European Commission President Ursula von der Leyen's plan to reshape the European Union's nearly €2 trillion budget spending structure is rapidly encountering implementation difficulties.
Von der Leyen's core proposal involves diverting hundreds of billions of euros from traditional EU budget mainstays, such as farmer subsidies and regional grants, towards defense spending and enhancing industrial competitiveness.
However, these modernization reforms—championed by wealthier northern European nations like Sweden and Denmark, which contribute far more to the EU budget than they receive—are struggling to advance due to fierce opposition from southern and central European countries. These nations, long reliant on generous EU agricultural subsidies and funding for poorer regions, are unwilling to relinquish their vested interests.
Less than six months after the European Commission outlined this budget reform direction focused on "new priorities," a coalition comprising EU national governments, legislators, and farming groups has already mobilized to block key provisions of the new 2028-2034 budget.
Last week, von der Leyen proposed allowing countries to spend up to an additional €45 billion from existing funds on farmer subsidies, a significant concession to conservative forces aimed at preserving the budget's status quo as much as possible.
Three European diplomats revealed that "backtracking" by other countries and stakeholders on EU budget reform is causing growing frustration among Nordic nations. In particular, efforts by France and Italy last week to secure more subsidies for farmers, leveraging negotiations to finalize the long-stalled EU-Mercosur trade agreement, have drawn specific ire from the north.
In 2004, the budget for the EU's Common Agricultural Policy accounted for 46% of the total EU budget. While the European Commission's proposed 2028-2034 budget allocates at least approximately 25% of the total funds for farmers, actual national agricultural spending is likely to far exceed this proportion.
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