Germany to Reject EU’s €2 Trillion Budget Proposal

Web Editor

July 16, 2025

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Key Points of the EU’s Proposed Budget and Germany’s Objections

Germany has announced its intention to reject the €2 trillion budget proposal presented by the European Commission for the 2028-2034 multiannual financial framework (MFF). The current budget stands at €1.2 trillion, but the new proposal would increase this to €2 trillion and allocate €131 billion for investments in defense, security, and space—five times more than the previous MFF.

Reasons for Germany’s Rejection

Stefan Kornelius, the German government’s spokesperson, stated that “it is not possible to justify a general increase in the EU budget at a time when all member states are making significant efforts to consolidate their national budgets.” He further emphasized, “Therefore, we cannot accept the Commission’s proposal.”

Specific Concerns of Germany

Berlin opposes two key components of the proposal: a tax on large companies with annual revenues exceeding €100 million and another levy on uncollected electronic waste for recycling. The German government document explicitly states, “We do not support additional taxation on businesses.”

The German government insists that the European Commission should maintain its reformist approach and prioritize new areas, such as competitiveness, prosperity, and security. They believe this direction is essential for strengthening Europe’s future.

EU Commission President Ursula von der Leyen’s Stance

In contrast, EU Commission President Ursula von der Leyen argued that the proposal “addresses Europe’s challenges and strengthens our independence,” as reported by the German news agency dpa.

Details of the Proposed Budget

The proposal includes a €590 billion competitiveness, prosperity, and security fund, with €451 billion dedicated to helping European businesses stay competitive against international rivals. Additionally, Brussels has proposed €100 billion in funding for Ukraine, which would support the country’s recovery and resilience while paving the way for its EU membership.

However, the European Union’s Common Agricultural Policy (CAP) faces a €87 billion cut, announced on the same day that European farmers and livestock protesters gathered outside the Commission’s headquarters in Brussels.

The spending ceiling rises from 1.13% of the EU’s Gross Domestic Product (GDP) to 1.26%, with 0.11% allocated to repaying debt from recovery and resilience plans.

Moreover, the defense and space window of the European Competitiveness Fund will allocate €131 billion to support investments in defense, security, and space—five times the previous period’s allocation.

Key Questions and Answers

  • What is the main issue between Germany and the EU Commission? Germany opposes the proposed general budget increase, arguing that member states need to consolidate their national budgets.
  • What specific components of the proposal does Germany reject? Germany opposes a tax on large companies with annual revenues over €100 million and another levy on uncollected electronic waste for recycling.
  • What are the key aspects of the EU’s proposed budget? The proposal includes a €590 billion competitiveness, prosperity, and security fund; €100 billion for Ukraine; and a significant increase in defense, security, and space investments.
  • How does the proposed budget affect the Common Agricultural Policy (CAP)? The CAP faces a €87 billion cut in the proposed budget.