The Irish Presidency of the Council of the European Union has already sent to the Twenty-Seven the new proposal on which to begin negotiating the next Multiannual Financial Framework (MFF) 2028-2034. A text that introduces a significant cut in the spending planned by Brussels and that will be discussed this very week by the heads of State and Government. The objective is to try to bring positions closer during the European Council summit, with the aim of reaching an agreement before the end of the year.
Dublin, which has introduced significant changes regarding the initial approach of the European Commission, claims that it seeks to achieve a balance between the fiscal constraints of the capitals and the need to finance the new priorities of the continent, "without undermining the policies based on the Treaties."
Specifically, the proposed cut compared to the initial initiative of the European Commission is 8%, which amounts to 141 billion euros, limiting the next community budget to 1,622,011 million.
A budget cut that has been made public in the same week in which the highest community leader, Ursula von der Leyen, has positioned herself before the European Parliament against reducing the volume of the next financial framework.
Cohesion and agriculture: a cut of 3%, but without touching the national allocations
Where is the cut coming from? One of the items that is being reduced is related to heading 1, which includes cohesion policies, agriculture, and rural and social prosperity.
The proposal contemplates a 3% adjustment compared to Brussels' plan, which is achieved by moderating the increases planned for the EU Facility and applying cuts in community agencies such as Frontex.
That said, Ireland has not wanted to cut the pre-assigned national allocations for the Common Agricultural Policy (CAP) or for the Cohesion Policy. A decision especially relevant at a time when both policies have become one of the main sources of tension among the Member States.
Furthermore, the new negobox —the negotiation document that collects the different budgetary options that the capitals must reach an agreement on— keeps unchanged the Commission's proposal to allocate a fixed amount of almost 150 billion euros to exclusively finance the repayments of the principal and the interest of the debt incurred through the NextGenerationEU funds between 2028 and 2034.
Competitiveness and defense: a 13% cut compared to the initial proposal
One of the most significant cuts affects the heading related to competitiveness, prosperity, and security, which experiences a reduction of 13% compared to the initial proposal of the community Executive.
Specifically, the European Competitiveness Fund is set at 355.911 billion euros, excluding from this figure the Innovation Fund. This instrument, along with Horizon Europe, forms a global investment package of over 400 billion euros.
The Irish proposal also specifies the allocations for some of the main strategic priorities of the continent. For the defense of the community bloc, Dublin proposes to allocate 96.418 billion euros, while digital leadership would receive 39.654 billion.
For its part, the clean transition would receive 20.184 billion euros and the section corresponding to health, biotechnology, and bioeconomy would have another 15.703 billion.
External action: the biggest cut in the community budget
The most pronounced adjustment, however, affects the external action of the European Union. The Irish Presidency has reduced the proposal initially presented by Brussels by 17%, making this heading the main victim of the budget review.
According to the sources consulted, "responding to the demands of the Member States, the cut is applied horizontally in the geographical pillars of the Global Europe Instrument."
However, Dublin has chosen to protect certain allocations considered priorities. Specifically, it maintains the 25 billion euros allocated to humanitarian aid, as well as the funds committed for the recovery and reconstruction of Ukraine.
The European public administration also does not escape the adjustment. The document incorporates a reduction of 8.8% compared to the proposal of the European Commission.
Ireland has rejected the substantial increase in places requested by Brussels and demands to stabilize the staff of the community institutions at their current levels, "promoting gains in administrative efficiency and the use of new technologies such as AI."
Own resources: Dublin wants to raise 55 billion annually
How to finance the next community budget? The Irish Presidency has also announced this Saturday a revised package of own resources, designed to generate approximately 55 billion euros annually.
The most relevant modification regarding the initial proposal affects the Carbon Border Adjustment Mechanism (CBAM). The new negobox raises the call rate of this instrument from the 75% originally proposed by the European Commission to 90%, thus increasing the proportion of revenue that would be directly allocated to the community budget.
As for the emissions trading system (ETS), the call rate of 30% is maintained, but a new feature is introduced: the possibility of a gradual application between 2028 and 2034 for those member states covered by the Modernization Fund.
The aim of this modification is to reduce the "regressive impact on their economies," taking into account the existing differences between the productive and energy systems of the Twenty-Seven.
The proposal that 90% of the revenue from the corresponding own resource be transferred directly to the community budget is also maintained, while member states would retain the remaining 10% as collection costs.
Likewise, the proposals regarding the resource on non-recycled waste from electrical and electronic equipment, the tobacco tax, and the contribution from large companies, called CORE, remain intact.
More flexibility for states in managing European funds
One of the issues that has raised the most controversy throughout the community debate has been related to governance and the application rules of the next budget.
In this area, Ireland has raised the possibility of granting additional leeway to member states to reallocate funds within their National and Regional Collaboration Plans, one of the main instruments provided for in the new budgetary architecture.
Dublin sets as an example the introduction of "a 25% flexibility reserve for the mid-term review or crisis situations." This mechanism would allow capitals to have a greater capacity for adaptation to unforeseen circumstances, without the need to completely alter the initial programming of the funds.
Along with this modification, the proposal also includes a simplification of the execution and audit rules, with the aim of providing greater clarity to the final beneficiaries in the procedures for disbursing community resources, according to the consulted texts.
The friends of Cohesion, the frugal ones, and the Parliament: a three-way negotiation
The discussions that now open, with the new negobox on the table, do not seem easy.
A group of 17 countries, including Spain and Italy, called "friends of Cohesion," is pushing to limit cuts to cohesion policies and preserve the weight of traditional allocations within the next financial framework.
On the opposite side are those dubbed "frugal," with Germany and the Netherlands among their main representatives, who advocate for a containment of community spending to reduce the budgetary burden that member states will have to bear.
In the midst of all this, the European Parliament. The negotiator of the European People's Party (EPP), Siegfried Mureșan, has rushed to outright reject the Irish proposal through his social media as soon as the document was made public.
The Eurochamber will also have a decisive role in the outcome of the negotiations. As recalled by the Minister of Agriculture, Luis Planas, in an interview granted to Demócrata, the approval of the next Multiannual Financial Framework will require the unanimity of the member states.
A requirement that gives each capital the ability to block the final agreement and that forces finding a balance between the different budgetary sensitivities.
The text will also need the consent of the European Parliament, which has the power to ratify or veto the financial framework, although not to directly modify the agreement reached by the member states.
With this scenario, Ireland puts on the table the first major political adjustment of the Brussels proposal. The negotiation now enters a decisive phase: to determine how much the Twenty-Seven are willing to contribute, what priorities should be financed, and how far community spending can be reduced without compromising the strategic ambitions of the Union for the next seven years.