Merz and five EU leaders threaten to block proposed budget unless it is cut

German Chancellor Friedrich Merz and leaders from five other European Union countries have threatened to withhold approval for the bloc’s proposed seven-year budget unless it is cut by billions of euros, according to a report cited by DW. Merz and the leaders of the Netherlands, Sweden, Denmark, Austria and Finland signed a letter setting out their opposition to the proposed size of the 2028-2034 budget, the Financial Times reported. The European Commission outlined the plan last year.

It is valued at nearly €2 trillion, or about $2.33 trillion, and must be approved by all EU member states. Governments hope to reach an agreement by the end of 2026. The proposed figure is substantially higher than the budget for the current 2021-2027 period.

The source said the six leaders want the amount reduced before they will approve it. Merz has previously argued that savings should apply across policy areas and rejected the use of additional joint EU borrowing to cover the gap. He said excessive debt threatened governments’ ability to act and required them to set priorities.

The German chancellor has called for greater spending on competitiveness and defence, saying the next budget must address present challenges rather than preserve an outdated structure. EU funding comes mainly from member-state contributions based on gross national income and value-added tax revenues. Germany, the bloc’s largest economy, contributes the largest amount in absolute terms, according to the source.

The dispute is unfolding alongside coalition talks in Mecklenburg-Western Pomerania, where parties are seeking to keep the far-right Alternative for Germany out of government.