Wealthy EU Nations Demand Major Budget Cuts Ahead of Talks

BRUSSELS — A coalition of wealthy EU nations is demanding that the next long-term budget be dramatically scaled back as diplomats and officials try to reach a deal by year-end.

In a letter seen by POLITICO, the leaders of Germany, the Netherlands, Austria, Denmark, Sweden and Finland call for the next draft of the budget to be "reduced by several hundred billion euros" when it is presented by Ireland, which holds the six-month rotating presidency of the Council of the EU.

The next seven-year multi-annual financial framework, due to take effect in 2028, governs spending on everything from agriculture subsidies to defense schemes, infrastructure investments and payments to poorer regions. The European Commission proposed a budget of nearly €2 trillion.

However, many net contributors — those who pay in more than they get out — want their bills cut. Others, including those who stand to gain most from the funding, want to see spending increased.

"Our six countries alone finance almost 40% of all Member States’ contributions. While net contributors as a whole are in the minority, they shoulder around three-quarters of the total financing burden," the letter reads. A 60% nominal increase in the size of the budget compared to the current one, they argue, is "simply not realistic."

In a bid to lessen the financial pressure on national capitals, the Commission wants to create new powers to raise revenue directly through bloc-wide taxes (known as own resources), with e-cigarettes, vapes and cryptocurrency transactions all being considered. That, however, has not satisfied more frugal nations.

"The EU budget is ultimately paid for by European citizens. That remains true whatever financing mechanism or own resources we invent," the letter cautions.

The Irish presidency is due to present a new negobox — a detailed breakdown of the proposed budget with fresh figures — in the coming days. Leaders will then hold talks over its content at a two-day summit in Brussels from Oct. 15.

Negotiators are eager to get a deal by the end of the year to ensure the budget is in place when the current one expires, and to prevent discussions being roiled by national elections in France, Poland and other countries.