The wider budget fight
The debate on new revenue is tied to a broader dispute over the size of the budget.
When Cyprus held the presidency of the Council of the EU in the first six months of 2026, it already cut €32 billion from the Commission’s original proposal. Ireland is expected to revise the figure again, with Germany and other governments pressing for reductions of hundreds of billions of euros.
However, Costa cautioned that cuts to EU priorities might ignite resistance from governments.
“Who wants to cut on defense? No one,” he said. “Who wants to cut on competitiveness? No one. Who wants to cut on agriculture? No one.”
Governments broadly agree that EU administrative spending can be reduced, Costa said, but that would not be enough to resolve the gap because “it’s a very small amount.”
Costa said all leaders he had spoken to remained committed to reaching an agreement by the end of the year, so the next budget can take effect on Jan. 1, 2028.
Without an agreement, he said, the EU would face cuts to funding for farmers, businesses, researchers and students.
Costa will take over the negotiations after the October European Council meeting, when EU leaders will react to Ireland’s negotiating package.