EU leaders divided over borrowing in upcoming multi‑year budget

European Union heads met in Brussels to negotiate the 2028‑2034 budget, a €2 trillion multi‑year plan that must be approved by all 27 member states and the European Parliament. Germany, backed by the Netherlands, Denmark, Sweden, Finland and Austria, called for a strict ban on any new borrowing, while France and several southern and eastern states pressed for a larger budget to fund agriculture and regional cohesion.

Cyprus, holding the rotating presidency, proposed a modest €32.8 billion cut to the draft, framing it as a compromise between the “Friends of Cohesion” – a bloc of 16 countries advocating more agricultural and regional support – and the fiscally‑conservative group. The Parliament rejected the Cypriot cut as insufficient for those sectors. Debates also turned to revenue sources, with suggestions ranging from taxes on gambling, digital services and crypto‑assets to reallocating proceeds from the EU Emissions Trading System and other fees.

Negotiators aim to seal a deal before the end of 2026 to avoid extending talks into 2027, when several major EU elections are scheduled.