Costa Consults EU Leaders to Finalize Budget Before Year-End

António Costa Tours Capitals to Forge a December EU Budget Deal

European Council President António Costa has started a four-week diplomatic tour across member state capitals to evaluate national positions on the European Union’s 2028-2034 budget. According to a high-ranking official, Costa’s primary objective is to build a coherent picture of every country’s stance and find a viable path toward a final agreement by December. Officials warn that if talks slip into the following year, the entire multi-year financial framework could derail and miss its operational start date of January 1, 2028.

The initial leg of the tour includes meetings with Robert Fico of Slovakia, Kristen Michal of Estonia, Andris Kulbergs of Latvia, Gitanas Nausėda of Lithuania, and Czech Prime Minister Andrej Babiš. Sweden is excluded from the current schedule due to upcoming general elections, as noted by EU organizers.

Frugal States and Cohesion Coalition Battle Over EU Spending

Member states remain deeply divided over the size and allocation of the bloc’s finances. The European Commission initially proposed a draft budget of nearly 2 trillion euros—the largest so far—before Cyprus introduced a compromise proposal featuring a 2% cut, according to diplomatic reports.

The Cypriot compromise was immediately rejected by self-described “modernizers” or “frugal” states. Wealthier members, including Germany, demand deep cuts to traditional spending areas like agriculture and regional cohesion. German Chancellor Friedrich Merz called the initial project “unacceptable” last month and plans to host frugal leaders for talks. Conversely, the “Amigos de la Cohesión”—a coalition of 17 nations—insists on increasing agricultural and cohesion funding, which they describe as the most visible EU policies for everyday citizens.

New EU Taxes and Joint Debt Stymie Architecture Talks

While EU nations have made slight progress on the general architecture proposed by the Commission to handle crises with greater flexibility, core disputes over funding mechanisms remain unresolved. Sweden has formally requested a radical 20% budget cut, which the Cohesion group strongly opposes. Meanwhile, Spain has proposed billions of euros in joint EU debt, a concept firmly rejected by the frugal bloc.

Another major point of friction involves new own-resource taxes designed to generate revenue at the EU level. The European Commission has tabled five proposals, and the Parliament has added three more. Diplomats acknowledge that some combination of these levies is practically unavoidable given the bloc’s ambitions in technology, defense, and climate adaptation, alongside the need to support Ukraine after its 90-billion-euro loan expires next year.

Timeline Toward the December Decision

Costa’s four-week outreach effort will directly feed into the work of the rotating Irish presidency of the Council of the EU. Ireland plans to release a revised negotiating box proposal in October, setting up a face-to-face debate among leaders during a late-October summit. Brussels is also preparing an extraordinary meeting in late November to pave the way for a definitive agreement at the December summit, according to Council officials.

Frequently Asked Questions

When must the 2028-2034 EU budget be finalized?

EU officials aim to secure unanimous agreement by December to ensure the seven-year budget is fully operational by January 1, 2028.

What is the main disagreement among member states?

Countries clash over the overall size of the budget, proposed spending cuts in agriculture and cohesion, the introduction of EU-wide taxes, and potential joint borrowing.

Who is leading the negotiations?

European Council President António Costa is leading the diplomatic tour of capitals to bridge gaps between national positions.