Brigid Laffan returned to Villa Schifanoia on 22 October to deliver the inaugural Brigid Laffan Lecture, closing the first day of the European Governance and Politics Programme (EGPP) Annual Conference 2026. The former Director of the Robert Schuman Centre (RSC) chose a subject that is in the news as she spoke: the budgeting and borrowing of the European Union, both above and below the political radar.
Money, Laffan argued, has shaped European integration since the Coal and Steel Community, yet it remains under-researched, technical, and kept, as governments have long preferred, in the realm of “quiet politics”. Every major treaty up to Maastricht carried a financial bargain: the Treaty of Rome brought the common agricultural policy and the European Social Fund, and the Single European Act doubled the structural funds. Maastricht broke that link - because it had to. If the monetary union had required a stabilisation mechanism to be agreed alongside it, “we would not have the euro in our pockets today,” she pointed out.
The EU budget is small, at around 1% of the Union’s gross national income. Around it, a galaxy of financial instruments has grown, most of them born of crises. In the first 50 years of integration alone, Laffan counted ten new instruments; since the eurozone crisis they have multiplied, as money became part of the response to each successive emergency. “This is not a transparent area of EU policy,” she remarked.
The core of the lecture dealt with the negotiations on the next multiannual financial framework (MFF), which has to be agreed in time for money to flow on 1 January 2028. She pointed out that the Commission’s proposal of summer 2025 tries, as every Commission has, to shift spending from agriculture and cohesion towards new priorities, with a competitiveness fund and a Global Europe heading, with some of the envelope going towards repaying the pandemic recovery borrowing. Member states have split along familiar lines: the self-styled ‘frugals,’ composed by the net contributors who together provide around 40% of the budget and want it smaller; the ‘friends of cohesion’ in the Mediterranean and the East; and what Laffan called the ‘friends of agriculture’, for whom the common agricultural policy still matters.
For member states to reach an agreement, she explained, four questions have to be settled, in order: the overall size of the budget, how it is split between old and new priorities, how it is funded, and who controls how it is spent. And, just as with every MFF before it, the settlement will be made at the top: “There will not be agreement until you get the heads of government into the Justus Lipsius building,” she quipped, “and you don’t let them out.”
In the meantime, the Irish presidency published its negotiating box on 10 October and was, in Laffan’s account, “kicked by everybody”: by the Commission, by Berlin and The Hague, and even by Bruegel, which called the result an abject failure while placing the blame on member states rather than on Dublin. “For the Irish presidency, this is the negotiation from hell,” Laffan said.
She does not expect that an agreement will be reached at the December European Council but in February or March 2027, because no member state has a better alternative. Without a new MFF, spending would be released month by month at previous levels under the treaty’s ‘provisional twelfths’. “There is no way the member states are going to let this run into election time,” she highlighted. Neither camp will get its way entirely, and the way out, she suggested, lies on the revenue side: a new ‘own resource’, phased in over several years, that would loosen the bargaining between the frugals and the friends of cohesion. Even the term is telling, she noted: “we don’t call it taxation and we don’t call it revenue.”
If the budget is negotiated above the radar, borrowing happens below it. The European Investment Bank is the largest multilateral lender in the world and “barely known” in the member states. When the EU has needed to lend, it has preferred instruments outside the Commission’s responsibility, from the bilateral loans to Greece to the European Stability Mechanism (ESM). In fact, the Recovery and Resilience Facility went to the Commission for one reason, according to Laffan: Italy would not take money from an ESM associated with conditionality and the stigma of the eurozone crisis. The Commission has since become one of the largest bond issuers in Europe, with the equivalent of a treasury inside it, and the markets like its bonds. Member states nonetheless insist that the recovery fund was a one-off. “The EU will resort to borrowing if the EU needs to,” Laffan concluded. “It’s not off the table.”
What struck her most about the current negotiations is how far they have “resorted to the older script” after the exception of 2020. Asked why that year was different, she pointed to politics: the finance ministers’ fear of a repeat of the financial crisis, and Angela Merkel’s decision in May 2020 to leave the frugal camp. Germany remains the pivotal actor, now with a government under extreme pressure, and it is “very difficult to be big and bold when domestic politics are breathing down your neck,” she summarised. “Politics matters.”
Her reading, Laffan stressed, is a snapshot rather than a settled picture, and contingent to the pressures Europe will face. “The Russian threat in and of itself is not enough,” she said. “But if you combine the Russian threat with the US withdrawal, the game changes for Europe.”
The lecture was also a homecoming. In addition to her former role as RSC Director - which she described as her “best job ever” - she is also the founding director of the European Governance and Politics Programme. “It was a wonderful time here,” she described. “We did a lot. And what really is even better is to come back this morning and to listen to all of the new projects and all of the wonderful work that’s still being done at the Schuman Centre. It really is a very vital and important part of the EUI.”
Watch the full recording of the inaugural Brigid Laffan Lecture.
Established in 2026, the Brigid Laffan Lecture honours the former Director of the Robert Schuman Centre and founding director of the European Governance and Politics Programme. Each year, a leading scholar of European integration is invited to reflect on the challenges, transformations, and future directions of the European project.