EU Parliament pushes for bigger long-term budget, new taxes

The European Parliament has voted in favor of a 10% increase to the EU's next long-term budget and the introduction of new revenue streams.

Supporters of the proposal want more funding for agriculture and for poorer regions, calling for nearly €100 billion more than already proposed by the European Commission.

What did the European Parliament vote for?

Lawmakers in the French city of Strasbourg on Tuesday voted to expand the proposed roughly €2 trillion ($2.34 trillion) plan for 2028–2034, backing measures that would include a digital levy on large corporations.

The plans were backed by 370 EU lawmakers, while 201 were against and 84 abstained.

The parliament also wants to exclude billions in repayments linked to the EU's COVID-19 recovery fund from the budget total.

Beyond a digital tax, lawmakers are pushing for new revenue sources such as levies on online gambling, an expanded carbon border mechanism, and taxes on cryptocurrency gains.

The EU's seven-year budget is always one of the bloc's most contested issues, with negotiations often stretching over years. The current proposal covers spending on defense, climate action, digitalization, and programs such as the Erasmus student exchange program.

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The lead negotiator with member states, Romanian EU lawmaker Siegfried Muresan, demanded a "strong" budget.

"The position of the European Parliament is clear. We believe we cannot do more with less," he said during the parliamentary debate.

Who is objecting to an EU budget increase?

Germany, the largest contributor to the EU budget, has already rejected the scale of the plan and called for a smaller framework, with several other member states voicing similar concerns.

"We need to be realistic and honest with each other: As long as national debt levels keep rising and national budgets remain tight and under strain, calls for an increase of the next EU budget don't have any credibility," an EU diplomat told the DPA news agency.

"We need to redirect available resources into making the EU's economies and companies more competitive and help close the economic and scientific gap with the US and China in fields like AI," the diplomat said.

EU leaders have already clashed over the bloc's existing long-term budget as divisions deepen between the parliament and some European capitals ahead of a 2026 deadline. The European Commission has proposed a two-trillion-euro plan for 2028–2034, but major contributors pushed back during summit talks in Cyprus last week.

Germany and the Netherlands, part of the so-called frugal group, warned against higher spending. Chancellor Friedrich Merz rejected new debt and said the EU must set priorities, even if that means cutting spending elsewhere.

Dutch Prime Minister Rob Jetten said the proposed budget needs to be "significantly reduced," calling it unacceptable for the Netherlands to face a sharp rise in contributions.

Edited by: Alex Berry