The words from Berlin are clear. The European Commission's spending wishes for the EU budget 2028 to 2034 cannot be financed. Of the two trillion euros, several hundred billion euros have to come down. This is what it says in the joint letter from Chancellor Friedrich Merz (CDU) and his counterparts from Austria, the Netherlands and the Scandinavian EU states. Then there's a bit of evasion: without a proposal for a "realistically financeable volume" there's no point in continuing to talk. And: “This question cannot be postponed.”
The letter dated September 28th is addressed to the Irish government, which will run the Council's business until the end of the year. She is currently working on a new compromise for the so-called financial framework. This should be available on October 9th. A week later, the EU heads of state and government are scheduled to discuss this for the first time at the summit.
The federal government and the other parties involved do not want to see this as an ultimatum or even a veto threat. But it's not far from it. In addition, it is the second time in a short period of time that the “frugal states” have spoken out. A week and a half ago they had already addressed the Irish in a joint article on the Politico portal.
Irish only want to cut Commission proposal by 100 billion euros
This accumulation shows two things: After months of tactics, the negotiations are now entering the hot phase. And the nervousness on the part of the six states is growing. They fear they will not be able to prevent the proposed sharp increase in spending. It is not about cuts, but about cutting the increase, it is made clear in Berlin. As a reminder: The Commission wants to increase spending nominally from around 1.2 trillion to around two trillion euros. That's about 60 percent.
So far, the Irish government is far from fulfilling Germany's wishes. According to information from the F.A.Z. According to diplomatic circles, the Irish are currently planning a cut of 100 billion euros - so there can be no question of several hundred. Representatives of the Council Presidency do not confirm this. They say we haven't gotten that far yet. This is millimeter work. For the “thrifty” it’s probably more about meters.
From the perspective of the six net contributors, the proposal has to work. EU Council President António Costa should then take over the negotiations and, if possible, bring them to a conclusion by the end of the year. Costa, however, tends to be a net receiver. At least that was the impression after his budget tour through the 27 EU states in recent weeks. “If Costa takes over, things will only go in one direction, upwards,” fear representatives of the signatory countries in unison.
Agreement at the end of the year in danger
The Irish listened too strongly to the sixteen members of the “Friends of Cohesion Policy,” EU diplomats criticize the signatories of the letter. In addition to Italy, Spain and Greece, these include, above all, the eastern EU states. They don't want cuts, just higher spending. Spain recently even called for a budget of two percent of European economic output for 2028 to 2034. That would be more than three trillion euros.
This puts the Irish in a difficult position. If they stick with a cut of 100 billion, Germany and the other “frugal states” can actually only reject the compromise. But the net recipients could also do the same if the cuts are too severe. Then the schedule for the agreement slips. This stipulates that the EU leaders make a first attempt at an agreement after the October summit at the end of November. After the anticipated failure, December should bring the breakthrough.
The agreement is difficult enough even beyond the level of total expenditure. Finally, it is also about how the money is divided between traditional items such as structural and agricultural aid and modern items such as defense and competitiveness. The six “thrifty people” also disagree on this point. That is why they are calling for all budget items to be cut equally first.
Rejection of new EU debt
According to Merz and the other five, new EU taxes are not a solution to the dispute over budget levels. “In the end, the citizens always pay,” they say. The same applies to new debts. There is therefore no way around the difficult question of the total volume.
If there is no compromise at the end of the year, things will be difficult. Next year there will be elections in France, Spain, Italy and Poland. This makes compromises difficult. In addition, the unification of the EU states is not enough. The EU Parliament must also agree. There is therefore a growing risk that the EU will find itself without a financial framework at the beginning of 2028.
The federal government actually wants to avoid that. It is the last thing the EU needs given the uncertain situation in the world, it says. On the other hand, the “frugal states” are actually in a good position. They finance 40 percent of contributions to the budget, as they point out in the letter.
In other words, the six signatories of the letter have nothing to lose financially. If the Commission prevails with its proposal, the German gross contribution - i.e. without taking into account the returns from Brussels - will rise to 70 billion euros per year, according to reports from Berlin.
Those who benefit from structural aid, in turn, will be in a bad position without a budget agreement. So far, however, there is no sign that their nervousness is growing, especially since Commission President Ursula von der Leyen has so far stood firm by her budget proposal.
What will be crucial is how France positions itself. The country pays more into the budget than it gets back. However, because of the EU agricultural aid, it is more in favor of a higher budget. The federal government has, at least so far, not managed to find a common line with President Emmanuel Macron.
