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 and Germany are moving towards a possible compromise over the future of Europe’s automotive industry, linking negotiations over EU vehicle-emission rules with a separate dispute over how strongly European-made products should be favoured in subsidies and public procurement.

The negotiations bring together two issues that have divided Paris and Berlin: Germany’s demand for greater flexibility in rules governing combustion-engine vehicles and France’s campaign for stronger “Made in Europe” requirements in EU industrial policy.

Officials involved in the discussions believe a broader Franco-German agreement may now be possible, although differences remain over how European content should be defined and whether products made in countries with EU free-trade agreements should receive similar treatment.

The automotive dispute follows the Commission’s decision in December 2025 to propose significant changes to rules that had originally required a 100 per cent reduction in tailpipe CO₂ emissions from new cars from 2035.

Under the revised automotive package, manufacturers would instead face a 90 per cent tailpipe-emissions reduction requirement from 2035.

The remaining 10 per cent could be compensated through mechanisms linked to low-carbon steel produced in the EU and the use of e-fuels and biofuels.

EU Today reported before the Commission presented the package that pressure from Germany, Italy and European manufacturers was forcing Brussels to reconsider the original 2035 framework.

The subsequent proposal confirmed the shift.

In March, EU Today also examined the Commission’s decision to link low-carbon European steel directly to vehicle-emissions compliance, creating a connection between automotive climate rules and support for Europe’s heavy industry.

Germany has continued to argue for a technology-neutral approach.

Berlin wants legislation to leave scope for combustion engines operating on renewable or low-carbon fuels rather than treating battery-electric vehicles as the only route towards lower emissions.

That position is particularly important for Germany because of the scale of its automotive sector and the large industrial supply chain built around combustion-engine technology.

France’s priority is different.

Paris wants EU industrial policy to ensure that public subsidies and procurement increasingly support products manufactured inside Europe.

The argument centres on the Commission’s Industrial Accelerator Act, proposed in March as part of a wider strategy to strengthen European manufacturing.

The legislation introduces “Made in EU” and low-carbon requirements for public procurement and public support schemes covering strategic sectors including automotive manufacturing, steel, cement and aluminium.

The dispute is over what “European” should mean.

France favours a relatively strict definition focused principally on production inside the EU’s 27 member states.

Germany has advocated what Economy Minister Katherina Reiche has described as a “Made with Europe” approach, under which some products from close trading partners could qualify if those countries provide equivalent market access to European companies.

That could potentially include states such as Norway and Switzerland and partners including Canada.

Spain has been among countries seeking a middle position between the French and German approaches.

The issue matters because modern automotive supply chains do not stop at the EU’s external border.

Battery materials, semiconductors, electric motors and other components can pass through several countries before final assembly, while Britain and Turkey remain deeply integrated into European vehicle production.

The EU-UK relationship is particularly sensitive because stricter rules of origin for electric vehicles are due to apply from 2027.

EU Today previously reported that European and British manufacturers were seeking another delay to those rules because the regional battery supply chain had not developed as quickly as originally expected.

At the same time, the EU is attempting to reduce dependence on Chinese electric vehicles, batteries and critical inputs.

The Commission has committed €1.8 billion to a Battery Booster strategy intended to strengthen the European battery value chain.

European electric-vehicle demand is continuing to grow. A 16-market European survey examined by EU Today showed battery-electric cars taking more than a quarter of new registrations in July, although large differences remain between national markets.

Manufacturers must therefore make investment decisions while several important elements of the regulatory framework remain under negotiation.

Factory conversion, battery plants and new vehicle platforms require investments planned years in advance. The conditions applying after 2030 will directly affect where those investments are made.

A Franco-German understanding would not determine the final EU rules. The European Parliament, Commission and other member states remain part of both legislative negotiations.

It could, however, bridge two of the most important disputes: Germany’s demand for greater technological flexibility in the 2035 vehicle regime and France’s demand that public money be used more directly to support European production.

The negotiations now underway suggest Paris and Berlin are increasingly treating those questions as parts of the same industrial bargain.