The leaders of Germany, the Netherlands, Sweden, Denmark, Austria and Finland have threatened to delay agreement on the bloc’s next seven-year budget unless “hundreds of billions” of euros in spending cuts are secured.
This is stated in their letter, the Financial Times reports.
The EU budget “must be fundamentally reformed. We must make choices,” the letter says.
The six leaders want to redirect resources towards defence and innovative companies in response to intensifying economic and security challenges, while cutting funding for farmers and poorer regions, which traditionally absorb about two thirds of the EU budget.
The budget is largely financed by contributions from member states, with the six signatories providing about 40% of EU budget revenues. They called for a substantial reduction from the €2 trillion figure proposed by the European Commission.
Ireland, which currently holds the EU presidency, is expected to prepare a compromise proposal by mid-October. The Irish government must reconcile the demands of the biggest budget contributors with the majority of countries insisting on preserving agricultural subsidies and regional development funding.
A group of 17 countries, including Spain and Italy, is pushing for increased funding for these traditional areas of spending and for the overall budget to exceed the proposed €2 trillion. Some also want the EU to issue more joint debt to finance higher spending—an idea rejected by Germany, the Netherlands, Sweden, Denmark, Austria and Finland.
France, which is a net contributor to the EU budget but also the largest recipient of agricultural subsidies, is calling for the introduction of EU-wide taxes to fund this increase.
In July 2025, the European Commission proposed a European Union budget for 2028–2034 totalling €2 trillion. Germany dismissed it as unacceptable.
The European Commission proposed moving away from the traditional fragmentation of the budget by cutting the number of headings from seven to four, and reducing the number of individual programmes and funds from 52 to 16.
The “National and Regional Plans” heading—€865bn. It includes funding for cohesion policy (Cohesion), the common agricultural policy, fisheries, internal security and migration.
The “Competitiveness, Research and Security” heading—€409bn. It includes funding for the European Competitiveness Fund, the Horizon Europe programme, digitalisation, AI programmes, defence and space.
The “Global Europe” heading—€200bn. Funding for EU enlargement, neighbourhood support, Ukraine’s long-term recovery, humanitarian aid, and the Global Gateway initiative
The “Education, Shared Values and Culture” heading—€49bn.
Separately, €168bn is earmarked for servicing EU debt. Other expenditure and reserves—€300bn.