EU budget talks face split as Ireland presidency seeks compromise

European Commission President Ursula von der Leyen warned that without new own‑revenue sources or higher national contributions the EU’s 2028‑2034 budget would have to be cut by about 40 %. She said the bloc needs roughly €66 billion a year from new sources such as a carbon border adjustment, higher tobacco duties and taxes on digital services, online gambling and crypto‑capital gains.

Ireland, which assumed the EU Council presidency on 1 July, aims to secure a deal on the long‑term budget before the end of the year. Irish Prime Minister Micheál Martin said negotiations will be “very, very hard” and cautioned against extreme positions. Germany’s chancellor‑candidate Friedrich Merz has called for deep cuts, citing an internal paper that estimates €400 billion in reductions – about 20 % of the Commission’s proposal of €1.98 trillion (inflation‑adjusted €1.76 trillion). The debate also touches on whether new EU‑wide debt instruments should be used, a step welcomed by France and Italy but rejected by Germany.