EU budget cuts clash with push for permanent joint borrowing

The proposal, known as the negobox, preserves three major off-budget lending facilities, including a €395bn crisis mechanism and €100bn for Ukraine. Under these terms, joint borrowing could reach €800bn—roughly 44 percent of the total budget. This trajectory highlights a growing disconnect: member states remain reluctant to fund common priorities through traditional contributions, opting instead for debt instruments that lack a permanent, coherent framework.

The risk of fiscal improvisation

Critics argue this approach is increasingly precarious. The European Court of Auditors has cautioned that these programs rely on "budget headroom" rather than pre-allocated funds, effectively placing the burden on future national contributions should loans default. With exposure already climbing to €681bn, the current strategy of treating each new debt instrument as a one-off exception is failing to address the scale of the challenges outlined in the Draghi report, such as rearmament and industrial competitiveness. As France faces record-high borrowing costs, the case for a more integrated, transparent system for shared risk is mounting. Without a formal structure, the EU risks market instability, even as global demand for euro-denominated safe assets grows.