The Swedish Post

BERLIN — Germany’s Minister of State for Europe, Gunther Krichbaum, has warned that the European Union has limited financial room to absorb the costs of future enlargement unless governments agree to reshape the bloc’s long-term budget and redirect spending towards new strategic priorities.

Krichbaum, a member of Chancellor Friedrich Merz’s Christian Democratic Union, made the remarks as negotiations intensify over the EU’s Multiannual Financial Framework for 2028–2034. The framework will determine how the Union finances agriculture, regional development, security, research, migration, foreign policy and assistance to countries seeking membership over the next seven-year period.

In an interview conducted in Berlin on July 21 and published by Euronews on July 22, Krichbaum said Germany’s fiscal room for manoeuvre was constrained by subdued economic growth and competing domestic demands. Other member states face similar pressures, creating a difficult negotiating environment in which governments support broader European ambitions but remain reluctant to approve significantly higher national contributions.

The dispute comes as enlargement has returned to the centre of EU strategy. Russia’s invasion of Ukraine transformed the membership prospects of Ukraine and Moldova, while the Union has also renewed efforts to advance negotiations with countries in the Western Balkans. Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia are at different stages of the accession process, while Kosovo remains a potential candidate.

On July 14, the EU held separate accession conferences with Ukraine, Moldova, Montenegro and Albania. The meetings advanced negotiations in areas including external relations, science, education, culture, competition policy and customs. EU institutions presented the simultaneous conferences as evidence that the enlargement process had moved from political declarations towards more detailed legal and institutional integration.

Krichbaum supported accelerating that process but argued that the traditional accession model had become increasingly difficult for candidate countries. EU applicants must adopt the acquis communautaire, the full body of Union law, regulations, standards and legal obligations accumulated over decades. As the scope of EU legislation has expanded, the administrative and political burden of meeting every requirement before accession has also increased.

He therefore backed a staircase or tiered model under which candidate countries could receive progressively deeper access to EU institutions and policies as they completed reforms. The process would not replace the established objective of full membership. Instead, it would provide intermediate stages intended to produce practical integration and political certainty before every condition for formal accession had been fulfilled.

One element discussed by Germany would be a form of associated membership for Ukraine, Moldova and Western Balkan candidates. Such countries could participate in selected institutional activities, potentially including sessions of the European Parliament, without acquiring voting rights. Krichbaum argued that limited forms of participation could deliver a strong geopolitical signal without immediately generating the full budgetary obligations associated with membership.

The proposal remains politically sensitive. Critics fear that an associated category could become a permanent waiting room, creating a second tier of European states without equal decision-making power. Supporters answer that staged integration would give candidate governments visible benefits, reward reforms and reduce the risk that prolonged negotiations weaken public support for joining the EU.

The budgetary implications are equally contentious. New members generally gain access to agricultural payments, cohesion funding, infrastructure programmes, education schemes and other EU instruments. Countries with lower incomes and large agricultural sectors may initially receive more from the common budget than they contribute, potentially reducing the amounts available to current beneficiaries unless overall spending rises or established policies are redesigned.

Krichbaum rejected the assumption that enlargement costs would remain permanently unmanageable. He pointed to earlier entrants that began as substantial recipients but later became stronger economies and, in some cases, larger contributors to shared European priorities. Poland was cited as an example of how membership, investment and single-market access can accelerate economic development over time.

Nevertheless, the immediate financing challenge is substantial. Germany is one of the EU’s largest net contributors, and its position carries significant weight among other fiscally cautious governments. Chancellor Merz has already described the existing budget proposal as unaffordable and unbalanced from Berlin’s perspective, while calling for a considerably streamlined compromise under the Irish presidency of the Council of the EU.

The European Commission’s formal proposal for 2028–2034 amounts to almost €2 trillion in current prices, equivalent to about 1.26% of the EU’s average gross national income over the period. The package is designed to respond to security threats, defence requirements, industrial competition, migration, energy vulnerability and climate resilience while maintaining support for agriculture and economic, social and territorial cohesion.

Krichbaum referred to a core spending ceiling of approximately €1.7 trillion and said Berlin was seeking reductions of about €400 billion. The difference between the figures used in political debate reflects, in part, the treatment of supplementary instruments, Ukraine-related support and calculations in current or constant prices. Regardless of the accounting basis, Germany’s position is that the Commission’s overall level must be reduced significantly.

Berlin’s argument is not simply that the EU should spend less. German officials are also demanding that expenditure be reorganised around priorities they regard as essential to Europe’s future security and economic strength. Krichbaum identified defence, cybersecurity, space, artificial intelligence and competitiveness as areas that should receive greater emphasis in the next framework.

That would require difficult choices in policies that have historically dominated the EU budget. The Common Agricultural Policy and cohesion programmes distribute large amounts to farmers, rural communities, regions and infrastructure projects across the Union. These programmes have powerful national constituencies and are defended by governments that consider them central to economic convergence, food security and political solidarity.

Krichbaum argued that if the EU were designing its budget from the beginning under present-day conditions, agriculture would no longer automatically occupy the dominant position it acquired during the early decades of European integration. He proposed combining agricultural and cohesion expenditure within a broader pillar, allowing national governments greater discretion in deciding how funds are divided while freeing political space for newer priorities.

The Commission’s proposal already moves partly in that direction. It would group agriculture, fisheries, cohesion, migration and internal security within national and regional partnership plans prepared by each member state. Payments would be linked to reforms, investments, milestones and agreed targets, replacing multiple separate programmes with a more consolidated structure.

The planned redesign has generated resistance from agricultural organisations, regional authorities and members of the European Parliament who fear that consolidated national plans could weaken dedicated protections for farming and regional development. They are also concerned that stronger national control could reduce the influence of regions and make established funding streams more vulnerable to political bargaining.

Germany’s preferred reductions would intensify those disputes. If member states reject a larger overall envelope while also expanding defence, technology and enlargement spending, cuts or slower growth in traditional programmes become difficult to avoid. Alternatively, governments could agree to new EU revenue streams, but several proposed sources are politically contentious and would require unanimous national approval.

The Commission has proposed additional revenue from the EU Emissions Trading System, the Carbon Border Adjustment Mechanism, tobacco excise duties, an electronic-waste levy and a corporate contribution linked to large companies operating in the single market. EU institutions estimate that the proposed resources could generate tens of billions of euros annually and reduce pressure on direct national contributions.

Member states remain divided over those options. Governments may support stronger European action while opposing taxes or levies that could affect domestic consumers and companies. Net contributors are also seeking safeguards against open-ended liabilities, while countries receiving substantial cohesion and agricultural funding are resisting reductions that could affect investment, employment and rural incomes.

Ukraine creates an additional layer of complexity because its reconstruction requirements, agricultural scale, population and lower income level would make its eventual accession financially significant. The Commission has proposed that additional long-term support for Ukraine be financed outside normal MFF ceilings so that assistance does not consume resources intended for other global and enlargement priorities.

That approach could protect existing programmes, but it would not eliminate political disagreement over who ultimately provides the money or how special borrowing and off-budget instruments should be governed. Governments must also decide how quickly candidate states receive access to the single market, structural funds, agricultural support and EU decision-making institutions.

The debate is therefore shifting from whether enlargement should happen to the institutional and financial conditions under which it can occur. Germany’s staged-accession proposal attempts to separate geopolitical integration from the immediate granting of every membership right and budget entitlement. Candidate countries could be drawn into selected policies earlier, while the most expensive components of membership would follow only after additional reforms and negotiations.

For Ukraine and Moldova, phased participation could offer practical benefits before final accession, including closer involvement in transport, energy, digital, security and trade programmes. For Western Balkan candidates, it could address frustration caused by accession processes that have lasted for years without a clear endpoint. The political risk is that temporary arrangements become permanent or that full membership remains vulnerable to national vetoes.

Any final settlement must satisfy all 27 member states. Under the EU treaties, the MFF regulation requires unanimity in the Council and the consent of the European Parliament. The decision establishing new own resources must also be approved unanimously and ratified by member states according to their constitutional procedures.

This gives every government significant leverage and makes the long-term budget one of the Union’s most difficult negotiations. Contributors can threaten to block the total spending level, recipients can resist cuts to major programmes, and governments with concerns about migration, rule-of-law conditions or enlargement can connect those issues to financial concessions.

Krichbaum said an agreement should be reached before the end of 2026. The Council has also identified a political settlement this year as necessary if sectoral legislation is to be completed in 2027 and funding programmes are to begin without disruption on January 1, 2028. A delay would compress the legislative timetable and increase uncertainty for governments, farmers, researchers, regions, businesses and external partners.

The Irish presidency is expected to lead efforts during the second half of 2026 to narrow the financial and political differences. Germany will press for a smaller and more strategically focused package, while the Commission and the European Parliament are likely to argue that Europe cannot meet expanding responsibilities through a budget that remains close to its historic scale.

Krichbaum’s warning makes clear that Germany sees enlargement as a strategic necessity but not as justification for unrestricted spending. Berlin’s emerging position combines faster political integration, staged membership, reduced overall expenditure and a shift away from traditional budget priorities towards defence, technology and competitiveness.

Whether that combination can secure unanimity remains uncertain. Enlargement is broadly supported as a means of strengthening European security and limiting Russian and Chinese influence, but its credibility depends on offering candidate countries a realistic path to membership. At the same time, the Union must convince existing members that enlargement will not destabilise agricultural support, regional investment or national public finances.

The negotiations will ultimately determine more than the size of the next EU budget. They will define how the Union balances solidarity with fiscal restraint, how it prepares its institutions for additional members and whether it can align financial resources with its rapidly expanding geopolitical ambitions.