“All national budgets need to be respected,” he added.
Costa’s visit came only three days after the far-right Alternative for Germany secured a historic landslide victory in the regional elections in Saxony-Anhalt. The Euroskeptics’ success risks hardening Merz’s stance in the budget negotiations, according to several EU diplomats.
Speaking alongside Costa, the German Chancellor reiterated calls to cut “several hundreds of billions” from the Commission’s near-€2 trillion proposal.
He described the budget increase as “simply prohibitive because at the end it is the European taxpayer who has to foot the bill.”
Costa countered that EU-wide taxes, known as own resources, are needed to finance common European policy areas such as defense and competitiveness that cannot be addressed by individual governments.
The Portuguese leader has previously signaled that he intends to narrow down several potential taxes that are acceptable to EU governments during a leaders’ summit on Oct. 15.
New own resources were expected to be €66 billion per year according to the Commission’s proposal from last July.
But after over one year of negotiations, EU governments have only agreed to proposed levies on foreign polluters, known as the Carbon Border Adjustment Mechanism, and on uncollected electronic waste, which are expected to jointly raise around €20 billion per year.