EU mega budget hits immediate German opposition

BRUSSELS

The European Union executive has proposed a two-trillion-euro long-term budget focused on tackling overseas competition and Russian aggression, but it was quickly shot down by Germany.

Germany said it was "unable to accept" the $2.3-trillion budget for 2028-2034, which EU chief Ursula von der Leyen called "the most ambitious ever proposed."

Farm unions also quickly came out against proposed reforms to the blocs huge agriculture subsidies.

The plan seeks to bolster Europe's security and ramp up competitiveness, against a backdrop of soaring trade tensions with the United States, while paying off debts from a massive COVID-era loan.

But German government spokesman Stefan Kornelius said in a statement that "a comprehensive increase in the EU budget is not acceptable at a time when all member states are making considerable efforts to consolidate their national budgets."

Germany also opposed the commission call to make companies with a turnover of more than 100 million euros pay more tax.

Budget commissioner Piotr Serafin said under the commission's plans, 300 billion euros would remain to support farmers, against around 387 billion euros, of which 270 billion in direct payouts, under the current seven-year budget.

Brussels says there would be an overhaul of the Common Agricultural Policy (CAP) subsidies, with some funding moved to other budget columns.

But the future of the CAP is headed for a fight, with farmers warning against cuts to their slice of the EU pie and marching on July 16 in Brussels to show their resolve.

Hundreds of European farmers joined a protest outside the commission building in Brussels organised by a pan-European agriculture lobby group, Copa-Cogeca.