EU Big Spenders Push Back Against Commission's €2 Trillion Budget Proposal

The European Union's budget for 2028-2034 is up for debate as five major net contributors, including Germany and Finland, call for a significant reduction in spending. In a joint op-ed published in Politico, the leaders of these countries argue that EU taxpayers cannot continue to bear the burden of both old and new priorities. They propose cutting several hundred billion euros from the European Commission's proposed €2 trillion budget, which is an increase of around 60% over the current 2021-2027 budget.

The five leaders, who are among the biggest net contributors to the EU budget, also suggest that more emphasis should be placed on common investment in security and defense, competitiveness, innovation, and the fight against irregular migration. They argue that the current budget is too focused on subsidies and transfers allocated largely in advance.

The proposed reduction has sparked concerns among net beneficiaries of the EU budget, who fear that it could lead to a decrease in funds for farmers and equalizing standards of living between poorer and richer regions of Europe. The European Commission's proposal calls for 1.26% of EU Gross National Income (GNI) to be allocated towards the budget, with some 168 billion euros going towards servicing the EU's borrowing for the post-pandemic recovery fund.

Spain has proposed changing the repayment schedule of part of the EU post-pandemic borrowing, linking it to economic growth and spreading it out over a longer period. This would free up around €70 billion, according to Spanish Economy Minister Carlos Cuerpo. He suggests that an annual payment of about 0.06% of EU GDP would retire the debt by 2058, the deadline agreed upon by member states.