Negotiations are now underway for the European Union's budget covering the period from 2028 to 2034, which is projected to total around 1.2 trillion euros, equivalent to approximately 1.4 trillion dollars.

Germany is advocating for a restrained approach to this budget, emphasizing the need to limit spending due to ongoing economic constraints.

The German economy has faced contraction for two consecutive years, prompting a cautious stance in budget discussions as growth forecasts for 2025 remain modest.

In its policy paper, Germany highlights that member states currently lack the financial flexibility to increase their contributions to the EU budget based on Gross National Income.

Germany firmly opposes the notion of jointly issued debt, particularly in relation to the Next Generation EU recovery program, asserting that repayments should begin in 2028 and that extending such measures is legally excluded.

The budget discussions are contentious, featuring conflicts between major net contributors like Germany and poorer net beneficiaries, alongside debates over funding allocations for traditional sectors versus innovative technologies.

Germany's policy paper also calls for the strengthening of EU security and defense capabilities, as well as continued support for Ukraine through the budget.

EU Commission President Ursula von der Leyen has previously indicated that the budget needs to be more flexible and focused to effectively address current challenges.