Getting co-decision powers on the budget, finally enshrined in the Lisbon Treaty after more than a decade of inter-institutional battles, was one of the European Parliament’s big wins. 

The challenge facing MEPs in the coming months is whether they are really going to use those powers on the 2028-34 budget. 

The early signs are that they are spoiling for a fight. The Irish government’s compromise proposal tabled on Saturday (10 October) – an 8 percent cut worth €141bn to the European Commission’s spending plan – isn’t exactly butchery. 

But it does display a startling lack of ambition, in particular on the raft of ‘own resources’ proposed by MEPs to make the budget process less vulnerable to member states wanting to reduce or at least freeze their annual contributions  

This time round, MEPs have proposed a digital services levy, an online gambling levy, and a levy on crypto-asset capital gains.

Put together the parliament reckons that these new taxes could bring an additional €30bn to the EU’s budget, on top of the €57.4bn that the EU commission believes can be raised from other levies, such as the emissions trading scheme and the carbon border levy. 

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Money and how to make more of it are among the top issues to be discussed among EU leaders as they gather for a two-day summit in Brussels, while they also struggle with ongoing problems on Ukraine, the Middle East, migration, defence, and new rules for EU-hopefuls, such as Montenegro.

The official talks kick off on Thursday (15 October) on how to make the 27 EU states more competitive in a turbulent world dominated by US tariffs, Chinese innovation, and Iran-war linked chokeholds in the Strait of Hormuz, which have forced the G7 wealthy nations to release 100m barrels of diesel and crude oil.

Gas prices have risen by 140 percent since the end of February with imported fossil fuels now costing an extra €100bn, says the European Commission.

In Europe, a grand scheme, a so-called “One Europe, One Market”, aims to spike European fortunes by saving an estimated €37.5bn for EU businesses by 2029.

The drive is part of a larger initiative to cut red tape and remove internal market barriers, including the eventual launch of a so-called EU Inc.

Ireland, which is currently steering the EU’s rotating presidency, had already announced that the summit would start with the competitiveness theme. And leaked draft conclusions, seen by EUobserver, lead with a sales pitch to step up ambitions over the ‘One Europe, One Market’ proposal.

It also gives a nod to the German car industry, by citing efforts needed to stop China from making too much money off Europeans. The goal is to get Europeans to spend more on European products, even if they are more expensive and less innovative.

The ‘more money’ talks dovetail into how to spend it (or not) in the EU’s next long-term budget, spanning 2028 to 2034.

António Costa, the president of the European Council, is hoping for an agreement of the nearly €2 trillion budget before the end of the year. People need predictability and stability, he said, in a invitation letter sent to the 27 EU states.

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The Irish government has set the path for a showdown between MEPs and governments over the next seven year EU budget after proposing an 8 percent cut worth €141bn to the European Commission’s spending plan. 

Savings from the commission proposal have been found across all headings in the so-called ‘negotiating box’ for the 2028–2034 Multiannual Financial Framework (MFF). But farmers’ subsidies under the common agricultural policy and the bloc’s cohesion policy, which provides funding to the EU’s poorest regions, have been exempted from any cuts. 

That is a nod to a sustained lobbying effort by a group of seventeen EU countries, known as ‘Friends of Cohesion’. 

As expected, meanwhile, cuts totalling €38bn have been made from the ‘Global Europe’ heading, which covers foreign aid, while €75bn has been taken from the competitiveness fund and €10bn from the EU’s administrative costs. 

In a statement on Saturday (10 October), Ireland’s minister for Europe, Thomas Byrne, said that the €1.62 trillion spending plan was “intended to bridge the many differences between Member States. It brings us closer to resolving the critical questions our Union faces on how to balance both new priorities and core policies, whilst also reflecting the fiscal realities that all Member States face.” 

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European Commission president Ursula von der Leyen has joined MEPs in urging the bloc’s governments not to gut the EU’s next seven-year budget, as talks on spending reach a critical phase. 

“I would like to caution against large cuts. It would risk cutting deep into critical priorities that we all together have agreed on,” von der Leyen told MEPs during a speech in Strasbourg on Tuesday (6 October), ahead of an EU summit on 15 October.

The commission has proposed a budget worth just under €2 trillion, equivalent to 1.26 percent of the EU’s gross national income, a small increase on the previous seven year spending plan. But the so-called ‘frugal’ group of countries, led by Germany, have demanded hefty cuts, complaining that they are contributing too much. 

“Having no new financial framework is by far the most financially advantageous solution for Germany,” chancellor Friedrich Merz said on Monday. 

But 17 EU countries from Southern and Eastern Europe signed a joint letter last week, demanding that farmers’ subsidies via the Common Agricultural Policy are maintained, as well as spending across the EU’s poorest regions, known as cohesion policy 

During a press conference on Tuesday, Siegfried Muresan, the Romanian centre-right MEP who is co-leading parliament’s negotiating team on the seven-year budget with Portuguese socialist and democrat Claudia Tavares, said that there was “still time” for the Irish presidency to avoid proposing “unjustified cuts” that “would make Europe weaker and severely undermine the institutional cooperation between parliament and council.” 

Though Muresan conceded that governments did not want to increase their national contributions, “there is a way out”, he said. 

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MEPs are pushing for an EU solidarity mechanism to help patients pay for treatment abroad, arguing that financial barriers are preventing Europeans from exercising rights they have had on paper for more than a decade.

The calls came as Parliament discussed a report commissioned to inform its own-initiative report on modernising patients’ rights in cross-border healthcare. The study found that cross-border care accounts for just 0.004% of EU public health expenditure, despite patients continuing to face upfront costs, complex reimbursement procedures and prior-authorisation requirements.

Tomislav Sokol (EPP, Croatia) called the proposed solidarity mechanism a potential “game changer” for vulnerable patients, but challenged Parliament to spell out how it would work.

“How would it work in practice? How would it be financed? Would this be part of the EU budget?” Sokol asked. “We need to know it now, so that we can also use this in negotiations on the future EU budget, in the next MFF.”