Dublin hoped its latest compromise would bring Europe closer to a deal. Instead, it has reopened the very divisions it was trying to bridge.
Four political groups in the European Parliament have rejected a new compromise on the EU’s multiannual financial framework (MFF) drawn up by Ireland’s Council presidency. They warn that the proposed cuts would undermine Europe’s competitiveness, security and ability to fund shared priorities.
“We reject the proposal put forward by the Irish Presidency, which cannot constitute a basis for Parliament’s consent on the next MFF,” representatives of the European People’s Party, the Socialists and Democrats, Renew Europe and the Greens said in a joint statement on Monday.
Together, the four groups command a majority in Parliament and insist on sticking to their negotiating position, adopted in April. “This is not an opening bid. It is the democratic position of the only directly elected EU institution, and we stand by it,” they stressed.
A smaller budget, a bigger gap in ambitions
Ireland’s presidency presented its revised negotiating framework on Saturday. It aims to bridge differences between member states over the EU budget for 2028–2034 and pave the way for further talks.
The proposal would cut €141 billion, or around eight per cent, from the European Commission’s original budget plan. In 2025 prices, the next long-term budget would total around €1.62 trillion (€1.82 trillion in current prices), down from the Commission’s proposed €1.763 trillion (nearly €2 trillion in current prices).
The presidency defends the changes as a necessary compromise between growing spending needs for new priorities and demands from countries unwilling to raise their contributions significantly. It also stresses that, despite the cuts, the budget would still grow substantially compared with the current multiannual financial framework.
Parliament’s political groups argue that this comparison fails to account adequately for inflation and the EU’s growing needs. Their calculations suggest the budget’s real value would fall by €161 billion, or ten per cent, compared with the current period. “A smaller MFF will not make Europe’s challenges disappear,” they warn.
Their concerns focus particularly on programmes supporting European competitiveness and strategic priorities. Compared with the Commission’s proposal, Ireland’s plan would cut funding for the European Competitiveness Fund by 13 per cent and for Horizon Europe by nearly 10 per cent. Spending on strategic infrastructure and military mobility would fall by 14 per cent, while civil protection funding would shrink by 35 per cent. The EU’s external action budget would be almost 16 per cent lower.
“How can Europe close its competitiveness gap while cutting the European Competitiveness Fund by 13 per cent and Horizon Europe by nearly ten?” the MEPs ask.
Commission warns against undermining priorities
The European Commission also has reservations about the new proposal. Its spokesperson, Balázs Ujvári, said the Commission “regrets the significant reduction in the overall size of the budget”.
“Large cuts risk undermining the critical priorities we have collectively agreed on,” he added, referring to Commission President Ursula von der Leyen’s recent address to the European Parliament. The EU needs a budget that matches its ambitions and provides enough funding to deliver on shared priorities, he said.
The Commission is also concerned about reduced budget flexibility, particularly cuts to instruments designed to meet unforeseen needs and respond to crises. Mr Ujvári further warned that the revised proposal weakens the link between national and regional plans and country-specific recommendations. In the Commission’s view, this could limit the budget’s ability to support reforms and investment.
“We are definitely not happy seeing these cuts,” Mr Ujvári said when asked whether the Commission considered it sensible to make deeper cuts in some areas while only modestly reducing spending on agriculture and cohesion.
However, the Commission does not dispute the entire structure of the future budget. Mr Ujvári said the shift from seven budget headings to four already marked a significant change on which the parties had managed to reach agreement.
New EU revenue streams remain a sticking point
The dispute is not just about spending. It is also about where the money should come from. Parliament’s political groups want new EU own resources so that shared priorities do not have to rely solely on contributions from member states.
Their proposals include levies on online gambling and betting, a contribution linked to crypto-assets and a digital levy on large platforms. The digital levy alone could generate up to €25 billion a year, on top of the €57.4 billion envisaged under the Commission’s July 2025 package of new own resources, according to the groups’ estimates.
“In the absence of an agreement on new own resources we will not be ready to support Parliament’s consent to MFF,” representatives of the four groups warn.
Ireland’s presidency has kept all five new own resources proposed by the Commission in its framework. It also proposes raising the EU’s share of revenue from the Carbon Border Adjustment Mechanism from 75 per cent to 90 per cent. Revenue from the Emissions Trading System would be phased in gradually to address member states’ concerns.
The Commission welcomes the fact that all five of its proposed new own resources remain on the table. But keeping the proposals alive is not enough, Mr Ujvári said. “We need substantial progress so that we can have these new own resources coming into force as soon as possible,” he added.
The new revenue streams matter not only for funding common priorities but also for repaying loans under the NextGenerationEU programme without placing an additional burden on national budgets.
Ireland seeks a deal, but capitals remain divided
Ireland’s presidency presents its negotiating framework as an attempt to bridge differences between member states. Minister for European Affairs Thomas Byrne said the proposal should move the talks forward, not prejudge their final outcome.
“As we see it, the negotiating box acts to bridge the many differences between the member states,” Mr Byrne said when presenting the proposal. “The negotiating box that we present today is not the final outcome,” he stressed, adding that the aim was to reach an agreement by the end of the year.
The new framework preserves national allocations adjusted under the previous Cypriot presidency and seeks to protect funding for agriculture and cohesion policy. Compared with the Commission’s proposal, it envisages lower spending across the main budget areas. However, Ireland’s presidency stresses that almost all programmes would still receive more funding than under the current budget period.
Some member states are pushing for even deeper savings. German Chancellor Friedrich Merz warned that the budget must remain sustainable for the countries that contribute the most. “The size of the new proposal is not a basis for agreement. (…) Everyone must contribute to the necessary adjustments, because prioritising and modernizing EU spending is a task for us all,” he said.
EU leaders will discuss the budget at a summit on 15–16 October. The Irish presidency aims to secure an agreement on the 2028–2034 multiannual financial framework by the end of this year, allowing the new budget to take effect in January 2028.
