Hit hard

"The first ever move to deploy the EU's "nuclear option" under Article 7 of the 2009 Lisbon treaty marks a major escalation in tensions with eurosceptics in formerly communist eastern Europe, just as wealthy Western governments prepare to hold down funding for their subsidies in an EU budget hit hard by the departure of second-ranked economy Britain." (Reuters.)

What is hit hard in the context above? Is it an EU budget or Western governments?