The European Union’s next long-term budget should be trimmed back below €1.7 trillion to accommodate concerns about increased spending, the Irish Government is expected to propose.
Several fiscally conservative European governments are preparing to criticise a compromise tabled by the Republic, in anticipation that it will not go far enough to reel in the proposed size of the union’s common budget, which will run from 2028 to 2034.
The Government will on Saturday lay out a revised headline figure for the joint EU budget, the product of months of behind-the-scenes diplomatic back-channelling, to help nudge all 27 member states towards a deal before the end of this year.
It is understood the State will likely propose cutting the total size of the draft budget by somewhere in the region of between €100 billion and €200 billion.
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The State, in its dealmaker role holding the rotating Council of the EU presidency, has taken soundings from all national capitals and the union’s institutions to propose a fresh draft of the European budget package.
Some EU member states want a larger budget and are seeking to protect traditional funding for Common Agricultural Policy (Cap) subsidies and money for “cohesion” infrastructure projects in poorer regions.
Other capitals want to scale back the proposed EU package by cutting the Cap and cohesion schemes, and instead pushing additional funding towards new priorities such as defence, border control, and a fund to boost Europe’s economy.
While the exact figures have been kept under tight wraps, the Irish revision will propose to scale back the €1.7 trillion draft package currently on the table.
The Government will pitch its compromise as a credible step towards a final budget deal, narrowing the distance between the previous draft and the “frugal” demands.
Germany, the Netherlands, Austria and other “frugal” Nordic countries have called for cutbacks in the region of several hundred billion euros as the price of their sign-off.
One Brussels-based diplomat from that camp said they expected the Irish compromise would shave about €150 billion off the top of the draft budget.
A larger group led by Italy, Spain and Poland, which includes most southern and eastern member states, are fighting to protect EU spending ambitions from being chopped back too aggressively.
Proposed cuts will be made to development aid funding and the administrative costs of staffing the union’s institutions, one source said.
The European Commission, the EU’s powerful executive body in Brussels, had initially sought to increase the bloc’s common budget to €1.9 trillion.
That was viewed as the starting point in what is always a long and often bitter political arm wrestle between the commission and national governments.
Taoiseach Micheál Martin has discussed the Republic’s budget compromise with French president Emmanuel Macron and German chancellor Friedrich Merz, among other EU leaders, in the past 10 days. Martin also spoke to commission president Ursula von der Leyen.
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The seven-year budget needs the support of all 27 member states to be approved.
The Irish presidency proposal will also include an “ambitious” package assessing several ways extra revenues could be raised to plug part of the funding shortfall, one senior source said.
Once the Republic sets out its budget compromise, known as a “negotiating box”, the contentious debate will shift up to the 27 national leaders.
European leaders are hoping to trash out a final deal over a series of crunch summits between next week and the end of the year.
Minister of State for European affairs Thomas Byrne said the Government’s revision would provide a “realistic basis” for leaders to carry the debate to a final deal.
