The heads of government of the 27 EU countries failed to reach an agreement on the European multiannual budget for 2028–2034 during their two-day summit in Brussels. An additional summit on November 26 is scheduled to break the deadlock.
President António Costa of the European Council will then have to come up with an adjusted proposal. In the coming weeks, he will consult with the European Commission and individual governments about possible cuts and new revenues. Costa aims to reach an agreement before Christmas, but several heads of government doubt this is feasible.
More cuts
The current compromise proposal from the Irish EU presidency foresees about 160 billion euros less spending than originally proposed by the European Commission. This is not enough for Germany, the Netherlands, Austria, Sweden, Denmark, and Finland. They believe the EU must further limit its spending as national budgets are also under significant financial pressure.
Promotion
Especially German Chancellor Friedrich Merz is pushing for further savings. He considers the proposed European expenditures too high and wants Brussels to focus more on competitiveness and defense. On the other hand, some countries want to prevent existing European support programs from being scaled back.
A group of sixteen EU countries opposes reductions in agricultural subsidies and financial support to poorer regions. They fear these traditional European expenditures will have to be cut to finance new (economic and military) priorities. This conflict highlights not only differences between richer and poorer member states but also contrasting views on the EU’s future roles.
New taxes
Council President Costa is attempting to bridge the opposing views by proposing new European revenues (read: taxes). Considered are levies on tobacco, electronic waste, and CO₂ emissions. Taxes on major technology companies, cryptocurrencies, and the gambling industry are also mentioned. Additional revenues would reduce the need for national governments to top up the common budget.
But there is significant division here as well. France regards new European revenues as a necessary condition for a budget agreement. Sweden doubts the benefits, and Belgian Prime Minister Bart De Wever warns that new taxes are no miracle solution. Moreover, all 27 member states would need to individually approve such measures.
European Parliament
The European Parliament also opposes drastic cuts. Parliament President Roberta Metsola believes government leaders cannot keep setting new European ambitions while simultaneously reducing the required funding. She particularly warns against cuts in defense, scientific research, infrastructure, and disaster protection. Without sufficient financial resources, the Parliament threatens to reject the new budget.
Elections
Commission President Ursula von der Leyen also warns that the Irish proposal halves the financial leeway for unexpected crises. According to her, the EU has learned in recent years how important such reserves are. The negotiations are further complicated by elections this fall in Spain and next year in France, Italy, and Poland. Particularly French President Emmanuel Macron therefore urges an agreement before the end of this year.