The European Commission has urged the “frugals”, a group of countries pressing for a smaller EU budget, to back off.

Piotr Serafin, the European budget commissioner, warned that cuts to his proposed seven-year budget, for 2028 to 2034, would limit the EU’s ability to spend on new priorities and ultimately force capitals to boost national spending.

“As the discussions on our proposal progress, we need to be mindful of the link between having a frugal budget and having a modern budget,” he said at an annual conference on the ‘Multiannual Financial Framework’ (MFF) on Thursday.

“The truth is that a more frugal EU budget may not necessarily be modern. Because the risk is that those new aspects of modernity will be the first ones to be chopped.”

The comments come after Cyprus, which relinquished the rotating EU presidency to Ireland on Wednesday, proposed a 2% cut last month to the EU executive’s proposed €1.76 trillion post-2028 MFF. Most of the reductions targeted the novel parts of the MFF focussed on competitiveness and external action.

Nicosia’s proposal was vehemently condemned by fiscally conservative member states, who pay more into the EU’s coffers than they get back, including Germany, the Netherlands, and Sweden, which want deeper cuts targeting the budget’s traditional areas of agriculture and regional development.

Serafin also noted that cutting the MFF would ultimately hurt EU taxpayers by causing national governments to duplicate spending and borrow at higher rates to finance investments.

“A more frugal EU budget may not necessarily be cheaper for the EU taxpayer,” Serafin said. “Because in many areas, the alternative to European spending is not no spending at all. It is national spending. Defence, energy security, R&D [research and development] will have to be financed one way or another. The choice is whether we do it separately or together.”

“Spending together is not only more effective, it is also cheaper,” he added.

Ireland is expected to table a new MFF proposal at an EU summit on October. António Costa, European Council president, is aiming to finalise the budget before the end of this year.

“We increase our ambitions, and then we need to fund our ambitions,” Costa said during a visit to Dublin yesterday. “We need to have a budget at [the] same level of our ambition on security, on defence, on competitiveness, on cohesion, [and] on supporting our farmers. We need to have this budget.”

(bw)