Germany and five EU net payers demand cuts to €1.98 trillion budget plan

Frugal coalition demands hundreds of billions in spending cuts

Leaders of six European Union net contributor nations, Germany, the Netherlands, Austria, Denmark, Finland, and Sweden, sent a joint letter to Irish Prime Minister Micheál Martin demanding cuts of several hundred billion euros to the proposed 2028–2034 EU budget. The letter directly challenges the European Commission proposal presented in July 2025, which outlines a long-term budget of €1.76 trillion in 2025 prices, or €1.98 trillion in current prices. The six governments stated that the Commission plan represents a nominal increase of roughly 60% compared to the existing €1.2 trillion 2021–2027 framework. Together, the six net contributors account for almost 40% of member state contributions to the EU budget. The heads of government warned in their letter that the scale of the expansion is not viable under present economic conditions.

Almost every EU member state is making painful efforts to consolidate its public finances. Without solid public finances there will be no European sovereignty.

Shifting priorities toward defence and competitiveness

The six net contributors want European Union funding directed toward common investments in security and defence, economic competitiveness, innovation, and combating irregular migration. To finance those priorities without increasing the overall envelope, the coalition seeks reductions in funding for agriculture and regional development, which currently absorb roughly two-thirds of the EU budget. The leaders also opposed expanding staff levels across European Union institutions while member states reduce personnel in their domestic administrations. In addition, the six governments rejected issuing new common EU debt as a method to settle the financing dispute, arguing that EU citizens ultimately fund the budget regardless of the mechanism.

Counterproposals and institutional divisions

The push for spending restraint faces opposition from other member states and European officials who favor a larger budget. French President Emmanuel Macron stated in June that Europe must accept the Commission proposed budget increase to fund defence, technology, and economic competitiveness. France and Italy have jointly proposed introducing a new digital levy on large technology companies to create new EU own resources without raising direct national contributions. Meanwhile, a group of 17 member states, including Spain and Italy, supports maintaining or expanding allocations for agriculture and regional development, which would lift total spending above €2 trillion. Dutch Prime Minister Rob Jetten previously stated in June that the Commission proposal was too high, reiterating that the Netherlands and its partners will not endorse spending growth at the proposed rate.

Year-end deadline and upcoming negotiations

Ireland, which holds the rotating presidency of the Council of the European Union, will present a revised draft budget proposal ahead of the European Council summit in October 2026. German Chancellor Friedrich Merz and other leaders want a finalized agreement before the end of 2026 to avoid talks spilling into 2027, when national elections take place in France, Italy, Spain, and Poland. Adopting the Multiannual Financial Framework requires unanimous agreement among all 27 European Union member states. An anonymous diplomat from the net payer coalition stated that no budget deal will occur this year unless the total volume is reduced by hundreds of billions of euros. The October summit will serve as the initial platform for heads of state and government to assess whether the Irish presidency revised figures can bridge the divide.