France and Germany lock horns over long-term EU budget

The EU's long-term budget is a multi-year plan that sets how much money the bloc can raise and spend across several years. It matters because common priorities, from agriculture to defence, require funding that individual national budgets cannot coordinate alone.

In this case, the proposed budget would support farmers, regional development and efforts to help European businesses compete with US and Chinese rivals. French President Emmanuel Macron also identified defence as a priority needing a stronger European budget.

The article focuses on the 2028–2034 plan, which the Commission valued at nearly €2 trillion. That proposal has divided governments. Some want cuts, while the Friends of Cohesion seek more support for agriculture and regional development. The final budget must balance these competing priorities and decide whether new revenues can help pay for them.

The proposed 2028–2034 EU budget is nearly €2 trillion. The current 2021–2027 budget is worth around €1.2 trillion. Both cover seven-year periods, so the comparison is broadly like-for-like.

The difference is roughly €800 billion. The article describes the proposed budget as an increase of around 60 percent. That larger figure reflects pressure to fund new or growing priorities, including defence, agriculture, regional development and stronger European businesses.

The scale is the central political problem. Germany, Austria, Denmark, Finland, the Netherlands and Sweden want cuts of several hundred billion euros. France argues that the EU needs enough money for rising challenges. The final package may therefore require spending reductions, new revenue sources, or compromises over who pays and who receives funding.

France and Germany lead opposing camps because they judge Europe's needs and financial limits differently. France says the 27-country bloc faces rising challenges and needs enough shared money to respond. Germany leads six countries seeking cuts of several hundred billion euros.

French President Emmanuel Macron has called for an ambitious budget, including support for defence. A French presidency official also said money is needed for farmers and to help European companies compete with US and Chinese rivals. Germany and its partners instead object to a large increase during painful fiscal consolidation.

The dispute is also political. France has its own budget problems, while German Chancellor Friedrich Merz is politically weakened by the electoral rise of the far-right AfD party. France is a net contributor, as is Germany, but they disagree over how much contributors should provide and what the EU should prioritize.

The Friends of Cohesion are a group of 17 countries from southern, central and eastern Europe. They want greater EU funding for agriculture and regional development. Their position adds a third force to negotiations already split between budget-cutting countries and governments seeking a larger overall plan.

Agriculture matters because farmers are one of the spending groups the French presidency official specifically said the budget must support. Regional development matters because cohesion funding is intended to help less-developed or economically weaker regions. The article gives the group's demand, though it does not list individual countries or specific projects.

Their influence could shape the final compromise. Even if leaders reduce the overall proposal, these countries may resist cuts that affect farming or regional support. The negotiations must therefore settle not only the budget's total size, but also how money is divided among priorities and countries.

If EU leaders fail to reach a political agreement before December, talks could move into a more dangerous election year. The article warns that eurosceptic victories in France and elsewhere could affect future dealmaking. A delay would therefore increase political uncertainty, even though it would not immediately make the budget legally impossible.

Spain has already called a snap election for next month, adding to the pressure. Ireland, which holds the rotating EU presidency, plans to issue a revised proposal before leaders meet in Brussels. That text is intended to narrow the gap between countries demanding cuts and those seeking more funding.

The legal situation is less urgent than the political one. The EU does not have to agree the budget this year; the final legal deadline is the end of 2027. Still, delay could leave leaders negotiating under changing national politics and make the already painful compromise harder to reach.

The EU could seek new revenue sources instead of relying mainly on larger contributions from member states. The European Commission has proposed several possibilities, including a tax on large companies, a levy on electronic waste and higher tobacco taxes. These would give the EU additional ways to finance shared priorities.

The European Parliament wants to go further. It supports taxes on digital giants and online gambling. The basic mechanism is simple: new levies would raise money for the EU budget, reducing pressure to increase direct payments from national governments.

Agreement is far from certain. Many countries dislike the proposed tax on big companies, and some oppose a digital levy. The article does not say whether Ireland's revised proposal will add more revenue ideas. New taxes could help bridge the budget gap, but they would also create another political dispute among member states.

The EU budget is a shared pool of money. Member states contribute to it, and the EU distributes funding through common programmes and priorities. The article highlights agriculture, regional development, defence and support for European businesses. It also discusses possible EU-wide taxes as additional revenue.

The key mechanism is the difference between money paid in and money received. A net contributor pays more into the EU budget than it gets back through EU programmes. A net recipient receives more funding than it contributes. France is described as a net contributor, while the article does not identify particular net recipients.

The article does not give a complete breakdown of existing collection rules. It does show the political tension clearly: contributors want to limit payments, while Friends of Cohesion countries seek greater funding. New levies could expand the pool, but several governments oppose some proposals.