Irish Council Presidency Releases Post-2027 MFF Negotiating Box: Proposed Cuts Trigger Debate Over Transport Innovation Funding

On 10 October 2026, the Irish Presidency of the Council of the European Union published its revised Negotiating Box for the 2028–2034 Multiannual Financial Framework (MFF). The document frames the core financial parameters for Member State negotiations on the EU’s long-term budget. 

The Irish Presidency proposes an overall budget volume of €1,622 billion in 2025 prices (equivalent to €1,825.5 billion in current prices). This represents an 8 per cent reduction compared to the European Commission’s original €1,985 billion proposal presented in July 2025. 

Under the principle that "nothing is agreed until everything is agreed", the proposal sets off a decisive phase of interinstitutional negotiations. European Parliament Co-Rapporteurs Siegfried Mureșan (EPP, Romania) and Carla Tavares (S&D, Portugal) immediately rejected the proposed 8 per cent cut, arguing that reduced spending will undermine European competitiveness, regional cohesion, and strategic security ambitions.

Breakdown of Key Budgetary Provisions

Reallocation of Pillar Funding

• Competitiveness and Innovation: Funding for competitiveness, research, and innovation falls to approximately €456 billion, down from the Commission's proposed €522 billion.
• Cohesion, Agriculture, and Security: Allocated a combined €914 billion (down from €946 billion). While the Common Agricultural Policy (CAP) envelope remains protected and cohesion receives a slight baseline increase, funding under the broader EU Facility is reduced by over 40 per cent. 
• Global Europe: Reduced to €157 billion, down from €190 billion. 
• Unchanged Envelopes: Targeted allocations for Ukraine support, the Flexibility Instrument, and the European Peace Facility remain outside the budget ceilings. 
• Delivery Mechanism: Implementation will follow the Commission's national and regional partnership plan model, bound by strict rule-of-law conditionality. 

Expanded EU Own Resources Package

To stabilise direct Member State contributions, own-resources ceilings are set at 1.75 per cent of Gross National Income (GNI) for payments and 1.81 per cent for commitments. The proposal incorporates five distinct revenue streams: 

1. Corporate Contribution: An annual lump-sum contribution ranging from €100,000 to €750,000 for large corporations operating in the single market.
2. Emissions Trading System (ETS): 30 per cent call rate on ETS revenues.
3. Carbon Border Adjustment Mechanism (CBAM): 90 per cent of CBAM revenues allocated to the EU budget.
4. E-Waste Levy: A uniform rate of €2 per kilogram on non-collected e-waste.
5. Tobacco Excise: A 15 per cent call rate on national minimum excise duties.

Note: A crisis-borrowing clause would also allow up to €350 billion in extraordinary funding.

Impact on ERTICO Partners

The proposed reductions in competitiveness and transport infrastructure spending have direct strategic implications for the ERTICO partnership and the broader Intelligent Transport Systems (ITS) ecosystem:

• Research and Innovation Capacity (FP10): The reduction in the overarching competitiveness envelope from €522 billion to €456 billion directly affects Framework Programme 10 (FP10) allocations. ERTICO partners developing NextGeneration Connected, Cooperative and Automated Mobility (CCAM) and AI-driven traffic management tools will face tighter competition for EU research grants.
• Deployment via Infrastructure Instruments: The 40 per cent reduction in the EU Facility envelope creates headwinds for large-scale physical and digital infrastructure deployments. ERTICO partners relying on co-funding for C-ITS corridor rollouts, heavy-duty charging networks, and urban mobility digitalisation will need to leverage public-private partnerships more aggressively.
• Corporate Contribution Considerations: Large industrial partners within the ERTICO network operating across multiple EU Member States will need to account for the proposed corporate lump-sum contribution mechanism.
• Focus on National and Regional Plans: As funding delivery shifts towards national and regional partnership plans, ERTICO partners must engage more closely with national ministries to ensure digital mobility, active transport infrastructure, and ITS projects are explicitly prioritized in national allocation strategies.

Looking Ahead

Under Article 312 of the Treaty on the Functioning of the European Union (TFEU), the Multiannual Financial Framework is adopted by unanimous agreement in the Council following the formal consent of the European Parliament expressed by an absolute majority.

Key upcoming steps in the negotiation process include:

• 13 October 2026: The General Affairs Council meets to review the technical details of the Irish Presidency's Negotiating Box.
• 15–16 October 2026: EU leaders discuss the budget parameters during the autumn European Council summit.
• Late 2026 – Early 2027: The Council aims to finalize its internal compromise position before entering interinstitutional negotiations with the European Parliament.

ERTICO will continue to monitor the MFF negotiations closely, working alongside European partners to highlight the strategic importance of sustained investment in research, digital transport infrastructure, and green mobility solutions across Europe.

Source: European Parliament