18.07.2025
On 16 July, the European Commission presented its official proposal for the next seven-year financial framework (MFF III), which will set the budgetary guidelines for the entire European Union for the years 2028-2034. Although negotiations between the Member States and the European Parliament are only just beginning, one thing has become clear: connectivity will not disappear from Europe's priorities. On the contrary, it will be doubled.
Commission President Ursula von der Leyen gave a strong signal of continued infrastructure investment in her budget presentation. “We are doubling the amount allocated to transport under the Connecting Europe Facility (CEF) and increasing the budget for military mobility tenfold – this is the part of transport that allows our armed forces to move faster, better and together,” von der Leyen said in her speech.
According to the Estonian Ministry of Climate, the news is clearly positive for the Rail Baltica project. “The Connecting Europe Facility (CEF), from which we mainly receive co-financing for the Rail Baltica project, has proposed a total of 51,5 billion euros, which is twice as much as the total volume of the previous period. This position from which to start negotiations is very good for us,” said Eva Killar, Head of the Mobility Development and Investment Department of the Ministry of Climate. In an interview with ERR.
Estonia needs an estimated 1,7 billion euros in additional funding for the construction of Rail Baltica, three quarters of which are expected to be covered by the CEF. However, the success of the project will not only depend on the size of the budget lines – the continued technical and financial readiness, progress in the existing stages, and the ability to link the project to the priorities of the European Union, including the green transition and military mobility, will be decisive.
For Estonia, the important change also means more favorable financing conditions than before. "This is rather positive news, because there were doubts earlier that this self-financing rate would increase to 50 percent," Killar told ERR. According to the new proposal, Estonia's contribution should remain at 25 percent.
It is also important that the CEF as a funding mechanism was preserved at all, as the original plan of the European Commission was to abandon this funding. CEF does not distribute money automatically, but through separate application rounds. In this regard, Rail Baltica is also in a good starting position. “Since Rail Baltica is a priority for the European Union, it certainly has an advantage over other new projects that could come from other member states,” Killar noted in an interview with ERR. According to him, the draft regulation on the new funding explicitly states that priority will be given to cross-border projects.
However, the final funding will depend on the political process. The budget negotiations for 2025-2026 will determine the size and structure of the entire financial framework. Once the MFF is approved in 2026, the preparation of the CEF work programmes will begin, which will determine the precise conditions for application. A final agreement on the next EU budget is expected to be reached within two years.
During this time, Rail Baltica must keep itself visible to Brussels – technically ready, politically relevant and internationally visible. The European Commission has given its direction. Now it is up to the Member States to decide whether Europe will move faster, better and together.
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