EU leaders split over 1.62 trillion euro budget as year-end deal looks doubtful

Net contributors reject the proposal

EU leaders met in Brussels on Thursday, 15 October, with their positions on the 2028-2034 multiannual financial framework still far apart. The Irish presidency sent its latest proposal to capitals on Saturday, 10 October, setting the total at 1.62 trillion euros. That is 141 billion euros below the European Commission's initial offer of 1.76 trillion, an 8% cut. Swedish Prime Minister Ulf Kristersson said Sweden will say no to the plan, which he argued would lift Sweden's net contribution by almost 60%.

This is far too big, far too expensive.

Dutch Prime Minister Rob Jetten said he does not like the proposal on the table and wants a smaller, more modern budget focused on competitiveness and security. Finnish Prime Minister Petteri Orpo said the overall amount is too high, though Finland would contribute more if the money went to new priorities. German Chancellor Friedrich Merz, whose country is the bloc's biggest economy, doubted the leaders could reach a conclusion over the weekend.

No member state in the EU can afford to pay contributions into the Union on such a level.

Friends of Cohesion and the case for more spending

A group of 17 countries known as the Friends of Cohesion, including Spain, Italy and Poland, signed a joint declaration at the summit calling for an ambitious, fair and balanced budget. Their text asks that farm and cohesion policies be protected, that funds reach member states and regions, and it rejects rebates. According to AP, those two policies make up about two thirds of the entire budget. Spain's Pedro Sánchez said the proposal falls far short and is unacceptable for Spain, which will become a net contributor for the first time, and that this opens a debate on tax justice. EU Budget Commissioner Piotr Serafin had warned on Tuesday, 13 October, that the cuts risk leaving the EU with less capacity to act together.

We were never going to please everybody on this one.

Energy prices split the summit

Leaders agreed that short-term measures are needed to contain the rising cost of energy for households and businesses, a burden the crisis in the Middle East has made worse. They warned that winter will add further pressure on prices. Some leaders raised a review of how the electricity market is designed, but no proposals or agreement emerged. The revision of the EU emissions trading system was discussed with renewed urgency. Italy, Greece and the Visegrad group of Poland, Hungary, Czechia and Slovakia pushed to delay ETS2, the system covering buildings and road transport due in 2028, by two years, while Spain and the Nordic countries resisted. Draft conclusions moved from setting timelines to inviting an agreement in time. Sánchez blamed both the Russian invasion of Ukraine and the war in Iran for the situation, saying the Iran war has cost member states more than 100,000 million euros since it began.

What comes next

A diplomatic source who asked not to be named described the talks as stalled after more than 11 hours, and no press conference was held. Costa was asked to present a new proposal in the coming weeks. An EU official said a special leaders' meeting would be held on 26 November, with agreement hoped for at the regular summit about three weeks later.

Costa is expected to focus on three areas: keeping national contributions from rising to politically unacceptable levels, building a new package of additional EU own resources, and keeping enough flexibility to respond to unforeseen crises. The own resources could include ideas from the European Parliament and a possible source tied to revenue from 6G spectrum auctions. Spending, national contributions and new income will be negotiated as one package. The declaration sets agreement before the end of 2026 as the target, so that legal acts can be adopted in 2027 and EU funds flow without interruption from early 2028.