Merz sees “no basis for agreement” on the Irish proposal for the EU budget

In the struggle over the European Union's budget, the Irish EU Council Presidency has presented a compromise. Chancellor Friedrich Merz (CDU) said: “The amount of the new proposal is not a basis for an agreement.”

The proposal slightly reduces the amount originally proposed by the Commission of around two trillion euros for the years 2028 to 2034. The government in Dublin, which holds the EU Council Presidency, sees savings potential of around 140 billion euros - or eight percent compared to the original proposal.

Merz wants to save more

Far from enough from the federal government's perspective: hundreds of billions of euros less - Merz recently made this demand. Similar to the heads of government of the Netherlands, Sweden and Austria. All of them are so-called “net contributors”: states that ultimately pay more into the EU budget than they get out.

Sweden rejects the new proposal, as does Austria. Austrian European Minister Claudia Bauer said the new budget proposal was still far from being approved by Vienna. The total of nine net contributors currently account for around 60 percent of the EU budget. The taxpayers cannot be expected to do more than that.

Dispute over defense funds

“The EU budget must be affordable for those who bear the brunt of the financing,” said Merz. Prioritizing and modernizing the EU budget is a task for everyone. This points to another line of conflict. The Irish Council Presidency has particularly significantly reduced the resources that the federal government wants to see strengthened - namely for competitiveness, research and defense.

In contrast, the traditionally largest billion-dollar pots for agriculture and regional funding are spared. The latter aims to reduce economic and social differences between the different regions of Europe. It therefore primarily benefits poorer EU states.

Funds for migration, border protection and internal security also remain largely untouched.

Criticism from the EU Parliament

Cross-party criticism also comes from the EU Parliament, but in the other direction. "The Irish Presidency's proposal cannot serve as a starting point for an agreement. A cut of eight percent compared to the Commission's proposal, which in any case only keeps the budget at the level of the current period, would mean a weakening of our ability to act."

This is emphasized by Parliament's negotiators for the Multiannual Financial Framework (MFF) from the EPP and the Social Democrats. And this is especially true now, when more commitment is being demanded from Europe in the areas of competitiveness, defense and security.

Negotiations on the new EU budget, the basis for the EU's work and priorities, will continue on Thursday at the summit of heads of state and government in Brussels.

Time is of the essence: The EU states had originally aimed for an agreement by the end of the year - also in order to forestall the presidential elections and a change of government in France.