Dublin’s changes to the long-term budget hit Commission priorities such as competitiveness and flexibility hardest.

The European Commission has warned that Europe will lose out from €159 billion in cuts to the European Union’s (EU) next long-term budget, just days before EU leaders meet in Brussels to discuss the bloc’s future spending, Politico Europe reports.

Key points:

  • the Irish presidency of the Council of the EU has proposed trimming the 2028–2034 budget by around 8% — €159 billion off the Commission’s proposal of nearly €2 trillion;
  • competitiveness loses €75 billion, foreign aid €38 billion and rainy-day funds at least €22 billion;
  • agriculture and regional payments, which make up almost half of the budget, are spared;
  • according to a diplomat, the changes would leave «no ways left to help farmers and regions» when crises hit;
  • EU leaders will discuss the budget at a summit on Thursday and Friday.

A warning behind closed doors

In an unusually sharp intervention, the Commission told national governments that stripping billions from several rainy-day funds would leave Europe less able to handle crises over the next seven-year budget cycle. This was relayed by four EU diplomats briefed on the talks, who were granted anonymity to discuss confidential deliberations.

Stéphanie Riso, the Commission’s top budget official, delivered the message to the EU’s 27 ambassadors at a closed-door meeting on Sunday. It came a day after the Irish presidency of the Council of the EU, which is steering the negotiations, proposed cutting roughly 8% from the bloc’s total budget for 2028 to 2034.

The Commission is «very concerned about cuts to flexibility», one EU diplomat said.

As a result of the changes, «we will have no ways left to help farmers and regions when crises hit, because of climate change or geopolitical tensions», the diplomat added.

What is being cut

Ambassadors met to discuss the Irish plan, which would take €159 billion in current prices out of the Commission’s proposal of nearly €2 trillion. Of that total, €38 billion comes from foreign aid, €75 billion from competitiveness and at least €22 billion from rainy-day funds.

Yet a German-led group of countries, which wants cuts running to several hundred billion euros, criticised even these reductions as insufficient. At the same meeting, a rival bloc of 17 countries known as the Friends of Cohesion welcomed the Irish presidency’s decision to shield agriculture and regional payments from cuts.

Racing the clock

EU governments are pushing to agree the budget among themselves by the end of the year, ahead of elections in France, Italy and Poland that could derail the talks.

The leaders’ summit on Thursday and Friday will offer early signs of whether the year-end deadline is realistic, or whether leaders should start drawing up contingency plans.

One EU diplomat said the onus is now on the leaders themselves:

«What could make a difference is if Friedrich Merz and Emmanuel Macron show up, hand-in-hand, and say we live in a new world».

Cuts to the future

The Commission warned that cuts like those proposed by Ireland would push the next budget — excluding repayments of post-Covid debt — below the current one.

The reductions fall mainly on EU-wide priorities such as competitiveness, defence and foreign aid, while traditional policies — agriculture and regional payouts, which together account for almost half the budget — are left untouched.

This undercuts the Commission’s proposal, which aimed for greater flexibility and channelled hundreds of billions of euros toward new priorities.

Fewer financial cushions

In a further blow to the Commission, Ireland also shrank — or scrapped altogether — several financial cushions designed to protect EU countries against unforeseen events such as natural disasters or public health emergencies.

The EU executive argues this would make spending under the next budget more rigid than under the current one, and could eventually require a midterm review.

Ireland’s Europe Minister Thomas Byrne rejected that view at a press conference on Saturday, saying the proposal:

«…offers increased flexibility … in response to the clear call from member states for a simplified and more flexible, modern [budget]».

Payouts and reforms

Another point of friction is Ireland’s decision to weaken the link between EU payouts and economic reforms.

The Commission has repeatedly defended using regular budget payments as a carrot to encourage governments to pursue reforms that boost their competitiveness.

However, Ireland’s ambassador to the EU, Aingeal O’Donoghue, told the meeting that the new text would not tie EU cash disbursements to «fiscal reforms», according to one of the diplomats.

Source: Politico Europe