Von der Leyen resists budget cuts and proposes centralized EU energy purchasing

Clash over the multiannual budget

European Commission President Ursula von der Leyen addressed the European Parliament in Strasbourg on Tuesday to defend the executive's proposal for the 2028–2034 Multiannual Financial Framework. The blueprint, presented in July 2025, sets total spending at 1.26% of European Union gross national income. The debate comes before the European Council summit scheduled for 15 and 16 October 2026, where heads of state will address spending limits and rising costs.

Six member states (Germany, the Netherlands, Austria, Denmark, Finland, and Sweden) sent a joint letter to the Irish Council presidency demanding budget reductions of several hundred billion euros. Five days later, Spain and 16 other member states submitted a counter-letter urging Brussels to protect the Common Agricultural Policy and Cohesion Funds from further reductions. Negotiators aim to finalize a political framework before the end of 2026, ahead of the 2027 French presidential campaign.

Von der Leyen rejected the proposed cuts, warning that reducing the ceiling would compromise agreed strategic programs across the bloc.

I would like to warn against large cuts. There would be a risk of drastically cutting back on fundamental priorities that we have all agreed on together.

Emergency measures for energy prices

Beyond spending limits, the Commission president devoted much of her address to market interventions aimed at curbing energy inflation. Wholesale gas prices have increased by 140% since late February, while diesel prices have doubled. The European Union has incurred an estimated €100 billion in additional fossil fuel import expenses since hostilities escalated in the Middle East.

To mitigate these costs, the Commission will establish a task force to aggregate energy demand across the 27 member states and mandate a market operator to negotiate bulk purchasing. This plan builds upon the voluntary platform established during the 2022 energy crisis, moving from simple matchmaking between buyers and sellers to a centralized procurement framework.

Strategic dialogue and fuel supply

On the supply side, the European Commission is launching a strategic dialogue with European oil refineries. The initiative is led jointly by Dan Jørgensen, the European Commissioner for Energy, and Andrius Kubilius, the European Commissioner for Defence. The talks focus on lowering refining costs, securing domestic transport fuel, and maintaining adequate supply reserves for military mobility and defence infrastructure.

The refinery initiative follows an agreement among G7 members to release 100 million barrels of crude and diesel to stabilize international fuel markets. The Commission has also granted fuel exporters an additional year of regulatory flexibility on methane emissions requirements to prevent near-term supply disruptions.

Revenue proposals and NextGen debt

To preserve spending on security, artificial intelligence, raw materials, and cross-border energy links without expanding direct national contributions, the Commission is advocating for new own resources. Potential revenue streams include a digital levy on large technology firms, capital gains taxes on crypto assets, and an EU-wide tax on online gambling, which could collectively generate an estimated €25 billion annually.

Spanish Economy Minister Carlos Cuerpo has separately suggested adjusting the repayment schedule for debt issued under the Next Generation EU recovery fund. Extending the reimbursement calendar could free up €11 billion annually for member states facing tight domestic budgets.

Von der Leyen reiterated that finding fresh revenues is essential if member states wish to maintain agreed spending targets.

If we want to preserve our priorities and the level of ambition we have for Europe, we have to do the difficult work on the revenue side.