Iain Begg explains why negotiations over the next EU budget are proving so difficult.

The latest episode in the drama around the EU budget, or multi-annual financial framework (MFF), for 2028 to 2034 is now unfolding. On 10 October, the Irish Presidency of the Council of Ministers produced a new ‘negobox’, proposing further amendments to the proposals launched by the European Commission in July 2025. An explanatory note asserts that:

‘The objective of the revision is to present an ambitious, modern and flexible budget that invests in new and emerging priorities and protects treaty-based policies, incl (sic) CAP and Cohesion, while at the same time reflecting the fiscal realities that all Member States face.’

Media commentary described the Irish proposals as being designed to ‘appease a German-led camp demanding major cuts’. But Ireland’s efforts to sweeten the pill by protecting spending on farmers and regional development (Cohesion Policy) imply larger cuts in spending on programmes favoured by many net contributors to the EU’s finances, especially related to competitiveness.

Reactions were immediate and, as reported by Euronews, predictably negative. German Chancellor Merz said ‘The size of the new proposal is not a basis for agreement. The EU budget must be affordable for those who bear the brunt of financing it’. His fellow travellers among the group of six ‘frugal’ member states concurred, with Dutch Finance Minister Eelco Heinen warning that ‘there will be no deal by the end of the year’.

By contrast, Carla Tavares MEP, co-rapporteur for the European Parliament on the MFF, made her disappointment clear: ‘the choice before us is not between a cheap and an expensive Europe. It is between an underfunded Europe at the mercy of the next crisis, and a properly funded Europe’.

The action moved next to a fractious European Council (EUCO) meeting on 15 October , but nothing was agreed, despite wrangling long into the night. Moreover, the spectre of – each MS striving to obtain the best possible net flow of money, irrespective of EU priorities – is manifestly risen again.

A trilemma and a three-way inter-institutional contest are at the core of the MFF challenges. The trilemma is that among the member states, there are three objectives: lowering the headline total for the EU budget, maintaining expenditure on ‘traditional’ programmes and increasing spending on new priorities.

All three, clearly, cannot be achieved simultaneously. The Irish proposal favours the first and, especially, the second: allocations for the proposed new National and Regional Partnership Plans (NRPPs), covering most traditional programmes would be cut by only a little, whereas sharper cuts are proposed for Competitiveness and, to the dismay of several European Commissioners, ‘Global Europe’ – see table.

Heading of spending (all EUR, billion, at 2025 prices)		Irish presidency October 2026	Percentage change
Indicative sums for NRPPs	771	746	-3.2
	261	261	no change
	195	195	no change
	207	180	-13.0
	155	140	-9.7
	190	156	-17.9
	1763	1622	-8.0

Inter-institutional disputes arise from the Parliament wanting higher expenditure and sufficient control of EU programmes, the Commission seeking greater flexibility over the course of the MFF and an enhanced ability to monitor EU spending and the Council being reluctant to cede budgetary power to the other institutions.

EUCO’s next, late November, meeting will have the MFF high on the agenda. In the past, once EUCO reaches agreement, the European Parliament has largely acquiesced, provided a few of its criticisms are addressed. This time, though, the Parliament cannot be expected to be passive.

It had already flexed its muscles in Autumn 2025 by extracting concessions from the Commission to safeguard money for rural areas, local authorities and regions at risk of losing substantial amounts. These concessions were just enough to prevent the Parliament rejecting the proposals. But Siegfried Muresan, the centre right’s MFF co-rapporteur for the EP is trenchant about the Irish proposals, noting that they offer “no meaningful new solutions and a weaker budget”.

The Parliament’s position in the inter-institutional battle is never an easy one. Along with the Council, it has to approve the MFF which is all about spending, but has limited influence on EU revenue raising. To invert a famous phrase, it has representation without taxation. A further point of contention is EU revenue, but the Irish Presidency has stuck with five prospective new resources proposed by the Commission, choosing to ignore three further ones suggested by the Parliament (with backing from France). This, too, will not go down well with MEPs.

Is there a credible solution even if, today, a deal still looks distant? After the impasse at the October EUCO, its Permanent head, Antonio Costa, will now have the thankless task of revising the ‘negobox’ for its November meeting. But room for manoeuvre is slender and haggling, not principles or priorities, will be the order of the day. Equally, today’s leaders know that national elections in 2027 may put in place new, more intransigent heads of government.

By being attacked by all sides, has the Irish Presidency struck a sensible balance? Neale Richmond, an Irish Minister, espoused this view on Euronews, claiming the proposal has no weak points. Thomas Byrne, Ireland’s Europe Minister argued, similarly, that a deal could still be done by Christmas.

The net contributors, some (not least France and Germany) facing daunting problems in disciplining their public finances, want curbs on their payments to the EU and, among them, the six ‘frugals’ will be in no rush to concede on the headline total. The latter and maybe other member states may now push for a fresh round of rebates. So far, resort to such ‘corrections’, a feature of every MFF since they began in 1988, has been resisted.

Current net recipients will fight equally hard to protect agricultural, social policy and regional development budgets. The Commission is upset with an Irish proposal to halve an ‘EU Facility’ aimed at dealing more flexibly with contingencies like natural disasters and will bemoan the salami-slicing of the competitiveness and Global Europe allocations.

By Professor Iain Begg, the European Institute, London School of Economics and Political Science.