The EU budget in the new Ireland proposal faced a reduction of 159 billion euros from the Commission's initial proposal. This plan, unveiled on Saturday, considers an approximately 8% reduction for the total EU budget from 2028 to 2034.
Details of the Ireland Proposal
The President of Ireland, who holds the presidency of the EU Council, proposed this reduction to satisfy a group of countries led by Germany that are seeking significant cuts in the budget. Ireland's negotiation document, known as the negobox, forecasts a reduction of 122 billion euros in current prices compared to the previous negobox presented by the Cypriot presidency in June.
Division of Opinions in the EU
The EU is divided into two camps: frugal countries seeking cuts of several hundred billion euros from a nearly 2 trillion euro proposal, and a rival group of southern and eastern countries known as solidarity friends who oppose any cuts to the budget. In response to the solidarity friends' requests, Ireland exempted agricultural subsidies and regional payments, which account for half of the total budget, from any reductions.
Instead, most cuts were made from external aid amounting to 38 billion euros, competitiveness by 75 billion euros, and EU administrative costs reduced by 10 billion euros. Additionally, Ireland has eliminated the emergency budget known as the "EU Facility cushion," which allows the European Commission to allocate cash in unforeseen emergencies.
However, Ireland's proposal is unlikely to satisfy the frugal countries, as they have warned about unfair cuts in the new EU priorities such as competitiveness, defense, and development financing. Germany and its allies criticized the previous Cypriot presidency for only reducing 32 billion euros in the last negobox.
On Sunday, ambassadors from the 27 EU countries will review the negobox and prepare for discussion among leaders on Thursday. Governments are striving to reach a budget agreement by the end of this year before elections in France, Poland, and Italy pose a threat to negotiations.
The President of Ireland has not made significant changes to a package of five new EU taxes proposed by the Commission last year. These taxes are intended to raise 66 billion euros for the budget.
