German Chancellor Friedrich Merz has called for significant reductions in the European Union's budget for 2028-2034, urging member states to save hundreds of billions of euros. Speaking at a press conference alongside Irish Prime Minister Micheal Martin, Merz emphasized the need for fiscal restraint and greater ambition in enhancing the bloc’s competitiveness.
The European Commission initially proposed a spending plan worth two trillion euros, but Germany and other fiscally conservative members have deemed this level excessive. Merz stated, "We need a budget proposal with cuts in all areas adding up to several hundred billion euros." He highlighted the importance of avoiding steep expenditure increases during a period when many EU countries are tightening their national budgets.
Prime Minister Martin, representing the current EU presidency, stressed the importance of a budget that aligns with both the union’s future goals and the current economic realities. He expressed optimism that a compromise could be reached by the end of the year, noting Ireland’s commitment to prioritizing economic competitiveness during its presidency.
While the European Commission suggested funding new initiatives through a tax on large businesses, Merz rejected this approach, stating that an additional EU-level business tax is unacceptable. He also criticized the EU’s current efforts to boost competitiveness as insufficient, calling for streamlined investment approval processes and a significant reduction in bureaucratic hurdles.
Merz further underscored the need to balance competitiveness with climate goals, referencing recent debates over the EU’s carbon pricing mechanism. He concluded that economic growth and environmental protection must advance together.
