However, Germany and allies from Northern Europe — whose contributions to the budget exceed their EU payouts — are pushing in the opposite direction, insisting that the EU slash its cashpot by hundreds of billions of euros. They argue that introducing new EU taxes is not an alternative to major cuts.

“One has to wonder whether Mr. Costa has completely lost touch with reality by now,” Krichbaum told reporters.

He added that “national budgets are under enormous pressure ... and everyone knows that the sky isn’t the limit.”

EU governments are lobbying the Irish presidency of the Council of the EU — which is steering the budget talks — to reflect their preferences in a new budget negotiating document, also known as a negobox, that is set to be presented in early October. 

Ireland has urged ministers to outline on Tuesday where they are ready to compromise on the most sensitive issues in the negotiations, including spending cuts and own resources.

Costa will take over the negotiations after an October European Council, when EU leaders will react to Ireland's proposal. Over the past month, Costa toured 25 EU capitals to sound out leaders on the most difficult topics in the negotiations.