EU’s Digital Sovereignty Push Runs Up Against Budget Cuts for Civil Society

Mark Scott is a contributing editor at Tech Policy Press.

Brussels is gearing up to break a major cultural taboo: talking about money.

By the end of 2026, the European Union wants to finalize its next seven-year budget that will pay for everything from doling out agricultural subsidies and supporting Ukraine’s fight against Russia to boosting the bloc’s competitiveness and safeguarding its digital rulebook.

Europe’s 27 member countries took another step forward on October 16 after national officials met in Brussels to hammer out a compromise before the real negotiations with the European Parliament and European Commission get underway.

“An agreement before the end of 2026 would allow for the adoption of legislative acts in 2027, which is necessary to ensure that EU funding reaches beneficiaries without interruption,” according to a statement from the Council of the EU, the body which represents EU member states.

Policymakers are eager to secure the next so-called Multiannual Financial Framework — whose budget could exceed €1.6 trillion between 2028 and 2034 — before the French presidential election in April 2027. A separate snap election in Spain next month, however, has cast doubts on whether the EU can reach an agreement before far-right politician Marine Le Pen potentially becomes France’s new president next year.

For a town that prides itself on formality and ceremony, policymakers, lobbyists and civil society groups in Brussels are now ditching such niceties to guarantee their slice of the public funds expected to become available in early 2028.

Yet the collective capability in Europe — including internet governance groups, digital regulatory compliance non-profits and independent fact-checking organizations — required to uphold the bloc’s digital sovereignty ambitions is on track to lose out significantly.

Together, these organizations have annual budgets totaling roughly €144 million, and almost 60 percent of that funding currently comes from either the United States government or US-based philanthropic organizations. EU institutional funding represents just 12 percent of the money required to implement the bloc’s digital rulebook, according to an analysis from the Atlantic Council’s Democracy + Tech Initiative.

On October 10, the six-month rotating Irish presidency of the European Council published the negotiating position for the 27 EU member states on the next EU budget. The document laid out proposed 30 percent funding cuts for AgoraEU, the sole European public funding program dedicated to supporting civil society, including those focused on the digital world.

The so-called AgoraEU program would receive €5.3 billion under the Council presidency’s proposal, down from the European Commission’s initial proposal of €7.6 billion. In its own draft, the European Parliament had suggested increasing public funds to support civil society groups to €10.7 billion.

In contrast, Ireland’s negotiation position on behalf of EU member states offered just a 10 percent reduction in a separate program designed to fund next-generation technologies like AI infrastructure and quantum computing aimed at boosting Europe’s competitiveness with the likes of the US and China.

The EU’s agricultural subsidies — a political hot potato for many national capitals — were largely protected amid clamor from countries like Germany, France and the Netherlands to make significant cuts in the bloc’s seven-year budget in the name of efficiency.

“We are confident that the revised Negotiating Box provides a delicate balance between competing voices,” Helen McEntee, Ireland’s minister for foreign affairs, said in a statement in reference to the proposed EU budget document. “We must now move away from our opening positions and towards the final stages of negotiations.

The European Parliament was not impressed. In a joint statement from leading politicians working on the civil society funding program, they criticized efforts by national capitals to hamstring public support for such groups in the name of cost savings.

“This cut will bring negligible savings to the EU budget,” said the members of the European Parliament, “but (it) will cause serious and irreversible damage to press freedom, the cultural and creative sectors, and civil society — precisely the areas that underpin the Union's democratic values.”

EU officials and politicians will now try to hammer out a compromise before the end of the year, though negotiations are likely to drag on well into 2027 as major disagreements remain.

Many national policymakers are reluctant to fund civil society amid concerns that groups use such public funds for advocacy around specific topics like campaigning against specific government policies. That is especially true in Germany — which provides the largest individual contribution to the EU budget — after Friedrich Merz’s government significantly cut back its national funding for these groups.

Yet amid such proposed reductions for civil society funding, digital groups are being asked to do more — even when the funding to support their work is on the chopping block.

In a series of roundtables that I organized in leading EU member states over the last 12 months when working for the Atlantic Council, officials acknowledged how non-government groups provided a significant share of evidence for digital regulation; promoted EU fundamental rights in the digital world; and represented a critical early-warning system for direct threats to both national and EU-wide democratic norms and institutions.

That support has now become an essential function in Brussels’ digital sovereignty ambitions as it seeks to reduce its dependencies, especially those associated with Washington.

The current EU budget negotiations, however, have yet to resolve a central tension between Europe’s digital ambitions and the funding needed to sustain them.

Policymakers have doubled down on funding digital infrastructure. But as negotiations get underway again around the next EU budget, Europe has yet to earmark similar public support for the democratic accountability layer — offered via these outside civil society groups — necessary to hold such technology to account.