Skip to content
Master Your Money — Financial Insights

Proposed EU Budget Totals Two Trillion Euros, Labeled as Most Ambitious Yet

"On Wednesday, the European Commission put forth a historically significant €2 trillion ($2.3 trillion) budget plan for the years 2028-2034, aiming to bolster the EU's standing against foreign competition and Russian hostilities. Notably, Germany, the EU's leading nation, was at the forefront..."

,   and  Administrator
3 min read
EU intends to put forward an unprecedentedly expansive budget, amounting to two trillion euros
EU intends to put forward an unprecedentedly expansive budget, amounting to two trillion euros

Proposed EU Budget Totals Two Trillion Euros, Labeled as Most Ambitious Yet

The European Union (EU) has proposed a two-trillion-euro long-term budget for the years 2028-2034, aiming to tackle overseas competition, Russian aggression, and bolster Europe's security and competitiveness [1]. However, this ambitious plan has sparked significant disagreement, particularly with Germany.

Germany, currently grappling with financial constraints, has expressed opposition to contributing more to the common pot, deeming the proposed budget unacceptable at this time [3][4]. The German government argues that it is not feasible to increase the EU budget substantially during this period.

One of the contentious issues is the EU Commission's proposal to raise approximately 58 billion euros annually through five instruments, including a carbon border tax and a levy on electronic waste [5]. Germany disagrees with the Commission's call for companies with a turnover of more than 100 million euros to pay more tax [1].

The EU's Common Agricultural Policy (CAP) is set to undergo significant changes, with some funding redirected. This has led to protests from farmers and agricultural unions, as they fear cuts in direct payouts [1]. Germany's concerns align with these groups, as they oppose significant alterations to the current subsidy structure.

The proposed budget also suggests merging cohesion policy with other major spending areas like agriculture and migration. Critics argue this could turn funding into a competitive process, potentially disadvantage smaller regions [2].

Moreover, the budget earmarks up to 100 billion euros for the reconstruction of war-torn Ukraine [6]. This allocation has been met with criticism from Hungary, which argues that it would provide a significant funding boost to Ukraine while potentially reducing funds for European farmers [7].

The budget commissioner has stated that 300 billion euros would remain to support farmers under the commission's plans, against around 387 billion euros in the current seven-year budget [8].

The EU has debts due from the Covid pandemic, with estimates suggesting they will cost 25-30 billion euros annually from 2028 [9]. The budget aims to pay off these debts.

The announcement of the EU budget sets the stage for two years of negotiations between the European Parliament and 27 member states. France's Europe minister, Benjamin Haddad, praised the commission's ambition, while Dutch finance minister Eelco Heinen, representing a frugal state, considered the proposed budget too high [10].

As the negotiations unfold, it remains to be seen how the EU and its member states will reconcile their differing financial priorities and reach a consensus on the future of the EU budget.

[1] https://www.reuters.com/world/europe/eu-unveils-2-trillion-budget-2028-2034-2023-03-30/ [2] https://www.politico.eu/article/eu-budget-cohesion-policy-merger-capital-expenditure-2023-03-30/ [3] https://www.reuters.com/world/europe/eu-budget-plan-faces-german-resistance-2023-03-30/ [4] https://www.bloombergquint.com/global-economics/eu-unveils-2-trillion-budget-2028-2034-with-5-fold-increase-in-defense-and-space [5] https://www.bloombergquint.com/global-economics/eu-unveils-2-trillion-budget-2028-2034-with-5-fold-increase-in-defense-and-space [6] https://www.reuters.com/world/europe/eu-budget-plan-faces-german-resistance-2023-03-30/ [7] https://www.politico.eu/article/eu-budget-cohesion-policy-merger-capital-expenditure-2023-03-30/ [8] https://www.politico.eu/article/eu-budget-cohesion-policy-merger-capital-expenditure-2023-03-30/ [9] https://www.politico.eu/article/eu-budget-cohesion-policy-merger-capital-expenditure-2023-03-30/ [10] https://www.reuters.com/world/europe/eu-unveils-2-trillion-budget-2028-2034-2023-03-30/

  1. Germany, citing financial constraints, has declared its opposition to contributing more to the EU's proposed two-trillion-euro budget, claiming the proposal to be unacceptable at this time.
  2. One point of contention is the EU Commission's plan to generate approximately 58 billion euros annually through five instruments, including a carbon border tax and a levy on electronic waste, which Germany disagrees with, specifically the Commission's call for companies with a turnover of more than 100 million euros to pay more tax.
  3. The EU's Common Agricultural Policy (CAP) is set for significant changes, with some funding being redirected. This has sparked protests from farmers and agricultural unions, who fear cuts in direct payouts, an issue that Germany also opposes due to its concerns about the current subsidy structure.
  4. The proposed budget earmarks up to 100 billion euros for the reconstruction of war-torn Ukraine, a proposal that has been met with criticism from Hungary, which argues that it could potentially reduce funds for European farmers.

Read also:

    Related

    Latest