Germany and Allies Push for EU Budget Cuts, Reject Borrowing

Germany and five other northern European countries showed a willingness to compromise on the EU budget during a meeting in Berlin on Thursday. However, they remained opposed to any further common EU borrowing. Leaders from Germany, Denmark, the Netherlands, Austria, Finland, and Sweden backed plans to finalize discussions on the Multiannual Financial Framework (MFF) for 2028-2034 by the end of the year. They insisted that any agreement must not come at any cost.

Key Details

German Chancellor Friedrich Merz said, "We are not stingy, but allocations of the kind proposed by the commission simply do not fit the times." He criticized the European Commission's plan to raise the budget to nearly €2 trillion, calling it unaffordable amid ongoing budget cuts in member states. Merz had previously suggested a €400 billion cut, which would still leave spending 27% higher than the last MFF.

Austrian Chancellor Christian Stocker agreed, stating that better decisions, not more funding, would strengthen Europe. The joint statement from the leaders did not mention specific figures but called for balanced cuts of "several hundred billion euros" across all budget areas. This opens the door for a possible compromise that shows the EU's political viability amid global challenges.

Background

The meeting revealed a divide within the EU, leading to two emerging camps. The "Friends of Cohesion" group includes 17 member states like Spain and Italy, which want to protect funding for agriculture and regional development. In contrast, the frugal camp advocates for significant budget cuts and a focus on competitiveness and defense. A compromise proposal from Cyprus suggested a €32.8 billion cut aimed at modernizing the budget.

Based on reporting by: irishtimes.com, euronews.com