Merz threatens the EU with a blockade
German Chancellor Friedrich Merz has openly rejected the current proposal for the European Union’s next long-term budget, warning that Germany could block the entire package if major changes are not made.
The dispute centers around the Multiannual Financial Framework, the EU’s seven-year budget plan for 2028 to 2034. This budget determines how money is allocated across major sectors such as agriculture, infrastructure, research, economic development, security, and defense. The European Commission previously proposed a budget worth €1.76 trillion.
After a summit in Brussels, Merz made Germany’s position clear, calling the current proposal both unaffordable and unbalanced. He stated that the overall amount is far too high and insisted that a completely revised proposal must be presented with significantly reduced numbers.
A new compromise from the Cypriot EU Council Presidency suggested cutting the proposed budget by around two percent, reducing it by approximately €32.8 billion. However, Germany says this reduction is nowhere near enough. According to Merz, the current plan would force Germany to contribute an additional €15 to €20 billion every year to the EU budget.
Germany is the EU’s largest financial contributor, providing nearly a quarter of the bloc’s total funding due to its strong economy. While Germany benefits heavily from the EU’s shared internal market, Merz argued that the country’s current financial situation makes such increased payments impossible for the foreseeable future.
Merz is not alone in his criticism. Other net contributor states—countries that pay more into the EU than they receive—such as the Netherlands, Sweden, Denmark, and Austria are also pushing for a smaller budget. On the opposite side are net recipient states, many of which rely heavily on EU funding for agriculture, infrastructure, and regional development and strongly oppose deeper cuts.
The conflict is especially serious because approval of the new EU budget requires unanimous support, meaning any single country can block the deal. This gives Germany significant leverage in negotiations. Despite his strong criticism, Merz said he still wants a quick agreement to ensure financial stability for countries and sectors that depend on EU funding from 2028 onward.
The debate is not only about the total amount but also about spending priorities. The latest proposal from Cyprus would reduce funding mainly for competitiveness and defense while largely protecting agriculture and structural support programs. Several countries disagree with this approach, arguing that Europe must invest more aggressively in security and economic competitiveness to remain strong in the coming decades.
French President Emmanuel Macron has taken the opposite stance from Merz, arguing that Europe needs a larger budget to fund modernization and long-term growth. Discussions are also expanding to possible new revenue sources, including taxes on large corporations, non-recycled electronic waste, tobacco, digital giants, online gambling, and even cryptocurrency-related capital gains.
With Ireland set to take over the rotating EU presidency on July 1, pressure is mounting for a breakthrough. A new compromise proposal is expected in October, followed by a special summit in November. However, Irish Prime Minister Micheál Martin has already warned that reaching consensus on the size and structure of the budget will be extremely difficult.