Germany calls for hundreds of billions of euros in cuts to EU budget

By Maria Martinez

BERLIN, Sept 9 (Reuters) - German Chancellor Friedrich Merz called for hundreds of billions of ‌euros in cuts to the European Commission's proposed long-term budget on Wednesday, arguing that the plan was unaffordable at a time of domestic spending restraint.

Germany, Denmark, the ​Netherlands, Austria, Finland and Sweden said in August that the Commission's proposed budget of nearly €2 ⁠trillion ($2.33 trillion) for 2028 to 2034 should be reduced "in a ​balanced manner" with all areas of spending contributing to ​cuts.

"Europe needs both realism and reform," Merz said after meeting European Council President Antonio Costa in Berlin, noting that the Commission's proposals for the next multiannual financial framework envisage a 60% rise over the current seven-year budget period. 

"At a time of budget cuts in all member states, that is simply unaffordable," Merz said about the proposed budget.

The ⁠EU's Multiannual Financial Framework (MFF) requires unanimity among all 27 member states. Costa and Merz said they want to reach an agreement by the end of 2026.

"We cannot ask (for) more from member states," Costa said. "We need to create new own resources in order to protect the national budgets. All national budgets must be respected."  

Merz said cuts should apply across all policy areas and rejected relying on further joint EU borrowing to bridge the gap.

"Excessive debt threatens our sovereignty and our capacity to act," Merz said, adding that governments had the "admittedly painful task" of setting priorities.

Merz called for the bloc's next budget to shift spending towards competitiveness and defence, arguing that a "20th-century budget" could not address current challenges. 

(Reporting by Maria Martinez in Berlin and Inti Landauro in Brussels; Editing by Alexander Smith )