European Union leaders are bracing for a heated showdown on Friday over the bloc’s next long-term spending plan, after an initial compromise proposal drew fire from both the countries that fund the budget and those that rely on it most.
The EU budget serves as the financial backbone for a wide range of programs across the 27-member bloc — from agricultural support and efforts to raise living standards in poorer regions, to research initiatives and student exchange programs. The European Commission has put forward a proposal calling for a €2 trillion ($2.3 trillion) budget covering the years 2028 through 2034.
The structure of the EU budget means wealthier member nations contribute more than they receive, while lower-income countries get back more than they put in. Every seven years, these two camps engage in intense negotiations to reach the unanimous agreement required to pass a budget.
A first compromise attempt, drafted last week by the Cypriot EU presidency, trimmed the Commission’s original proposal by 2% — a cut that proved too deep for some nations and not nearly deep enough for others.
The compromise also shifted funding within the budget toward agriculture and programs aimed at equalizing living standards across the bloc, while pulling back support for research and innovation. That shift frustrated countries working to keep pace with the industrial sectors of China and the United States.
The Netherlands, which pays more into the EU budget than it receives, pushed back on the proposal, saying it leaned too heavily on traditional spending areas like farming and regional development rather than addressing newer priorities such as defense and modernization.
Dutch Prime Minister Rob Jetten made the country’s position clear on Thursday, stating: “The proposal currently on the table is really not good enough for the Netherlands.”
Spain, which receives slightly more from the budget than it contributes, took the opposite stance — arguing the budget was too small and that spending on farmers and regional development needed to be increased to account for inflation.
Spanish Prime Minister Pedro Sanchez was equally blunt, saying: “The proposal … is even more inadequate than the one initially proposed by the European Commission, and we therefore certainly do not agree with it at all.”
Time is becoming a factor. While EU governments are legally required to finalize the 2028-2034 budget by the end of 2027, upcoming elections in France, Italy, Poland, Spain, Greece, Estonia, Finland, and Slovakia next year have created pressure to reach a deal by the close of 2026 — before those campaigns can complicate the negotiations.
One key piece of the puzzle involves finding new sources of revenue for the EU that wouldn’t come directly from member countries’ national budgets. This could help ease the financial burden on net contributors while still meeting the spending expectations of net beneficiaries.
Several options are being floated, though each faces support from some countries and opposition from others. These include directing a portion of the revenue that EU governments earn from selling carbon emissions permits to companies, as well as a share of taxes on imported goods made in countries with weaker climate policies than the EU.
Additional ideas on the table include a tax on uncollected electronic waste, a portion of tobacco excise duties, and a yearly flat-rate contribution from large corporations that operate and sell within the EU.
Further proposals under consideration include levies on extreme wealth, digital services, online gambling, and capital gains from cryptocurrency assets.
Leaders are not expected to make final decisions on these revenue options at Friday’s meeting, but their expressed preferences will guide the incoming Irish EU presidency as it prepares a new compromise proposal ahead of October.
