EU budget slashed by €159B in new Irish proposal

The EU’s next seven‑year budget has been slashed by €159 billion after the Irish Council presidency unveiled a new negotiating document, or “negobox,” on Saturday. The proposal trims roughly 8 % from the bloc’s 2028‑2034 budget, cutting €122 billion in current‑price terms compared with the Cyprus presidency’s June draft. The reductions target foreign aid (€38 billion), competitiveness programmes (€75 billion) and the EU’s administrative costs (€10 billion), while preserving farmer subsidies and regional payouts that together make up half of the total budget. Ireland’s Minister of State for European Affairs, Thomas Byrne, presented the plan as a balanced compromise meant to protect traditional Union policies and look toward the future, even as it eliminates the “EU Facility cushion” rainy‑day fund.

The cuts reflect a deep split between frugal member states, led by Germany, demanding steep reductions to the nearly €2 trillion proposal, and the “Friends of Cohesion,” a coalition of southern and eastern countries opposing cuts to development and cohesion spending. While Ireland’s concession to shield agriculture and regional funds appeased the latter group, the frugal camp remains dissatisfied, arguing that the proposal still over‑invests in 20th‑century priorities and fails to fund new EU‑wide initiatives such as defence, competitiveness and development. An EU diplomat dismissed the Irish negobox as “not even close to a landing zone,” calling for greater financial realism, and the European People’s Party’s budget negotiator, Siegfried Mureșan, warned that Parliament would not consent to the weakened budget.

The next steps involve intense diplomatic maneuvering ahead of the EU leaders’ summit next week. Ambassadors will meet on Sunday to discuss the Irish negobox and set the agenda for Thursday’s summit, where heads of state must forge a budget deal before year‑end elections in France, Poland and Italy threaten to derail negotiations. Ireland left the Commission’s five‑tax package—intended to raise €66 billion—largely untouched, offering only technical tweaks such as phasing in ETS contributions for poorer countries and boosting carbon‑import levies. France, which had pushed for levies on digital giants, online gambling and crypto firms, remains disappointed. The outcome of Thursday’s talks will determine whether the contested own‑resource reforms, championed by European Council President António Costa, can be reconciled with the divergent fiscal priorities of the 27 member states.

⚡ Effects Interpreter