A reduction of €159 billion, or 8%. That is the full scale of the cuts proposed by the Irish Presidency of the Council of the EU to the next long-term EU budget, compared with the European Commission’s proposal of July 2025.
The EU’s Multiannual Financial Framework (MFF) would thus amount to €1,825 billion (at 2025 prices) for 2028-2034, according to the new figures in the negotiating box unveiled by Dublin on Saturday 10 October. The Commission had initially proposed a 7-year budget of €1,985 billion.
The proposal is “not the end of the road” but represents “a significant step” towards an agreement on the EU budget by the end of 2026, Irish Minister for European Affairs Thomas Byrne said on Saturday 10 October in Brussels. According to him, “almost every programme receives an increase compared to the current 2021-2027 MFF”.
The Irish cuts – which add €122 billion to those proposed in June by the preceding Cyprus Presidency (see EUROPE 13886/1) – were intended as a move in the direction of the northern countries known as the ‘frugals’, led by Germany.
But this group, which also includes Sweden, the Netherlands, Finland, Austria and Denmark and which favours a reduction of “several hundred billion euros”, was quick to criticise the draft MFF as still far too large (see EUROPE 13957/2).
The dissatisfaction of these six governments, which prefer to describe themselves as ‘modernisers’ of the EU budget (see EUROPE 13943/9), is all the greater because the proposed savings primarily affect the Union’s so-called “new priorities”: investment in competitiveness, defence and innovation, as well as external action.
By contrast, the common agricultural policy (CAP) and cohesion policy have been largely spared by the Irish negotiations. This is because a solid majority of member states remain strongly attached to these two traditional pillars of the EU budget (see EUROPE 13951/12).
Competitiveness and defence. Heading 2 of the draft MFF, devoted in particular to industrial competitiveness, innovation and defence, has actually been cut by €75 billion, accounting for nearly half of all the cuts. Its total has thus fallen from €590 billion in the Commission’s original proposal to €515 billion in the Irish Presidency’s version.
This amounts to a 13% reduction, primarily affecting the ‘European Competitiveness Fund’ (ECF). The fund has been reduced to €362 billion, compared with €409 billion in the Commission’s proposal (see EUROPE 13954/3).
Within the ECF, the allocation for the ‘Horizon Europe’ Research Framework Programme has fallen sharply, in particular, to €158 billion over 7 years, compared with the original €175 billion.
The ‘Competitiveness Fund’ spending line devoted to ‘Resilience, Security, Defence Industry and Space’ has also suffered a substantial 13% cut, falling from €130 billion to €113 billion in the new negotiating box.
However, the part of the ECF reserved for ‘Clean Transition and Industrial Decarbonisation’ has fared better, with a reduction of just €3 billion (to a total of €64 billion over 7 years).
External action. The third MFF heading, ‘Global Europe’, is the other major casualty of the Irish decisions. This heading, which covers spending on EU external action, including development aid, has been cut by €38 billion (-17%) and now has an allocation of €177 billion.
Within this heading, the allocations reserved for the different geographical regions of the world have all been affected. The Irish Presidency nevertheless says it has preserved the ring-fenced €25 billion allocation for humanitarian aid, as well as the funds devoted to Ukraine’s reconstruction.
Cost of EU institutions. Savings of €11 billion are also proposed on the cost of the EU institutions. Heading 4 of the draft MFF now receives €107 billion, compared with €118 billion in the Commission’s proposal (see EUROPE 13920/10).
CAP and cohesion. Heading 1, meanwhile, has been largely spared, in what looks like a victory for the large group of countries known as the ‘Friends of Cohesion’. The cuts here are very limited, at around 3%.
The total for this heading remains at €1,026 billion, close to the original €1,062 billion. Moreover, these savings leave the EU27’s allocations under the future national and regional partnership plans (NRPP) entirely untouched.
These plans are managed directly by the Member States, and will finance most CAP and cohesion policy spending, which together still account for more than half of the MFF for 2028-2034.
The cuts to heading 1 are, however, concentrated on instruments managed by the Commission, including the ‘EU Facility for Union Action’, whose allocation has been halved to €36 billion over 7 years.
Cuts of this kind clearly raise questions about the flexibility of the multiannual budget.
Crisis response. Dublin has also removed altogether a so-called ‘precautionary’ reserve, which was to have been allocated €8.7 billion to address unforeseen emergencies during the budgetary period.
Similarly, the ‘EU Civil Protection Mechanism’, the main instrument of European solidarity in the event of natural disasters, among other emergencies, has been cut by 35% to €7 billion over 7 years.
Own resources. As for financing the post-2027 MFF, the negotiating box retains the five own-resources proposals originally put forward by the Commission (resources based on the EU Emissions Trading System and the Carbon Border Adjustment Mechanism, taxes on electronic waste and the turnover of large companies, and tobacco excise duties), although none has yet secured unanimous support.
“We want to be ambitious on own resources”, Mr Byrne said.
The Council Presidency does, however, suggest a more gradual increase in the contribution to the next EU budget based on national revenues from the EU carbon market (‘EU ETS’), solely for the benefit of countries eligible for the ‘Modernisation Fund’. This concession would mainly benefit Central European countries, in the hope of easing their criticism of the proposal.
Although the Irish authorities say they have taken them into account, they have not included the three new EU taxes – on digital services, crypto-assets and online gambling – advocated by the European Parliament (see EUROPE 13953/20), arguing that it would be difficult to have them operational by early 2028.
Nor has the Irish Presidency changed the €168 billion allocation for repaying the debt incurred under the post-Covid recovery plan, although some countries, including Spain, favour a rescheduling (‘roll-over’) of these payments to give the EU more room for manoeuvre.
After an initial reaction from Member State ambassadors on Sunday, the Irish MFF proposal will be discussed at the ‘General Affairs’ Council on Tuesday, then at the European Council summit on Thursday 15 October.
See the negotiating box with figures: https://aeur.eu/f/nv4 (Original version in French by Clément Solal)