Brussels. In the EU, the dispute over the next long-term EU budget is heating up. On Saturday, Chancellor Friedrich Merz rejected a new concept of the current Irish Council Presidency as unacceptable just a few hours after it was published. “The amount of the new proposal is not a basis for an agreement,” said the CDU politician. The EU budget must be affordable for those who bear the brunt of the financing.
In the struggle for the next long-term EU budget for the years 2028 to 2034, the current Irish EU Council Presidency had previously embarked on a confrontation course with Germany and other important net contributors. A concept presented in Brussels envisages cutting the next budget by only around 159 billion euros compared to the EU Commission's original proposal, to a total of around 1.826 trillion euros.
However, 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 are among the states that ultimately pay more into the EU budget than they receive back.
The distribution of the proposed cuts also does not correspond to the ideas of the federal government under CDU leader Merz. 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 would be particularly significantly reduced. 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 particularly benefits economically weaker regions.
Merz commented that everyone must contribute to the necessary adjustments, because prioritizing and modernizing the spending of the EU budget is a task for everyone. An agreement is “still a long way away”.
An agreement on the next long-term EU budget plan should actually be reached by the end of the year. However, it is now unlikely that the new concept will be the basis for a breakthrough in the negotiations.
The Austrian European Minister Claudia Bauer also stated that 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 by favoring 20th century political priorities, the proposal failed 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 member states had demanded that national allocations for agriculture and cohesion not be further reduced. 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.
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.
According to figures from the EU Commission, in 2025 the Federal Republic transferred a total of around 34.1 billion euros to the EU budget; 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 Presidency is given in current prices and thus takes into account an assumed price development over the seven-year financial period. In 2025 prices, the financial framework for 2028 to 2034 would amount to around 1.622 trillion euros. 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.
