German Chancellor Friedrich Merz has rejected the European Commission's proposal to lift the European Union's next long-term budget to around €2 trillion, calling the amount unaffordable and demanding sharp cuts as he travelled to the G7 summit in Évian.
The Commission wants the bloc's next multiannual financial framework, covering 2028 to 2034, to total roughly €2 trillion (about $2.3 trillion) — some €700 billion more than the current seven-year period. Berlin, the EU's largest net contributor, has given what officials describe as a clear rejection of that figure.
Germany is leading a bloc of so-called frugal member states, including the Netherlands, that are pressing for austerity and warning that higher contributions are politically and fiscally untenable at home. The European Parliament, by contrast, has pushed for even more spending, demanding an additional €200 billion on top of the Commission plan.
The dispute pits competing visions of the EU's priorities against one another. Brussels argues that more money is needed for defence, border security, competitiveness against China and the United States, and repayment of joint pandemic-era debt. Frugal capitals counter that the bloc should reallocate existing funds rather than grow the overall envelope.
Merz, who took office earlier this year, has made fiscal discipline a centrepiece of his European policy even as he backs higher defence spending. His stance sets up months of tense negotiations, with budget talks among the 27 governments and the Parliament expected to stretch well into 2027.
The budget fight shadowed Merz's appearance at the G7, where European leaders are seeking a united front on trade with China and support for Ukraine — coordination that is harder to project while the bloc argues internally over how much it can afford to spend.