Germany and Five Allies Threaten to Veto EU’s €2 Trillion Budget Plan

Germany and five other major contributors to the EU budget have threatened to withhold support for the bloc’s next seven-year spending plan unless it is cut by hundreds of billions of euros.

The leaders of the Netherlands, Sweden, Denmark, Austria and Finland joined German Chancellor Friedrich Merz in rejecting the European Commission’s proposed €2 trillion budget for 2028–2034.

Together, their countries provide about 40% of member-state contributions.

In a letter seen by the Financial Times, the six leaders said the budget “must be fundamentally reformed. We must make choices.”

A Demand for Cuts

The six governments want the EU to direct more funding toward defense, competitive industries and migration.

They are seeking reductions in agricultural subsidies and regional development funds, which have traditionally accounted for much of the budget.

A diplomat from one of the six countries put the scale of the demand plainly: “Unless the budget is cut by hundreds of billions, there won’t be an agreement this year.”

Any agreement requires the consent of all 27 member states.

The warning puts the six governments at odds with a group of 17 countries, including Spain and Italy, that want increased farm and regional funding and a higher overall budget than the Commission’s proposal.

Some in that group also favor additional joint EU borrowing, which Germany and its allies oppose. France, meanwhile, is pressing for EU-wide levies to help finance higher spending.

October Deadline

Ireland, which holds the rotating EU presidency, must prepare a compromise ahead of the October 15–16 European Council meeting.

EU leaders had committed in June to reaching a budget agreement this year.

The Commission has proposed raising about €60 billion annually through new levies, including measures tied to carbon emissions, electronic waste, tobacco and large companies.

Those proposals face resistance from governments reluctant to give Brussels more authority over taxation.

A spokesperson for European Council President António Costa said the aim remained to close the differences and reach “a balanced overall agreement” by the end of the year.