Listen: Rich EU countries set out their red lines ahead of budget negotiations

EU countries are beginning negotiations on the bloc’s next Multiannual Financial Framework (MFF), covering 2028 to 2034. The European Commission has proposed a budget of €2 trillion, up from the current €1.2 trillion, with the aim of increasing flexibility for national spending and boosting funding for defence and competitiveness. But as discussions open, why are richer member states drawing the line on how far they’re willing to go?

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EU countries are beginning negotiations on the bloc’s next Multiannual Financial Framework, covering 2028 to 2034. The European Commission has proposed a budget of €2 trillion, up from the current €1.2 trillion, with the aim of increasing flexibility for national spending and boosting funding for defence and competitiveness. But as discussions open, why are richer member states drawing the line on how far they’re willing to go?

This morning, some of the EU’s frugal countries like Austria, Sweden, Germany, the Netherlands, France, Belgium, Finland and Ireland, met in Brussels to coordinate their position.

Denmark attended as an observer because it currently holds the rotating Council presidency.

These governments are either traditionally part of the “frugal” group, meaning countries that contribute disproportionately more to the bloc’s joint budget or align with the idea that the EU should limit spending growth.

Historically known as “frugal” countries, this group has opposed large increases in the EU budget. Austria’s Europe minister, Claudia Plakolm, said that national governments facing domestic cuts cannot defend an EU budget of unprecedented scale, adding that Europe should “spend better, not more.”

Sweden’s EU affairs minister, Jessica Rosencrantz, echoed this, describing the Commission’s proposal as something that should be “put on a diet,” and insisting that defence, the climate transition and global competitiveness should remain the priorities.

Although the group is not expected to present a specific counter-proposal today, it is laying the groundwork for a more united stance in the negotiations ahead. Some of these countries also want to ensure that rebates, the reductions they receive on their contributions, continue in the next budget cycle.

The context is already tense. Earlier this month, the European Parliament forced the Commission to adjust its original proposal, after objecting to the merging of major funding lines.

Today’s General Affairs Council meeting in Brussels will be the first official ministerial discussion of the Commission’s revised proposal, which includes creating a new Partnership Fund. Under this plan, the Common Agricultural Policy, Cohesion Policy and Home Affairs funding would be merged into a single pot, with spending guided by National and Regional Partnership Plans.

EU capitals, along with MEPs, have raised concerns about how much control local and regional authorities will have under this new approach.

Now this matters because the EU budget shapes core areas of European policy. It determines the future of farm subsidies, regional development, defence investment, migration management, climate action and more.

The Commission’s proposal represents not only a financial increase but a significant reorganisation of how the EU allocates money. Changing the architecture of agricultural and cohesion policy could reshape relationships between EU institutions, national governments and local authorities.

And increasing the budget to €2 trillion would require many member states to raise their contributions at a time when several governments are cutting spending domestically or facing public pressure to reduce deficits.

The renewed push from traditionally frugal countries shows that longstanding divisions over EU spending never disappeared; they simply became less visible during the pandemic and the early years of Russia’s war in Ukraine. Their return will likely limit the scale of whatever budget emerges from the negotiations.

So, what can we expect?

Today’s ministerial meeting in Brussels marks the beginning of a long negotiation process. Member states will outline their initial positions on the Commission’s proposal, with the focus likely to fall on whether agricultural funding should remain separate, whether rebates will continue, how the new Partnership Fund would operate and how much overall spending governments are willing to accept.

The December European Council will offer the next major moment, when EU leaders will review progress and set the political direction for the talks.

But reaching an agreement will take time because the budget requires unanimity among all 27 member states, and the early signals suggest that compromise will not come easily.