Germany says Costa losing touch ‘with reality’ on EU budget

Germany has accused European Council President António Costa of being out of touch with reality regarding the EU's upcoming seven-year budget negotiations. Speaking before a meeting of European ministers in Brussels, Germany's Gunther Krichbaum dismissed Costa's recent interview with POLITICO as "not very helpful" and urged him to adopt "more realism" on the budget.

In the interview, which took place in Dublin following Costa's tour of EU capitals, he had stated that agreeing to new EU-wide taxes, or own resources, is crucial for avoiding significant budget cuts and keeping national contributions to Brussels in check. He also warned that cutting the Commission's nearly €2 trillion budget proposal could face opposition from numerous national governments.

However, Germany and Northern European allies, whose contributions to the budget surpass their EU payouts, are advocating for the opposite course of action, urging the EU to reduce its financial pot by hundreds of billions of euros. They argue that introducing new EU taxes is not a substitute for substantial cuts. Krichbaum questioned whether Costa has "completely lost touch with reality" and highlighted that "national budgets are under enormous pressure … and everyone knows that the sky isn't the limit."

EU governments are urging Ireland, the current presidency of the Council of the EU, to incorporate their preferences into a negotiating document, known as a negobox, set to be presented in early October. Ireland has called for ministers to indicate on Tuesday where they are willing to compromise on sensitive issues, including spending cuts and own resources.

Costa will assume negotiations following an October European Council, at which EU leaders will consider Ireland's proposal. Over the past month, Costa has traveled to 25 EU capitals to gauge leaders' opinions on the most contentious topics in the negotiations.