Ireland’s proposed EU budget cuts would reduce the bloc’s next seven-year spending plan by €141 billion, as the country seeks to bridge divisions between governments over how much the European Union should spend and which priorities deserve protection.
The proposal, prepared by Ireland during its rotating presidency of the Council of the EU, would cut the European Commission’s proposed budget for 2028 to 2034 by 8%. It directs the largest reductions towards international cooperation and economic competitiveness, while limiting cuts to agriculture, fisheries and funding for less-developed regions.
The plan is intended to move negotiations forward before EU leaders meet on 15 and 16 October. It offers a compromise between countries demanding a smaller budget and those determined to protect traditional EU spending programmes.
Thomas Byrne, Ireland’s Minister of State for European Affairs, said the proposal seeks to reconcile competing demands from member states. These include financing newer priorities such as defence and competitiveness, maintaining established policies such as agriculture and regional development, and recognising the financial pressures facing national governments.
The negotiations concern the EU’s Multiannual Financial Framework, or MFF, which sets the bloc’s spending limits and priorities for a seven-year period. Governments are approaching a critical stage in discussions over the 2028-2034 budget, with the size and distribution of funding remaining major points of disagreement.
Ireland proposes setting the budget at €1.622 trillion in 2025 prices, €141 billion below the Commission’s proposal. That would still leave it about 30% larger than the current long-term budget. Measured in current prices, the proposed total would be approximately €1.825 trillion.
The smallest reductions would fall on cohesion, agriculture and fisheries, which together account for the largest share of EU expenditure. Their combined allocation would fall by 3% to €914 billion.
By comparison, the proposed allocation for economic competitiveness, research and defence would decline by 13% to €456 billion. The Global Europe programme, which funds cooperation with countries outside the EU, would face a deeper reduction of 17%, bringing its budget to €157 billion.
EU administrative spending would also fall, by 8.8% to €95 billion. Several member states have called for lower administrative costs as national governments face pressure to control their own public spending.
Byrne expressed confidence that the revised budget and changes to spending priorities would reflect member states’ preferences and help move the negotiations into their next phase.
The Irish proposal also includes a package of new EU revenue sources, known as own resources, which would raise an estimated €55 billion annually. These are EU-level taxes and levies intended to provide direct revenue for the bloc rather than relying as heavily on contributions from national governments.
One of the main changes concerns the Carbon Border Adjustment Mechanism, or CBAM, which applies a carbon-related charge to certain imports from outside the EU. Ireland proposes increasing the share of CBAM revenue transferred to the EU budget from 75% to 90%.
The proposal also provides for the EU’s share of revenue from the Emissions Trading System to be introduced gradually for member states receiving support through the Modernisation Fund. The change reflects opposition from governments concerned about surrendering part of their national revenue.
Other revenue measures in the European Commission’s original package remain in the Irish text. These include a proposed tobacco excise duty, a corporate revenue contribution known as CORE, an electronic waste levy and a plan for the EU to retain 90% of customs duties collected on imports.
However, the compromise leaves out three additional revenue sources proposed by the European Parliament: levies on digital services, online gambling and crypto assets. Recent estimates cited in the debate suggest these measures could generate up to €32 billion a year.
Byrne said Ireland assessed potential new revenue sources against three criteria: whether they could secure unanimous support from member states, whether they would generate substantial income, and whether they could be ready by 1 January 2028. He said the proposed parliamentary measures did not clearly meet the funding and implementation requirements.
The budget negotiations are also taking place against a tense political backdrop. EU governments want to reach a political agreement by the end of 2026, ahead of several important national elections in 2027 that could change the balance of opinion on European spending and integration.
Spain’s political timetable has already added pressure to the talks. Prime Minister Pedro Sanchez has called snap elections for 29 November, placing the vote in the middle of the budget negotiations. In Germany, expected gains by the far-right Alternative for Germany in regional elections could strengthen pressure on the government to take a tougher position on EU spending.
Germany leads a group of six countries commonly known as the “frugal” states. They want a much smaller budget than the Commission has proposed, arguing that spending should focus more strongly on newer priorities, particularly defence and economic competitiveness. The group has called for reductions of several hundred billion euros.
A competing alliance, known as the Friends of Cohesion, includes 17 southern and eastern European member states led politically by Italy’s Prime Minister Giorgia Meloni. These countries want to protect funding for farmers and poorer regions, arguing that traditional EU policies remain essential to economic and social development across the bloc.
The two groups have disagreed over how to distribute the costs of new priorities. Defence and competitiveness have gained prominence in the budget debate, but increasing their funding requires governments to decide whether to raise the overall budget, reduce existing programmes or find additional sources of revenue.
An earlier compromise proposed in June by the then Cypriot presidency of the Council of the EU included a €32.8 billion reduction, with the largest cuts falling on competitiveness and defence spending. That proposal drew criticism from the frugal countries, which considered the reduction insufficient.
Ireland’s plan goes further, proposing an 8% cut to the Commission’s budget proposal compared with the 2% reduction in the Cypriot proposal. Even so, it has failed to satisfy all governments.
Sweden’s Minister for EU Affairs, Jessica Rosencrantz, criticised the new negotiating framework in a post on X, arguing that the overall budget needed to come down significantly. She said the figures still represented an unaffordable increase and that the member states remained far from an agreement.
The Irish proposal will now move through a series of discussions involving national representatives, ministers and EU leaders. EU ambassadors are scheduled to discuss the text before ministers take it up at the General Affairs Council on 13 October. Leaders will then consider the budget at the European Council meeting on 15 and 16 October.
The negotiating framework is not a final budget agreement. It is intended to give governments a basis for further talks, with the size of the overall budget, the balance between traditional and newer priorities, and the design of EU revenue sources still subject to political negotiation.
