Chancellor Merz Advocates Overhaul of EU Budget Amid Criticism of Commission's Fiscal Plans

German Chancellor Friedrich Merz has called for a comprehensive reform of the European Union's budget, expressing clear opposition to the current financial proposals set forth by the European Commission. Speaking at the ceremony honoring former European Central Bank President Mario Draghi with the International Charlemagne Prize in Aachen, Merz emphasized the need for the EU to redirect its limited resources towards enhancing competitiveness, strengthening defense capabilities, and promoting economic autonomy.

Merz pointed out that the structure and content of the EU's existing budget framework have remained largely unchanged for decades, with allocations predetermined for seven-year periods. He argued that this approach, which directs more than two-thirds of available funds toward redistribution and subsidies, is no longer suitable given the evolving global geopolitical landscape. According to Merz, a fundamental modernization of the EU's financial framework is necessary in order to adapt to new challenges and strategic priorities.

The Chancellor advocated for a more streamlined budget structure, proposing that future financial planning focus more closely on Europe-wide priorities rather than maintaining traditional spending patterns. Merz also reiterated Germany's constitutional limitations regarding the creation of new EU debt, making it clear that the country would not support initiatives that would require member states to take on additional collective obligations.

These remarks come as preparations are underway for the next multi-annual financial framework of the European Union. The European Commission has proposed a significant increase in the budget for the period beginning in 2028, suggesting an inflation-adjusted total of approximately 1.76 trillion euros. This proposal has sparked debate among member states, with differing views on how best to allocate EU resources amid ongoing economic, defense, and technological challenges.

During the award ceremony, Merz also recognized Mario Draghi's role during the eurozone crisis. He highlighted Draghi's decisive actions in 2012, which were seen as pivotal in safeguarding the stability of the euro currency. Merz noted that the euro remains stable and robust as a result of these efforts. The Chancellor further acknowledged the economic reforms undertaken by Greece, describing them as demanding but ultimately beneficial. These reforms, he said, have contributed to greater stability and growth within the euro area.

The ongoing discussions regarding the EU's budget and fiscal direction are expected to continue as member states negotiate the future allocation of resources, seeking to balance national interests with collective European goals. The outcome of these negotiations will shape the Union's ability to address future challenges while maintaining fiscal responsibility and promoting strategic priorities across the continent.