After three months of consultations, Ireland’s presidency presented a revised proposal on 10 October, setting the EU’s seven-year budget for 2028 to 2034 at €1.62 trillion. That is €141 billion, or 8%, below the European Commission’s initial €1.76 trillion offer. The draft includes around €150 billion to service and repay joint borrowing from the pandemic-era NextGenerationEU programme. Its total is about 30% above the 2021-2027 financial structure and equals 1.16% of EU gross national income, or 1.05% excluding NextGenerationEU debt costs. EU leaders are due to discuss the proposal at the 15-16 October European Council.
The split is already hardening.
Spain and 16 other members of the «Amigos de la Cohesión» group say the budget must address new challenges while protecting core policies. Germany and the Netherlands are among those seeking deeper cuts. Under Ireland’s draft, funding for regional development and agriculture falls by about 3%, including fisheries funding. The heading for competitiveness and prosperity, alongside security, faces a cut of around 13%.
The group set out its position at a Brussels meeting hosted by Italy and Romania ahead of the European Council. Its members want the next Multiannual Financial Structure, or MFF, to protect funding for the Common Agricultural Policy, known as PAC, and Cohesion policy. They also want rules that let member states and regions use available funds effectively. The group says the current budget has already been cut to 1.02% of EU GDP.
The 17-country coalition represents southern and eastern EU states. Germany and Denmark are among the countries seeking tighter spending limits, along with the Netherlands. Sweden shares that position, as do Austria and Finland.
Revenue is another fault line. The 17 countries want a fairer system, with the financial burden more evenly shared among member states. They oppose budget rebates, saying those arrangements have no place in a modernised and fair budget. Reuters has reported that the dispute also covers the EU budget’s revenue sources and the balance between net contributors and net beneficiaries.
The draft keeps contributions linked to large companies and retains revenue measures for tobacco and electronic waste. It also proposes higher income from the carbon border adjustment mechanism. Levies on large digital platforms are absent, as are proposed charges on cryptocurrencies and online betting, which the European Parliament has defended.
Leaders expect the summit to test red lines, not settle the budget. On 13 October, the EU General Affairs Council held political discussions on the next MFF as part of preparations for the European Council. Ireland’s presidency said its revised negotiating structure was intended to move talks towards a timely agreement.
The summit agenda also covers economic competitiveness and energy prices. Leaders will discuss support for Ukraine alongside the situation in the Middle East. European Council president António Costa still aims to conclude the MFF negotiations before the end of the year, although some delegations say they do not feel pressed by that timetable. The new structure is due to take effect in 2028, and all 27 member states must agree.
