The European Union’s long-term budget for 2028-2034 should be €400 billion lower than the European Commission’s proposed €2 trillion, the Irish EU presidency said on Saturday.
This would result in a budget of €1.6 trillion, subject to contentious negotiations among EU countries in the coming months. The EU budget is the main source of financing for all of the 27-country bloc’s main policies.
EU leaders will discuss a scaled back budget when they meet in Brussels next week after negotiators slashed the initial proposal in response to pressure from some member states.
Ireland, which holds the bloc’s rotating presidency, presented a compromise plan on the EU’s next seven-year budget on Saturday.
The proposal “is the product of intensive exchanges undertaken by the Irish presidency with member states and EU institutions over the last three months”, Europe Minister Thomas Byrne said in advance of a press conference in Brussels on Saturday.
The compromise package follows months of behind-the-scenes negotiations on the budget, known as the multiannual financial framework. European Council president Antonio Costa, who chairs meetings of EU leaders, is pushing for a deal by December.
The size and scope of the EU’s seven-year budget has long been a subject of contention, with countries like Germany, Austria and the Netherlands advocating a smaller package while other member states including Italy and Spain are opposed to cuts.
There have been growing calls for the EU to direct spending away from areas like agriculture and funding for poorer countries – which have traditionally represented more than half of EU spending – to new priorities such as research and innovation as well as defence.
Under Ireland’s proposal, money for the Common Agricultural Policy (CAP) and cohesion funds – those earmarked for less affluent EU members – will be protected. Instead, the reduction from the earlier €2 trillion proposed price tag will be offset by cuts to development funding, administration, and the bloc’s competitiveness fund, relative to the initial proposal.
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The bulk of the EU’s budget is financed by contributions from member states, with so-called “net contributors” coughing up most of the money. Germany has been one of the most critical voices, dismissing the commission’s initial price tag hours after it was presented last year as “unacceptable”.
The proposed cut is unlikely to be enough to appease the so-called “frugal” member states. Speaking alongside Costa on Friday evening in advance of the announcement, Dutch prime minister Rob Jetten said a budget increase compared with the previous seven-year budget was “simply not viable at a time when national budgets are already under pressure”.
Jetten said the budget must reflect concerns such as security, economic resilience and competitiveness. “We cannot just saddle our citizens with high costs unless we offer solutions to today’s challenges,” he said.
Irish Farmers’ Association president Francie Gorman described the budget, including the allocation for CAP, as “a huge let down” for Irish farmers.
“In the original commission proposal, the EU CAP budget was cut by 22 per cent which would result in a 24 per cent cut to Irish payments,” he said. “The Irish presidency proposal today has not improved this at all. It is huge let down for Irish and EU farmers.
“Farmers will feel that EU is turning their back on farming and that the Irish Government is not delivering for them.
“The proposal today is to allocate €293 billion to the EU CAP budget. EU farmers need €500 billion to build on-farm resilience, to encourage young people into our sector, to ensure food security and to enhance the sustainability of a very fragile sector,” he added.
Irish MEP Barry Andrews, who is chairman of the development committee at the European parliament, described cuts to development cooperation as a “serious error”.
“The Irish presidency’s negotiating box for the next EU budget proposes to cut Global Europe, the EU global development cooperation funding, by around 17 per cent,” he said. “This would be a serious error, and one Europe will pay for with its own security and standing in the world.
“Our neighbourhood is more unstable than at any point in a generation. Conflict, democratic backsliding and climate shocks are driving displacement and fragility on our borders and beyond.
“At the same time, the withdrawal of US development funding has opened a gap that partners, and our competitors, are already moving to fill.
“Reducing our own external action now would mean retreating at the moment our partners most need reliability and our own interests and long-term security are most exposed.”
Andrews said development cooperation “is not charity” but how Europe “prevents crises rather than paying far more to manage them”.
“It underpins stability in our neighbourhood, supports partners who share our interests and values, and gives Europe a credible alternative to the offers of other powers. A smaller Global Europe means less influence, less leverage and less security.
“The European Parliament has consistently called for an external action budget that matches the EU’s ambitions and responsibilities. A cut of this size is incompatible with those ambitions, and with the commitments Member States have made on development, humanitarian response and global partnerships.” – Bloomberg/Reuters