The EU executive proposed on Wednesday a long-term budget boosted to two trillion euros as Europe confronts complex challenges.

EU budget commissioner Piotr Serafin unveiled a funding plan from 2028 to 2034 that aims to foster the bloc's economic competitiveness, support Ukraine and satisfy traditional beneficiaries of European money, such as farmers.

"The next MFF (Multiannual Financial Framework) will be the most ambitious ever proposed. It is more strategic, more flexible, more transparent," EU chief Ursula von der Leyen said.

The proposal is set to kick start two years of tense negotiations with the EU's 27 member states and lawmakers in Brussels.

Serafin said that under the commission's plans, 300 billion euros (US$347 billion) will be ring-fenced to support farmers, who have been worried about potential cuts to their slice of the pie.

A competitiveness fund bringing together EU investment efforts in clean tech, digital, biotech, defence, space and food will amount to 451 billion euros, he said at the European Parliament.

The European Commission also proposed establishing a fund of up to 100 billion euros (US$115 billion) to support war-torn Ukraine.

"This is a long-term commitment to Ukraine's recovery and reconstruction," Serafin said.

And as Europe pushes to re-arm, the amounts dedicated to defence and space will increase five-fold to 131 billion euros.

Similarly, the sums dedicated to military mobility under a separate pot dedicated to investment in infrastructure will go up 10-fold, he said.

The current 2021-to-27 budget is worth around 1.2 trillion euros. (AFP)