A fierce battle over the European Union's next long-term budget has begun after senior members of the European Parliament rejected a compromise proposal from the Irish presidency, warning that it would leave Europe weaker just as it is being asked to do more.

The Irish presidency of the Council of the EU circulated its revised "negotiating box" for the 2028-2034 Multiannual Financial Framework (MFF) on Saturday, after three months of talks with member states.

'Cannot be the starting point'

Parliament's lead negotiators on the budget, Siegfried Mureșan of the centre-right EPP group and Carla Tavares of the centre-left S&D, issued a joint statement with the co-rapporteurs on the EU's own resources, Danuše Nerudová and Sandra Gómez López, firmly rejecting the plan.

"The Irish Presidency's proposal cannot be the starting point for an agreement," they said. "A cut of 8% to the Commission's proposal, which already only keeps the budget at the level of the current period, would mean weakening our capacity to act, just as Europe is asked to do more on competitiveness, defence, and security."

They warned it would leave Europe "less capable of protecting its citizens and of competing economically with the world's major economies", and would mean underfunding agriculture and reducing support for regions.

Inflation erosion

The MEPs argued that national budgets had grown in recent years while the EU budget had not kept pace, and that about 10% of its purchasing power had been lost to high inflation.

Parliament has previously adopted a position calling for a larger budget to fund new priorities without cutting traditional policies.

Dublin's case

The Irish government described its proposal as "ambitious, modern and flexible". It said the plan invests in new and emerging priorities while protecting treaty-based policies, including the Common Agricultural Policy (CAP) and cohesion funding for poorer regions.

"At the core of the next MFF is a bold focus on competitiveness, research, innovation, security and defence, with a level of ambition for these priorities that is unprecedented in any long-term budget," the Irish Department of Foreign Affairs said.

Dublin said the revision responded to calls from a majority of member states to protect cohesion and CAP, while also "reflecting the fiscal realities that all Member States face".

The familiar divide

The clash reflects a long-standing split. Net contributor countries, including Germany, the Netherlands, Sweden and Austria, have pushed to limit the size of the budget, arguing that national finances are already stretched by defence spending and high borrowing costs.

Other member states, particularly in southern and eastern Europe, want generous cohesion funding and farm support, while many governments also want significant new money for defence, technology and industrial competitiveness.

Farmers' organisations have warned that any reduction in CAP funding would deepen an income squeeze that has fuelled protests across Europe in recent years.

New money, new rows

Alongside spending levels, negotiators must also agree on new "own resources", revenue sources that go directly to the EU budget rather than through national contributions. These are needed partly to repay the borrowing that funded the bloc's post-pandemic recovery plan.

Proposals for new levies, including on carbon imports and large companies, have divided capitals, with some governments opposed to giving Brussels new revenue streams.

A long road ahead

The budget must be agreed unanimously by all 27 member states and requires the consent of the European Parliament, giving MEPs real leverage. Past negotiations have dragged on for well over a year, often ending in late-night summits.

The Irish proposal will be discussed by EU leaders in the coming weeks. With Parliament having drawn a firm line, and capitals still far apart, the next stage of one of Europe's most consequential negotiations is likely to be bruising.

For citizens, the outcome will shape everything from farm payments and regional infrastructure to research grants and Europe's ability to fund its own defence for the rest of the decade.