EU financial framework: Merz increases the pressure in negotiations

In the difficult negotiations over the future EU financial framework worth billions, Chancellor Friedrich Merz is increasing the pressure. “Not having a new financial framework is by far the most financially advantageous solution for Germany,” warned Merz on Monday in Berlin after a meeting with Lithuanian Prime Minister Mindaugas Sinkevičius.

The background is that without an agreement on the new seven-year financial framework starting in 2028, the EU net contributors in particular would have to transfer less money to Brussels because the EU would then no longer be able to launch any new programs. However, they had so far only pointed this out behind the scenes in the EU-27 negotiations. Apparently the Chancellor is very dissatisfied that nothing has moved in the negotiations so far. Germany is clearly the largest net contributor, meaning it transfers more money to Brussels than it gets back in subsidies.

At the same time, Merz emphasized that it was still his goal to achieve a deal by the end of the year. He doesn't want failure, "because that would severely limit Europe's ability to act." Together with five other net contributor countries, he is demanding that the draft of around two trillion euros presented by the EU Commission must be reduced by several hundred billion euros from 2028 to 2034. However, the net recipient countries have so far rejected this.

If an agreement is reached by the end of the year, determinations on the individual programs in the budget would then be addressed under the Lithuanian EU Council Presidency from January 2027, said Merz. ‌The Lithuanian Prime Minister Sinkevičius, however, was not very optimistic. He had just held talks in Brussels. "I took less optimism with me to Lithuania. That's why I think these negotiations will not be very easy." There are many divergent positions. It would be a “good Christmas message or pre-Christmas message” if the 27 EU governments could come to an agreement. Otherwise, Lithuania will take over the process.