EU budget cuts worth several hundred billion euros are being demanded by Germany, Denmark, Finland, Sweden, Austria and the Netherlands as negotiations over the bloc’s next seven-year financial framework enter a decisive phase. The six governments argue that the European Commission’s proposed budget of almost €2 trillion for 2028-2034 is too large and should be reduced across all areas of spending.
The common position brings together three Nordic countries and three other major net contributors to the EU budget. Their leaders agreed on the position after a meeting hosted by German Chancellor Friedrich Merz in Berlin on 27 August.
Six countries push for major EU budget cuts
The six governments say the Commission’s proposal should be reduced by “several hundred billion euros”, with every spending category contributing to the reductions.
The European Commission proposed the new Multiannual Financial Framework (MFF) in July 2025. It would provide almost €2 trillion, equivalent to around 1.26% of the EU’s average gross national income, for the period from 2028 to 2034. The framework would finance areas ranging from agriculture and regional development to research, migration, defence and external policies.
Germany had already called in June for the proposal to be reduced by around €400 billion, according to Reuters. The joint initiative now gives that demand broader political backing among some of the EU’s largest net contributors.
The six governments argue that the EU should apply the same fiscal discipline currently being demanded from national governments.
“At a time when virtually all Member States are undertaking painful fiscal consolidation, the EU budget cannot be an exception,” they said in their joint declaration.
Denmark, Finland and Sweden join the new budget coalition
The participation of Denmark, Finland and Sweden gives the initiative a particularly strong Nordic component. They are joined by Germany, Austria and the Netherlands.
Rather than simply reducing EU activity, the six countries want money redirected towards what they consider the bloc’s most important common priorities. Their declaration identifies security and defence, competitiveness, migration and European sovereignty as areas that should receive greater attention.
The governments also want access to European funding to remain conditional on respect for the rule of law and EU fundamental values. At the same time, they argue that EU institutions should handle their responsibilities without increasing existing staff levels.
The proposal reflects a recurring divide in EU budget negotiations between governments that contribute more to the common budget than they receive and member states that depend more heavily on agricultural, cohesion and regional funding.
In May, for example, 16 EU countries, including Italy, Spain, Poland and several Central and Eastern European member states, called for stronger funding for agriculture, fisheries and regional policies in the next financial framework.
The six governments reject new common EU debt
Another important element of the EU budget cuts proposal concerns borrowing. Germany, Denmark, Finland, Sweden, Austria and the Netherlands explicitly oppose issuing new common EU debt to finance additional spending.
“New common borrowing is not the solution to our budgetary challenges and is no alternative to structural reforms,” their declaration says.
The issue is politically significant because common borrowing became a much larger part of EU economic policy with the post-pandemic recovery programme. How the EU should finance new common priorities, particularly defence and competitiveness, has since become one of the central disputes between member states.
The Commission has instead proposed expanding the EU’s own revenues through measures including contributions linked to the Emissions Trading System, the Carbon Border Adjustment Mechanism, tobacco excise duties, electronic waste and large companies.
The EU budget still requires agreement from all 27 countries
The dispute will have to be resolved as part of the wider negotiations over the 2028-2034 EU budget.
The Multiannual Financial Framework requires the unanimous agreement of all 27 EU member states, followed by the consent of the European Parliament. EU leaders are aiming to reach a political agreement by the end of 2026 so that the necessary legislation can be adopted in 2027 and the new framework can take effect on 1 January 2028.
The position adopted by Denmark, Finland and Sweden therefore does not determine the final size of the budget. It does, however, create a coordinated bloc of net contributors demanding that the Commission substantially scale back its proposal while concentrating more resources on defence, competitiveness and other shared European priorities.
The negotiations will now have to reconcile that demand with pressure from other member states to preserve funding for agriculture, cohesion and regional development, making the overall size of the next EU budget one of the main unresolved questions in the bloc’s agenda for the remainder of 2026.
