EU member states have clashed over the first figures for the bloc’s next seven-year budget, exposing a deep rift between governments that want to protect farm and regional spending and richer states demanding sharp cuts.
The dispute surfaced on June 16 at a meeting of European affairs ministers in Luxembourg, the first political debate on a draft negotiating box put forward by Cyprus, which holds the rotating presidency of the Council of the European Union.
The text feeds into a summit of EU leaders, the European Council, in Brussels on June 18 and 19, where the budget is set to be among the most divisive items.
The European Commission proposed in July 2025 a record budget of almost €2 trillion for 2028-2034, equal to 1.26 per cent of the bloc’s gross national income.
That compares with about €1.2 trillion for the current 2021-2027 framework, a figure that rises to roughly €2 trillion once the €800 billion NextGenerationEU recovery fund is added.
The Cyprus presidency has trimmed the proposed total by about 2 per cent, a cut of €32.8 billion, while broadly keeping the Commission’s structure intact.
It nudges up farm income support to about €261 billion and cohesion funding to roughly €410 billion, though both remain below current levels. Spending on competitiveness, research, security, defence and external action would be reduced.
European Commission President Ursula von der Leyen has cast the package as a more flexible, future-proof budget, with research and innovation spending almost doubling to €175 billion.
Around 15 mostly southern and eastern countries, among them Italy, Spain and Poland, have lined up to defend the traditional policies.
CALLS FOR A BIGGER, MORE AMBITIOUS BUDGET
Spain and France led demands for a more ambitious framework. Spain’s secretary of state for the European Union Fernando Sampedro said deeper cuts were the real obstacle to a deal and called for a budget able to fund defence alongside the green and digital transitions without sacrificing farmers or the regions.
France argued the Union needed greater investment capacity and warned the budget could not rest on national contributions alone, leaving the door open to fresh common borrowing and new own resources for strategic projects.
Latvia said cohesion and the Common Agricultural Policy (CAP) had driven growth and investment across Europe’s regions and were “far from obsolete”.
Italy struck a more critical note, with its government saying the structure of the negotiating box raised “serious concerns”.
The cohesion camp also wants to ease the squeeze caused by repaying the NextGenerationEU debt, the cost of which is estimated at about €168 billion over the next budget cycle.
NET CONTRIBUTORS PUSH FOR DISCIPLINE
Wealthier states pushed back hard. Germany’s Europe minister Gunther Krichbaum called the proposed spending “completely disproportionate” and said Berlin would back neither a larger budget nor more joint debt, insisting the EU had to tighten its belt as national governments do.
Berlin’s resistance is partly domestic. Brussels Signal has reported that Germany’s net contributions could rise by around 80 per cent under the Commission’s plans, a figure its ambassador to the EU called unaffordable.
Finland welcomed the broad architecture though it said the overall figure remained too high, urging more money for competitiveness, research, military mobility and its eastern border with Russia.
Sweden was blunter still. Europe minister Jessica Rosencrantz, who said she was “disappointed” and “frustrated”, argued the budget had to be cut substantially and accused the presidency of targeting “the wrong areas”.
The Netherlands and Sweden have also led an alliance, including Finland, against any new common debt, while several net contributors want to keep their budget rebates.
A SQUEEZE BEFORE THE SUMMIT
Ministers did agree the outline of several new instruments, including a single national and regional plan for each country, a European Competitiveness Fund and a Global Europe fund for external action.
That deal is expected to come at the cost of weakening the link between EU money and respect for the rule of law, a conditionality mechanism once championed by Brussels.
The Council’s caution sits awkwardly with the European Parliament, which has demanded a far larger €2.2 trillion budget and this week dismissed the presidency’s cuts as insufficient.
It leaves Cyprus squeezed between MEPs seeking more money and capitals seeking less, with Parliament’s consent and unanimity among member states both required for any final agreement.
The figures also arrive after the European Court of Auditors (ECA) warned that the planned reform does not guarantee better spending, raising fresh questions over value for money in a budget nearing €2 trillion.
The detailed sums will be fought over for months. Ireland takes up the Council presidency in July, with leaders hoping for a deal by the end of the year.
