A coalition of wealthy EU countries has called for a significant reduction in the future long-term budget. This request comes following the efforts of diplomats and officials to reach an agreement by the end of this year.
Request for budget reduction
The leaders of Germany, the Netherlands, Austria, Denmark, Sweden, and Finland have requested in a letter that has been obtained, for Ireland to reduce the next draft budget "by several hundred billion euros." Ireland, as the rotating six-month presidency of the EU Council, is responsible for presenting this draft.
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The future multiannual financial budget, which is set to be implemented from 2028, includes expenses for everything from agricultural subsidies to defense projects, infrastructure investments, and payments to low-income regions. The European Commission has proposed a budget close to 2 trillion euros.
Financial pressure on net contributor countries
Many net contributor countries, meaning countries that pay more than they receive, are calling for a reduction in expenses. In contrast, some other countries that will benefit from this budget are calling for an increase in expenses.
The letter states: "Our countries alone provide nearly 40% of the total contributions from member states. While net contributors are generally in the minority, they bear about three-quarters of the total financial burden." They also argue that a 60% increase in the size of the budget compared to the current budget "is simply unrealistic."
The Commission has called for new powers to increase revenue through block-wide taxes (own resources) to alleviate financial pressure on national capitals. These resources include taxes on e-cigarettes, vapes, and cryptocurrency transactions. However, this measure has not been sufficient for frugal countries.
The President of the European Council, Antonio Costa, is optimistic about the prospect of an agreement. However, an internal German diplomatic cable has warned that "there is no basis for compromise" between the two sides in recent negotiations. This cable added that Ireland is now asking representatives to turn to compromise.
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