EU Parliament receives additional funding of up to nine billion euros from Germany
The European Parliament is gearing up for the seventh round of negotiations with the German government, scheduled for Thursday, as the latter holds the rotating presidency of the Council. The focus of these talks remains the EU budget dispute, with Germany maintaining its stance against expanding the EU budget to around €2 trillion for the period 2028-2034.
German Chancellor Friedrich Merz has rejected the European Commission's proposal, citing concerns over increasing debt and corporate taxes as key reasons. This refusal to increase debt aligns with Germany's constitutional debt brake, a commitment that has also been reflected in the 2025 draft federal budget cuts, where overall expenditures were reduced while avoiding drastic cuts to priority ministries.
The European Commission, led by Ursula von der Leyen, had unveiled the ambitious budget proposal in July 2025, aiming to boost competitiveness, defense funding, support for Ukraine, and investment in technology and infrastructure. The proposal included plans to ring-fence €300 billion for farmers and increase defense spending fivefold to €131 billion, among other strategic investments.
However, the German government's unwillingness to increase debt has left the Commission's proposal in limbo. The Commission's goals, such as supporting farmers, boosting defense, and investing in clean technology and digital infrastructure, are yet to find agreement in the negotiations.
One of the points of contention in these negotiations is the creation of a new mechanism to stop the payment of EU funds if the rule of law is not functioning in the recipient countries.
The German EU ambassador represents the member states in these negotiations, and the latest update suggests that there is no compromise yet from Germany on the additional funds to EU programs as proposed by the Commission. As a result, the dispute remains unresolved as of late July 2025.
The EU summit in July 2021 had agreed on a budget of 1.074 billion euros for the seven years from 2021 to 2027, plus a 750 billion euro COVID-19 recovery fund. MEPs demand significant increases for some EU programs, and the approval of the European Parliament is needed for the money to flow on time.
The ongoing negotiations promise to be a challenging and prolonged process, with both sides holding firm to their positions. The outcome of these talks will have significant implications for the EU's future budget and its ability to support critical programs and initiatives.
Other business areas, such as finance and politics, have become intertwined with the general-news of the EU budget dispute, as the European Commission and the German government continue their negotiations. The refusal by the German government to increase debt could impact the Commission's plans for supporting farmers, boosting defense, and investing in clean technology and digital infrastructure.
