European regional and local leaders have warned that the EU’s next long-term budget risks transferring control over investment programmes to national governments, potentially increasing economic disparities and reducing the ability of poorer regions to shape their own development.

The warning was delivered in Brussels on 12 October by Kata Tüttő, President of the European Committee of the Regions, during the opening of the European Week of Regions and Cities.

Her intervention comes as EU leaders prepare to negotiate the 2028–2034 budget, with disagreements over agricultural funding, regional development, defence, industrial competitiveness and the distribution of financial responsibilities among member states.

The Committee of the Regions warned that greater centralisation could concentrate economic opportunities in already prosperous areas while limiting other territories’ capacity to attract investment and develop essential infrastructure.

The concern goes beyond money allocated to regional development. It addresses who controls spending decisions and whether local authorities retain a meaningful role in determining how European funds are used.

Regional governments resist centralisation

EU cohesion policy has traditionally sought to reduce disparities between richer and poorer regions through investment in transport, infrastructure, education, business development and public services. While national governments administer considerable funds, regional and local authorities are frequently involved in identifying priorities and delivering projects.

The Committee argues that restructuring which concentrates decision-making at national level could weaken this arrangement. National governments may favour country-wide industrial or infrastructure programmes, while regional authorities identify specific problems arising from local conditions.

A national infrastructure strategy could prioritise major transport routes and industrial centres. Regional administrations might instead emphasise connecting smaller communities, maintaining local services or developing specialised economic activities.

The dispute concerns whether the next EU budget will maintain flexibility for regional priorities. In Belgium, Germany, Spain and Italy, regional institutions possess important responsibilities across economic development, education and infrastructure. Changes to EU spending governance could alter established relations between European, national and regional institutions.

The budget negotiations intensify the dispute

Ireland’s rotating Council presidency has proposed reducing the Commission’s original seven-year budget plans by approximately €141 billion while largely protecting agriculture and cohesion compared with other expenditure categories.

The proposed financial framework would nevertheless remain substantially larger than the current budget. The distribution of resources remains contentious, and an overall cut does not necessarily translate into the same reduction for every region.

Effects will depend on allocation formulas, national spending plans and programme governance. Meanwhile, European institutions face demands for stronger investment in defence production, digital infrastructure, competitiveness and support for Ukraine while maintaining agricultural and regional commitments.

Economic disparities remain a European problem

The Committee presented its seventh annual assessment of Europe’s regions and cities during the European Week of Regions and Cities, held in Brussels from 12 to 14 October.

The assessment examines competitiveness, resilience, public services, democratic governance and financial conditions. Regional disparities remain a significant feature of the EU economy despite decades of common investment programmes.

Large metropolitan areas often benefit from concentrations of universities, research institutions, advanced industries and capital. Less densely populated territories may struggle with demographic decline, shortages of skilled workers and the cost of maintaining infrastructure.

These differences can reinforce themselves over time. Businesses invest where suitable workers, transport networks and customers are already concentrated. Younger workers moving towards metropolitan economies may further reduce the economic prospects of communities they leave behind.

Defence spending creates new pressures

The increase in European defence expenditure introduces another dimension. Regions containing defence manufacturers, engineering firms, research institutions and military installations could benefit substantially from new spending, while others may receive little direct economic advantage.

If industrial investment concentrates in already advanced manufacturing centres, geographical disparities could widen. Conversely, procurement programmes and infrastructure investment could bring opportunities to weaker regional economies with suitable facilities and labour.

A question of political authority

The Committee of the Regions has limited formal authority over the EU’s long-term budget. National governments will negotiate the framework, and the European Parliament must consent to the final agreement.

Regional leaders are seeking to influence those negotiations before political compromises are established. Their central argument is that aggregate European economic growth alone does not capture the distribution of investment, employment and public services across the Union.

The approaching European Council negotiations will indicate whether governments intend to preserve regional influence over EU spending or concentrate greater authority over investment decisions at national level.

European Union governments are entering a critical round of budget negotiations after the Irish presidency of the Council proposed cutting €141 billion from the European Commission’s long-term spending plans, exposing deep disagreements over how the bloc intends to finance its expanding responsibilities.

The revised proposal, circulated ahead of the European Council meeting scheduled for 15–16 October, would reduce the planned 2028–2034 financial framework by approximately eight per cent to around €1.6 trillion, calculated in constant prices.

Despite the reduction, the proposed budget remains approximately 30 per cent larger than the current seven-year framework. Germany, Sweden, the Netherlands and other governments concerned about national contributions have nevertheless argued that further restraint is necessary.

The compromise, detailed in negotiations over the EU’s next financial framework, reduces proposed spending across several areas while largely protecting the Union’s established agricultural and regional development programmes. The distribution of those cuts is becoming as contentious as the overall size of the budget.

Europe’s new priorities face the deepest reductions

Under the Irish proposal, agricultural and regional development allocations would decline by approximately three per cent compared with the Commission’s initial plans. By contrast, funding intended for competitiveness and security would be reduced by around 13 per cent, while external action and development cooperation face cuts of approximately 17 per cent.

The difference raises questions about whether the next EU budget can support the strategic ambitions repeatedly endorsed by European leaders.

The Commission has presented industrial competitiveness, technological development, defence readiness and economic resilience as central priorities for the remainder of the decade. Yet these sectors would absorb proportionately larger reductions under the revised framework than agricultural and cohesion programmes.

The consequences could extend to investments in advanced technologies, European industrial supply chains, research programmes and cross-border defence cooperation. They could also constrain the Union’s capacity to fund external partnerships and development initiatives.

The debate is particularly sensitive because the EU’s responsibilities have changed considerably since the previous budget was negotiated. Russia’s invasion of Ukraine has increased defence requirements, while competition with China and the United States has intensified demands for industrial investment.

Germany and the net contributors demand restraint

The central disagreement concerns how much additional expenditure European governments are willing to finance through the common budget. Germany and other major net contributors face domestic fiscal constraints, rising borrowing costs and demands to increase national defence spending.

For these governments, accepting a substantially larger EU budget would add to financial commitments already being made through national budgets.

The Irish compromise therefore faces opposition from two directions. Some governments consider the reductions insufficient, while others fear that the remaining cuts will weaken programmes essential to their national economies.

Traditional recipients of agricultural and regional funding have an interest in protecting established expenditure. Governments seeking stronger European investment in defence, innovation and industrial competitiveness have different priorities.

The European Parliament is another obstacle. Its consent will be required before the final financial framework can enter into force, giving MEPs considerable leverage in negotiations with national governments.

New EU revenues remain controversial

The proposal also envisages approximately €55 billion in additional annual financing through new or revised EU revenue sources, including customs revenues, emissions-related income and corporate contributions.

The Commission’s framework for the next long-term budget reflects a broader debate over the extent to which the Union should develop independent financing mechanisms rather than rely predominantly on national contributions.

Such mechanisms would potentially give Brussels a more predictable revenue base. However, they also raise questions about fiscal sovereignty, the distribution of costs among member states and the political accountability of European taxation.

National governments remain reluctant to surrender substantial authority over revenue collection, particularly when proposed resources could impose costs on domestic industries or consumers.

Ukraine, enlargement and Europe’s strategic ambitions

The negotiations will influence the Union’s ability to respond to future enlargement. Ukraine and several Western Balkan countries are pursuing accession, but the financial implications of bringing additional members into the Union remain substantial.

Existing arrangements for agricultural subsidies and regional development assistance would require reconsideration if large new beneficiaries entered the budgetary system.

At the same time, the EU faces pressure to support Ukraine financially and strengthen defence production without depending indefinitely on extraordinary borrowing or ad hoc national contributions. These responsibilities cannot be addressed simply by preserving the structure of earlier budgets.

European Council President António Costa will seek to narrow the divisions among the 27 leaders, but agreement on the financial framework requires unanimity. Any government can withhold its consent if it considers the final distribution of costs unacceptable.

The forthcoming summit is therefore likely to establish the parameters of further negotiations rather than eliminate the underlying disagreements. The immediate political question is whether member states can reconcile their commitment to greater European strategic capacity with their reluctance to finance it collectively.

Getting co-decision powers on the budget, finally enshrined in the Lisbon Treaty after more than a decade of inter-institutional battles, was one of the European Parliament’s big wins. 

The challenge facing MEPs in the coming months is whether they are really going to use those powers on the 2028-34 budget. 

The early signs are that they are spoiling for a fight. The Irish government’s compromise proposal tabled on Saturday (10 October) – an 8 percent cut worth €141bn to the European Commission’s spending plan – isn’t exactly butchery. 

But it does display a startling lack of ambition, in particular on the raft of ‘own resources’ proposed by MEPs to make the budget process less vulnerable to member states wanting to reduce or at least freeze their annual contributions  

This time round, MEPs have proposed a digital services levy, an online gambling levy, and a levy on crypto-asset capital gains.

Put together the parliament reckons that these new taxes could bring an additional €30bn to the EU’s budget, on top of the €57.4bn that the EU commission believes can be raised from other levies, such as the emissions trading scheme and the carbon border levy. 

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European Union leaders will meet in Brussels on 15–16 October under pressure to address surging energy costs, Russian hybrid attacks, continued support for Ukraine and the bloc’s next long-term budget. The summit comes as economic pressures expose growing differences between national governments.

European Union leaders are preparing for a two-day summit in Brussels dominated by the economic consequences of the Middle East conflict, Russia’s continuing war against Ukraine and mounting pressure on governments to reconcile defence commitments with deteriorating public finances.

The European Council meeting on 15–16 October will bring together the leaders of the 27 member states to consider immediate measures addressing high energy prices alongside longer-term decisions on competitiveness, enlargement, migration and the EU’s budget for 2028–2034.

European Council President António Costa has placed economic competitiveness and energy costs at the centre of the discussions, reflecting concerns that the disruption of global oil and gas markets is threatening the bloc’s industrial recovery.

The meeting also takes place against the background of renewed disputes over national spending limits, with Italy and Greece seeking greater freedom to finance energy relief and France facing increasing pressure over the credibility of its budget.

Energy crisis puts fiscal rules under pressure

The Middle East conflict has created a renewed energy shock for European economies, raising transport and industrial costs while pushing inflation higher.

The disruption of shipping through the Strait of Hormuz has also affected global oil supplies, exposing Europe’s continuing dependence on internationally traded fossil fuels despite efforts to diversify imports following Russia’s invasion of Ukraine.

European leaders are expected to consider targeted and temporary support measures for households and businesses, as well as longer-term policies intended to reduce energy dependence.

The political disagreement concerns how those measures should be financed.

The European Commission has resisted requests from Italy and Greece for further exemptions from the EU’s fiscal framework. Both governments argue that extraordinary energy costs require additional budgetary flexibility.

Brussels maintains that existing provisions already permit exceptional expenditure within defined limits.

The disagreement is particularly difficult for indebted governments that must simultaneously finance military expansion, maintain public services and protect their economies from energy inflation.

France’s position has added urgency to the debate. Its borrowing costs have increased sharply as investors question whether the government can adopt a credible budget ahead of the 2027 presidential election.

A summit agreement on emergency energy assistance would therefore have to accommodate substantially different national fiscal circumstances.

Ukraine and the changing transatlantic relationship

Support for Ukraine remains a central item on the summit agenda as Russia continues attacks against Ukrainian cities, energy infrastructure and industrial facilities.

EU leaders are expected to review military and financial assistance, the implementation of sanctions against Moscow and the resilience of Ukraine’s economy.

The discussions take place amid renewed uncertainty surrounding American weapons deliveries.

Washington’s reported threats to suspend supplies under the NATO-backed PURL procurement arrangement have raised further questions about Europe’s dependence on the United States for advanced military equipment.

European governments have increased defence expenditure and committed additional support to Ukraine, but replacing American capabilities remains difficult, particularly in air defence, precision-guided weapons and certain intelligence systems.

The summit is unlikely to resolve those industrial limitations, but the broader question of Europe’s ability to sustain Ukrainian defence over several years will influence discussions.

Member states must also consider how increased defence expenditure will be financed alongside other demands on national budgets.

Russian hybrid operations move higher on the agenda

The EU’s published summit agenda includes Russian-linked hybrid attacks within Europe.

The issue has gained prominence as European governments investigate sabotage, cyber operations, information interference and threats against infrastructure and defence-related industries.

Recent warnings concerning possible Russian assassination operations targeting European defence executives and employees of companies supplying Ukraine illustrate the changing nature of the security threat.

Such activities place additional demands on national intelligence services, police forces and European institutions responsible for cross-border cooperation.

The EU has strengthened its sanctions instruments against hybrid activities, but enforcement remains dependent on coordination between national authorities.

Any further measures would need to address intelligence sharing, protection of critical infrastructure and the relationship between internal security and the Union’s wider Russia policy.

A larger EU with a contested budget

Enlargement will form another important part of the discussions following the Commission’s proposals for preparing a wider Union.

Brussels has outlined possible institutional safeguards intended to prevent future members from undermining democratic standards or blocking common decisions.

Montenegro and Albania are advancing through their accession negotiations, while Ukraine and Moldova remain central to the EU’s geopolitical enlargement strategy.

The financial implications will become increasingly important as governments negotiate the next multiannual financial framework covering 2028–2034.

Existing members are already divided over how much the EU should spend, which programmes should receive priority and whether additional common resources should be raised.

Agricultural expenditure, cohesion funding, defence investment and support for Ukraine will compete for resources within the same budget negotiations.

The Commission argues that enlargement can be accommodated through targeted reforms, but securing agreement among member states will require decisions on future expenditure and the distribution of financial benefits.

Competitiveness and the single market

Leaders will also examine progress on the One Europe, One Market agenda, which aims to reduce barriers to economic activity within the EU and improve conditions for European businesses.

The initiative is intended to address structural weaknesses affecting investment, industrial development and the ability of European companies to compete internationally.

High energy prices have made those concerns more immediate, particularly for industries competing against producers in economies where electricity and fuel are cheaper.

The European Council will be asked to provide direction on measures planned for 2026 and 2027, but implementation will depend on subsequent legislation and decisions by member states.

The October meeting brings several unresolved European policy questions into the same negotiation: how to protect economic competitiveness, maintain fiscal credibility, finance defence, sustain Ukraine and prepare for enlargement.

The immediate test will be whether leaders can agree on a credible response to energy prices without reopening broader disputes over national budgets.

More difficult decisions concerning defence financing, institutional reform and the EU’s long-term expenditure commitments will extend well beyond the two-day summit.

The Irish government has set the path for a showdown between MEPs and governments over the next seven year EU budget after proposing an 8 percent cut worth €141bn to the European Commission’s spending plan. 

Savings from the commission proposal have been found across all headings in the so-called ‘negotiating box’ for the 2028–2034 Multiannual Financial Framework (MFF). But farmers’ subsidies under the common agricultural policy and the bloc’s cohesion policy, which provides funding to the EU’s poorest regions, have been exempted from any cuts. 

That is a nod to a sustained lobbying effort by a group of seventeen EU countries, known as ‘Friends of Cohesion’. 

As expected, meanwhile, cuts totalling €38bn have been made from the ‘Global Europe’ heading, which covers foreign aid, while €75bn has been taken from the competitiveness fund and €10bn from the EU’s administrative costs. 

In a statement on Saturday (10 October), Ireland’s minister for Europe, Thomas Byrne, said that the €1.62 trillion spending plan was “intended to bridge the many differences between Member States. It brings us closer to resolving the critical questions our Union faces on how to balance both new priorities and core policies, whilst also reflecting the fiscal realities that all Member States face.” 

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When certain governments discuss the EU’s next seven-year budget, their first reflex seems to be: what can we cut? That is the wrong question. The real question is not how much the EU budget costs, but how much an insufficient budget will cost us all.  

Economic benefits of EU membership are estimated to be two to six times the financial contribution of individual member states. For every euro we contribute to the EU budget, we can receive up to six euros in return.

That is the power of investing together: European investment delivers more than fragmented national spending. And it does so with a budget of just one percent of EU GNI, while national budgets can reach 50 percent.

The EU budget is not simply money transferred from national capitals to Brussels: it is an investment that creates value benefiting citizens through stronger economies, better infrastructure, food security, cutting-edge research, educational opportunities, regional development, and security.

Ultimately, all member states benefit from the added value created by the EU, making the concept of ‘net contributors’ obsolete.

Easing the pressure on national contributions is a legitimate objective, and it has a clear solution: an EU revenue reform. 

The European Parliament supports the basket approach of the European Commission on new own resources and its proposals. It also proposed three additional options capable of generating substantial revenue by 1 January 2028: a digital service levy on major platforms (€25.2bn per year), a levy on online gambling (€3.9bn per year) and a crypto-assets-based own resource (€3bn per year).

Our position is clear: large global companies that benefit most from Europe’s single market should contribute fairly to the EU budget that makes those benefits possible.

Cutting the EU budget may look like saving money. But if it means weaker competitiveness, less social investment and a less secure Europe, we save nothing and taxpayers foot the bill.

The European Union’s common budget has not grown in real terms for 40 years. On the contrary, its purchasing power has been steadily eroded due to high inflation. The current EU budget has lost around 10 percent of its purchasing power compared to when it was adopted in 2020. 

A more ambitious EU budget does not automatically mean that member states will have to contribute substantially more from their national budgets. When amounts are compared in constant prices and as a share of the size of the European economy – like with like – a more realistic picture emerges. 

In terms of spending capacity, and without counting repayment of the Covid-19 recovery fund (NextGenerationEU), the commission’s proposal for the 2028-2034 budget would be below the relative size of the current 2021-2027 MFF at the time of its adoption.

Even with parliament’s proposed increase for key EU programmes, member states’ contributions would still not substantially increase. 

Let us not forget: Europeans benefit considerably more than their countries’ headline contributions suggest. The single market is the clearest example. By removing barriers between 27 economies, it creates opportunities and delivers growth that no country could generate alone. 

By reducing the budget, the EU and its member states will have less capacity to deliver the economic and social benefits that citizens expect. We’ll have less cohesion, less competitiveness, a weaker agricultural sector, less global influence, reduced social investment and a much less secure Europe. And this also comes at a cost. A big one.

Instead of “what can we cut” we should be asking ourselves, “how can we finance a budget that delivers more for all”.  

If we genuinely want to use limited public resources efficiently, we must invest together. Economies of scale work for successful businesses, and they work for Europe.

Siegfried Mureşan (EPP, Romania) and Carla Tavares (S&D, Portugal) are the parliament’s co-rapporteurs on the EU budget, also known as the multiannual financial framework (MFF)

Europe’s Green party has called on the European Commission to exercise the powers it previously used during the Ukraine war to tax the exceptional profits made by big oil and gas companies during the ongoing conflict in Iran. 

“There are models in Europe that we can use to tax these super profits,” German MEP Rasmus Andresen told a European Parliament debate in Strasbourg on Wednesday (7 October), in his call to crack down on Iran-crisis profiteering.

The Strasbourg debate came after Austria, Germany, Italy, Poland, Portugal, and Spain wrote to Ireland’s finance minister in August calling for an EU-wide framework to tax windfall profits.

Ireland holds the rotating EU presidency and can set agendas in the EU Council until the end of the year.

Several of those in the group of six EU states already put in place energy windfall taxes since this summer, ranging from 60 percent levies on excess fuel profits in Poland to 33 percent in Portugal.

Many other EU countries oppose introducing another tax at European level, which would require unanimity among all 27 member states to put in place.

But for his part, the Greens’ Andresen told MEPs in the hemicycle on Wednesday: “I don’t understand how despite the fact that there is this initiative from these six member states, that the commission is not taking action.”

Estimates from NGO Transport and Environment found that excess profits of €7.5bn were seen by eight oil companies alone in the first half of 2026 in Europe.

The figures were twice what they had made in the previous quarter. 

The EU had reacted to soaring energy prices after Russia’s full invasion of Ukraine in 2022 with a special “solidarity” tax on oil and gas firms, said groups on the Parliament’s left.

A commission assessment found that the measure raised €28bn in 2022-2023.

A senior official representing the Irish presidency, Thomas Byrne, said on Wednesday that windfall taxes “could be considered to respond to the concern related to the rising cost of living“.

But energy commissioner Dan Jørgensen poured cold water on appeals for EU-level action, saying “corporate taxation falls mainly in the realm of national competence” in legal terms.

Andresen’s fellow Green MEP, Marie Toussaint, said taxing Iran profits could be used “to pay for the energy transformation” in Europe, in the context of difficult talks on the EU’s next multi-annual European budget.

If they were not taxed, “how can they be exonerated from all responsibility in the rise of prices at the gas station?,” said the French vice-president of the Greens group.

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European Commission president Ursula von der Leyen has joined MEPs in urging the bloc’s governments not to gut the EU’s next seven-year budget, as talks on spending reach a critical phase. 

“I would like to caution against large cuts. It would risk cutting deep into critical priorities that we all together have agreed on,” von der Leyen told MEPs during a speech in Strasbourg on Tuesday (6 October), ahead of an EU summit on 15 October.

The commission has proposed a budget worth just under €2 trillion, equivalent to 1.26 percent of the EU’s gross national income, a small increase on the previous seven year spending plan. But the so-called ‘frugal’ group of countries, led by Germany, have demanded hefty cuts, complaining that they are contributing too much. 

“Having no new financial framework is by far the most financially advantageous solution for Germany,” chancellor Friedrich Merz said on Monday. 

But 17 EU countries from Southern and Eastern Europe signed a joint letter last week, demanding that farmers’ subsidies via the Common Agricultural Policy are maintained, as well as spending across the EU’s poorest regions, known as cohesion policy 

During a press conference on Tuesday, Siegfried Muresan, the Romanian centre-right MEP who is co-leading parliament’s negotiating team on the seven-year budget with Portuguese socialist and democrat Claudia Tavares, said that there was “still time” for the Irish presidency to avoid proposing “unjustified cuts” that “would make Europe weaker and severely undermine the institutional cooperation between parliament and council.” 

Though Muresan conceded that governments did not want to increase their national contributions, “there is a way out”, he said. 

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Seventeen EU governments have joined forces to defend agricultural and regional funding in the bloc’s next seven-year budget, setting up a confrontation with Germany and five other countries demanding substantial reductions to the European Commission’s proposed €2 trillion spending plan.

Seventeen European Union countries have called for agriculture and cohesion funding to be protected from further cuts as negotiations over the bloc’s 2028–2034 budget enter a decisive phase.

In a letter dated 2 October to Irish Taoiseach Micheál Martin, whose government currently holds the rotating presidency of the Council of the EU, the countries said the overall financing of Cohesion Policy and the Common Agricultural Policy should be maintained in the next Multiannual Financial Framework.

The signatories are Bulgaria, Croatia, Cyprus, Czechia, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

The initiative follows months of coordination by the so-called Friends of Cohesion. In an earlier joint position published by the Spanish government, members argued that cohesion, agriculture and fisheries remained central EU policies and called for new EU revenue sources to be “genuine, fair, simple and non-regressive”.

Italian Prime Minister Giorgia Meloni and Romanian President Nicușor Dan have been coordinating the group at leaders’ level. They are expected to convene another informal meeting alongside the European Council on 15–16 October. The two leaders previously brought the group together ahead of the June European Council as governments sought to coordinate their positions on the budget.

The intervention places the group in direct opposition to Germany, Denmark, the Netherlands, Austria, Finland and Sweden.

Those six governments have argued that the Commission’s near-€2 trillion proposal should be reduced by several hundred billion euros. In their joint statement on the 2028–2034 budget, they said national governments were already undertaking fiscal consolidation and that the EU budget could not be exempt from similar pressure. They called for reductions across all spending headings while giving greater weight to security, defence, competitiveness, migration and sovereignty.

EU Today previously reported on the growing pressure from net-contributor countries for deep reductions to the Commission proposal as negotiations moved towards the Irish presidency’s attempt to secure an agreement before the end of the year.

The Commission’s original proposal for the 2028–2034 Multiannual Financial Framework amounts to almost €2 trillion in current prices, equivalent to 1.26 per cent of the EU’s average gross national income over the seven-year period. It substantially restructures the budget, bringing agriculture, cohesion, fisheries, migration and internal security into national and regional partnership plans while allocating more money to competitiveness, research, defence and other emerging priorities.

Agriculture and regional development have consequently become two of the most sensitive parts of the negotiations.

The Council has already backed the principle of the new national and regional plans, but financial allocations remain unresolved. Its negotiating position specifically leaves the money to be settled as part of the overall MFF talks.

EU Today has followed the dispute since the Cyprus presidency produced a negotiating framework in June that proposed reducing the Commission’s plan by about €32.8bn. The disagreement has since widened as governments attempt to reconcile traditional spending on farmers and poorer regions with growing demands for defence, industrial competitiveness and security.

Revenue is another source of disagreement.

The Commission has proposed five new EU own resources, including revenue connected to the Emissions Trading System and Carbon Border Adjustment Mechanism, a contribution based on uncollected electronic waste, a tobacco excise resource and a contribution from large companies operating in the EU. The proposals are intended partly to reduce reliance on national contributions and help finance repayment of pandemic-era borrowing.

EU Today previously examined the dispute over new sources of EU revenue after leaders asked the Irish presidency to develop financing options alongside negotiations over expenditure.

The Friends of Cohesion have also called for a more gradual repayment schedule for NextGenerationEU borrowing and oppose retaining contribution rebates for wealthier member states. Under the Commission proposal, repayments of principal and interest would amount to a fixed €24bn annually between 2028 and 2034, or €168bn across the seven-year budget period.

Ireland now faces the task of narrowing the gap.

The Council’s timetable for the negotiations envisages the Irish presidency advancing the next negotiating framework ahead of the October European Council, with governments seeking a political agreement before the end of 2026. That would leave 2027 for adoption of the legislation required before the new budget takes effect on 1 January 2028.

An agreement among governments will require unanimity. The European Parliament must then give its consent, while the separate decision governing the EU’s own resources also requires unanimous approval by member states and ratification according to their national constitutional procedures.

With 17 governments now explicitly defending agriculture and cohesion spending and six major contributors demanding substantial reductions, the October summit will bring the central budget dispute directly before EU leaders.

France has called for money collected through European Union fines against Google to be used to reduce national contributions to the EU budget as governments negotiate the bloc’s next seven-year financial framework.

Europe Minister Benjamin Haddad said proceeds from penalties imposed on the US technology company should be treated as EU revenue and used to lower the sums governments must pay into the common budget.

The proposal comes as negotiations intensify over the 2028–34 Multiannual Financial Framework, for which the European Commission has proposed expenditure of almost €2 trillion.

Haddad referred to about €4.6 billion in revenue associated with Google penalties and interest.

The proposal is less radical in budgetary terms than it first appears because fines that become final already enter the EU budget as “other revenue”.

The Commission’s explanation of EU budget revenue states that gross national income-based contributions act as the balancing element of the budget after customs duties, VAT-based resources and other revenues — including fines on companies — are taken into account.

Higher income from definitive competition fines can therefore reduce the amount required from national governments.

France is pressing for that mechanism to be applied clearly to the Google proceeds at a time when governments are seeking ways to limit increases in their national payments.

Google has accumulated substantial EU penalties through both competition law and the Digital Markets Act.

In July, the European Commission fined Google €890 million under the Digital Markets Act in two separate decisions.

A €460 million penalty concerned the Commission’s finding that Google gave preferential treatment to its own services in search results. A further €430 million fine concerned restrictions affecting developers’ ability to direct users towards alternative purchasing channels outside Google Play.

Google has contested elements of the EU enforcement regime and has continued legal proceedings over Commission decisions.

EU Today has followed the dispute closely. In September, Google began changing European search results following the DMA enforcement action, while earlier Commission measures generated a wider dispute with Washington over European regulation of US technology groups.

The French budget proposal shifts the issue from regulation towards public finance.

EU governments are currently divided over the Commission’s proposed 2028–34 budget, which averages about 1.26 per cent of EU gross national income.

Germany, Denmark, Finland, the Netherlands and Austria are among governments seeking substantial reductions in the proposed spending level.

EU Today reported this month that five large net contributors were demanding cuts of several hundred billion euros from the Commission proposal.

France also faces a sharp increase in its projected contribution.

Against that background, governments are looking at both expenditure reductions and new revenue streams that could limit demands on national treasuries.

The wider negotiations cover possible EU “own resources” — revenue that flows directly or indirectly to the European budget rather than being provided through conventional national contributions.

Existing resources include customs duties, a VAT-based contribution, a plastics contribution and national payments calculated according to gross national income.

The Commission has also proposed additional sources linked to carbon pricing and other EU policies.

EU Today has previously examined how EU leaders are searching for new revenue sources for the €2 trillion budget while attempting to finance defence, competitiveness, migration, agriculture, cohesion programmes and support for Ukraine.

Company fines differ from permanent own resources because their size is unpredictable and depends on enforcement decisions and subsequent legal proceedings.

A large fine can provide a one-off boost to EU revenue, but it cannot readily finance recurring expenditure across a seven-year financial framework.

Definitive fines have nevertheless affected member-state contributions before. Commission budget amendments have explicitly incorporated competition penalties as additional revenue, reducing the amount that must be raised elsewhere.

France is now seeking to ensure that the Google proceeds are reflected directly in the sums demanded from national budgets.

The proposal comes before another round of negotiations over the Multiannual Financial Framework, where the size of the budget remains unresolved.

With agreement requiring unanimity among all 27 governments, even relatively small sources of additional revenue are becoming part of the bargaining over who ultimately pays for the EU’s expanding spending commitments.

Six frugal countries this week circulated a letter threatening to block a deal on the next EU budget unless “hundreds of billions” of euros in spending was cut. 

The Dutch and Germans, ever the most zealous keepers of the frugal flame, want to redirect what remains away from regional and farming funds, towards innovation and defence.  

For those following EU fiscal debates, this song will sound familiar. So-called ‘net payer’ countries have never liked sending money to the economic periphery. 

In 2013, after a year of bickering, Britain, Germany, and the Netherlands killed a European Commission plan for a five percent increase and pushed through the EU’s first-ever budget cut, with farm and cohesion funds taking the biggest hit.

But new research suggests that the frugals may be shooting themselves in the foot. 

Last week, Olga Ivanova, a senior researcher at the Netherlands Environmental Assessment Agency (PBL), published a study in Dutch economics journal ESB calculating what EU money actually does for the Netherlands’ 12 provinces. 

And, for most of them, she found that the growth effect of EU investment outweighed their share of what the Netherlands paid into the budget. 

Using PBL’s own economic model, she traced 10 EU funding streams between 2013 and 2024, from Horizon science research grants to farm subsidies and regional development money. 

Across the Netherlands as a whole, provinces get back about 99 cents in extra growth for every euro paid out to the EU budget.

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As the EU seeks budget cuts to break a stalemate in member states’ talks, women’s rights groups are on the chopping bloc, prompting advocates’ concern that the cause is fading from the common agenda.

Research published on Monday (28 September) by rights initiative MOTERIS showed a consistent loss of funding for feminist organisations across EU countries.

Some groups are also facing political conditions on the money they receive, for instance in Poland and Croatia, alongside groups reporting increasing dependance on unpaid work.

And the trajectory points toward decreased funding in the 2028-2034 EU multi-annual framework (MFF), which is currently being haggled in Brussels, making matters worse.

Feminist groups pointed toward AgoraEU as evidence of the trend – the proposed new single-funding stream is to merge grants for culture, media, equality and civil society under in the same MFF bracket, in what would make equally worthy causes and their defenders compete against one another for diluted resources.

And the ongoing cuts at national level meant that “EU funds are a crucial lifeline for many women’s rights groups where state funding is insufficient,” MOTERIS said.

Small, grassroots rights groups, many of whom MOTERIS represents, find it even harder to access grants due to heavy administrative requirements.

Meanwhile, the Czech Republic and Lithuania served as examples of EU countries whose philanthropy was dependent on external top-ups, making them “more vulnerable to geopolitical shifts, such as the withdrawal of US funding.”

MOTERIS staged a protest to push for MFF support for women’s rights groups outside the European Parliament in Brussels on Tuesday (29 September), ahead of an MEPs’ debate on the topic. 

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The EU is negotiating its next long-term budget, worth 2 trillion euros. But reaching an agreement among the 27 member states is proving difficult. The deadline is approaching, and the stakes are high.

Will the EU member states be able to agree on the budget? And what are the different options?

The bloc’s next long-term budget covers the period from 2028 to 2032.

The aim is to reach an agreement by the end of this year. Then, in 2027, the European Parliament will have to give its consent, and the political agreement will need to be translated into legislation, with funding allocated to the different programmes.

But with just three months left before the end of the year, reaching a deal on time is proving difficult. A meeting of EU ministers dedicated to the budget last week led nowhere. Countries stuck to their positions.

On one side are the so-called frugals: Germany, Austria, Denmark, Finland, the Netherlands and Sweden. But they prefer to call themselves “modernisers”. They want to limit spending and are reluctant to increase their contributions to the EU budget.

On the other side are countries worried about receiving less European funding in the years to come.

The European Commission argues that the next budget needs to be bigger than the previous one to address new challenges, including European competitiveness and defence.

And it’s not just the Commission’s view. The European Parliament and many observers share it.

But the countries calling for spending cuts say the EU cannot simply add new priorities to existing ones. They argue that choices have to be made.

So the Commission has proposed another option: increasing the EU’s own resources.

These are revenues that go directly into the European budget, rather than relying entirely on contributions from member states. The idea is to raise additional money without asking national governments to pay more.

But this proposal is also facing opposition from countries calling for spending restraint. They argue that the bloc should not simply look for more money to fund all its priorities.

So how can the 27 countries break the deadlock?

When ministers cannot reach an agreement, the issue is taken up by EU leaders themselves. And that is exactly what is expected to happen in the coming months.

The president of the European Council is planning several meetings of EU leaders before the end of the year, in an attempt to bring countries closer together.

He is even said to be considering a summit lasting three to four days at the end of November, to give leaders enough time to reach an agreement and avoid a difficult December.

But what happens if the 27 countries still fail to agree before the end of the year? There is some room for manoeuvre in 2027. According to media reports, several dates have already been set aside early next year for last-minute negotiations, should an agreement not be reached in time.

But this leaves very little room for delay.

The European Parliament will still need several months to give its consent, and the EU will then have to finalise the legislation and prepare the different programmes.

That brings us very close to 2028, when the new budget is supposed to take effect.

And if everything is not ready by then, the EU does have a mechanism to keep things running.

It can continue covering certain ongoing expenses and payments that have already been committed, even without a new long-term budget in place.

Unlike in the United States, where a budget deadlock can lead to a government shutdown and some public employees being temporarily sent home without pay, the EU has a system designed to avoid such a complete halt.

But this would only be a temporary solution.

It would not provide the certainty needed to launch new programmes or guarantee that all European funding will be available as planned.