Germany cuts, France sticks to the increase... Conflict over EU long-term budget

(Seoul = Yonhap News) Reporter Shin Jae-woo = As France and Germany clash head-on over the European Union's (EU) next long-term budget plan (2028-2034), a dark cloud is casting over an agreement within the year.

Six countries, led by Germany, are demanding budget cuts worth hundreds of billions of euros, while France is fighting back, saying sufficient finances are needed to strengthen national defense and secure economic competitiveness.

According to AFP on the 10th (local time), the seven-year long-term budget proposed by the European Commission is approximately 2 trillion euros (approximately 3,11 trillion won).

This is an increase of about 60% from the long-term budget of about 1.2 trillion euros for 2021-2027.

Germany, the region's largest economy, joins Austria, Denmark, Finland, the Netherlands and Sweden in calling for hundreds of billions of euros to be cut from the next long-term budget.

These six countries, which are net contributors whose contribution to the EU budget is more than the amount received, are in the position that it is difficult to handle a significant increase in the EU budget at a time when member states are tightening their budgets to strengthen their finances.

In a recent letter to the EU, they emphasized that the EU budget, like that of member states, must adjust its spending priorities and focus financial resources on key areas such as defense and security, economic competitiveness, and immigration response.

On the other hand, France, the EU's second-largest economy and net budget contributor, is of the position that bold financial investment is needed to respond to the security and economic challenges facing Europe.

French President Emmanuel Macron said last month, "We need an ambitious European budget," and emphasized, "We must protect a much stronger European budget" to support the EU's core tasks, including defense.

However, France is also experiencing serious financial difficulties, and Marine Le Pen, a member of the far-right National Coalition (RN), a leading presidential candidate, is calling for a reduction in France's share of the EU budget to reduce national debt.

In addition, 17 southern, central, and eastern European countries formed a coalition called 'Friends of Cohesion' and demanded increased subsidies for agriculture and regional development, making budget negotiations more complicated.

The EU's goal is to reach an agreement by Christmas this year, but the differences in positions between member states are so large that there is a possibility that the negotiations will be moved to next year.

Ireland, which holds the rotating presidency of the EU, plans to present a revised budget to narrow differences of opinion on this day, and based on this, fierce negotiations are expected to take place at the EU summit held in Brussels next week.

The reason the EU is pushing for an agreement a year ahead of the legal deadline of the end of 2027 is because of concerns that negotiations could become more difficult if forces skeptical of European integration win elections in France and other countries next year.

Spain's decision to hold early general elections next month is also increasing political uncertainty.

Securing new revenue sources to reduce the financial burden on member countries is also an issue.

The European Commission has proposed taxation of large corporations, e-waste levies, and tobacco-related tax increases, and the European Parliament is even demanding taxation of large digital companies and online gambling.

However, as some member countries are opposed to the introduction of new taxes, difficulties over securing financial resources are expected.