How the new MFF could redefine EU budget governance and CAP architecture

The European Commission’s proposal for the 2028-2034 Multiannual Financial Framework (MFF) would profoundly reshape EU budget governance and the architecture of the Common Agricultural Policy (CAP). By merging the CAP into a new €800 billion National and Regional Partnership Fund alongside cohesion, migration, and border policies, the reform shifts power towards Member States, who would design national plans with significant discretion over spending priorities. Safeguards are foreseen for direct farmer support, and rule-of-law conditionality mechanisms would be embedded from the start, yet environmental measures risk dilution while leaving the CAP vulnerable to national fragmentation and economic operators exposed to uneven market conditions. The effective use of the Commission's limited oversight mechanisms under the new framework becomes crucial for maintaining policy coherence. Without rigorous plan evaluation, timely activation of conditionality mechanisms, and targeted use of soft law instruments for policy guidance, it remains unclear how the proposed framework could ensure rule-of-law compliance, uphold environmental ambition and preserve the CAP's common character across Member States.

On 16 July, the European Commission presented its proposal (COM(2025) 571 final) for the new Multiannual Financial Framework (MFF): the EU’s long-term budget plan allocating resources across different policy areas for the 2028-2034 period. The proposed legislative texts are setting the stage for a fundamental conflict: the European Union's urgent new spending priorities - defense, competitiveness, enlargement - and its drive for a more streamlined, flexible and performance-based budget are clashing with the Common Agricultural Policy's (CAP) traditional structure, stable funding expectations, and stated objectives of competitiveness, resilience, and sustainability. This tension not only threatens to lead to budget cuts for support to European farmers, a reduction in CAP’s environmental ambition, but also to a significant shift in its governance model.

The proposed texts, as they stand now, reflect the continuing reorientation towards a more nationalised agricultural policy. The trend is not new: the last CAP reform, with its New delivery model, already gave Member States responsibility for designing certain measures within National Strategic Plans (Lamy & Pons et al., 2024), affecting both direct payments to farmers and rural development funds. However, what emerges this time is not merely an extension of that flexibility but a blueprint for a major redistribution of power between Brussels and national capitals in favour of the latter, raising serious questions about how much of the Common Agricultural Policy remains truly common.

The European Commission proposes a comprehensive restructuring of the EU long-term budget intended to create a simpler system that strengthens subsidiarity and flexibility. This framework draws heavily on the governance model of the post-Covid Recovery and Resilience Facility (RRF), notably incorporating its cash-for-reform logic, conditioning the disbursement of EU funds on the achievement of objectives jointly agreed by the Commission and Member States.

Whereas the current MFF spans seven headings and around 50 programmes, amounting to €1.2 trillion (in 2025 prices), the new proposal consolidates these into 4 main pillars, with a total envelope of €1.8 trillion:

1.        Economic, social and territorial cohesion, agriculture, rural and maritime prosperity and security;

2.        Competitiveness, prosperity and security;

3.        Global Europe;

4.        EU administration.

Central to the first heading is the €800 billion National and Regional Partnership Fund (NRPF), which represents over 80% of this pillar’s resources. This new instrument combines agricultural policy, as well as migration and border management, and cohesion policy funding into a single framework, implemented through nationally drafted plans that outline specific milestones and targets. Plans are first assessed by the European Commission and then approved by the Council. The Commission may suspend all or part of the payments if one or more milestones or targets are not fulfilled, having due regard to the principle of proportionality.

The long-standing distinction between its two financing instruments would also disappear: the European Agricultural Guarantee Fund (EAGF), which provides direct income support to farmers, and the European Agricultural Fund for Rural Development (EAFRD) would both be indistinctly incorporated into the NRPF.

Member States would assume far greater responsibility through national plans (NRP Plans), setting the balance for resource allocation between agriculture, rural development, cohesion, and migration policy, within the framework set by the NRPF Regulation (COM(2025) 565 final). This flexibility, however, would operate within certain limits: Article 10 of the draft Regulation sets minimum allocation requirements for each policy area.

The special status of these measures is further reflected in the proposal of an ad hoc CAP Regulation (COM(2025) 560 final), under the NRPF framework, which essentially sets out detailed rules for direct support to farmers.

By contrast, rural development measures (excluding agri-environmental schemes) appear more exposed to reallocation pressures at the national level. In total, around €235 billion would remain unallocated at the EU level, giving Member States considerable discretion to redirect resources among the policy areas covered by the NRPF according to national priorities.

Greater national flexibility should be counterbalanced by reinforced oversight at Union level to ensure:

·       The respect for EU values in the allocation and use of CAP funds;

·       The preservation of a common supranational agricultural policy framework.

In the draft texts, enhanced conditionality mechanisms are proposed to guarantee compliance with the rule of law and the EU Charter of Fundamental Rights, providing the minimum common foundation necessary for a sound implementation of the CAP and more broadly of the Union budget. Nevertheless, worries about the fragmentation of agricultural policy, and especially environmental standards, leave open questions about the proposal’s overall effectiveness in contributing to EU farmers’ long-term competitiveness and environmental objectives, as well as market integration.

Compliance with the rule of law and the Charter of Fundamental Rights are obligations that already formally cover the current CAP framework, but their practical effectiveness remains limited. Under Regulation 2020/2092 (Conditionality regulation), Rule of law conditionality also applies to CAP, allowing the Council to suspend funds (by qualified majority) on a Commission proposal where breaches compromise the sound financial management of the EU budget. However, this mechanism has been criticised for its heavy procedural requirements and stringent evidentiary conditions, which restrict its ability to address systemic deficiencies (Huemer et al., 2025), such as threats to judicial independence that could undermine the review of unlawful decisions by national authorities managing CAP funds. Respect for the Charter is even less enforceable, as Article 9 of the CAP Strategic Plans Regulation (Regulation 2021/2115) merely states the obligation without providing a dedicated compliance mechanism.

The NRPF Regulation would introduce two distinct conditionality systems: one for respect of the Charter (Article 8) and one for respect of the rule of law (Article 9). The latter mirrors the Conditionality Regulation but with simplified conditions. The Commission could trigger the mechanism as soon as it considers that a Member State no longer complies with the rule of law condition and would only need to “take into consideration” rather than “establish” the actual or potential impact on the EU budget of the breach, along with its nature, duration, gravity and scope.

The Council would still have to make the final decision, but only through the adoption of an implementing act confirming a breach of the rule of law condition, rather than directly imposing sanctions. This minor change in procedure could possibly reduce political resistance and favour the chances of building a qualified majority. If a breach is confirmed, payments for specific measures within the NRPF plan that are affected by the breach would automatically suspended, as Article 9(5) provides that the Commission cannot make any further disbursements until compliance is restored.

Payment suspension for specific measures could also result from Charter breaches through a parallel mechanism under Article 8. Following the model of Article 9, the Commission would trigger the procedure and should “take into consideration” the actual or potential impact on the EU budget of the breach. However, in this case the Commission would decide alone on non-fulfilment of the Charter condition, directly through the adoption of an implementing decision and without any involvement of the Council.

Beyond the enhanced enforcement mechanisms, the Regulation also represents significant progress in embedding compliance with the rule of law and the Charter from the outset, with the Commission's assessment powers of national plans covering the respect of these principles. In their draft plans, Member States would have to identify potential shortcomings and propose corrective actions based on country-specific findings from the Rule of Law Report (Art. 22 (3) (p), (q) NRPF Regulation), and the Commission is obliged to particularly assess these elements when reviewing the plans (Art. 23(1) NRPF Regulation). As a result, national plans would not be approved without prior assurance that these two horizontal conditions are fully met in advance.

All EU funding is an expression of the solidarity among Member States and such solidarity rests on mutual trust, which in turn requires respecting shared values. While the measures outlined above may contribute to reinforcing this trust, the Commission’s proposal encounters significant challenges in mitigating the risk of disparities and barriers within the Single Market.

Under the NRPF framework, the CAP Regulation, which establishes the rules for disbursing funds to farmers, only defines broad agricultural policy objectives without introducing enforceable targets. These objectives include preserving soil potential, protecting watercourses from pollution, and safeguarding wetlands and peatlands (Art. 3(4) and related annex). However, each Member State would retain wide discretion in determining the arrangements for achieving these objectives by establishing a set of protective practices to be included in their NRP Plans, with which farmers must comply in order to receive payments.

The rationale behind this enhanced subsidiarity is to allow for policies tailored to the diversity of agricultural contexts within the Union. However, the experience of the current CAP under its new delivery model calls this assumption into question. National authorities already enjoy considerable flexibility through instruments such as eco-schemes, nationally-designed financial support schemes for farmers adopting environmentally beneficial practices. Nonetheless, Member States frequently failed to exploit this flexibility to foster more ambitious environmental measures. In certain cases, eco-schemes were deliberately conceived so as to be accessible to nearly all farmers, thereby allowing payments without requiring significant changes to existing practices. (Lamy & Pons et al., 2024; Midler et al., 2023; Bradley & Pagnon, 2023).

A weak EU-level framework and increased subsidiarity may further weaken environmental ambition and generate tensions, leading to undesirable competition between Member States in the implementation of the upcoming CAP.

To counter this risk, very few levers remain available to the Commission.

Although a soft law instrument, such recommendations could assume a significant role within the new framework. These recommendations would aim to address “key challenges” and define the “relevant interventions” notably related to farmers’ income and competitiveness, climate action and biodiversity conservation (Art. 2 and recital 4 CAP Regulation). The Commission has already demonstrated effective utilisation of similar tools during the previous CAP reform to foster greater policy coherence among National Strategic Plans and promote alignment with its policy vision through the publication of detailed recommendations (Caiati & Pratelli, 2025). These instruments distinguished themselves through their specificity, being meticulously tailored to each Member State, while remaining inspired by the common vision of the European Green Deal.

This process would provide a critical control point to ensure that Member States have adequately addressed in their plans the recommendations issued by the Commission and that the proposed measures genuinely contribute to the Union's climate and environmental objectives and the completion of the Single Market, as required by the NRPF Regulation. Ultimately, the supranational character of the Common Agricultural Policy and the maintenance of comparable standards of environmental ambition among Member States, would depend on the rigour and consistency with which this assessment will be conducted.