Five EU Nations Push for Smaller 2028-2034 Budget as Spain Offers Debt Relief Plan

Germany, Denmark, Finland, the Netherlands and Austria have jointly called for the European Union's budget for 2028-2034 to be reduced by several hundred billion euros, setting the stage for difficult negotiations in the coming months.

In a joint op-ed, the leaders of the five countries — among the largest net contributors to the EU budget — argued that the proposed €2 trillion package is too heavily weighted toward pre-allocated subsidies and transfers. They said this leaves insufficient room for shared investment in security and defence, competitiveness, innovation, and efforts to curb irregular migration.

The European Commission's proposal amounts to €2 trillion, or 1.26% of EU Gross National Income (GNI). Of that, roughly €168 billion, or 0.11% of GNI, would go toward servicing the EU's borrowing for the post-pandemic recovery fund. The five leaders described the proposed nominal increase of about 60% over the 2021-2027 budget as unrealistic.

Net beneficiary countries are worried that such cuts would reduce funding for farmers and for narrowing living-standard gaps between richer and poorer regions. That concern carries political weight ahead of parliamentary elections next year in France, Italy, Spain, Poland, Greece, Finland, Slovakia and Estonia.

To help bridge the divide, Spain has proposed altering the repayment schedule for part of the EU's post-pandemic borrowing. Spanish Economy Minister Carlos Cuerpo said linking repayments to economic growth and extending them over a longer period would free up approximately €70 billion. Under the plan, an annual payment of about 0.06% of EU GDP would retire the debt by 2058, the deadline already agreed by member states.

EU governments are set to discuss the next budget at summits in October, November and December, with the aim of reaching a deal before the end of the year.