Every seven years, the EU approves a new budget, known as a Multiannual Financial Framework (MFF). The next MFF will cover the period 2028–34, and has been described by European Commission president Ursula von der Leyen as “the most ambitious ever proposed.” It has to be approved unanimously by the end of 2027, but with general elections due in almost a third of the bloc’s 27 countries next year (France, Italy, Poland, Spain, Greece, Estonia, Finland, and Slovakia), the pressure is on to have negotiations wrapped up by Christmas. After a two-day summit in Brussels on June 18 and 19, however, only one point of agreement had been reached: to bring new funding ideas to the next brainstorming session in October.

This task will mainly fall to Ireland, which takes over the six-month presidency of the Council of the European Union from Cyprus at the end of this month (usually a meaningless administrative position). Dublin’s challenge? To put some substance behind the hot new phrase in Brussels: “new own resources.” These are proposed new funding streams to help finance an MFF of €2 trillion ($2.27 trillion)—equivalent to 1.26% of the bloc’s combined gross national income—without further raiding capitals’ coffers. The ideas on the table so far include sharing cash generated by the sale of CO2 emissions permits, a cluster of green taxes, and a windfall levy on the bloc’s biggest companies. Whatever they are, these new resources have to bring in around €66 billion ($74.94 billion).

It will take more than Irish ingenuity to resolve other major difficulties, which threaten to make this MFF—described by German Chancellor Friedrich Merz as “unacceptable and unbalanced”—the most contentious in the EU’s history. As usual with economic disputes, the bloc is split into two main camps—the so-called “Frugal Five” in one, formed following the Brexit vote of 2016, and sixteen other countries, known as the “Friends of Cohesion,” in another. But the divisions aren’t as neat as that, nor is the debate focused exclusively on the size of the budget. Another crucial question is whether the MFF needs........

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