How much money should be allocated to the next long-term EU budget? This question is currently being debated intensively. Now there is a proposal that Chancellor Merz is unlikely to like.
Brussels. In the struggle for the next long-term EU budget, the current Council Presidency is heading towards confrontation with Germany and other important net contributors. A concept presented in Brussels by the Irish EU Presidency envisages reducing the next long-term budget by only around 159 billion euros to a total of around 1.826 trillion euros compared to the EU Commission's original proposal.
Germany and other important net contributor countries such as the Netherlands, Sweden and Austria had called for the draft budget to be cut by several hundred billion euros. They belong to the group of states that ultimately pays more into the EU budget than they get out.
The distribution of the cuts also does not correspond to the ideas of the federal government under Chancellor Friedrich Merz (CDU). Compared to the Commission's proposal, the pots from which more money should actually flow in the future for competitiveness, research, defense and foreign and development policy will be particularly significantly reduced.
Success of the agricultural lobby?
The traditional large budget items agricultural and cohesion policy, on the other hand, would be largely spared. Cohesion policy aims to reduce economic and social differences between the different regions of Europe. It primarily benefits poorer EU states.
According to the Irish proposal, the money earmarked for the member states for migration, border protection and internal security would also remain largely untouched. However, the proposal envisages significant cuts in additional funding for this area and for agencies such as Frontex and Europol.
Agreement doubtful by the end of the year
An agreement on the next long-term EU budget plan should actually be reached by the end of the year. However, it is highly doubtful whether the new concept will enable a quick breakthrough in the negotiations. Austrian European Minister Claudia Bauer said the new budget proposal was still far from being approved by Vienna. Together with the other eight net contributors, Austria already accounts for more than 60 percent of the EU budget. The taxpayers cannot be expected to do more than that.
Swedish EU Minister Jessica Rosencrantz called the proposal inadequate and demanded that the overall volume should fall significantly. An EU diplomat commented that the Irish proposal was a disappointment and not even close to a possible basis for agreement. By favoring 20th century political priorities, the proposal fails to prepare the EU for the 21st century. “We urgently need more financial realism and less financial la-la-land,” he said.
The Irish Minister of State for European Affairs, Thomas Byrne, countered, among other things, that a “very large majority” of the member states had demanded no further cuts in the areas of agriculture and cohesion. This also includes some net contributors. "No one will get everything they wanted. But we believe there is something for all member states," he said.
Showdown at EU summit
There will now be an open discussion about the new concept at the EU summit next Thursday and Friday in Brussels. The permanent EU Council President António Costa is expected to take over the lead in the negotiations.
The Irish proposal also leaves key controversial issues open when it comes to financing. Possible new EU own resources include contributions from large companies, income from emissions trading and CO2 border adjustments, as well as taxes on tobacco and electronic waste. However, there is still no agreement on these instruments.
However, the largest part of the long-term EU budget will continue to have to be financed by contributions from the member states - each EU state pays a certain percentage of its gross national income (GNI). As the largest economy in the EU, Germany makes by far the largest contribution, most recently more than a fifth. At the same time, however, it benefits greatly from the EU internal market.
Germany is the largest net contributor
According to figures from the EU Commission, in 2025 the Federal Republic paid a total of around 34.1 billion euros in EU contributions; This included around 29.6 billion euros in national contributions as well as around 4.4 billion euros in tariffs levied in Germany, which are considered traditional EU own resources. The approximately 12.2 billion euros in EU spending in Germany was offset by a net EU contribution of around 21.8 billion euros when tariffs were included.
The total budget volume of 1.826 trillion euros proposed by the Irish takes into account expected inflation over the seven-year financial period. In 2025 prices, the financial framework for 2028 to 2034 would amount to around 1.622 trillion euros according to the Irish concept. The Commission had proposed 1.763 trillion euros, adjusted for inflation. The Irish Council Presidency is thus reducing the real volume by around 141 billion euros or eight percent.
