German Chancellor Friedrich Merz thinks the European Union's next budget misses the mark by several hundred billion euros. The EU's executive branch had offered to cut the budget by about 2% - a reduction Merz shot down as far too small. He argued the figures are unbalanced and that member states need to go much deeper with cuts.
"Such a vast expansion of the European budget is unsustainable for us - the figures are unbalanced," Merz said.
He also laid down a tight timeline. If they miss that window, the next EU budget cycle will not start on time.
"We aim to conclude these extremely difficult and complex negotiations by the end of 2026, if possible," Merz said. "Only then will European Union programs be able to launch as planned from January 2028."
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The rush to get a deal done is not just about numbers. It is about politics.
Far-right leader Marine Le Pen already leads in French opinion polls, which could stall or shift budget talks if they drag into election season. Merz is worried that political deadlock in France or Spain would make a reasonable compromise nearly impossible.
That is why he is working closely with French President Emmanuel Macron, who traditionally wants higher EU spending. The two leaders are trying to hammer out a plan before France votes.
"Work between Germany and France is essential at a time when Russia threatens our security, when the People's Republic of China poses a challenge to our economy and when the transatlantic partnership is no longer taken for granted," Merz said.
Ireland, which holds the rotating EU presidency, will play a key role in drafting a compromise budget. Dublin must balance Germany's push for austerity against the spending demands of southern member states. The Irish presidency's ability to broker a deal before the 2027 elections is seen as essential.
The EU's seven-year spending blueprint, officially called the multiannual financial framework, covers a wide range of expenditures including farm support and infrastructure development. Delays in agreement could disrupt programs that rely on EU funding, affecting millions of citizens across the continent.
The budget negotiations carry high stakes because they determine financing for agricultural subsidies, regional development, and border security. Merz's push for austerity reflects Germany's traditional fiscal conservatism, while southern member states like Spain and Italy typically advocate for higher spending to support their economies. The 2027 elections in France and Spain add urgency, as political shifts could reshape the negotiating landscape.
A suspected Islamist terror attack on a major LGBTQ event in Berlin last Sunday cast a shadow over Merz's three-hour Dublin visit. The attack, described by German authorities as Islamist, left one woman dead and several people severely wounded. Additionally, Merz is facing growing backlash from his own CDU party over a cabinet reshuffle that senior members have called poorly planned and executed.
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