Ireland’s presidency has put 1.62 trillion euros ($1.81 trillion) on the table for the EU’s next seven-year budget. Sweden calls the figure “wildly unaffordable.” With a leaders’ summit days away, the gap between the capitals that pay and the regions that depend on the money looked wide on Tuesday.
The proposal covers 2028-2034. At 30% larger than the current package, it still sits 8% below the European Commission’s proposal. Known as the multiannual financial framework, the budget amounts to around 1.2% of the bloc’s gross national income. Every member state and the European Parliament must endorse it.
The Squeeze on Net Contributors
Sweden is one of about eight net contributors, paying in more than it receives. EU Affairs Minister Jessica Rozencrantz said “several hundred billion euros” more in cuts are needed. “It’s wildly unaffordable, and the volume must go down,” she told reporters as ministers met to discuss the Irish text. She said the plan would mean “a 60% increase in the Swedish contribution,” a “fee for the Swedish taxpayers to pick up, which limits us to make the necessary priorities back home.”
Germany’s position is similar. Chancellor Friedrich Merz welcomed Ireland’s “tireless efforts” on Sunday, but said “we are still a long way from reaching an agreement.” He said the budget “must be affordable for those who bear the main burden of financing.” “Everyone must contribute to the necessary adjustments.”
That “everyone” points at countries resisting cuts to cohesion funds for poorer regions and agricultural subsidies. Those two areas together make up about two-thirds of the budget. The arithmetic is blunt. Governments that won’t pay more must shrink farm or cohesion spending, scale back defence and competitiveness ambitions, or find money somewhere new. The Commission is seeking fresh “own resources,” including through the carbon emissions trading system and a new tobacco duty.
Pressure From the Calendar
The talks are running against a political clock. Elections in France, Italy, Poland and Spain in 2027 could test the bloc’s resilience. The hard right leads in French polls, while results in Poland and Spain are hard to call. The budget must also finance continued support for Ukraine as it fights off the Russian invasion, while Europe copes with high energy prices and trade tensions with the United States and China.
Ireland’s EU Affairs Minister Thomas Byrne kept expectations low. “We weren’t asked to find a basis for agreement. That will come later,” he said in Luxembourg. “Nobody’s going to get everything that they want. But we hope that there’ll be something there for everybody.”
Missing the end-of-December deadline wouldn’t mean the money runs out; countries would have another year. Still, spending legislation must pass in time for funds to flow by January 2028. European Council President António Costa wrote to leaders that a “timely agreement” was “essential to provide our economies with the predictability and stability they need in an unstable and unpredictable world.”
An Emergency Brake on Legislation
In a separate move, Merz, Italian Prime Minister Giorgia Meloni and Belgian Prime Minister Bart De Wever wrote to Costa on Monday, asking for an “emergency brake” on new EU legislation they consider excessively burdensome for businesses. They called it “a last resort and additional safeguard.” Its scope and procedures remain unclear. Diplomatic sources said it is expected on the agenda at Thursday’s summit in Brussels.
The letter builds on the “Friends of Competitiveness,” an informal group of 19 countries led by Germany, Italy and Belgium. It also proposes a “priority rule” that would temporarily suspend some regulations in decarbonisation, energy, artificial intelligence and defence to speed up new technologies. The proposal would cut reporting requirements and reverse the burden of proof, requiring officials to justify an obligation rather than assume it. A separate account of the letter said it would let EU capitals block legislation they judge too burdensome.
Why This Matters:
The budget decides whether the EU can fund cohesion regions, farmers, Ukraine’s support and its own climate and defence goals at once. Farm and cohesion spending make up two-thirds of the budget. Cuts hit poorer regions and rural communities first.
The emergency-brake proposal raises a separate question. Temporarily suspending rules in decarbonisation and energy, or letting capitals block laws, could slow protections that citizens and workers rely on. Leaders will face the question of whether simplification can coexist with social and environmental standards, and who gets to decide, on Thursday. Failure to agree wouldn’t cut off funds immediately, but delay erodes the predictability Costa says Europe’s economies need.