Six major contributors call for EU budget cut

Germany's Chancellor Friedrich Merz is leading a group of six countries threatening to withhold their backing for the European Union's next seven-year budget unless substantial cuts are made, highlighting divisions within the 27-nation bloc over where its focus should be.

The proposed budget for the years 2028 to 2034, which is worth 2 trillion euros ($2.3 trillion), must have unanimous backing to be adopted, but the Financial Times newspaper has seen a letter signed by Merz and by the heads of government of Austria, Denmark, Finland, the Netherlands, and Sweden — countries that together make up nearly 40 percent of EU budget revenue — demanding changes.

The situation is all the more delicate because of pressure to agree a budget before next year, when there will be a presidential election in France, and general elections in Italy, Poland, and Spain, all of which could potentially have a huge impact on the political tone and direction of national and supranational politics.

Merz has said that a "20th century budget" cannot address contemporary challenges, and the letter says it "must be fundamentally reformed. We must make choices".

It is believed that the signatories' alternative vision of Europe's financial future would see less spent on agriculture and support for poorer regions of the bloc, which absorb much of its resources, and more devoted to challenges including security and global trade.

"Our six countries alone finance almost 40 percent of all member states' contributions," the letter says. "While net contributors as a whole are in the minority, they shoulder around three-quarters of the total financing burden."

Differing national priorities are being highlighted by the split, and it falls to Ireland, which holds the rotating EU presidency, to come up with a compromise by the middle of next month, which will be a huge challenge because of fundamental differences of opinion between countries.

Most countries oppose the German-backed reduction on spending in areas including agriculture, saying that spending should instead be increased, which is something the signatories have rejected as "simply not realistic". Some nations have proposed that the EU should borrow more, which is anathema to Germany and its supporters. Earlier this month, Merz said "excessive debt threatens our sovereignty and our capacity to act", and that governments have the "admittedly painful task" of setting priorities.

Despite European Council President Antonio Costa being publicly upbeat about the chances of common ground being found, the Politico website has seen German diplomatic messages saying that "no potential areas for compromise were apparent" when the two sides had negotiations earlier this month, and referring to attitudes on both sides of the dispute as being "entrenched positions".

julian@mail.chinadailyuk.com