The Government was “never going to please everybody” with its proposed compromise in the negotiations to settle the size of the European Union’s next long-term budget, Taoiseach Micheál Martin has said.
Ireland, in its deal-making role holding the presidency of the Council of the EU, suggested trimming back the scale of a draft €1.7 trillion budget package.
The European Commission, the union’s executive arm, which drafted the initial proposal, is unhappy with how the Irish changes reduced the budget’s flexibility, leaving Brussels officials less room to respond to unexpected crises over the seven-year period.
In attempting to narrow the gap between those who want a bigger, more ambitious EU budget, and fiscally conservative governments who favour sweeping cuts, the Government shipped criticism from all sides.
Speaking on Thursday, Martin said there was still “a lot to play for” in the Brussels talks.
The negotiations will decide how much money will be set aside for Common Agriculture Policy (CAP) payments for farmers, “cohesion” funding to develop roads and infrastructure in poorer regions, overseas development aid, spending on defence and border control, and a jumbo fund to boost Europe’s economy.
The next EU budget will run from 2028 until 2034, but European leaders are pushing to agree a deal on the size of the package, and how it would be funded, by the end of this year.
“It is a challenging task because there is a real divergence of opinion between those who want a lower budget and those who want a higher budget, and those who want to protect traditional programmes … and those who want a modern, outward-looking Europe,” Martin said.
The union’s 27 leaders meet in Brussels on Thursday, for what is expected to be the first real clash as budget negotiations intensify.
A coalition of “frugal” states – Germany, the Netherlands, Finland, Denmark, Sweden, Austria – want the draft budget to be cut by several hundred billion euro.
[ EU budget: ‘Frugal’ states demand hundreds of billions be cut from spendingOpens in new window ]
Many of that group favour slashing funding for CAP and cohesion development schemes. That would leave more money to put towards what they view as “modern” priorities such as defence, migration control and economic competitiveness.
A larger group, made up of Italy, Spain, Poland and many eastern and southern states, want CAP and the other traditional planks of the EU budget to be “protected at all costs”, Martin said.
Ireland’s revision to the EU budget package was “never going to please everybody”, he said.
German chancellor Friedrich Merz said the Irish proposal was a “step in the right direction” but the suggested cuts left the budget package too large and “far from where we need to be”.
The Irish Government has handed the job of piecing together a final deal over to António Costa, the European Council president who chairs the summits of national leaders.
[ Ireland’s EU presidency proposes budget cut of €141bn for the blocOpens in new window ]
The joint budget is predominantly financed by national contributions based on the size of each member states’ economy. Governments are separately fighting over ways they could raise additional revenue at EU level to fill some of the shortfall between the bloc’s’s big ambitions and what member states are willing to pay.
Speaking to reporters, the Taoiseach said the EU needed a “larger budget” than the current €1.2 trillion package that would run until the end of next year.