The EU is also becoming too reliant on joint debt, the chancellor said, explaining it’s “permissible as an exception” but has become “the new normal.”
Germany, which has long been fiercely resistant to EU borrowing underpinned by all 27 governments collectively — as much as anything, because it would mean Berlin would end up on the hook for debts run up by more spend-friendly countries — did back down at the height of the Covid-19 pandemic to allow it as a one-off to fund the economic recovery.
Commission officials this week suggested that the proposed permanent EU crisis fund could be financed in the same way. But Germany’s renewed opposition again looks to be insurmountable.
“The European Union must basically make do with the money it has available,” the conservative leader said. “That is why there will be a pretty tough struggle over the next two years.”
The Commission proposed a central EU budget of €1.816 trillion for the seven-year period from 2028. That figure would represent a major increase in the EU’s spending power compared with the current budget that has run since 2021.
To finance that spending, the EU executive presented three new taxes targeting electric waste, tobacco products and high-turnover companies to repay the post-Covid debt, which is estimated to cost €25 to €30 billion per year.
