BRUSSELS — German Chancellor Friedrich Merz will on Thursday bring together a group of leaders now pushing for hundreds of billions of euros to be sliced off the next seven-year EU budget — just as the European Council president is touring the bloc trying to broker a compromise. Merz, whose is increasingly unpopular in Germany and is on course to lose a key state election to the far right, has rejected the European Commission’s proposal for the bloc’s near-€2 trillion budget for 2028-2034. He’s convened the heads of the Netherlands, Finland, Austria, Denmark and Sweden, while Council President António Costa continues his rival set of meetings with a trip to Prague.
And they want to impose conditions to stop governments getting cash if they breach democratic standards. The discussion is unlikely to result in the publication of any precise numbers but instead produce a united front for the negotiations to come, three people familiar with the preparations said. Ireland, which is shepherding the budget process as part of its role at the helm of the six-month presidency of the Council of the EU, is to put forward fresh compromise numbers in October ahead of a summit of EU leaders later in the month.
Costa, who has already visited Bratislava, Tallinn, Riga and Vilnius, believes governments aren’t as far apart as their public statements suggest, according to a senior EU official familiar with the negotiations, who like others mentioned this article were granted anonymity because the talks are at such a sensitive stage. While leaders are defending domestic red lines they do all seem to be committed to reaching a deal by the end of the year, the official said. The immediate question is whether Thursday’s Berlin meeting produces anything more concrete than a general call for cuts.
Countries only received the detailed breakdown of the proposed budget, including spending allocations and figures, in June. Only once countries attach hard numbers to their demands, can the budget negotiations begin in earnest. That Merz has yet to detail what programs he wants cut and exactly by how much is a sign that his real demands may not be as onerous as his rhetoric suggests, the senior EU official signaled.“The German chancellor has also said he thinks an agreement by the end of the year is desirable.
And I’d like to point out that in these big cuts … he never mentioned a figure. That’s important.” Germany is the EU’s largest contributor, accounting for roughly a quarter of the bloc’s budget. Merz is facing domestic pressure from the far-right, Euroskeptic Alternative for Germany, which is on track to win Saxony-Anhalt’s state election on Sept. 6.
That makes it harder for the chancellor to give too much away in the EU budget. The outcome of the Saxony-Anhalt election, along with Sweden’s general election on Sept. 13, could affect the negotiations, the EU diplomat close to the talks said. Still, Merz wants Germany to lead Europe on defense, competitiveness and strategic autonomy — policy areas that require substantial funding.
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