EU Budget 2028-2034: Six Countries Demand Cuts of Several Hundred Billion Euros

The battle over the next long-term budget of the European Union is intensifying. Germany, Denmark, the Netherlands, Austria, Finland, and Sweden called on Thursday for a reduction of "several hundred billion euros" from the EU's multiannual financial framework for the period 2028-2034. Meeting in Berlin at the initiative of German Chancellor Friedrich Merz, the six member states, all net contributors to the European budget, aim to present a united front ahead of the decisive negotiations this autumn.

A Budget Considered Too High

The European Commission proposed in July 2025 a multiannual financial framework of nearly 2 trillion euros for 2028-2034, which represents about 1.26% of the Union's gross national income on average over the period. The project aims to strengthen investments in defense, competitiveness, security, migration, innovation, and climate transition.

However, for Berlin and its five partners, the proposed budget is excessive. In their joint statement, the six governments demand that the budget be "substantially reduced" and that the effort be distributed evenly among the various spending items. The goal is to push the EU to make trade-offs rather than further increasing national contributions.

This position extends the German initiative launched during the summer. Friedrich Merz had already advocated for a reduction of several hundred billion euros, in a context where Berlin seeks to contain its own spending and preserve its budgetary flexibility.

The Return of the "Frugal" Camp

The rapprochement between Germany, the Netherlands, Denmark, Austria, Finland, and Sweden revitalizes the political weight of the group traditionally referred to as the "frugal" in Brussels. These states have been advocating for stricter management of European finances for several years and are particularly reluctant to a lasting increase in national contributions.

The six countries also wish to redirect spending towards priorities considered strategic: defense, economic competitiveness, migration, and European sovereignty. They also oppose any new common debt for the Union and demand that access to European funds be more conditional on respect for the rule of law.

However, this stance does not mean that the six governments wish to abandon traditional Union policies. The Commission itself plans to maintain agriculture and economic, social, and territorial cohesion at the heart of the next budget while integrating them into a more flexible financial architecture.

An Opposing Coalition Defends Cohesion and Agriculture

In response to the calls for cuts, several Southern and Eastern European states advocate a different approach. In May, a group of 16 countries, including Italy, Spain, and Poland, had already called for preserving cohesion policies and the main European support mechanisms.

The disagreement thus concerns both the overall budget amount and its distribution. Countries favoring an ambitious budget fear that significant cuts will weaken the regions most dependent on European funds and reduce the Union's capacity to finance the necessary investments for its competitiveness.

Conversely, net contributors argue that the new European priorities should not automatically translate into an increased bill for member states.

Financing: Another Point of Friction

The issue of revenue further complicates discussions. To finance its ambitions without excessively increasing national contributions, the Commission has proposed five new own resources: a share of the revenues from the European emissions trading system, the carbon border adjustment mechanism, a contribution linked to uncollected electronic waste, a resource based on excise duties on tobacco, and a contribution from large companies operating in the European market.

According to the Council of the EU, all these new resources and the adjustments made to the current system could represent approximately 58 billion euros per year at 2025 prices. The European Court of Auditors estimates, in current prices, that the proposed changes could yield around 66 billion euros in additional annual revenues.

But these mechanisms will also have to overcome the political hurdle of the member states. The question of who will pay, how much, and in what form remains at the heart of the negotiations.

A Tight Timeline Before the End of 2026

Time is running out for European institutions. The European Council aims for a political agreement before the end of 2026 to allow for the adoption of the necessary texts in 2027 and the entry into force of the new budget in January 2028.

The Irish presidency of the EU Council is set to continue the work during the second half of the year, with an important milestone during the European Council meeting scheduled for October 15 and 16, 2026.

European Council President António Costa is also conducting consultations among capitals to bring positions closer together. The goal is to find a compromise on the total budget amount, spending priorities, and new financial resources.

The Berlin meeting thus marks less the beginning of formal negotiations than a political warning. By displaying their unity, the six net contributors seek to influence the next phase of discussions. Opposing them, the states advocating for an ambitious cohesion policy will need to convince that a larger budget is essential to address the economic and geopolitical challenges facing the Union.

With just a few months before the deadline, the future European budget appears to be a particularly delicate balancing act: financing more defense, competitiveness, and security while protecting the Union's historical policies, without further increasing national contributions or paving the way for new common debt.