Germany and five other northern European countries have signalled readiness to compromise in budget talks after meeting in Berlin, but retained their opposition to further common EU borrowing.
Leaders of Germany, Denmark, the Netherlands, Austria, Finland and Sweden said they backed plans to conclude talks on the Multiannual Financial Framework (MFF) 2028-2034 by year-end – but not at any price.
Facing growing financial challenges at home, they say EU plans to increase its budget to nearly €2 trillion is a no-go for them.
“We are not stingy, but allocations of the kind proposed by the commission simply do not fit the times,” German chancellor Friedrich Merz said at a press conference in Berlin on Thursday, flanked by five other leaders.
“Current proposals foresee a rise of up to 60 per cent, something that is simply unaffordable at a time of budget consolidation in all member states.”
Germany, the largest budget contributor, has led the cutback campaign. Last month, in Dublin, Merz demanded a €400 billion cut, which would still see spending up 27 per cent on the last MFF.
Across-the-board cuts were “essential”, he said.
Austrian chancellor Christian Stocker, another vocal critic of the European Commission’s plans, told journalists in Berlin: “A better Europe comes from better decisions, not from more money and more officials.”
While Thursday’s document brings on board five other EU leaders and reiterates many of the main Merz points, crucially it avoids any numbers.
Instead the paper argues for cuts of “several hundred billion euros in a balanced manner” across all headings, opening the door to a face-saving compromise that shows the EU is still politically viable in an era of unprecedented global challenges.
As part of Ireland’s presidency of the Council of the European Union, Irish officials will present new proposals in advance of a crucial summit in October. Thursday’s joint paper urged EU institutions to “make clear choices and reprioritise within the budget, just as we do at home”.
The six so-called “frugal” EU leaders insisted that, on other fronts, they would not be a pushover in remaining talks. They demanded EU institutions “organise their workload within the existing staff levels” – rather than expect the 2,500 new jobs envisaged by European Commission president Ursula von der Leyen.
Opposition to “frugal” EU member states comes from a loose alliance of around 16 member states, led by Spain and Italy. These member states are pushing for more flexible repayment terms for pandemic-era funding and, in the new MFF, a “joint borrowing for loan support”.
Such a permanent, common EU borrowing mechanism was, the six leaders said in Berlin, “not the solution to our budgetary challenges”.