Germany seeks hundreds of billions in EU budget cuts

Germany demanded cuts of “at least several hundreds of billions of euros” from the EU’s next long-term budget and rejected new common borrowing in a Euronews interview published Oct. 21.

The demand exceeds the Irish EU presidency’s latest framework, which reduced the European Commission proposal by around €140 billion, and raises the difficulty of reaching a deal before Christmas.

“The Commission proposal was far too high,” German Ambassador to the EU Thomas Ossowski said in the interview. “We are not there yet. More cuts will definitely be necessary.”

Ossowski said Germany would not accept another round of joint EU debt if national governments decline to raise contributions. “No, definitely not new common borrowing,” he said.

The German position sets up a difficult negotiation over how the EU funds new priorities while preserving large existing programmes. Ossowski said Berlin wants spending focused on competitiveness, innovation, research, defence, security and Ukraine.

Germany supports reducing the combined share of agriculture and cohesion funding from roughly 66% of the EU budget today to 50%. Agriculture and cohesion spending would remain, but would take a smaller portion of the overall package. “We think that is a sustainable approach,” Ossowski said.

Berlin is willing to discuss new EU “own resources,” meaning revenue streams assigned to the EU budget, Ossowski said. He ruled out an EU-level tax on European companies and said Germany sees further joint debt as a threat to national sovereignty.

Ukraine financing adds another layer to the dispute. Ossowski said €90 billion in loans already arranged for Ukraine had been financed outside the regular EU budget through the bloc’s existing “headroom,” or unused budget capacity.

Further support will be needed to get Ukraine through the winter and into next year, Ossowski said. “Germany stands with Ukraine and the European Union stands with Ukraine,” he said, adding that Berlin expects the G7 and other international partners to contribute.

Ossowski also expressed doubt about current diplomacy on the war. “We don't see any readiness by Russia to engage in any kind of negotiations,” he said, citing continued Russian attacks on Ukrainian cities and civilians.

The unresolved budget fight leaves EU governments balancing competing claims on limited resources: support for Ukraine, more defence and security spending, industrial competitiveness, farm subsidies and cohesion funds for poorer regions.

European Council President António Costa is expected to put forward a new negotiating proposal ahead of an informal EU summit at the end of November.

EU governments are aiming for a budget deal before Christmas, a timetable Ossowski described as “an ambitious plan.”