Von der Leyen Defends 2 Trillion Euro EU Budget Proposal

European Commission President Ursula von der Leyen is defending a proposed 2 trillion euro budget for the 2028-2034 Multiannual Financial Framework, a 60% increase over current spending. She cautioned the European Parliament that large cuts would jeopardize critical priorities in defense, innovation, and competitiveness. To fund the envelope, the Commission proposed new revenue streams, including tobacco levies, environmental taxation, and taxes on large companies.

Opposition to the plan is split between two blocs. Germany and five other frugal nations—Austria, Denmark, Finland, the Netherlands, and Sweden—are pushing to reduce the budget by several hundred billion euros. Meanwhile, a group of 17 southern and eastern European countries, known as the Friends of Cohesion, advocate for a more ambitious budget to support farmers and reduce regional disparities. The European Parliament has further suggested rolling over debt and introducing taxes on digital giants and online gambling.

Adding pressure to the negotiations, the European Court of Auditors warned that EU debt reached 739 billion euros by the end of 2025 and could hit one trillion euros by 2027. This debt, largely from COVID-19 recovery funds, could result in annual interest payments of 93 billion euros. EU heads of state will negotiate the budget and revenue proposals at a summit in Brussels on October 15 and 16, with the goal of reaching a deal by Christmas despite complicating snap elections in Spain and an upcoming French presidential vote.