On the second day of the informal EU summit in Nicosia (Cyprus), heated discussions are expected over the EU's medium-term budget, Multiannual Financial Framework for 2028–2034, due to opposing approaches to the issue from the union's two largest economies.
According to Report, Germany opposes increased borrowing, while France supports expanded financing.
"Today, we will discuss European finances and the medium-term financial plan after 2028. We will have to set new priorities, and that means cutting spending in other parts of the EU budget," said German Chancellor Friedrich Merz before the start of the summit's second day.
According to Merz, increasing the debt burden and issuing pan-European bonds on the capital market is unacceptable for Berlin.
"That is not a position that Germany shares. Europe must manage with the resources it has," he added, emphasizing that a number of countries support this approach.
Meanwhile, French President Emmanuel Macron holds the opposite position, advocating for an increase in the overall EU budget.
Paris and some other EU countries, concerned about the state of their finances, support increased spending, including more significant payments to farmers, regions, and for pan-European programs.
Additional funds could come from the EU's so-called "own resources" – revenues from levies on single market sectors, the French leader believes.
He also stressed the importance of coordination among European countries on issues of economic stability and foreign policy support, including initiatives regarding the Middle East and strengthening defense cooperation.
The discussions are further complicated by the fact that the budget issue has repeatedly been pushed to the back burner amid geopolitical crises, while a decision must be reached by the end of this year.