Ireland proposed €140 billion in EU budget cuts that keep a 20% reduction in farm spending.

European Union governments opened a new phase in the fight over the bloc’s 2028-2034 budget after Ireland, which holds the rotating presidency of the Council of the EU, put forward a revised negotiating package that would cut about €140 billion from the European Commission’s original plan, or roughly 8%, while leaving unchanged the Commission’s proposed 20% reduction in the Common Agricultural Policy budget.

The Irish presidency presented the figures on October 10 as a new basis for negotiations among the 27 member states. According to the proposal, the fresh cuts would fall mainly on development aid, administrative spending and a new competitiveness fund that several sectors, including agriculture, had hoped to tap. The CAP is not singled out for additional reductions in the Irish text, but the proposal does not reverse the smaller farm budget already set out by the Commission.

That distinction quickly drew criticism from Copa-Cogeca, the main umbrella group for EU farm organizations and cooperatives. The group said the new document still accepts the 20% CAP reduction proposed by Brussels and does so without what it called credible guarantees to preserve the policy’s historic structure, its autonomy and its common EU character. The reference to the policy’s structure points to long-running concerns over its two-pillar model, which combines direct farm payments with rural development funding.

The budget fight now moves to a meeting of EU general affairs ministers in Luxembourg on October 13, followed by a summit of EU heads of state and government in Brussels on October 15 and 16. Those meetings are expected to show whether member states are ready to narrow deep differences over both the size of the next seven-year budget and the balance between older policies such as agriculture and newer spending priorities tied to competitiveness, defense, migration and external action.

Early signs suggest the gap remains wide. German Chancellor Friedrich Merz, who has emerged as a leading voice among the bloc’s more fiscally conservative governments, said after the Irish proposal that governments were still far from an agreement and warned that the new total was not a good basis for a deal. His comments underline the pressure from countries often described as “frugal,” which want tighter EU spending and are likely to resist calls to restore funding in large programs unless savings are found elsewhere.

The CAP has been one of the most sensitive issues in the talks because it remains one of the largest items in the EU budget and because many governments, especially in countries with large farm sectors, see direct payments as politically difficult to cut. The Commission’s proposed 20% reduction had already triggered a backlash from farm groups, which argue that Brussels cannot ask agriculture to do more on climate, food security, generational renewal and competitiveness while providing less money.

The Irish compromise appears to reflect that political reality. By avoiding new cuts aimed directly at the CAP, Dublin may be trying to keep the talks moving and prevent the farm budget from becoming the immediate target in a broader savings exercise. But by leaving the Commission’s original CAP reduction in place, the presidency also avoids reopening one of the biggest and most divisive parts of the draft budget.

That leaves agricultural interests in a difficult position. Farm groups can point to the fact that the latest round of cuts does not further reduce CAP funding, but they still face the prospect of a lower farm budget overall unless later talks bring changes. The debate is also about more than the headline number. Agricultural organizations are watching closely for any sign that the policy could be folded into broader national spending envelopes or lose some of its common EU rules, which they say would weaken equal conditions across the single market.

The outcome matters beyond farms alone. A smaller CAP budget from 2028 could affect support programs, investment planning and financial stability for Europe’s wine sector, especially in wine-growing regions that depend on rural development funds, restructuring aid and other EU-backed measures. Breweries, distillers and other beverage producers could also feel indirect effects if lower farm support changes the economics of grain, hops, fruit and grape production or slows investment in agricultural areas tied to beverage supply chains.

The timing is sensitive for those sectors because many businesses are already dealing with weaker demand in parts of Europe, changing trade flows and pressure to finance climate adaptation. In viticulture, in particular, producers are watching EU policy debates closely as they manage market imbalances, replanting decisions and environmental requirements that often carry long lead times and high capital costs.

For the Irish presidency, the challenge is to build a compromise that can satisfy governments asking for restraint without provoking a broader revolt from capitals that want to protect traditional policies. The revised text suggests Dublin is looking for savings in areas that may face less immediate political resistance than farm payments, but the reaction from Berlin and from farm groups shows that approach has not yet produced a workable middle ground.

EU officials still hope to complete negotiations on the budget by the end of the year, but that target looks demanding. The next two rounds of talks in Luxembourg and Brussels are expected to show whether governments are moving toward a landing zone or simply restating red lines over the overall size of the package, the treatment of agriculture and the future balance between common EU programs and national flexibility.