European Union capitals, which had previously committed to reaching a final agreement by December 2026, are now reconsidering the timeline following an inconclusive summit in Brussels. As talks dragged on longer than anticipated during Thursday's meeting, a growing number of governments began to question whether that deadline is truly necessary. Caretaker Swedish Prime Minister Ulf Kristersson expressed significant skepticism, stating that an agreement is unlikely to be reached this month or next. He suggested that there is no urgent need to rush, warning that if negotiations spill into 2027, there will not be enough time to complete the complex legislative work required to get the budget operational by 1 January 2028.
The summit concluded without a breakthrough, particularly after the Irish presidency’s compromise proposal to cut the overall budget volume by €141 billion was largely rejected. European Council President Antonio Costa is now set to take over the negotiations, a move that was widely expected. Costa is due to present a new negotiating proposal in a few weeks, which is expected to follow a completely different logic from the Irish version. Specifically, the new proposal is expected to keep national contributions low, introduce a new package of EU-wide taxes to finance the budget, and maintain sufficient flexibility for unforeseen expenses—a budget line that the Irish proposal had significantly reduced.
EU leaders have been called in for a special summit on 26 November to address these issues. Even before the recent summit, the draft joint conclusions were watered down regarding the deadline, softening language that had explicitly set out the aim of reaching a final agreement by the end of the year. The final language now states that an agreement before the end of 2026 would allow for the adoption of legislative acts in 2027, which is necessary to ensure that EU funding reaches beneficiaries without interruption in January 2028.
Italian Prime Minister Giorgia Meloni emphasized that the content of the agreement must take precedence over the timeline. She told the Senate on Wednesday that Italy will not sign an agreement that is not advantageous just to meet a deadline, asserting that they will only sign when the deal is right for Italy. The main battle line remains drawn between two camps: the so-called “frugals,” a German-led coalition of six net contributors pushing for steep cuts to the overall volume, and the Friends of Cohesion, a 17-strong bloc of southern and eastern countries fighting to preserve traditional funding programmes for the poorest regions.
These camps are not monolithic. Some Friends of Cohesion, such as Spain and Italy, have a vested interest in agricultural funds, while others, like the Baltic states, want to boost defense spending due to their proximity to Russia. Among the frugals, Germany and Sweden are seen as the most radical, while Finland is keen on farming subsidies. France, the bloc’s second-largest economy, has yet to pick a side, trapped between its European ambitions and a runaway budget deficit. Belgium and Luxembourg are currently dithering between the factions. With red lines so entrenched and the room for compromise so slim, a landing zone currently looks like a mirage.
Paris remains a particular concern for the bloc. Far-right candidate Marine Le Pen is currently the favorite to win the presidential race, and she has promised to cap France’s contribution at €5 billion a year, a sharp cut from the current level of around €8 billion. Meanwhile, elections in Spain, where voters go to the polls on 29 November, and Sweden, which voted in September, are likely to create some issues, according to Cypriot President Nikos Christodoulides. Despite the widespread hesitation, Christodoulides remains one of the few EU leaders still reiterating the need to reach an agreement by the end of the year.
