Ireland has reduced the proposed European Union budget by €141 billion in an effort to break a stalemate among member states over overall spending levels and priorities for 2028-2034. The revised seven-year budget plan, presented under Ireland’s rotating EU presidency, now totals €1.62 trillion, marking an 8 percent reduction from the European Commission’s original proposal but still representing a 30 percent increase over the current 2021-2027 budget.

The cuts primarily target foreign policy, development aid, innovation, and defense, while shielding core areas such as agriculture and regional funding from severe reductions. The spending allocated to traditional policies stands at €914 billion, only slightly down from the Commission’s suggested €946 billion but still 11 percent higher than the current budget period. Meanwhile, funding for foreign policy and development aid has been trimmed from €190 billion to €157 billion. Support for innovative companies and defense programs was reduced by 13 percent, from €522 billion to €456 billion, although this remains more than double what is currently budgeted. The administration costs of running the EU have also been cut by €9 billion.

The budget, which draws largely on member states’ contributions proportional to the size of their economies, must gain approval from all EU capitals. Negotiators are under increasing pressure to reach consensus before year-end deadlines, particularly as national elections loom in France, Italy, and Poland, countries whose political shifts might complicate future negotiations.

The Irish proposal seeks a balance by increasing expected revenue from new EU-wide taxes to approximately €55 billion annually and maintaining all five newly proposed EU levies. This move aims to address funding concerns without resorting exclusively to member state contributions or new joint borrowing, both of which face resistance, particularly from wealthier member states.

Despite the concessions, some member states remain critical. One EU diplomat dismissed the revised proposal as “unaffordable and financially not viable” and argued that it prioritizes “20th-century” policy areas at the expense of preparing the EU for future challenges. They called for greater fiscal realism, warning that the proposal does not provide a workable foundation for agreement among the member states.

The disagreement largely falls along familiar lines: six net contributor countries, led by Germany, have called for substantial cuts amounting to hundreds of billions and have been cautious about increased joint borrowing and new taxes. Conversely, most other member states seek to maintain or increase spending on agricultural subsidies and regional aid while supporting joint debt issuance and higher member contributions to finance the overall budget.

EU leaders are expected to continue discussions on the budget during an upcoming summit in Brussels scheduled for Thursday and Friday, with hopes of securing a deal before national elections begin reshaping the political landscape across the bloc.