors by choosing to be styled as “Defender of Faiths” in the plural, rather than the traditional singular “Defender of the Faith.” Ultimately, the King chose to retain the historic singular formulation.
Nevertheless, both during his tenure as the Prince of Wales and since ascending the throne, the King has made interfaith dialogue a cornerstone of his public life.
Regularly referencing the Abrahamic religions, King Charles maintains active engagement with Jewish, Muslim, Sikh, Orthodox, and other religious communities across the United Kingdom and globally.
By contrast, the official role of Queen Elizabeth II, as outlined in the Sovereign Grant reports during her reign, was more straightforwardly defined, styling her as “Supreme Governor of the Church of England” and “Head of the Armed Forces.”
In this year’s assessment, the King’s relationship with the military has been rephrased, stating that he “provides spiritual support to our Armed Forces.”
The updated report also outlines several of the King’s core purposes in detail, describing him as a “catalyst for charitable activity,” recognizing his work on “the degradation of nature,” and highlighting his responsibility to “foster a sense of pride, continuity, and stability, reinforcing the social fabric and cohesion of the United Kingdom, particularly at significant moments in national life, both in times of celebration and tragedy.”
The document adds: “His Majesty also has a particular role in bringing together and engaging with communities and faith groups across the different regions and nations of the United Kingdom.”
Beyond the constitutional and ceremonial adjustments, the report revealed that the King paid £12.9 million in tax during the 2024–25 financial year, a figure that places him among the top 100 taxpayers in the country for that period.
Furthermore, it was announced that the King and Queen will not move their permanent residence to Buckingham Palace even after the ongoing £369 million reservicing and renovation program is completed.
A YouGov opinion poll published on Friday indicated that 66% of the British public support the decision not to relocate to the palace.
This is not the first time Buckingham Palace has revised the formal job description of the reigning monarch.
In 2022, near the end of Queen Elizabeth II’s reign, the Sovereign Grant redefined the role of the monarchy by removing a series of specific duties she “must fulfill,” delegating more responsibilities to the then-Prince of Wales.
That revision marked the first time in at least a decade that the late Queen’s official duties had been altered in the palace’s annual report, removing specific events—such as the State Opening of Parliament—that had previously been deemed mandatory under “constitutional convention.”
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