EU leaders reject budget deal by year-end as Germany and Sweden refuse to pay higher contributions

European Union leaders have thrown the bloc's seven-year budget timetable into serious doubt after a Brussels summit ended without agreement, with a growing number of governments openly questioning whether a deal can be reached before 2027. Swedish caretaker Prime Minister Ulf Kristersson said flatly that agreement this year is far from certain, while German Chancellor Friedrich Merz cautioned that the proposed contribution levels are beyond what any member state can bear. European Council President António Costa, who has repeatedly championed a December deadline, will now take the lead on negotiations and is expected to put forward a revised proposal before a special summit on 26 November.

Ireland's compromise proposal to trim the budget by €141 billion was largely rebuffed, leaving the €1.62 trillion package with little prospect of survival in its current form.

Failing to meet the December deadline would risk disrupting the complex legislative timetable needed to make the budget operational by 1 January 2028, and would collide with a series of national elections across the bloc.

Germany is heading a 'frugals' grouping that includes the Netherlands, Austria, Sweden and Denmark, all of which are pressing for spending cuts rather than higher national contributions.