The Irish EU presidency has proposed a revised budget of 1.83 trillion euros for the period 2028–2034. This is 8 percent less than the nearly 2 trillion euros originally proposed by the European Commission. Ireland is attempting to reach a compromise between countries wanting sharp savings and governments wishing to protect existing subsidies.
Less or more
Six “frugal” countries consider this reduction insufficient. German Chancellor Friedrich Merz calls the proposal no basis for agreement. Dutch Finance Minister Eelco Heinen also doubts an agreement this year is possible. These six countries want to save hundreds of billions of euros more.
Opposing them are seventeen countries, led by Italy, Spain, and Poland, who resist deep cuts to agricultural subsidies and regional aid. Ireland accommodates this group by reducing those subsidies by only 3 percent, significantly less than other budget items. However, agricultural organizations have firmly rejected even this limited cut.
Promotion
Economy
The deepest cuts hit the programs through which the EU aims to strengthen its economy. Barely two years ago, EU circles praised former EU President Draghi’s proposals to finally invest in a stronger modern European economy.
The European Competitiveness Fund, including research, receives approximately 362 billion euros, down from the original 409 billion. International cooperation is also substantially reduced. Spending on European governance drops by nearly 9 percent.
Priorities
The new proposed cuts create fresh divisions. The frugal countries want more funding for defense, security, research, and a stronger European industry. Ireland tries to combine these new priorities with existing support for farmers and regions, but this has drawn criticism from different sides.
The European Parliament also opposes the cuts. MEPs want to spend roughly 10 percent more than the European Commission proposed. They warn that further cuts limit the capacity to invest in security, economic development, and other European priorities.
Taxes
There is also disagreement over financing. Ireland proposes new European levies expected to yield around 55 billion euros annually. These include taxes on companies, tobacco, electronic waste, and CO₂ emissions. The European Parliament additionally wants a European tax on digital services, online gambling, and cryptocurrency earnings on the internet.
EU leaders will discuss the Irish proposal on October 15 and 16, after which relevant ministers in the EU Councils may review it in November. Ireland aims to reach agreement before the end of December, before upcoming elections in Spain, France, Italy, and Poland could complicate negotiations further. All 27 EU countries must approve, and the European Parliament must give its consent as well.