EU presidency proposes 8% cut to its 2028-2034 budget to €1.6 trillion

Investing.com -- The Irish presidency of the European Union has proposed reducing the bloc’s 2028-2034 budget to €1.6 trillion, according to a Saturday announcement, setting the stage for contentious negotiations among the EU’s 27 member states.

The latest proposal represents a substantial reduction from the European Commission’s €2 trillion spending plan, which was presented in July 2025 to finance the bloc’s priorities over seven years.

The Irish presidency described the proposed reduction as 8%, although the stated €1.6 trillion total is 20% below the Commission’s original proposal.

The announcement follows an earlier compromise presented by Cyprus, which held the EU’s rotating presidency in June and proposed a smaller 2% reduction.

That proposal sought to moderate planned increases in defence and competitiveness spending while providing additional support for agriculture and regional development.

The Commission’s original framework aimed to redirect more resources towards technological competitiveness, security and defence as Europe faces economic competition from China and the United States.

Negotiations have exposed divisions between countries seeking tighter spending limits and those demanding greater investment in the bloc’s emerging priorities.

The Netherlands previously rejected the June compromise, arguing that it devoted too much funding to existing programmes rather than future challenges.

European Parliament representatives also criticised the earlier proposal, calling instead for a 10% increase to adequately finance traditional spending commitments and new priorities.

The EU’s long-term budget provides financing for agricultural subsidies, regional development, research, infrastructure and other programmes across member states.

Any final agreement will require negotiations over both the overall spending ceiling and the allocation of funds among competing priorities.

EU leaders have been seeking an agreement by December, although significant differences over national contributions and spending priorities remain unresolved.