EU presidency proposes 8% cut to its 2028-2034 budget to €1.6 trillion

The Irish leadership of the European Union has unveiled a proposal to trim the bloc's budget for the 2028-2034 period to €1.6 trillion, as disclosed on Saturday. This move sets the stage for intense negotiations among the 27 member states. The proposed cut amounts to 8%, which is a significant decrease from the European Commission's original €2 trillion spending plan unveiled in July 2025. However, the €1.6 trillion figure represents a 20% reduction from the Commission's initial proposal.

The decision follows a compromise presented by Cyprus in June, which suggested an 2% reduction. That plan aimed to temper growth in defense and competitiveness spending while providing extra support for agriculture and regional development. The Commission's initial framework sought to reallocate resources towards technological competitiveness, security, and defence as Europe confronts economic competition from China and the United States.

The negotiation process has revealed stark divisions between countries advocating for stricter spending limits and those pushing for greater investments in emerging priorities of the bloc. The Netherlands had previously declined the June compromise, contending that it allocated too much funding to ongoing programs instead of future challenges. European Parliament representatives also criticized the earlier proposal, advocating for a 10% increase to adequately finance traditional commitments and new priorities.

Financing for the EU's long-term budget covers agricultural subsidies, regional development, research, infrastructure, and various programs across member states. Final agreement will hinge on negotiations over both the overall spending ceiling and the distribution of funds among competing priorities. EU leaders have been aiming for a consensus by December, although significant differences remain over national contributions and spending priorities.