Merz Calls for Major Overhaul of EU Budget

German Chancellor Friedrich Merz has opened a debate on a major overhaul of the European Union budget, arguing that the bloc can no longer operate on a model designed for a different era and must invest more in defense and competitiveness.

The call came during this year's award of the Charlemagne Prize in Aachen to Mario Draghi, former head of the European Central Bank (ECB), who warned last year of a decline in Europe's economic strength.

The dispute over the EU budget for 2028-2034 is meanwhile gradually escalating. The European Parliament is calling for higher spending, but several member states are refusing to contribute more.

Merz has backed simplifying budget rules and redirecting funding towards strategic priorities. He also criticized the high share of subsidies, which now account for more than two thirds of the EU budget.

He firmly rejected French President Emmanuel Macron's proposals for European debt sharing, arguing that new debt would weaken Europe's ability to act and jeopardize its sovereignty.

"We cannot meet the challenges of the 21st century with a 20th-century budget", Merz declared.

(reuters, bak)