Struggle for a trillion-dollar budget: Hardened fronts: Merz insists on a slim EU budget

Brussels. There is no compromise in sight in the dispute over the future trillion-dollar EU budget for the years 2028 to 2034. At an EU summit in Brussels on Thursday, Chancellor Friedrich Merz and leaders of other wealthy countries insisted on calls for significant cuts to the draft budget currently on the table. However, a large group of other countries did not call for further cuts. This primarily includes those countries that receive a lot of money from the EU budget for structurally weak regions and pay in less money than they get out.

In Brussels, Chancellor Merz spoke of “very, very difficult negotiations” and made it clear that he did not expect a quick agreement. Acting Swedish Prime Minister Ulf Kristersson said that, in his view, the current proposal does not even provide a basis for the negotiations. Like Germany, the Netherlands, Austria and Finland, Sweden is also one of the countries that generally pay significantly more money into the EU budget than they get out.

For Merz and other heads of state and government from net contributor states, the dispute also has a domestic political dimension. Significantly increasing contributions could make them politically vulnerable - especially because savings and high burdens on national budgets are being discussed in all countries at the same time.

The AfD in Germany has already sharply attacked the Commission's original two trillion euro proposal and called for a reduction in the EU budget. This increases the pressure for Merz to find a compromise in Brussels that he can sell at home as a limit to Germany's burdens. As the largest economy, Germany already finances more than a fifth of national contributions to the EU budget.

Merz said the current proposal is 50 percent higher than what is being financed in the current medium-term financial framework. No member state in the European Union can afford to pay contributions to the European Union to this extent. Merz also linked possible German concessions in the negotiations to further deregulation measures. “If we don’t manage to significantly reduce the excessive bureaucracy in Europe, then it makes relatively little sense to talk about money,” he said.

The goal is actually to find a compromise by the end of the year. This is intended, among other things, to prevent upcoming elections in countries such as France and Poland next year from delaying an agreement or legal implementation. However, several heads of state and government made it clear at the summit that they would rather take longer than accept a deal that was bad for them. Merz said they were very far apart two and a half months before the end of the year. That doesn't mean that solutions can't be found at further planned meetings. For the summit in December, however, you should “pack a few more shirts than usual,” said Merz.

At the start of the EU summit, Merz called for a further increase in funding for Ukraine. “I advocated in various smaller meetings this morning that we do everything we can to help Ukraine over the winter and next year too,” said the CDU chairman. “We will have to increase the resources here again in order to really provide lasting help to Ukraine.” He didn't get any more specific.

Ukrainian Finance Minister Serhiy Marchenko said during a visit to Brussels in September that his country's regular budget for next year was missing $32.6 billion (29.1 billion euros). He put the gap in defense spending at $45 billion (40.1 billion euros). Ukraine's financing is secured for the current year.