German Chancellor Friedrich Merz said on Tuesday that the European Commission's proposal for a nearly 2 trillion euro EU budget should be cut by "several hundred billion" euros. He described the plan as "unacceptable" and "unbalanced" and opposed the proposal to create 2,500 new jobs in the European institutions, "Politico" quoted him as saying.
At a press conference with Irish Prime Minister Michaël Martin, Merz said: "That's why we need a draft budget with cuts in all areas — a total of several hundred billion euros. These cuts are essential." The German chancellor did not specify whether the requested reduction matched the 400 billion euro cut proposed in a German document, noting that budget negotiations were ongoing. Merz also criticized the increase in staff in EU institutions, which Brussels has cited as increasing tasks related to geopolitical crises. "It is unacceptable to create 2,500 new positions for the European institutions now. We will not accept this," he said, noting that Germany plans to reduce its state administration by 8% by 2029. Ireland, which holds the EU Council presidency, is due to present a new budget proposal before the EU leaders' meeting in October. Martin will have to balance German demands for cuts with pressure from countries such as Italy, Spain and Poland, which support a bigger budget.
The previous Cypriot presidency proposed a 2% cut from the Commission's initial draft, but Germany and its northern European allies have dismissed that as insufficient.
Martin said he would "listen carefully to the Chancellor about what is important to him and to Germany" and added: "I believe that if we all approach the task in the right spirit, an agreement should be possible by the end of the year."
New sources of revenue for the EU budget remain among the contentious issues. The Commission has proposed five new own resources, including higher rates on tobacco and a tax on EU businesses to finance defence and competitiveness spending.
Germany opposes corporate tax and has rejected a proposal for exemptions for small and medium-sized enterprises. Ireland has also spoken out against the digital tax, backed by the European Parliament and French President Emmanuel Macron, warning that it could threaten last year's "Turnberry trade deal" with the United States.