Germany rejects new long-term EU budget proposal as unacceptable

Germany on Saturday quickly rejected a new proposal for the European Union's next seven-year budget as unacceptable, saying the spending cuts did not go far enough.

"The size of the new proposal is no basis for an agreement," Chancellor Friedrich Merz said in a statement issued in Berlin.

The EU budget must remain affordable for the countries that shoulder the greatest share of its financing, Merz said.

The rejection came just hours after Ireland, which holds the rotating EU presidency, presented a new budget plan in Brussels.

It would cut spending for 2028-34 by around €159 billion from the European Commission's original proposal of nearly €1.985 trillion, bringing the total to €1.826 trillion.

Both figures are in current prices, including projected inflation over the seven-year period.

Germany and other major net contributors, including the Netherlands, Sweden and Austria, have demanded cuts of several hundred billion euros to the European Commission's original proposal put forward last year.

These countries pay more into the EU budget than they receive in return.

The proposed distribution of the cuts also runs counter to the priorities of Merz's centre-right government in Berlin.

The reductions would fall particularly heavily on areas where the European Commission had planned to increase spending, including competitiveness, research, defence and foreign and development policy.

Agricultural subsidies and cohesion funding, which aims to reduce economic and social disparities between EU regions and primarily benefits poorer member states, would largely be protected.

EU leaders are aiming to reach an agreement by the end of the year, but prospects for a quick breakthrough are unlikely.

The EU budget is financed primarily through contributions based on member states' gross national income (GNI). As the bloc's largest economy, Germany contributes by far the largest share.

The EU's 27 leaders are set to discuss the budget at a summit next week.