EU Eyes €160 Billion Cut From Initial Budget Heading Into Talks

European Union leaders will discuss a scaled back budget when they meet in Brussels next week after negotiators slashed the initial proposal in response to pressure from some member states.

Ireland, which holds the bloc’s rotating presidency, presented a compromise plan on the EU’s next seven-year budget on Saturday, shaving about €160 billion ($179 billion) from the €2 trillion figure proposed last year by the European Commission, the EU’s executive arm.

The proposal “is the product of intensive exchanges undertaken by the Irish presidency with member states and EU institutions over the last three months,” Ireland’s Europe Minister Thomas Byrne said ahead of a press conference in Brussels on Saturday.

The compromise package follows months of behind-the-scenes negotiations on the budget, known as the multi-annual financial framework (MFF). European Council President Antonio Costa, who chairs meetings of EU leaders, is pushing for a deal by December.

The size and scope of the EU’s seven-year budget has long been a subject of contention, with countries like Germany, Austria and the Netherlands advocating a smaller package while other member states including Italy and Spain opposed to cuts.

Read more: Germany Leads Call for EU Budget Cuts in ‘Hundred Billion’ Range

There have been growing calls for years for the EU to direct spending away from areas like agriculture and funding for poorer countries — which have traditionally represented more than half of EU spending — to new priorities such as research and innovation as well as defense.

Under Ireland’s proposal, money for the Common Agricultural Policy (CAP) and cohesion funds – those earmarked for less affluent EU members – will be protected. Instead, the reduction from the earlier €2 trillion proposed price tag will be offset by cuts to development funding, administration, and the bloc’s competitiveness fund, relative to the initial proposal.

The bulk of the EU’s budget is financed by contributions from member states, with so-called “net contributors” coughing up most of the money. Germany has been one of the most critical voices, dismissing the commission’s initial price-tag hours after it was presented last year as “unacceptable.”

The proposed cut is unlikely to be enough to appease the so-called “frugal” member states. Speaking alongside Costa on Friday evening ahead of the announcement, Dutch Prime Minister Rob Jetten said that a budget increase compared to the previous seven-year budget is “simply not viable at a time when national budgets are already under pressure.”

Jetten said the budget must reflects current concerns such as security, economic resilience, and competitiveness. “We cannot just saddle our citizens with high costs unless we offer solutions to today’s challenges,” he said.