Von der Leyen warns EU budget faces 40% cut without new revenue

European Commission President Ursula von der Leyen has warned EU leaders that the bloc's budget faces drastic cuts of up to 40% unless new revenue streams are found. Speaking in Cork, Ireland, von der Leyen emphasized the "crucial need for new own resources," stating that without them, member states must either increase their contributions or accept significant reductions.

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If we do not want to increase national contributions and there are no new own resources, then cuts must be made. And if we have to cut to compensate for about 66 billion euros per year, this means a 40% cut compared to our proposal.

The potential shortfall amounts to approximately 66 billion euros annually. Von der Leyen highlighted the commission's proposals, including new taxes on emissions trading, a climate levy, and levies on tobacco, companies, and e-waste. The European Parliament has also suggested taxes on digital multinationals, crypto-assets, and online gambling.

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This shows how important and crucial the need for new own resources is.

Irish Prime Minister Michéal Martin acknowledged the divisions among member states regarding budget negotiations but expressed confidence in the EU's ability to reach an agreement, citing past successes like the 2020 budget and recovery fund deal. He stressed the imperative to finalize a deal by the end of 2026, noting that a "majority" of leaders prefer to conclude discussions within the year.

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It is essential for the next budget to be ready to fulfill its function from January 1, 2028. It will require a lot of hard work, we know, and we will be there to support at every step.

Leaders are scheduled to debate a new budget proposal at an October summit. Von der Leyen stressed the importance of agreeing on a "shared position" to ensure the next budget is ready by January 1, 2028, requiring "hard work" from all parties involved.

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The bloc has overcome this before.