German Chancellor Merz urges cuts to EU's €2 trillion 2028‑2034 budget

EU leaders are negotiating the Multiannual Financial Framework for 2028‑2034, a seven‑year budget of about €2 trillion. The European Commission’s proposal, supported by the Cypriot EU Council presidency, trims the draft by roughly 2 % (€32.8 billion) but many net‑contributor states consider it still too high. German Chancellor Friedrich Merz said at the European Council in Brussels, “The proposal on the table is far too high. The numbers must go down,” adding that the Union can only spend “as much as we have.” He also opposed any new EU‑wide debt, urging discussion of revenue sources.

A coalition of net‑paying countries – Germany, the Netherlands, Sweden, Denmark, Austria and others – is pushing for deeper cuts, while a group of 16 “Friends of Cohesion” (including Spain, Italy, Poland, Greece and the Czech Republic) defends a larger budget to protect agriculture, regional development and cohesion funds. The debate also covers new revenue ideas such as a digital levy, gambling tax and a crypto‑asset tax, which frugal states view with skepticism. Leaders aim for a revised negotiating text by October, with the incoming Irish presidency to steer the final talks, hoping to reach a unanimous agreement before the end of 2026.

Germany, the EU’s largest net contributor, currently finances about 23.6 % of the EU budget and could see its annual contribution rise from roughly €47 billion to €67 billion under the new framework, a potential increase of over €20 billion per year. The outcome will shape EU spending on defence, green and digital transitions, agriculture and regional cohesion for the next seven years.