{"id":41841,"date":"2026-05-14T11:35:08","date_gmt":"2026-05-14T11:35:08","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/41841\/"},"modified":"2026-05-14T11:35:08","modified_gmt":"2026-05-14T11:35:08","slug":"germanys-merz-calls-for-eu-budget-overhaul-as-battle-looms","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/41841\/","title":{"rendered":"Germany’s Merz Calls for EU Budget Overhaul as Battle Looms"},"content":{"rendered":"

By Christian Kraemer and Matthias Williams<\/p>\n

BERLIN, May 14 (Reuters) – German \u2060Chancellor \u2060Friedrich Merz on Thursday called \u2060for a revamp of what he cast as the European Union’s \u200boutdated budget system, backing a streamlined approach that prioritised investing in defence and making the bloc more \u200ccompetitive.<\/p>\n

The speech showed how battle lines \u200cwere being drawn over the 2028-2034 EU budget, where calls for increased security spending vie \u2060for funds with \u2060more traditional recipients such as farming subsidies and regional development aid.\u00a0<\/p>\n

The \u200bEuropean Parliament, which co-decides with EU governments on spending plans, in April voted to raise the budget beyond what the European Commission proposed last year, setting up a showdown with member states reluctant to pay \u200bmore.\u00a0<\/p>\n

Merz made the remarks at the award ceremony for the Charlemagne Prize in the city \u2060of Aachen, \u2060which this year went \u2060to former European \u200bCentral Bank Chief Mario Draghi, who issued a storm-warning in 2024 about the EU’s fading \u200bcompetitiveness.<\/p>\n

Also at the ceremony was \u2060Prime Minister Kyriakos Mitsotakis of Greece, whose country bore the brunt of the euro zone debt crisis when Draghi, as ECB chief, delivered his famous promise to do “whatever it takes” to save the euro.<\/p>\n

“A sovereign Europe needs a ‘Draghi-proofed’ budget,” Merz said.<\/p>\n

“Streamlined structures, investments in competitiveness and defence, a \u2060focus on European funds for European policies – all of this is necessary because resources \u2060are limited.”<\/p>\n

MERZ SAYS MODERNISATION IS ESSENTIAL<\/p>\n

French President Emmanuel Macron had in February called for joint borrowing to keep pace with the U.S. and China, but Berlin opposes the idea. It also opposed other Commission proposals such as levies on tobacco and on large companies’ turnover.\u00a0<\/p>\n

“Some believe we can evade this painful task by taking on new debt \u2014 European debt \u2014 by financing regular spending through debt. Germany cannot follow this path, if only for constitutional reasons,” Merz said.<\/p>\n

At the moment, more than two-thirds of the EU \u2060budget was directed towards subsidies, Merz said, while some countries were spending more money on servicing their debt than on defence.<\/p>\n

“But we cannot meet the challenges of the 21st century with a 20th-century budget. Fundamental modernisation is therefore essential,” he said.<\/p>\n

“Moreover, the \u200breality is that excessive debt threatens sovereignty and limits our ability to \u200bact.”<\/p>\n

(Writing by Matthias Williams; Editing by Alison Williams)<\/p>\n

Copyright 2026 Thomson Reuters.<\/p>\n

Photos You Should See \u2013 April 2026<\/p>\n

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