EU leaders clash over trillion-euro budget as fears grow over French election fallout

The EU’s long-term budget is a seven-year spending plan for the bloc. The proposed plan covers 2028 to 2034 and is worth nearly two trillion euros. It sets the EU’s main priorities and determines how much money is available for shared policies.

The budget would support agriculture, defence, economic competitiveness and migration measures. Leaders must decide how much farmers receive, what to spend on defence, and whether European money should fund migrant “return hubs” in Africa. The budget also reflects the EU’s response to competition from the United States and China.

The negotiations matter because the budget shapes the bloc’s choices for years. Germany and other frugal countries want major reductions, while France and the Friends of Cohesion seek more funding. Leaders hope to reach an agreement before elections make compromise harder.

The proposed EU budget for 2028 to 2034 is nearly two trillion euros, equal to about US$2.2 trillion. It would finance the bloc’s major priorities for seven years. These include agriculture, defence, economic competitiveness and migration.

Ireland’s latest proposal, presented as the basis for negotiations, would cut around 140 billion euros from the budget total. The figure is much smaller than the reductions demanded by Germany, the Netherlands and Sweden. Sweden’s prime minister called the draft far too large and expensive, showing how divided the governments remain.

The draft therefore satisfies no major camp. Frugal countries want cuts of several hundred billion euros. France opposes massive reductions, while the Friends of Cohesion say the proposal is insufficient for agriculture and regional development. Leaders are now trying to reshape the plan before December.

Germany, the Netherlands and Sweden are pressing for major cuts because they view the draft budget as too large and expensive. They belong to the group known as the frugals. Their demand is for reductions of several hundred billion euros, far beyond the roughly 140-billion-euro cut in Ireland’s proposal.

France takes the opposite view. Paris says Europe faces rising challenges and needs a larger budget to respond. It also wants substantial new EU-wide taxes, arguing that cuts alone cannot finance the bloc’s priorities. The Friends of Cohesion form a third camp and say more funding is needed for agriculture and regional development.

These positions create a three-way deadlock. Frugal governments focus on limiting spending. France seeks a bigger financial pool and new revenue. Cohesion countries want existing support protected or increased. Leaders must bridge these demands before the budget can be agreed.

The EU agrees its long-term budget through negotiations among the 27 national leaders. They bargain over the total amount, spending priorities and possible new revenue sources. In this round, Ireland presented a proposal, while European Council President Antonio Costa is leading the negotiations toward a settlement.

The process is difficult because governments defend different interests. Germany, the Netherlands and Sweden want deep cuts. France wants a larger budget and new bloc-wide taxes. The Friends of Cohesion want stronger support for agriculture and regional development. Leaders must find a package that addresses all these demands.

All 27 countries must reach a deal because the plan covers the entire EU and distributes shared money across its members and regions. Without agreement, the bloc cannot settle its priorities for 2028 to 2034. The article does not describe the formal voting rule, but it makes clear that a common agreement is required.

If leaders miss an agreement before France’s elections in April and May, the negotiations would restart in the summer. That delay would remove the advantage of settling the budget before elections across the bloc. A second EU diplomat described the restart as “an awful exercise.”

The danger comes from possible Eurosceptic victories. Marine Le Pen is favoured in French opinion polls and wants to reduce France’s contribution to the EU budget. Her potential success could make France’s position harder and complicate the wider bargaining. Elections are also looming in Italy, Poland, Greece and Finland.

Leaders are therefore trying to reach a deal by Christmas, although the latest draft asks only for a “timely agreement.” Antonio Costa has added an extraordinary meeting in late November to help. Germany’s Friedrich Merz warned that leaders remain far apart and may need a final summit in December.

France is proposing new EU-wide taxes to help finance the long-term budget. Paris says there can be no agreement without substantial new bloc-wide revenue. The proposal would reduce the pressure to fund the budget mainly through contributions from national governments.

The suggested sources include taxes on large companies, environmental taxation and levies on tobacco. France also wants EU-wide taxes on digital services, cryptoassets and online gambling. The European Parliament supports the latter group of proposals as well.

These ideas are part of France’s wider opposition to massive budget cuts. Paris argues that Europe needs a larger pot to handle rising challenges, while frugal governments want spending reduced. The tax proposals could help preserve a bigger budget, but the article shows no agreement has been reached. They remain one of the central disputes in the negotiations.

National governments contribute to the EU budget so the bloc can finance shared priorities that individual countries address together. In this negotiation, that common spending includes agriculture, defence, competitiveness and migration. The article also shows that France’s contribution is a major political issue, especially because Marine Le Pen wants to reduce it.

The budget redistributes money through programmes for farmers and regional development. The Friends of Cohesion are specifically demanding more support for these areas. Leaders must decide how much money goes to agriculture and how much is available for other priorities, such as defence or migrant “return hubs” in Africa.

This system creates competing national interests. Frugal countries want lower overall contributions and deep cuts. France wants a larger budget and new EU-wide taxes. Cohesion countries want funding protected for agriculture and regions. The article does not provide a country-by-country redistribution formula.