Germany and five other net contributors want major cuts to the EU’s proposed 2028-34 budget, setting up tough negotiations among the bloc’s 27 members
The European Union’s plan for a nearly €2 trillion budget has run into a major roadblock, with Germany and five other big net contributors demanding cuts of several hundred billion euros as member states begin the final stretch of negotiations over the bloc’s spending for 2028-2034.
Germany, Denmark, the Netherlands, Austria, Finland and Sweden issued a joint statement on Thursday calling for a substantial reduction in the European Commission’s proposed long-term budget.
The six countries said any cuts should be made in a “balanced manner”, with every area of EU spending contributing to the reduction.
The demand comes as negotiations over the bloc’s next seven-year budget enter a decisive phase. The Commission’s proposal covers the period from 2028 to 2034 and is valued at nearly €2 trillion.
Germany had already sought €400 billion cut
Germany, the EU’s largest economy and biggest net contributor to the bloc’s budget, had already called for a major reduction in the proposed spending plan.
Berlin sought a cut of about €400 billion in June, arguing that the Commission’s proposal was unaffordable at a time when national governments are facing pressure to control public finances.
The latest joint position broadens that push, bringing together five other countries that pay more into the EU budget than they receive in funding.
More from BusinessThe six governments said EU spending should focus on common priorities, including defence, competitiveness, migration and European sovereignty.
They also opposed plans for new joint EU borrowing to finance the bloc’s spending needs.
“New joint borrowing is not the solution to our budgetary challenges,” the countries said in their joint statement.
The position reflects growing concern among wealthier member states that the EU’s financial demands are rising as governments are also being asked to increase national spending on defence, energy security and economic competitiveness.
EU faces difficult budget negotiations
The EU’s long-term budget, formally known as the Multiannual Financial Framework (MFF), requires the unanimous approval of all 27 member states.
European Council President Antonio Costa has been consulting EU governments as the bloc seeks to reach an agreement. Costa has said securing a deal by the end of 2026 is a priority.
The negotiations are likely to be difficult because member states have sharply different priorities for EU spending.
Countries that are major recipients of EU funds are expected to resist deep reductions, particularly in programmes supporting agriculture, regional development and economic cohesion. Net contributors, meanwhile, are pushing for tighter control over spending and a smaller overall financial burden.
The six countries also called for stronger rule-of-law conditions to be attached to EU funding. Such conditions could allow the bloc to restrict payments to member states accused of undermining judicial independence or other democratic standards.
They further said EU institutions should manage their workload with existing staff, signalling opposition to a significant expansion of the bloc’s administrative costs.
What is at stake
The proposed €2 trillion budget will determine how the EU allocates money across agriculture, regional development, competitiveness, defence, migration and other common priorities during 2028-2034.
The dispute reflects broader pressure on European governments to increase spending on defence and competitiveness while managing tight national budgets.
For the six net contributors, the priority is to redirect EU spending towards areas they consider strategically important while limiting the overall financial burden on their economies.
For the wider EU, however, any major reduction in the proposed budget could force difficult choices over programmes that depend heavily on bloc-level funding.
A smaller budget could intensify competition between existing priorities, particularly if governments seek to increase funding for defence, migration management and industrial policy without reducing support for agriculture and poorer regions.
With unanimity required, negotiations will have to bridge the gap between countries seeking lower contributions and those that rely more heavily on EU funds.
The coming months are therefore expected to be critical in determining the size and priorities of the EU’s next seven-year budget.
(With inputs from agencies.)
