Germany, Italy and Belgium want an “emergency brake” that could allow EU capitals to block legislation they view as too burdensome for governments and businesses, as ministers argue over who will pay for the bloc’s next long-term budget. The mechanism’s scope and procedures remain unclear. Diplomatic sources said leaders are expected to discuss it at Thursday’s summit in Brussels.
Who Pays for the Brussels Budget
Ireland, which holds the EU’s rotating presidency, proposed a 2028-2034 budget of 1.62 trillion euros ($1.81 trillion). That’s 30% more than the current seven-year package, but 8% below the European Commission’s proposal. The budget equals around 1.2% of the 27-nation bloc’s gross national income. Member countries finance most of it, according to the size of their economies.
Every member country and the European Parliament must endorse the spending plan. In one negotiation, it brings together competing priorities and economic constraints, with governments deciding how much goes to poorer regions, farmers, defense, competitiveness and other priorities.
Sweden is one of about eight net contributors, paying more into the budget than it receives in allocations. It says “several hundred billion euros” more in cuts are needed. “It's wildly unaffordable, and the volume must go down,” Sweden's EU Affairs Minister Jessica Rozencrantz said as ministers met to discuss the Irish proposal.
Rozencrantz said the plan would mean “a 60% increase in the Swedish contribution,” amounting to “a fee for the Swedish taxpayers to pick up, which limits us to make the necessary priorities back home.” The arithmetic is blunt: if countries won’t contribute more, they must shrink farm or cohesion spending, scale back EU ambitions on defense and competitiveness, or find money elsewhere.
Cohesion funds for poorer regions and agricultural policy, which subsidizes farmers, together account for about two-thirds of the budget. Chancellor Friedrich Merz of Germany, Europe's biggest economy and a major net budget contributor, said the budget “must be affordable for those who bear the main burden of financing. Everyone must contribute to the necessary adjustments.” He welcomed Ireland's “tireless efforts,” but said “we are still a long way from reaching an agreement.”
An Emergency Brake for Business
Merz, Italian Prime Minister Giorgia Meloni and Belgian Prime Minister Bart De Wever have proposed a “last resort and additional safeguard” against what they describe as unnecessary bureaucratic costs from new EU laws. The three leaders also called for fewer reporting requirements for companies and a reversal of the burden of proof: rather than assume a reporting obligation is needed, officials would have to justify its necessity.
The leaders’ letter builds on work by an informal group of 19 EU countries called the “Friends of Competitiveness,” led by Germany, Italy and Belgium. They want quicker planning and approval for investments in decarbonisation, energy, artificial intelligence and defence. Under a proposed “priority rule,” officials would temporarily suspend some regulations in those sectors to speed the development and deployment of new technologies.
A separate account of the letter said it called for EU capitals to be able to block legislation they consider too burdensome for governments and businesses. The proposal would give national governments another gate over EU law. What counts as excessive burden, and how the brake would work, hasn’t been made clear.
Deadlines, Debt and Political Risk
The EU is negotiating its 2028-2034 budget as it seeks to support Ukraine in its fight against the Russian invasion and stay competitive amid high energy prices and trade tensions with the United States and China. Elections in France, Italy, Poland and Spain next year could test the bloc’s resilience. The hard right leads in opinion polls in France, while results in Poland and Spain are difficult to predict.
France, Italy and Belgium are mired in debt and oppose paying more. The EU can’t levy taxes as a bloc; it gets revenue through mechanisms including customs duties and value added tax. The European Commission is seeking new “own resources,” including through the carbon emissions trading system and a new tobacco duty.
Missing the end-of-December deadline wouldn’t mean the money runs out: countries would have another year. But lawmakers must adopt and approve legislation on spending programmes in time for funds to flow by January 2028. European Council President António Costa called a “timely agreement” “essential to provide our economies with the predictability and stability they need in an unstable and unpredictable world.” Ireland's EU Affairs Minister Thomas Byrne said the presidency had found a basis for negotiations, not agreement. “Nobody's going to get everything that they want,” he said. “But we hope that there'll be something there for everybody.”