Revamping the EU Budget: Merz Pushes for Modernization and Efficiency

German Chancellor Friedrich Merz advocates for a modernization of the EU's budget system, emphasizing the need for increased investment in defence and competitiveness. The tensions in European Parliament over the 2028-2034 budget highlight the challenges in balancing traditional funding needs with new priorities for a sovereign Europe.

German Chancellor Friedrich Merz has called for a comprehensive overhaul of the European Union's budget, describing the current system as outdated. The process of allocating funds has become a battleground, especially with the upcoming 2028-2034 EU budget discussions where security and defence investments are hotly contested against traditional recipients like farming subsidies.

The European Parliament, having voted earlier this year to exceed the budget proposed by the European Commission, is at odds with member states that are hesitant to increase their financial contributions. During the Charlemagne Prize ceremony, where former ECB Chief Mario Draghi was honoured, Merz stressed the urgency of a 'Draghi-proofed' budget for a financially resilient Europe.

According to Merz, the current allocation, which directs over two-thirds to subsidies, requires rethinking to address modern challenges. Despite differing opinions with the French President on joint borrowing, Merz insists on avoiding increased debt, reiterating that excessive debt threatens sovereignty.