The new MFF plan envisions an increase in the EU's seven-year joint budget from the current €1.2 trillion to nearly €2 trillion, equivalent to a rise from 1.1 percent to 1.26 percent of the member states' combined gross national income (GNI), according to Politico. It was announced yesterday.

The proposal "is good for Europe and for Estonia," Prime Minister Kristen Michal (Reform) wrote on social media.

Today's MFF proposal from @EU_Commission is good for Europe and for Estonia.
Estonia supports an ambitious budget prepared by the Commission, as it serves EU's common interests - defence readiness, support to Ukraine, cross-border connectivity.
Though, we need more attention to… pic.twitter.com/zN7x9szKLN

— Kristen Michal (@KristenMichalPM) July 16, 2025

He highlighted that the new MFF includes a significant increase in support for enhancing European defense capabilities and assisting Ukraine as well as extra money for transport connections, which Estonia can apply for to fund Rail Baltic.

Energy connections will also receive more funding, which offers Estonia good opportunities to better protect subsea infrastructure and develop new energy links.

At the same time, Michal said he intends to work to ensure that agricultural direct payments for Estonian farmers are equal to those elsewhere in the EU and that member states along the eastern border, which have suffered most from Russia's war of aggression, receive greater support and attention in the budget.

Important priorities covered

Minister of Finance Jürgen Ligi (Reform) also pointed out the new budget's priorities in an interview with ERR on Thursday: security, cross-border connectivity, military mobility, defense, and Ukraine. All of which, he said, are important topics for Estonia as well.

Ligi added that Estonia supports an increase in the overall budget volume, since many new and pressing challenges have emerged. However, he also noted that so-called net contributor countries have already expressed resistance to expanding the budget.

Commenting on the issue of agricultural subsidies, which farmer organizations have already spoken out about, the minister said, "The agriculture lobby is stronger than its actual significance to the European Union as a whole. We will continue to push for a fairer subsidy system, but this issue is not currently front and center."

The finance minister also noted that, with Estonia's growing prosperity, the country will have to start addressing the transition from being a net beneficiary to becoming a net contributor, and ensure that the shift does not happen too abruptly.

Sharper foreign policy focus 

Several senior officials who have worked in this field also welcomed the new budget proposal.

"The European Union's new budget proposal is, broadly speaking, very well prioritized from Estonia's perspective, as it addresses key issues for us like security and defense, integrating Europe as a whole, and also internal integration in transport, energy, and digital infrastructure, along with continued support for Ukraine — all of which are being allocated significantly more funds," said former director for EU affairs at the Government Office Klen Jäärats, who was responsible for negotiating the previous two MFFs.

"Focusing on competitiveness, technology, and climate change within the cohesion and agricultural frameworks, as well as a unified approach to external financing, should considerably improve our overall technological capacity, resource policy, and global positioning," he added.

In a social media post, Jäärats also praised the unification of foreign policy funding in the new budget. Previously, it was fragmented across various commissioners and directorates. "This may help sharpen the focus and support the realization of European interests in the stated priority areas," Jäärats explained.

More money for Rail Baltic

Former diplomat Marten Kokk, who until recently represented Estonia in the EU's Committee of Permanent Representatives (COREPER I) and is now secretary general of the Ministry of Climate, highlighted three positive aspects of the new MFF project related to the climate ministry's field.

"First, the proposal to increase the Connecting Europe Facility (CEF) transport budget to €51.5 billion. That's twice the amount in the current multiannual financial framework. It should reassure everyone that Rail Baltica's construction will not be held back by a lack of funding," Kokk wrote.

Second, he pointed out the proposal to allocate €17.65 billion in the transport budget specifically for military mobility.

"This is a major step forward compared to the current situation, a tenfold increase /---/ and with this, a substantial amount of transport infrastructure can also be developed in Estonia," he noted.

As a third positive proposal, the climate ministry's secretary general mentioned the fivefold increase in funding for cross-border energy projects, from which Estonia has already received support for disconnecting its electricity grid from Russia's.

Increasing this budget line to €29.9 billion will undoubtedly enable much greater improvement in interconnections between member states, Kokk said.

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