Von der Leyen: EU's next budget must fund Europe's independence from foreign powers

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PARIS — The EU’s next seven-year budget needs to finance the bloc’s independence from foreign powers, Ursula von der Leyen said, as six countries led by Germany press to cut hundreds of billions of euros from the spending package.

Von der Leyen’s call for a bigger investment program comes as the bloc seeks to reduce its reliance on Chinese supply chains and critical raw materials, American technology and imported fossil fuels.

“The next budget will be the financial arm for our independence,” the European Commission president said in a speech to France’s business lobby MEDEF in Paris on Thursday.

The Commission has proposed a budget of almost €2 trillion. Germany and five allies — Austria, Denmark, Finland, the Netherlands and Sweden — are calling for cuts of several hundred billion euros. Italy and Spain are leading a separate group seeking a larger budget.

The size of the budget will determine how much money the EU can put behind von der Leyen’s economic agenda, including investment in strategic industries, energy and artificial intelligence — sectors she says are essential to reducing Europe’s dependence.

“With over €450 billion from the European Competitiveness Fund and the Horizon Europe program, we will support the entire chain — from research to innovation, from laboratories to business, and from initial prototypes to industrial production,” von der Leyen said, referring to the EU’s proposed fund for strategic industries and its research-and-innovation program.

“Europe cannot set new ambitions without providing the means to finance them,” she added.

The spending proposal is facing sustained opposition from German Chancellor Friedrich Merz and his allies, who argue that the increase is unaffordable while national governments are cutting back.

“The current proposals call for an increase of up to 60 percent,” Merz said in a joint statement with the five countries later on Thursday.

“In times of budget consolidation across all member states, this is simply unaffordable,” he said. “The proposals must be cut by several hundred billion. And these cuts will have to affect all areas.”

European Council President António Costa is touring national capitals until the end of September to line up support for a compromise. The next phase of negotiations will force governments to confront the core trade-offs: the size of the budget, national contributions and how much money goes to competing priorities.

Governments want to settle the package by the end of the year, before national election campaigns in several EU countries narrow their room for maneuver.

Hans von der Burchard contributed reporting.