Germany and Allies Reject Ireland's Proposal to Trim Draft EU Budget

Germany and its allies in the European Union on Saturday rejected Ireland's proposal to cut the draft of the next seven-year EU budget by about 8 percent, calling it insufficient. Ireland currently chairs the Council of the EU and proposed trimming the European Commission's plan for 2028 to 2034 by €159 billion. The dispute matters because EU governments want to reach an agreement by the end of the year.

German Chancellor Friedrich Merz said in a statement that a deal is still far off and that the level of the new proposal does not provide a basis for agreement. In his words, the EU budget must be sustainable for those who carry the main financing burden.

The frugal camp

As the EU's largest and wealthiest economy, Germany contributes roughly a quarter of the common budget. Berlin leads a group of six countries pushing for a leaner budget. It also includes Sweden, Denmark, the Netherlands, Finland and Austria, which together provide 40 percent of the budget. The group wants cuts of several hundred billion euros. The Commission's proposal totals just under €2 trillion.

Sweden's EU affairs minister Jessica Rosencrantz described Ireland's proposal as a "completely unaffordable increase", since the total would still exceed the current budget. Austria's EU affairs minister Claudia Bauer said the new budget remained "miles away from an Austrian yes".

A divided bloc

The EU is split between frugal countries seeking cuts and a rival camp of southern and eastern states opposed to reductions in farm subsidies and regional economic support. These areas make up almost half of the total budget.

The budget will also be on the agenda at the summit of EU heads of state and government in Brussels on Thursday and Friday. Governments hope to strike a deal before elections in France, Italy and Poland in 2027 threaten to disrupt the talks.