Euro Commission President Ursula von der Leyen has warned the European Parliament in Strasbourg that efforts by Germany and other countries to significantly slash the next long-term EU budget threaten key legislative priorities, setting up a high-stakes collision ahead of the upcoming October 15–16 Brussels summit.
Brussels and Berlin Clash Over Trillion-Euro Projections
The European Commission has proposed a 1.76 trillion euro, seven-year budget for the 2028–2034 period. The blueprint aims to funnel capital into innovation, competitiveness, and defense infrastructure across member states. But Berlin is pushing back hard.
Germany, alongside Austria, Denmark, Finland, the Netherlands, and Sweden—often dubbed the “frugal” bloc—are demanding that the 2028–2034 budget be trimmed by “several hundred billion euros” compared to the Commission’s project. These capitals argue that national treasuries face tight constraints.
Addressing lawmakers in Strasbourg, Ursula von der Leyen acknowledged the difficult budgetary positions facing national capitals, yet she drew a firm red line against excessive cuts. “However, I would like to warn against major reductions,” she told the European Parliament. “This would carry the risk of severely cutting key priorities on which we all agreed together.”
The Divergence Between Frugal States and the Cohesion Alliance
The debate over the long-term financial framework has fractured the European Council into distinct ideological camps. While fiscal conservatives press for austerity, a powerful counterweight has organized in defense of traditional regional spending.
Seventeen Southern and Eastern European states have forged a coalition known as the “Friends of Cohesion,” advocating for an ambitious budget that protects farming subsidies and social and regional disparities. Lithuanian President Gitanas Nausėda joined counterparts from 16 other member states—including Poland, Spain, Italy, and Romania—in dispatching a formal letter to the presidency of the Council of the European Union, as detailed by Mano ūkis.
| Bloc / Coalition | Core Priorities | Key Member States |
|---|---|---|
| The “Frugal” Coalition | Spending reduction, fiscal restraint, trimming hundreds of billions from the proposal | Germany, Austria, Denmark, Finland, Netherlands, Sweden |
| The “Friends of Cohesion” | Preserving Common Agricultural Policy, regional convergence, social funds | Lithuania, Poland, Spain, Italy, Romania, and 12 others |
The leaders’ letter stresses that Europe faces mounting challenges in security, defense, connectivity, energy resilience, and competitiveness. The signatories argue that, according to the European Commission’s proposal, financing for cohesion and agriculture would decrease in real terms. They argue that new European priorities require additional resources while maintaining funding for agriculture and cohesion.
New Revenue Streams and the Upcoming Brussels Summit
To help finance new priorities, the European Commission is proposing to increase EU own resources, such as environmental and tobacco taxes. Ursula von der Leyen urged the European Parliament to support this step. “If we want to preserve our priorities and level of ambition planned for Europe, we must do the hard work on the revenue side,” she stated.
As the presidency of the Council of the European Union prepares to issue a new compromise proposal, European Council President Antonio Costa aims to secure an agreement on the new budget before the end of the year.
Negotiations on the budget and proposals for new revenue sources will be on the agenda when EU heads of state and government gather in Brussels on October 15–16.
