Key facts
- EU budget for 2028-2034 proposed to be 8% lower than Commission's €2 trillion plan.
- Irish presidency's proposal suggests a total budget of €1.6 trillion.
- Cuts target foreign aid (€38B), competitiveness (€75B), and administrative costs (€10B).
- Spending on regional development, agriculture, and fisheries largely protected.
- Proposal includes five new EU-wide taxes to generate €66 billion.
- EU leaders to discuss the proposal on October 15-16, aiming for year-end agreement.
The European Union's long-term budget for the period 2028 to 2034 is facing significant proposed reductions, with the Irish EU presidency suggesting an 8% cut from the European Commission's initial €2 trillion plan. This new proposal, presented on Saturday, aims to reconcile demands for savings from fiscally conservative countries like Germany with the interests of southern and eastern EU states, known as the Friends of Cohesion, who advocate for protecting spending on regional development and agriculture.
The Irish proposal outlines a total budget of €1.6 trillion, representing a €159 billion reduction from the Commission's figure. The cuts are primarily directed at foreign aid, with a proposed €38 billion reduction, and competitiveness, facing a €75 billion cut, alongside a €10 billion reduction in administrative costs. Spending on agriculture and regional development, which constitute a substantial portion of the EU budget, is largely shielded from significant reductions.
To generate new revenue, the proposal maintains a package of five proposed EU-wide taxes, expected to yield €66 billion. These include a corporate tax and a levy on polluting firms. The Irish presidency has focused on technical adjustments to address opposition to certain levies, such as phasing in Emissions Trading System contributions for poorer countries.
EU ambassadors are scheduled to discuss the proposal, referred to as a 'negobox,' on Sunday, ahead of a summit of leaders on October 15-16. Governments are under pressure to reach an agreement by the end of the year.