EU Budget Faces 40% Cut Without Agreement on New €66 Billion Taxes

A European Commission assessment warns that failure to agree on new EU-wide taxes could lead to spending cuts of up to 40% in the bloc’s next long-term budget (2028-2034). The Commission plans to raise €66 billion annually through these new levies to fund expenditure. Without agreement, national contributions would need to increase, which is unlikely due to opposition from large contributors, or significant spending reductions would be necessary.

These cuts could impact traditional policies like agriculture, which might face a 40% reduction. If agriculture and cohesion funding are shielded, cuts to «modernisation» (competitiveness and security) could reach 80%. Flagship programs like Horizon could be halved, and Erasmus could see cuts of about a third.

Capitals remain divided on the proposals for new revenue streams, which include duties on tobacco, e-waste, corporations, carbon pricing, and greenhouse gas emissions. France insists on new taxes, while Sweden and Austria are skeptical. Poland and Italy oppose greenhouse gas emission duties, and Germany opposes a corporate tax. Council President António Costa urged progress, warning that a year-end deal might otherwise be unfeasible.