EU Council presidency unveils draft for next long-term budget as net contributors reject cuts as too shallow

Limited cuts to agriculture and regional funding

Agriculture and regional funding would see comparatively small reductions. In May, sixteen countries from southern and eastern Europe, including Italy, Poland and Portugal, had jointly called for higher spending in regional aid and agriculture. The draft largely reflects that position, leaving the two policy areas close to the Commission's original figures. By contrast, the single market budget would be reduced by around 20 billion euros and foreign policy spending by roughly 7.5 billion euros.

Germany and the Netherlands push back

German Chancellor Friedrich Merz had already set the tone in his government declaration on Thursday, calling for a "fundamental modernisation of the European budget". He described the Commission's draft as "unaffordable, unbalanced and setting the wrong priorities", according to the report. Germany is the largest single contributor to the EU budget, and Berlin has advocated for stronger austerity measures in the ongoing negotiations.

Dutch Finance Minister Eelco Heinen struck a similarly harsh tone, calling the Cypriot presidency's paper an "inakzeptabel" basis for negotiations. He told reporters, according to the report, that the total volume remained "much too high – at a time when fiscal headroom is limited across Europe and difficult decisions are unavoidable", and that the document "shows exactly how one should not proceed". Heinen also separately branded the proposal "a no-go" and said the negotiation framework "falls far short of what is required".

Political stakes ahead of next summit

An EU diplomat from another net contributor country echoed those calls, demanding "significant cuts across all headings to bring the figures down and preserve modernisation". The draft has not included demands from the European Parliament for a tax on digital companies, a proposal that several member states have also resisted.

The EU budget is among the most politically sensitive dossiers in Brussels, since contributions and rebates are tied closely to national fiscal interests. Net contributors argue that an overall expansion of the framework is incompatible with constrained domestic budgets, while recipient countries warn that cuts to regional funds would hit cohesion objectives. The proposal now forms the basis for negotiations among the bloc's 27 member states, with the next EU summit scheduled for next week where leaders are expected to take stock of the talks.