# COMMENTARY: Berlin rejects the EU's multiyear budget, leaves Brussels exposed

> German chancellor Friedrich Merz met, on July 28, 2026 , Irish Taoiseach Micheál Martin in Dublin, where Ireland holds the EU's rotating presidency, to tell him that Berlin rejects the current multiyear budget plan of…

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Commentary
- Published: 2026-07-29
- Canonical URL: https://mad-max.co/en/article/commentary-berlin-rejects-the-eu-s-multiyear-budget-leaves-brussels-exposed

## Key takeaways

- Merz said he aims to conclude the negotiations by the end of 2026 and called the cuts "essential," regardless of progress on new own resources.
- The Netherlands, Sweden and Denmark, also net contributors, seek similar cuts, according to Bloomberg; exact amounts are not public.
- Net-beneficiary states, especially in Central and Southern Europe, depend on transfers, and their reactions were not yet documented.
- The same day, Italy said it will request 14.9 billion euros via the SAFE loan instrument, and the EU prepared a sanctions package against more than 1,600 Russian companies, both requiring unanimity.
- The Commission must now revise its proposal, and the article warns of possible delay, a last-minute deal, or a temporary extension of the framework.

### Merz says no in Dublin, and Brussels loses its biggest payer

German chancellor **Friedrich Merz** met, on **July 28, 2026**, Irish Taoiseach **Micheál Martin** in Dublin, where Ireland holds the EU's rotating presidency, to tell him that Berlin **rejects the current multiyear budget plan** of the EU, according to Bloomberg. Merz said he wanted to "conclude these extremely difficult and complex negotiations by the end of 2026," insisting: "these cuts are essential, no matter how far we get on new own resources." *When the **biggest payer** of a budget says no, that is not a technical nuance. It is a budget that no longer exists as written.*

Germany is not alone in this position: the **Netherlands**, **Sweden**, and **Denmark**, all **net contributors** to the EU budget, are also seeking cuts, according to the same source. The precise terms of the compromise Berlin is seeking — exact amounts, targeted line items — are not detailed publicly at this stage.

## What Merz said exactly, word for word

### A quote that carries more weight than a thousand statements

The German chancellor's phrasing deserves to be read without shortcuts: "We aim to conclude these **extremely difficult and complex** negotiations by the end of 2026, if possible." This sentence, delivered in **Dublin** before his Irish counterpart, sets a **political timeline** — the end of the year — without guaranteeing that timeline will hold, since **Merz himself** calls the negotiations "extremely difficult."

The second part of the quote is even more direct: "These cuts are essential, no matter how far we get on new own resources." **The word "essential"** leaves little room for negotiation on the principle of the cuts themselves; it leaves room only on their **scale**. *A chancellor who says "**essential**" is no longer negotiating the principle. He is only negotiating the pain he is willing to inflict.*

### The choice of place and timing is never neutral

Choosing Dublin as the backdrop for this declaration is not incidental: **Ireland** currently holds the rotating presidency of the Council of the European Union, which makes **Martin** the logical institutional interlocutor to receive this kind of message before it is formalized before all twenty-seven member states. **A message delivered** to the rotating presidency carries a different weight than one delivered directly to the Commission.

The timing chosen, late July, comes several months ahead of the deadline Merz himself set for the end of the year. **This months-long window** leaves room for negotiation, but it also signals that **Berlin** does not intend to wait until autumn to lay out its conditions.

## The club of net contributors demanding cuts

### Germany is not isolated in its refusal

The **Netherlands**, **Sweden**, and **Denmark** share, according to Bloomberg, the same budgetary concern as Berlin: all pay more into the EU budget than they receive, and all seek, to varying degrees, to reduce their net contribution in the next multiyear financial framework. **This informal coalition of net contributors** has no official name or single spokesperson, but it weighs, in practice, on the balance of the negotiations to come.

This grouping of similar budgetary interests does not guarantee an identical common position on every line of the budget: each country has its own **spending priorities** and its own **red lines**. **What these countries do share**, however, is the conviction that the current financial framework asks too much of those who, proportionally, finance the most.

### What this budgetary front means for net beneficiary countries

Unlike the net contributors, several **Central and Southern European member states** structurally depend on European transfers to fund entire portions of their **agricultural and regional policies**. **A reduction of the overall budget**, if it materializes on the terms Berlin wants, would directly affect these beneficiary countries, whose representatives have not yet publicly reacted in the sources consulted for this dossier.

The European budgetary balance of power is therefore playing out, this week, along a simple but rarely stated axis: those who pay more want to pay less, those who receive more have not yet said what they are willing to lose. *A **European budget** is never negotiated between equals. It is negotiated between those who pay and those waiting to see how much will be left.*

## What the multiyear financial framework actually represents

### An instrument that finances seven years of common policies

The European Union's **multiyear financial framework** sets, for multi-year periods, spending ceilings for all common policies: agriculture, regional cohesion, research, defense, external aid. **Every revision of this framework** requires unanimity among the twenty-seven member states, turning every budget negotiation into a high-risk exercise in compromise.

Merz's rejection targets the **current plan**, meaning negotiations will need to produce a **revised version** before the intended deadline. Nothing in the available sources specifies whether this rejection applies to the **entire plan** or to specific budget lines.

### The question of the "new own resources" Merz raises

Merz's reference to "**new own resources**" points to an older European debate over diversifying the common budget's funding sources, beyond national contributions calculated on each state's gross national income. **These own resources** have, in past European discussions, included mechanisms such as a carbon border tax or a levy on large digital companies.

By stating that cuts remain essential "no matter" the outcome of this debate on own resources, **Merz explicitly decouples** the question of budget savings from that of new revenue sources, which limits the Commission's **room to maneuver** in presenting the cuts as temporary while awaiting **new revenue**.

## The defense context complicating the budget squeeze

### Italy requests 14.9 billion euros via SAFE the same day

Germany's rejection of the multiyear budget comes the same day that Italian minister **Antonio Tajani** announced, before the Italian parliament, that Rome will request **14.9 billion euros** through the EU's **SAFE** instrument (Security Action for Europe) by year's end, according to Reuters. Defense minister **Guido Crosetto** specified that these funds will go toward already-budgeted projects, not new spending.

**SAFE is a loan instrument**, distinct from the classic multiyear financial framework, meaning Italy's request does not directly clash with Germany's rejection of the common budget. But the two files together illustrate the same tension: Europe wants to spend more on its defense at the exact moment its biggest contributors want to spend less on everything else. *You never fund a **rearmament** by cutting the budget that makes it possible. You fund it by choosing, every time, what you are willing to sacrifice elsewhere.*

### Italy's League wants to keep control over the SAFE funds

The Italian **League** party, through **Claudio Borghi**, states that the Italian parliament "will have the final say" over the use of the SAFE funds requested by Rome, according to a secondary source consulted for this dossier. This insistence on **national parliamentary control** illustrates a broader distrust, present in several **European capitals**, of financing mechanisms decided in Brussels.

**This national parliamentary distrust** echoes, on a different level, the German position: in both cases, national political actors want to reclaim more direct control over EU budget decisions perceived as too centralized.

## The Russia sanctions package that also costs money

### Sixteen hundred companies targeted, a political and financial cost

On the same July 28, the European Union is preparing, according to a separate Bloomberg report, the largest sanctions plan ever drafted against Russia, targeting more than **1,600 companies**, with combined revenue exceeding **20 billion U.S. dollars**. **Adoption of this package** will require, like any EU sanctions decision, unanimity among the twenty-seven member states.

This sanctions package does not fall directly within the multiyear financial framework Merz contests, but it illustrates the same underlying **logic**: every major European file this week — defense, sanctions, budget — requires an increasingly difficult unanimity among twenty-seven governments with diverging budgetary priorities. **This required unanimity** is precisely what makes Germany's position on the budget so structurally decisive.

### The EU's top diplomat faces a heavy agenda

**Kaja Kallas**, the EU's foreign policy chief, is simultaneously carrying the Russia sanctions file and, indirectly, the pressure on common finances that must sustain aid to Ukraine and broader European defense. **This dual burden** illustrates the difficulty of advancing on several European financial fronts at once, as the main payers announce they want to reduce their contribution.

Nothing in the sources consulted allows for a **direct link** between Merz's budget rejection and the **sanctions timeline**, but both files share the same European negotiating room and the same unanimity constraint. ***Brussels** can sanction Moscow and cut its own budget the same week. Both decisions cost unanimity, a resource scarcer than money.*

## Merz and Germany's domestic political context

### A cabinet reshuffle days before Dublin

Merz's firm budgetary stance in Dublin comes on the heels of a **cabinet reshuffle** announced days earlier, according to **Euronews**. This context of **internal government reorganization** gives added political weight to the chancellor's posture on the European stage: a government that has just reorganized itself often seeks to demonstrate firmness on external files.

**This calendar coincidence** between an internal reshuffle and European budgetary firmness proves no direct cause-and-effect link, but it **illuminates** the **political context** in which Merz chooses to hold a hard line on the multiyear budget rather than seek a **quick, discreet compromise**.

### Pressure from German public opinion on European spending

Germany has, for decades, remained one of the largest net contributors to the EU budget in absolute terms, which regularly fuels a **domestic debate** over the **proportionality** of this contribution relative to the benefits perceived by German citizens. **This domestic debate** is not documented in detail in the sources available for this specific week, but it forms the political backdrop against which Merz's statement is made.

A chancellor who insists on "essential" cuts is speaking, in part, to this **domestic opinion** as much as to his European counterparts gathered in **Brussels** or Dublin. *A European budget speech is always delivered to two audiences: the one negotiating across the table, and the one watching from Berlin.*

## What Germany's rejection concretely changes for Brussels

### A Commission that must revise its proposal without its biggest financial ally

The **European Commission**, which presented its initial multiyear financial framework proposal, now faces an explicit refusal from its historic largest net contributor. **This refusal** does not mechanically block the entire process, since European budget negotiations always proceed through successive adjustments among member states, but it removes a base of support previously considered relatively secure.

Without German backing for the initial plan, the Commission must now deal with at least four governments — Germany, the Netherlands, Sweden, Denmark — demanding cuts, which substantially changes the **balance of power** in the negotiating room. **This shift in balance of power** could delay **final adoption** beyond the year-end deadline Merz himself targeted.

### The risk of a last-minute deal under pressure

European budget negotiations have, in the past, often been resolved in the final weeks before a deadline, under **calendar pressure** that pushes member states toward quick and sometimes poorly **detailed public** compromises. **This recurring pattern** could repeat itself this time, if Merz maintains his end-of-2026 deadline despite the complexity he himself acknowledges in his Dublin quote.

Nothing guarantees, at this stage, that this **last-minute compromise** will satisfy both the **net contributors** demanding cuts and the net beneficiaries who depend on current transfers. *A last-minute **budget compromise** never resolves a disagreement; it postpones it, dressed up as a solution, until the next financial framework.*

### Negotiations that have dragged on for decades

Every negotiating cycle of the European multiyear financial framework, since the instrument's creation, has seen **similar tensions** between net contributors wanting to limit their burden and net beneficiaries wanting to preserve their transfers. **This structural tension** is therefore not unique to 2026; it is built into the very architecture of a common budget unequally financed by twenty-seven very different economies.

What potentially sets this cycle apart is the **simultaneity** with heightened defense pressure — Italy requesting billions via SAFE, Ukraine continuing to need sustained financial support — which makes the cuts demanded by Berlin harder to **justify** without sacrificing security priorities that Germany itself otherwise supports.

### The paradox of a Germany that cuts and rearms

Germany has, in recent years, committed to a **significant rearmament** of its own conventional forces, while simultaneously demanding cuts to the common European budget that partly finances collective aid to Ukraine and certain shared defense programs. **This apparent paradox** is explained by a German preference for national funding of its own defense rather than pooled funding at the European level.

This **preference for national control** over pooling echoes the League's position in Italy on SAFE funds: in both cases, governments want to finance their defense without ceding **political control** of that money to centralized European bodies. ***Europe is rearming**, but every capital wants to keep a hand on its own checkbook. That may be the real defense doctrine of this continent in 2026.*

## The expected reaction from European institutions

### The European Parliament faces a budget already contested before adoption

The **European Parliament**, which must jointly approve the final multiyear financial framework with the Council, finds itself facing a text contested even before beginning its own thorough review. **This early contestation** by a member state as central as Germany complicates the task of parliamentary rapporteurs tasked with building a viable interinstitutional compromise.

No **official reaction** from the European Parliament is recorded in the sources consulted for this dossier as of writing, which makes it impossible to anticipate the **position** the institution will adopt regarding Germany's rejection.

### The Irish presidency in a delicate mediating role

By receiving Merz in Dublin, Taoiseach **Micheál Martin** finds himself, by virtue of Ireland's rotating presidency, in a position of potential mediator between the German position and that of other member states, though the sources consulted do not detail the precise response Martin gave to the German chancellor's statement. **This mediating role** will weigh on the coming months of the Irish presidency, which will need to manage this budget file through to its conclusion or the handover to the next presidency.

Ireland, itself a historic beneficiary of several European programs, must handle this mediation with **particular caution**, given its own **past dependence** on European transfers that it now defends as a neutral presidency. *Presiding over the **Union** sometimes means defending, quietly, the opposite of what you yourself once received to build yourself up.*

## What this file reveals about European budgetary fragmentation

### A Union moving at several financial speeds

The combination, in a single week of late July 2026, of a German budget rejection, an **Italian defense-funding request** through a separate instrument, and a **Russia sanctions package** requiring separate unanimity, illustrates a **financially fragmented European Union** running on several parallel tracks rather than a single, coherent common budget.

This fragmentation, documented by the simple juxtaposition of these three distinct files, complicates the **overall reading** of European budget policy for anyone seeking a single, simple view of "what Europe spends" during this specific period.

### The risk of prolonged decisional paralysis

If every major European financial file — the common budget, defense instruments, economic sanctions — requires its own separate unanimity among twenty-seven governments with diverging priorities, the risk of **prolonged decisional paralysis** mechanically rises with every new bilateral disagreement between major capitals.

This risk is not **hypothetical**: it is already documented by the history of previous European budget negotiations, which have often required **months, even years**, of wrangling before reaching a final compromise acceptable to all parties. ***Twenty-seven separate unanimities** do not make a stronger Union; they make twenty-seven distinct chances to block everything.*

## The possible consequences for European aid to Ukraine

### A tighter budget could weaken continued financial support

The European multiyear financial framework funds, among other items, part of the Union's continued financial support to **Ukraine** amid the ongoing conflict with Russia. **Significant budget cuts**, if they materialize on the terms Berlin wants, could, in theory, affect the EU's ability to maintain its current level of financial support to Kyiv over the course of the next multiyear framework.

No source consulted for this dossier specifies whether the cuts envisioned by Merz would specifically target **budget lines linked to Ukrainian support**, or whether they would instead fall on other common spending items. **This uncertainty** deserves to be flagged without being filled in by an undocumented extrapolation.

### Budgetary pressure that says nothing about actual political support

It would be wrong to conclude, from Merz's budget rejection alone, that Germany would reduce its overall political and military support for Ukraine: the chancellor has otherwise maintained a **firm line** toward Russia on other European security files documented this same week. **The budget rejection concerns a shared financial architecture**, not necessarily the intensity of German national support for Kyiv, which can continue to flow through bilateral channels distinct from the European multiyear framework.

This distinction between common budgetary rigor and maintained bilateral support deserves to be preserved to avoid any **excessively pessimistic reading** of a file that, for now, remains above all a financial negotiation between member states. ***Cutting a common budget** does not erase bilateral support. It only shifts the question of who, exactly, will keep paying for what.*

## The European political calendar through year's end

### Several deadlines stack up before December 2026

The year-end deadline set by Merz for concluding budget negotiations coincides with other already-heavy European institutional calendars, notably the hoped-for adoption of the sanctions package targeting the 1,600 Russian companies, with a ministerial meeting targeted for **October 2026**. **This stacking of calendars** imposes on European institutions a burden of simultaneous negotiation on several high-tension political files.

Managing these negotiations in parallel, with the same **finance ministers** and foreign ministers often mobilized on several files at once, increases the **risk of cascading delays** if any one file takes longer than expected to resolve.

### What a negotiating failure before the deadline would mean

If budget negotiations fail to reach a compromise before the end of 2026 as Merz hopes, the European Union might need to resort to mechanisms for temporarily extending the existing financial framework, a solution already used in the past during **similar deadlocks**. **This temporary extension**, if it materializes, would prolong budgetary uncertainty for all programs funded by the common European budget.

Neither **Merz** nor the Commission have, according to the available sources, publicly raised this extension scenario as an option under consideration at this stage of negotiations. *A budget extended by default is never a chosen budget; it is a budget one endures, for having failed to negotiate another one in time.*

## What this budgetary week says about the Union's real balance of power

### Economic weight continues to dictate political weight

Germany's ability, on its own, to derail the adoption timeline of a **multiyear financial framework** illustrates, once again, the disproportionate weight the largest net contributor retains in **European budgetary power dynamics**, despite the **formal principle of equality** among member states enshrined in the treaties. **This real economic weight** never fully disappears behind the legal equality proclaimed by the Union's founding texts.

The Netherlands, Sweden, and Denmark, by joining the German position, **reinforce this balance of power** without individually holding the same weight as Berlin in the negotiations ahead.

### What smaller member states can still hope to obtain

Smaller, net-beneficiary member states retain, despite this unfavorable balance of power, a theoretical blocking power through the unanimity mechanism required for final adoption of the multiyear financial framework. **This blocking power** remains, for now, an unplayed card in the sources consulted for this dossier, but it could become decisive if the cuts proposed by Berlin prove too severe to accept without substantial compensation.

The **negotiation now opening**, or rather hardening with this Dublin statement, will pit a clear economic balance of power against an institutional mechanism that, formally, gives every member state an equal veto right. ***Unanimity** protects small countries on paper. In the negotiating room, it protects only those who know how to use it until the last day.*

## What Merz risks politically at home if he fails

### A bet that stakes his European credibility as much as his national one

By personally setting the **year-end deadline** and calling the **budget cuts** "essential," Merz stakes his own **political credibility** on the final outcome of these negotiations, both with his **domestic public** and with his European partners who will watch whether he keeps his word. **This personal commitment** turns a technical budget file into a test of Merz's ability to impose his priorities on the European stage.

A **failure to secure the announced cuts**, or a compromise perceived as too weak by his domestic public, could weaken Merz's position at the very moment he has just carried out a **cabinet reshuffle** meant, in part, to consolidate his governing authority. **This domestic political risk** adds further pressure to negotiations the chancellor himself already calls complex.

### What the success or failure of this bet would mean for the Union

Beyond Merz's own political trajectory, the outcome of this budget file will determine, for at least the **next seven years**, the scale of financial means available to the European Union to fund its common priorities, from agriculture to defense to continued support for Ukraine. **This long-term scope** far exceeds the narrow national political calculation of any single head of government involved in the negotiation.

That may be the true stake of this budgetary week: beyond individual **egos** and national electoral calendars, a Union that must collectively decide what it is still willing to fund together. *A European budget is never just an **arithmetic sum**. It is the only concrete proof of what twenty-seven countries still agree to do together.*

### Brussels exposed, but not alone

Merz said no in Dublin, and that no strips Brussels of one of the financial pillars it counted on to close its next multiyear framework. **This no is not isolated**: it comes with a quiet but real chorus of net contributors who, from the **Netherlands** to Denmark, are demanding the same thing. The Union's budget for the next seven years will therefore be negotiated under a balance of power the **treaties had not anticipated** with this intensity.

What this week revealed, more than a simple budget disagreement, is a Union that must rearm, sanction, and support Ukraine with a budget that its biggest payers want, right now, to reduce. *You never build a **common defense** with a budget you cut at the same time you demand it. Sooner or later, you choose which of the two ambitions you are truly willing to fund.*

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [Bloomberg — Merz rejects EU budget plan, pushes for compromise by year-end — July 28, 2026](https://www.bloomberg.com/news/articles/2026-07-28/merz-rejects-eu-budget-plan-pushes-for-compromise-by-year-end)

- [Reuters — Italy to use EU's SAFE scheme to fund defence spending, foreign minister says — July 28, 2026](https://www.reuters.com/business/italy-use-eu-safe-scheme-fund-defence-spending-foreign-minister-says-2026-07-28/)

### Secondary sources

- [Euronews — German chancellor Friedrich Merz announces cabinet overhaul — July 24, 2026](https://www.euronews.com/my-europe/2026/07/24/german-chancellor-friedrich-merz-announces-cabinet-overhaul)

- [KFGO — Italy's League says parliament will have final say on EU defence funds — July 28, 2026](https://kfgo.com/2026/07/28/italys-league-says-parliament-will-have-final-say-on-eu-defence-funds/)

- [Liga.net — EU summons Russia's representative over drones in Romania and the strike on the Latvian consulate — July 28, 2026](https://news.liga.net/en/war/news/the-eu-summoned-russias-representative-over-drones-in-romania-and-the-strike-on-the-latvian-consulate)

- [NV.ua — EU plans to sanction 1,600 companies tied to Moscow — July 28, 2026](https://english.nv.ua/nation/eu-plans-to-sanction-1-600-companies-tied-to-moscow-50628005.html)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/commentary-berlin-rejects-the-eu-s-multiyear-budget-leaves-brussels-exposed