Struggle for trillions: EU budget dispute: Presidency presents new proposal

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.

When it comes to money, things often get complicated in the EU too. (Archive image) Photo: Michael Kappeler/dpa

Brussels. In the struggle for the next long-term EU budget plan, a new negotiation proposal is on the table. A concept presented in Brussels by the current Irish EU Council Presidency envisages cutting the next long-term EU budget by around 159 billion euros compared to the EU Commission's original proposal. Instead of just under 1.985 trillion euros, the financial framework for 2028 to 2034 should amount to 1.826 trillion euros. Both sums are calculated in current prices, i.e. taking into account expected inflation over the seven-year financial period.

The proposal envisages particularly strong cuts in those areas in which the EU Commission actually wanted to spend more money on competitiveness, research, defense and foreign and development policy in the future. 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.

An agreement on the next long-term EU budget plan should actually be reached by the end of the year. However, it is doubtful whether the new concept will enable a quick breakthrough in the negotiations. Germany and other important net contributor countries such as the Netherlands, Sweden and Austria had called on the Irish Council Presidency to cut the draft budget by several hundred billion euros.

An EU diplomat commented on Saturday that the Irish proposal was a disappointment and not even close to a possible basis for agreement. The planned sharp increase in spending is unaffordable. 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 EU budget is financed predominantly from a share of the gross national income (GNI) of the member states. As the largest economy in the EU, Germany pays by far the largest contribution.