Germany’s Merz calls for overhaul of EU budget system

German Chancellor Friedrich Merz said on May 14 that there is a need to reform the European Union’s “outdated budget system,” proposing a simpler approach focused on investment in defence and enhancing competitiveness.

Speaking at the Charlemagne Prize ceremony in Aachen, Merz noted that disagreements are emerging within the EU over the future budget for 2028–2034. According to him, increased spending on security is clashing with traditional funding priorities such as agriculture and regional support, Caliber.Az reports via foreign media.

He stressed that the European Parliament has already proposed increasing the budget beyond the European Commission’s initiatives, which has heightened tensions between EU institutions and member states that are unwilling to raise their contributions.

“A sovereign Europe needs a 'Draghi-proofed' budget,” Merz said, referring to warnings by former ECB President Mario Draghi about declining EU competitiveness.

The Chancellor emphasised that resources should be redirected toward defence, innovation, and competitiveness.

“Streamlined structures, investments in competitiveness and defence, a focus on European funds for European policies - all of this is necessary because resources are limited,” he said.

Merz also opposed ideas of joint borrowing at the EU level, previously promoted by French President Emmanuel Macron, and rejected proposals for new EU-wide taxes.

He said Germany cannot support a model of financing current expenditures through debt, including for constitutional reasons.

He added that more than two-thirds of the EU budget currently goes to subsidies, while some countries spend more on debt servicing than on defence.

By Vugar Khalilov