Six EU powers demand leaner budget as fiscal pressure mounts

Six fiscally hawkish European Union countries have renewed calls for a substantially smaller seven-year EU budget, arguing that member states are already facing “painful fiscal consolidation” at home, Euractiv reports.

German Chancellor Friedrich Merz hosted the leaders of Denmark, the Netherlands, Austria, Finland and Sweden for a working lunch on August 28 as negotiations over the European Commission’s proposed €2 trillion budget for 2028–2034 intensify ahead of an October EU summit.

“The MFF [Multi-annual Financial Framework] will grow to address our strategic priorities, but it can only do so at a moderate pace,” the six leaders said in a joint statement, adding that the budget must be “reduced by several hundred billion euros”.

The overall size of the budget, spending priorities and financing arrangements remain unresolved as EU leaders seek to reach an agreement by the end of the year, ahead of a busy electoral calendar.

“The MFF must be modernised and reformed both in its architecture and the way it allocates resources,” the statement said, arguing that spending cuts were necessary across the board because “virtually all member states are undertaking painful fiscal consolidation”.

The six countries also rejected new joint EU borrowing and called against increasing the bloc’s staffing levels. However, their statement did not address the controversial proposal for new “own resources” — EU-level taxes intended to generate additional revenue and reduce the need for direct contributions from national governments.

Proposed levies on corporations, carbon emissions and tobacco are among the most contentious elements of the budget negotiations. The measures require unanimous approval from all 27 EU member states, many of which remain skeptical.

European Council President António Costa, who is responsible for brokering a compromise, has continued to press governments to support the new levies, which he considers essential to reaching a budget agreement.

EU affairs ministers are due to meet informally in Ireland at the end of next week to discuss the MFF.

Ireland, which currently holds the rotating presidency of the Council of the EU, is expected to present an updated budget proposal before EU leaders gather for their mid-October summit.

By Vafa Guliyeva