According to a report out of Euractiv, Germany has proposed that the 2028-2034 budget for the European Union should include “milestones” that must be met by member states before they receive a good part of any funding. A final framework for the next budget will be presented by the European Commission in July. 

Despite its recent economic woes, Germany is still the EU’s largest economy and contributes around a quarter of the EU budget, the portal notes. 

Brussels has long used cohesion funds as a means to help certain member states “catch up” with richer countries. However, Germany feels that incentives must be used more aggressively to force those countries receiving these funds to pass needed reforms. 

Hungary has been subject to having its funds withheld for years due to alleged rule-of-law violations under Article 7, including opposition to the migrant relocation scheme and refusal to abide by the gender ideology pushed by Brussels on its own territory.

Such a comprehensive reform being pushed by Berlin is a more direct approach to imposing change on member states and is sure to create ire. Euractiv notes it is similar to the EU’s €648 billion post-pandemic recovery fund, where member states had to present a recovery plan and demonstrate reforms to receive money due. 

The European Commission has already signaled it is on board with the plan. “Each tranche of funding will be distributed when the agreed targets have been met (…) this is the strongest incentive we can provide to get things done,” Commission President Ursula von der Leyen said last month about the budget. 

Germany will also not increase its contribution to the Multiannual Financial Framework (MFF) for the next budget cycle. “There is no reason to increase the size of the MFF relative to economic strength,” the position paper, seen by Euractiv, states.

Germany does, however, recognize the need for greater security, stating that all member states “must assume more responsibility for security and defence” and suggests implementing better “incentives for collective development, production and purchasing.”

Regarding the Common Agricultural Policy (CAP), Germany now wants it to “remain an independent policy area,” with one-third of funds given to farmers “target- and result-oriented,” as well as stronger incentives for “climate, environment and animal welfare” purposes.