Merz revolts over EU budget, report says

German Chancellor Friedrich Merz and his counterparts from five other nations have threatened to withhold their approval to a seven-year European Union budget proposal unless it were slashed by billions of euros as they’ve demanded for.

Merz and leaders from the Netherlands, Sweden, Denmark, Austria and Finland have signed a letter to make clear their wish to have the proposed budget trimmed by billions of euros or see it blocked, according to the Financial Times.

The budget for 2028-2034 was outlined by the European Commission last year and needs to be approved by all EU countries.

The proposed budget was set at nearly €2 trillion ($2.33 trillion) and parties involved are hoping to reach an agreement by the end of 2026.

The proposed amount is significantly higher than the current one set at between 2021 and 2027.

Merz earlier this month said cuts should apply across all policy areas and rejected relying on further joint EU borrowing to bridge the gap.

“Excessive debt ​threatens our sovereignty ⁠and our capacity to act,” Merz said earlier this month, adding that governments had the “admittedly painful task” of setting priorities.

The German leader has called for the bloc’s next budget to shift spending toward competitiveness and defense, arguing that a “20th-century budget” could not address current challenges.

The EU budget is funded primarily through contributions from member states, either in the form of national contributions calculated on the basis of gross national income or as a percentage linked to national VAT revenues.

As the EU’s largest economy, Germany contributes the largest amount in absolute terms.