Ireland, which currently holds the European Union’s rotating presidency, has proposed an 8% reduction in the European Commission’s budget plan for 2028 to 2034, bringing the proposed spending package to approximately €1.6 trillion ($1.79 trillion).
The proposal, announced on Saturday, October 10, has already sparked disagreement among EU member states, with some of the bloc’s biggest financial contributors arguing that the cuts do not go far enough.
Despite the proposed reduction, the new budget would still represent a 30% increase compared with the EU’s current spending framework, which covers 2021 to 2027.
The EU budget provides funding for major policies and programmes across the bloc’s 27 member countries, including agriculture, regional development, research, security and economic competitiveness.
Ireland Proposes €141 Billion in Budget Savings
The European Commission had initially proposed a €2 trillion budget for the seven-year period.
However, after adjusting the original figure for inflation and calculating it using 2025 prices, Ireland placed the Commission’s proposal at €1.76 trillion.
Its revised plan would reduce that amount by 8%, representing savings of approximately €141 billion and bringing the proposed budget to about €1.6 trillion.
“The Negotiating Box provides savings of 8%, or €141 billion, on the Commission’s original proposal,” Ireland said in a statement.
The proposal is intended to serve as a compromise between EU governments that want increased spending on emerging priorities and those seeking tighter budget controls.
Ireland Seeks Compromise Over Defence and Agriculture Funding
The European Commission has argued that the EU must increase spending on defence and strengthen Europe’s economic competitiveness.
However, several member states want to preserve substantial funding for traditional priorities, particularly agriculture and regional development.
Speaking at a press conference, Irish minister Thomas Byrne said the proposed budget was designed to narrow the differences between member countries.
“As we see it, the negotiating box acts to bridge the many differences between the member states,” Byrne said.
He explained that the proposal seeks to address competing financial demands while maintaining support for essential EU programmes.
“It brings us closer to resolving the budgetary trilemma, addressing the talks of how best to finance new priorities in competitiveness, research, innovation, security and defence while at the same time addressing core policies,” he added.
Proposed Cuts Affect Agriculture, Regional Development and Security
Under Ireland’s compromise plan, spending on regional development, agriculture and fisheries would be reduced by 3% compared with the European Commission’s original proposal.
These sectors account for the largest share of the EU budget and remain major priorities for several member states.
The plan also proposes a 13% reduction in funding allocated to competitiveness and security.
To support the revised spending framework, Ireland has proposed approximately €55 billion in new financing options.
The proposed revenue sources include customs duties, a share of the proceeds EU governments receive from selling carbon dioxide emissions permits to companies, and annual lump-sum contributions from large businesses operating within the bloc.
These measures are among several options being considered to generate additional funding for the EU’s long-term spending commitments.
Germany, Sweden and Netherlands Criticise Proposal
Ireland’s proposed reduction has drawn criticism from Germany, Sweden and the Netherlands, three countries that contribute more to the EU budget than they receive.
German Chancellor Friedrich Merz joined ministers from Sweden and the Netherlands in expressing concern that the revised spending plan remained too expensive.
“The EU budget must be affordable for those who bear the main burden of financing it,” Merz said.
Their opposition reflects concerns among net contributors about the financial obligations that would accompany the proposed seven-year budget.
European Parliament Opposes Proposed Cuts
While some EU governments believe Ireland’s proposal does not reduce spending sufficiently, lawmakers in the European Parliament have taken the opposite position.
The Parliament has called for a 10% increase above the European Commission’s original €2 trillion proposal.
Lawmakers warned that Ireland’s proposed cuts could weaken Europe’s ability to address major economic and security challenges.
They also indicated that the proposal would not receive the Parliament’s consent in its current form.
The disagreement highlights the difficulties facing EU negotiators as they attempt to balance growing financial demands with concerns over affordability.
EU Leaders to Discuss Budget on October 15–16
EU leaders are expected to discuss Ireland’s compromise proposal during meetings scheduled for October 15 and 16 in Brussels.
The bloc’s long-term budget, formally known as the Multiannual Financial Framework (MFF), must be agreed upon by all 27 EU member states.
The European Parliament’s consent is also required before the framework can be adopted.
With major disagreements remaining over the overall size of the budget, funding priorities and contributions from member states, negotiations are expected to remain challenging.
The outcome will determine how the European Union finances its major programmes and policy priorities between 2028 and 2034.
