Six EU States Threaten to Block 2 Trillion Euro Budget

Six European Union member states led by Germany have threatened to reject the bloc’s next seven-year budget unless spending is cut by hundreds of billions of euros, setting up a bruising negotiation over priorities as the EU prepares to redirect money toward defense and competitiveness.

The countries — Germany, the Netherlands, Sweden, Denmark, Austria and Finland — signed a joint letter stating the proposed budget for 2028-2034 “must be fundamentally reformed,” according to TASS, which cited the Financial Times. The European Commission’s proposal would raise total spending to nearly €2 trillion (about $2.33 trillion), roughly €800 billion more than the current 2021-2027 framework of about €1.2 trillion.

“Unless the budget is cut by hundreds of billions, there won’t be an agreement this year,” a diplomat from one of the signatory countries told the FT.

Veto Leverage in a 27-Nation Bloc

The Multiannual Financial Framework (MFF) — the EU’s long-term budget — requires the unanimous approval of all 27 member states. That gives the six countries, which together account for about 40% of the bloc’s budget revenues, effective veto power over the plan.

The six countries contribute far more to the EU budget than they receive in return, and they argue the budget should make clear choices rather than increase national contributions. They want resources redirected toward defense and support for innovative, competitive companies, while reducing funding for agriculture and less-developed regions — which traditionally account for about two-thirds of the framework’s spending.

According to Het Laatste Nieuws (HLN), the six governments want the EU to make clear choices and invest more in areas such as defense and innovation.

What’s in the Commission’s Proposal

When the European Commission unveiled the plan in July 2025, Budget Commissioner Pjotr Serafin described it as an “ambitious and balanced budget.” The proposal detailed in a separate HLN background report would allocate:

• €300 billion for agriculture, a reduction from current levels
• €218 billion for aid to less-developed regions
• €451 billion for a new fund to boost EU competitiveness
• €100 billion for a dedicated Ukraine support pot
• A tripling of current border-guard spending

The proposal equals about 1.26% of the EU’s gross national income, up from roughly 1.1% under the current framework. To help finance it, the Commission proposed new EU revenue sources, including a levy on companies with annual turnover above €100 million, a tax on the non-recycling of electrical waste, and a share of national tobacco excise duties — which the Commission hoped would add €58.5 billion a year to the budget.

The Modernization Push

The budget reflects a broader “modernization” drive by European Commission President Ursula von der Leyen, who has pushed to shift money away from farmers and regions toward research, innovation and competitiveness. The frugal seven-year framework battle has been sharpened by fiscal constraints across the bloc: weak growth and large defense investment needs leave many governments little room to increase their contributions.

German Chancellor Friedrich Merz has rejected relying on further joint EU borrowing to bridge the gap. “Excessive debt threatens our sovereignty and our capacity to act,” he said earlier this month, according to Deutsche Welle. Merz has called for spending to shift toward competitiveness and defense, arguing a “20th-century budget” cannot address current challenges.

The push has alarmed groups that depend on traditional EU funding. The Flemish farmers’ union Boerenbond called the proposal “a blow to the face of the sector,” warning the agriculture budget could shrink by a fifth, and urged member states and the European Parliament to block it.

The European Parliament has its own complaints. Some lawmakers believe the increased budget is still not enough to address the challenges facing the EU, with some pushing for a figure closer to €2,200 billion. “Europe needs a shared vision, not 27 separate wish lists,” co-rapporteur Siegfried Mureșan of the EPP said, criticizing the proposal for listening too much to member states.

Fraying Tempers in Brussels

The negotiation has already grown personal. German European Affairs Minister Gunther Kirchbaum openly wondered whether European Council President António Costa had “by now completely lost touch with reality,” NRC reported — and that was before the EU ministers’ meeting on the new budget had even begun.

Costa, who wants to conclude negotiations before the end of the year, has pushed new EU own-resource taxes, targeting about €60 billion of the €2 trillion from new sources. That has irritated net payers. “Of course we are annoyed by the fact that new own resources are presented as a miracle cure. It isn’t. One way or another the money still comes from European citizens,” a Brussels diplomat told NRC.

Dutch diplomats have similarly insisted the budget must “fall by several hundred billion and become financially sustainable.” Merz’s negotiating position is complicated by domestic weakness: the German chancellor has been politically weakened after a series of poor state-election results.

What’s Next

Ireland, which currently holds the EU’s rotating presidency, has been tasked with presenting a compromise proposal in early October. EU leaders are expected to discuss it at a summit in mid-October. Costa is targeting an agreement before the end of 2026, with the budget set to enter into force in 2028.

The window is tight and deliberately chosen: EU leaders in June committed to reaching a deal this year, ahead of elections in France, Italy, Spain and Poland. Whether the six net payers can be brought on board — and at what cost to agriculture and regional funding — will determine whether the bloc’s most ambitious budget ever becomes a reality or stalls in a standoff with no obvious exit.