Irish EU presidency proposes 8% cut to 2028-2034 budget, drawing frugal and southern pushback

The Irish proposal

Ireland, which holds the rotating presidency of the Council of the EU, proposed on Saturday an 8% cut to the bloc's multiannual budget for 2028-2034, according to Reuters as carried by Agerpres. The Commission had proposed a budget of about 2,000 billion euros. Figures for the size of the reduction differ between outlets: Politico put it at €159 billion, while Europa Press and El Mundo reported about €141 billion. Europa Press puts the new total at 1.62 trillion euros, against the Commission's 1.76 trillion euros at constant 2025 prices (1.98 trillion at current prices). The proposal is a negotiating document that member states still have to agree among themselves.

Where the cuts fall

The largest reductions target competitiveness, which loses €75 billion, and external aid, which loses €38 billion. EU administrative spending is cut by €10 billion. Ireland spared farm subsidies and regional development funds, which together make up half of the total budget and are described as politically sensitive, a concession to the group of southern and eastern states known as the Friends of Cohesion. The plan also drops the 'EU Facility cushion', a reserve that allowed the Commission to mobilise money for unforeseen emergencies over the seven years. El Mundo said the reductions hit competitiveness and security, cohesion, agriculture and borders, and funds for foreign policy.

Frugal states want deeper cuts

Germany and its allies want considerably larger reductions. In a letter sent to the Irish presidency at the end of last month, Friedrich Merz, Rob Jetten, Christian Stocker, Ulf Kristersson, Mette Frederiksen and Petteri Orpo said the Commission's proposal would have to be reduced by several hundred billion euros, with all chapters contributing to the savings. El Mundo judged that even the Irish figure is unlikely to satisfy them. Germany and its allies had already criticized the Cyprus presidency for proposing a cut of only €32 billion in its June negotiating document. Southern states oppose deep cuts, and Pedro Sánchez and Giorgia Meloni both called for a more ambitious budget. Romania is among the countries in the Friends of Cohesion group opposing the reductions.

Own resources and the calendar

The Commission proposed last year five new EU-wide taxes, or own resources, expected to raise a total of €66 billion for the budget. The Irish presidency made no substantive changes to the package and kept all five on the table, suggesting technical adjustments such as phasing in ETS contributions for poorer countries. It also proposed increasing budget contributions from a levy on carbon imports, which most governments accept. That is a disappointment for France, which had pressed Dublin to add the European Parliament's proposed levies on digital giants, online gambling and crypto firms. The corporate tax known as CORE and the ETS levy on polluting firms have been challenged by governments for more than a year of negotiations. António Costa, president of the European Council, said he intends to 'fix' a package of potential taxes acceptable to governments at Thursday's leaders' discussion.

Next steps

The 27 ambassadors will discuss the proposal at a meeting on Sunday, which will also prepare the leaders' discussion scheduled for Thursday. Bloomberg reports the leaders will meet in Brussels next week. Governments aim to reach a budget deal among themselves by the end of the year, before elections in France, Poland and Italy could complicate negotiations. The last summit of the year, on 17 and 18 December, is where leaders intend to close the new multiannual financial framework.