EU budget needs several hundred billion in cuts, states say

Germany and five other so-called frugal EU members said the European Commission's nearly two trillion euro budget proposal should be cut by “several hundred billion euros”.

German Chancellor Friedrich Merz hosted the leaders of Austria, Denmark and Finland in Berlin on Thursday. The Dutch and Swedish leaders joined by video link.

The six leaders issued a joint statement as the 27-member European Union prepares for difficult talks on its 2028-34 budget. They said the proposal should be reduced “in a balanced manner” and guided by priorities including security and defence, competitiveness, migration and sovereignty.

“At a time when virtually all member states are undertaking painful fiscal consolidation, the EU budget cannot be an exception,” they said.

Merz said the Commission's proposed allocations “simply do not fit the times we live in”. He said the six countries represented in the talks finance around 40 percent of the European budget and much of European support for Ukraine.

Danish Prime Minister Mette Frederiksen said the EU budget should prioritise European defence and security, continued support for Ukraine and external border protection. “Russia is threatening us and testing us,” she said.

The group also said new common borrowing was not the answer to the EU's budget challenges and said EU institutions should organise their work within existing staff levels.

The Commission's proposal is worth nearly two trillion euros, equivalent to about $2.3 trillion. The frugal states have traditionally differed from countries including Italy, Spain and Poland, which support a larger budget.

European Council chief Antonio Costa began a tour of EU capitals this week to seek a compromise. EU leaders are expected to discuss the budget at a Brussels summit in October, with another meeting likely in November before a December push to seal a deal.