A group of the EU’s biggest net contributors, led by Germany and including Finland, Sweden and the Netherlands, has rejected the latest compromise on the bloc’s next long-term budget. The dispute sets up a tense European Council summit on Thursday and Friday, where leaders are expected to give political direction on spending for 2028 to 2034.
The Irish Council presidency proposed on Saturday to cut €141 billion, bringing the budget to €1.622 trillion in 2025 prices. German Chancellor Friedrich Merz said the plan is far from an agreement and that the budget must be affordable for the countries that pay most of it. Germany and its allies object most to where the cuts fall: competitiveness funding would shrink by 13 per cent and global cooperation by 17 per cent, while agriculture and cohesion would lose only 3 per cent. Those two policies are defended by the Friends of Cohesion, a group of 17 southern and eastern countries including Italy and Romania.
Nordic governments have been among the sharpest critics. Finland’s Prime Minister Petteri Orpo said defence, research and new technologies are being hit too hard and called for more balanced savings. Sweden’s EU affairs minister, Jessica Rosencrantz, called the proposal “unreasonable”. Dutch Finance Minister Eelco Heinen said the Netherlands cannot accept it and warned that at this rate there will be no deal this year.
The European Parliament is unhappy for the opposite reason. Excluding repayments for the NextGenerationEU recovery fund, the budget would equal 1.02 per cent of EU gross national income, which leading MEPs say amounts to a 10 per cent real-terms cut on the current budget. On Monday the leaders of the EPP, S&D, Renew and Greens/EFA groups rejected the Irish text as a basis for talks, and Portuguese MEP Carla Tavares said the choice is between an underfunded Europe and a properly funded one.
The European Commission has raised its own concerns. Budget director-general Stéphanie Riso told ambassadors the proposal lacks ambition and makes the budget more rigid, pointing to a 40 per cent cut to the EU Facility, the bloc’s tool for responding to shocks. Commission spokesperson Balazs Ujvari said on Monday that flexibility is essential if the budget is to respond to change. A diplomat said the debate keeps repeating the same arguments and that leaders now need to move it forward.
