Germany and Allies Demand Major Cuts to EU Budget Proposal for 2028-2034

Germany, along with five other EU net contributor countries—Denmark, Austria, Finland, Sweden, and the Netherlands—has called for significant reductions to the European Union's Multiannual Financial Framework (MFF) budget proposal for 2028 to 2034. This coalition rejects the European Commission's proposed budget increase of nearly 60%, which would bring the total to around €1.76 trillion. German Chancellor Friedrich Merz described this increase as "simply unaffordable," especially amid fiscal consolidation efforts across member states.

The group stresses that while they prioritize increased spending on security, defense, migration, competitiveness, and sovereignty, the overall EU budget must grow only moderately. They advocate for cuts of several hundred billion euros, insisting that all areas of expenditure contribute to savings. They also call for reforms to the EU budget architecture, including linking funding to the rule of law and European values, and explicitly oppose new joint EU debt issuance as a solution.

Chancellor Merz emphasized that these six countries contribute roughly 40% of the EU budget and provide 70% of the bilateral aid to Ukraine, underscoring their significant financial responsibility. He urged for "realism and reforms" in the MFF, which is set to take effect on January 1, 2028, arguing that a 20th-century budget will not address 21st-century challenges. Negotiations for the budget are expected to start in October, with the coalition aiming to present a united front and conclude agreements by the end of the year.

The proposal, which would fund EU initiatives including defense procurement, agricultural policy, structural funds, and Erasmus exchange programs, faces intense political sensitivity. Within Germany's ruling party, tensions have emerged due to Chancellor Merz's firm stance against the Commission's draft. Economists like Bernd Lucke have supported the calls for cuts, pointing out that much of the cohesion policy funding simply returns to member states, suggesting a more efficient management might be achieved by the countries themselves.

Criticism from opponents such as Rasmus Andresen of the Greens/EFA accuses Merz of undermining European unity through his stringent demands. Meanwhile, discussions continue regarding potential new revenue sources for the EU budget, including taxes on large technology companies. As the negotiations unfold, the key focus remains on balancing increased priorities with fiscal responsibility amid strained national budgets.