European Commission President Ursula von der Leyen during her meeting with U.S. President Donald Trump in Turnberry, Scotland on July 27, 2025
Brendan Smialowski / AFP
European Commission President Ursula von der Leyen seems to be testing the limits. Last week, her European Commission presented an official proposal for the new long-term European budget, which provides for EU spending for the period from 2028 to 2034. No one seems satisfied, which raises questions about the legitimacy of the Commission President.
That no EU Member State is willing to accept the proposal as it stands is understandable, but the idea that European spending should be allowed to rise from 1.2 trillion euros to almost 2 trillion euros is meeting with opposition from net contributors, not least because von der Leyen wants to scrap the current contribution rebates enjoyed by countries such as the Netherlands and Germany. Apparently, the Commission does not consider its proposal to be an increase, because it simply adds the EU’s de facto second budget —the €800 billion Recovery Fund—to the existing budget. However, in 2020, the Netherlands was only willing to agree to this fraud-prone shadowy fund on condition that it would be a one-off operation.
The regular EU budget is mainly financed by contributions from the Member States, while the COVID-19 recovery fund was financed by loans, which must be repaid from 2028 onwards. A major challenge is how this will be done. Countries such as Belgium are opposed to taking out new loans to pay off old ones, but they do not have much budgetary leeway to pay off the old loans from their own budgets. We can therefore expect enormous pressure on Member States such as the Netherlands and Germany to simply repay the old loans with new ones. This means that the Recovery Fund will become permanent. One day, it may even replace the regular budget in the long run, because if there is one thing the Eurocrats dislike, it is the open battle for money every seven years, when a difficult agreement has to be reached.
Time and again, there is therefore a little more attention for the particularly problematic way in which European funds have been spent. The European Court of Auditors, the EU’s financial watchdog, has been strongly critical of how the EU spends money for years, and certainly of the recent increase in misappropriated EU expenditure. In 2024, the institution complained that €15 billion in cohesion funds had been misused as a result of shortcomings on the part of both the European Commission and the Member States.
Misuse is one thing. Corruption and fraud are another. In 2021, Professor Vince Musacchio, a renowned anti-corruption expert at the Rutgers Institute on Anti-Corruption Studies, warned that “between 2015 and 2020, the EU has allocated around €70bn to Italy in structural & investment funds. Half of these funds ended up in the hands of organised crime.”
The Commission does not seem to be overly concerned. After all, one thing is conspicuously absent from its proposal: a serious plan to prevent EU funds amounting to up to one billion euros per year from being siphoned off by fraudsters. An EU official regrets the Commission’s lack of urgency, rightly telling Euractiv: ‘If we’re going to ask citizens to accept budget discipline, we should start by showing that the money isn’t being stolen.’
At every occasion, the European Commission is trying to acquire more tax powers for itself. This time, it wants to finance 800 of the 1200 billion in this way, amongst others through an EU tax on large companies, among other things. Germany has already rejected the proposal, but the EU Commission is unlikely to just leave things there.
Another aspect of the EU Commission plan is to tax tobacco products much more and return some of the proceeds to the EU budget. Sweden has already spoken out strongly against this. Swedish Finance Minister Elisabeth Svantesson called the idea ‘completely unacceptable’. She pointed out that the Commission not only wants to tackle tobacco products, but also alternatives to tobacco: ‘It seems that the European Commission’s proposal would mean a very large tax increase on white snus and, in addition, the Commission wants the tax revenue to go to the EU and not to Sweden.’
Dutch EU Commissioner Wopke Hoekstra is responsible for revising the EU directive on tobacco excise duties. In a LinkedIn post, he indicates that he fully supports von der Leyen’s approach, especially when it comes to tackling alternatives to tobacco, such as vaping or nicotine pouches, even though they do not contain tobacco. Earlier this year, he said: ‘Smoking kills, vaping kills.’ Hoekstra thereby equated the two, even though, according to the British Department of Health, ‘best estimates show e-cigarettes are 95% less harmful to your health than normal cigarettes.’
It is no coincidence that Sweden is so strongly opposed to the Commission’s proposals. The country is the only EU Member State exempt from the EU ban on snus, which serves as an alternative to smoking. After three decades of exemption, the results are downright embarrassing for EU policy in this area: Sweden has not only one of the lowest smoking rates in Europe, but also a much lower incidence of smoking-related diseases. Compared to other EU countries, Sweden has 44% fewer deaths from tobacco use, 41% fewer lung cancer cases and 38% fewer cancer deaths. One would expect policymakers who sincerely want to help people break unhealthy habits to explore the option of allowing less harmful alternatives.
However, the European Commission cannot suppress its own paternalistic instincts to simply ban everything. Apart from the obvious fact that even higher taxes will erode Europeans’ purchasing power, Commissioner Hoekstra also seems to fail to understand that this will further increase the market for illegal cigarettes, an important source of income for organised crime.
On the contrary, he claims that higher taxes on tobacco ‘will help to crack down on fraud & cross-border traffic, counterfeit goods, and tax evasion.’ This is almost laughable. Every serious study shows that the opposite is true. For example, the EPICENTER think tank cites a study showing that ‘a 1 euro increase in excise duty per pack is associated with a 5 to 12 per cent increase in the illegal market.’
Furthermore, von der Leyen & co also want to introduce a new tax on electronic waste and income from the new European ETS2 carbon tax. This new tax, which will come into force in 2027, means that the European ETS climate taxation scheme, which has helped to make energy prohibitively expensive for European companies, will be extended to consumers. They will have to pay an estimated 25% more to drive a diesel or petrol car. Average households will also have to pay an extra 700 euros per year to heat their homes with gas. This is a particularly aggressive attack on the purchasing power of the population, and yet there is hardly any political uproar about it. And now the European Commission wants a share of the revenue from the Member States.
The way in which von der Leyen drew up the proposal also raises many questions. The European Parliament is angry about this, but even her own team of commissioners was only informed of the exact figures a few hours before they were made public.
The German Commission President has often been criticised for her very secretive approach, whereby she tries to decide everything with a close group of confidants. Telling here is the ruling of the EU court in Luxembourg in ‘Pfizergate’ about vaccine negotiations in May. In that case, the judges ruled that the European Commission had wrongfully withheld text messages between EU leader Ursula von der Leyen and Pfizer boss Albert Bourla. An appeal is currently pending, but it is yet another sign that the administrative culture in the European Commission has completely derailed.
Fundamentally, the question is whether we should all find it normal that a supranational bureaucracy, acting on its own initiative and against public opinion and EU Member States, is trying to increase its own enormous budget from 1.2 trillion euros to 2 trillion, while doing next to nothing to address fraudulent and erroneous EU spending. However, as long as national governments continue to accept this from the top Eurocrat, Ursula von der Leyen, things will continue like this.
