The European Union's next long-term budget has entered its final stretch, with a compromise protecting farm aid and taking almost half its cuts from competitiveness spending.

European Council President Antonio Costa has taken over the talks and is preparing a revised negotiating box for a special summit in Brussels on 26 and 27 November.

The Irish presidency's revised box of 10 October set commitments at 1.622 trillion euros in 2025 prices, about 141 billion euros below the Commission's original proposal of 1.76 trillion euros. Nearly 67 billion euros of the cut came from competitiveness, research and security, down almost 13% to 455.6 billion euros.

Farmers largely spared, Ukraine funding entangled

Cohesion, agriculture and fisheries — the largest heading — shrank by only 3% to 914.2 billion euros. Global Europe, covering external spending, dropped 17% to 156.9 billion euros. A separate Ukraine Reserve outside the ceilings was set at 88.9 billion euros for 2028-2034, down from about 100 billion euros.

The talks are entangled with Ukraine's needs before the new budget starts. President Volodymyr Zelenskyy told leaders on 16 October that the war would cost his country 155 billion euros in 2027 and asked for at least 70 billion euros more. Leaders have asked the Commission for a proposal on Ukraine's extra 2027 financing, due at the same summit.

Leaders have set the end of this year as the deadline, so the budget can take effect on 1 January 2028. Any deal needs unanimous backing from all 27 member states plus the European Parliament's consent, so one government can block it. Spain holds a snap election on 29 November, two days after the summit, while France, Italy and Poland face elections in 2027.