Chancellor Merz and Five Nations Demand Cuts to EU Budget Proposal

Chancellor Friedrich Merz of Germany and leaders from five other countries have threatened to withhold approval of the European Union budget proposal unless it is reduced by billions of euros. This statement was made public on September 29, 2026. Coalition discussions are ongoing in Mecklenburg-Western Pomerania, where the Social Democrats (SPD) are set to meet with the Green Party to discuss forming a government. The SPD met with the socialist Left Party the previous day. A coalition among the Social Democrats, Greens, and Left Party is considered the only viable option to prevent the far-right Alternative for Germany (AfD) from gaining power. The AfD received 38.2% of the vote in the recent election but lacks coalition partners. The SPD finished second with 35.5% of the vote. Merz and the leaders from the Netherlands, Sweden, Denmark, Austria, and Finland have signed a letter expressing their demand for significant cuts to the proposed seven-year EU budget, which was outlined by the European Commission last year and requires approval from all EU member states. The proposed budget for 2028-2034 is nearly €2 trillion ($2.33 trillion), significantly higher than the current budget for 2021-2027. Merz has stated that cuts should be made across all policy areas and has rejected the idea of relying on further joint EU borrowing. He emphasized that excessive debt threatens national sovereignty and the ability to act, and he called for a shift in budget priorities towards competitiveness and defense. The EU budget is primarily funded through contributions from member states based on gross national income or linked to national VAT revenues, with Germany being the largest contributor in absolute terms.