EU budget talks clash over cuts to farm and regional aid as north pushes for lower spending — UnionPress
Member states dispute the Commission's 2028‑2034 budget, with wealthier northern countries demanding a smaller pot while southern and eastern members defend agricultural and cohesion funding.
European Commission has presented its draft multiannual financial framework for 2028‑2034, asking for just under €2 trillion, about 1.26 % of the bloc's average gross national income, a sizeable rise from the €1.2 trillion allocated to 2021‑2027.
The proposal earmarks more money for the economy, the energy transition and defence, but it also trims the share devoted to agriculture and regional development, two pillars that currently absorb roughly one‑third and 35 % of the EU budget respectively.
Negotiations have quickly become a showdown between the fiscally restrained north and the coalition of southern and eastern states that rely heavily on cohesion and farm subsidies. Sweden's minister for European affairs, Jessica Rosencrantz, warned that the volume "needs to come down, big time", while Dutch finance minister Eelco Heinen called the figure "far too high at a time when fiscal space is limited across Europe". Both countries are net contributors to the EU budget.
In contrast, a bloc of sixteen countries, including Poland, Italy and Spain, have pushed back fiercely against any reduction in farm and regional aid, arguing that these programmes are the most visible EU policies for ordinary citizens.
The European Parliament has added fuel to the fire, voting overwhelmingly for a budget 10 % larger than the Commission's draft in order to protect those programmes from cuts.
Farm subsidies and cohesion funds support millions of jobs in rural areas and help modernise infrastructure in less‑developed regions. Cutting them could deepen the disparity between wealthier north‑west states and poorer south‑east members, a pattern that has long shaped EU politics.
At the same time, the Commission's emphasis on the energy transition and defence reflects pressing challenges. An ageing population is putting pressure on pension and health‑care systems, while the war in Ukraine and rising energy prices have forced member states to boost defence spending and seek cheaper, home‑grown renewable power.
According to the International Monetary Fund, public debt across the EU could more than double by 2040 if fiscal trajectories remain unchanged. Some governments, notably Belgium, are already contemplating cuts to pensions and public services to keep debt in check, a move that unions have condemned as a threat to living standards.
Former European Central Bank president Mario Draghi has warned that the EU needs roughly €1.2 trillion of annual investment to revive growth. The Commission argues that private capital, banks, pension funds and other investors, can be mobilised alongside public money to finance strategic sectors such as renewable energy, digital infrastructure and advanced manufacturing.
German Chancellor Friedrich Merz has expressed doubt that a consensus will be reached before the end of the year, noting the difficulty of reconciling divergent national priorities. He cautions that a delayed deal could make the next round of negotiations even more complex.
In France, far‑right leader Jordan Bardella, a leading contender for the 2027 presidential election, has called for halving the country's contribution to the EU budget, a stance that would further strain the north‑south compromise.
Despite the deadlock, a Eurobarometer survey this spring found that six out of ten Europeans remain optimistic about the Union's future, and a narrow majority still trust its institutions. That confidence hinges on the EU's ability to deliver tangible benefits, from affordable energy to decent pensions, and on the perception that the budget can be used effectively.As the deadline approaches, member states must balance short‑term political pressures with long‑term strategic needs. A smaller budget could limit the Union's capacity to fund the green transition, bolster defence and support lagging regions, while a larger one risks overburdening taxpayers in countries already feeling the squeeze of high energy bills and inflation.
Whatever the outcome, the next multiannual financial framework will set the tone for Europe's economic and social policy for the next seven years, shaping everything from farm incomes in the Polish countryside to renewable‑energy projects in the German Ruhr and digital upgrades in the French Riviera.