The EU budget is crucial for responding to the challenges the EU faces. It ensures that the EU remains democratic, peaceful, prosperous and competitive. The EU uses its budget to finance EU priorities and big projects that most EU countries could not finance on their own – either because of the project’s size or its cross-border nature. By pooling resources, standing together and helping all EU countries, their citizens and beyond, the EU budget strengthens Europe’s economy and geopolitical standing.
The EU adopts long-term spending plans, known as multiannual financial frameworks, which set out the EU’s spending priorities and limits for several years. The current long-term budget runs from 2021 to 2027.
In addition to the long-term budget, an annual budget is negotiated and adopted each year. This sets out the spending and revenue for the financial year, within the amounts agreed under the long-term budget.
The Commission puts forward a draft budget which is then negotiated and agreed by the European Parliament and Council. The Commission is responsible for managing the money although it manages more than half jointly with national governments.
Every year, the Parliament assesses how the previous year’s budget was implemented and decides whether to approve the way the Commission has done so, on the basis of a recommendation from the Council. This is known as ‘granting the discharge’.
What the money is used for
The EU budget creates jobs, funds projects that improve our health, education, transport and energy infrastructure, improves the security of our borders, helps combat climate change, and promotes the digital transition of our societies. And these are just a few examples.
In recent years, the EU budget has become an ever stronger expression of EU solidarity by serving as the EU’s main crisis response tool. It helps address the EU’s biggest challenges, from the COVID-19 pandemic to the Russian invasion of Ukraine, as well as ensuring our energy independence and building the EU’s strategic autonomy.
Together with the recovery fund NextGenerationEU, the 2021-27 budget amounts to around €2 trillion in current prices. It can be broken down into roughly 7 areas of expenditure:
- Single market, innovation and digital
- Cohesion, resilience and values
- Natural resources and environment
- Migration and border management
- Security and defence
- Neighbourhood and the world
- European Public Administration
Overview of the long-term budget amounts in current prices
Priorities and spending set out in the budget for 2024
The 2024 budget funds the most crucial recovery needs of EU countries and partners around the world. It helps modernise and strengthen the EU by fostering the green and digital transitions, creating jobs and strengthening Europe's role in the world.
In particular, it reinforces the EU’s support to Ukraine, boosts investments in critical technologies and defence, provides resources to support partners in the Western Balkans, and helps EU countries affected by natural disasters as well as countries facing humanitarian crises.
Managing EU funds
Over the 2021-27 period, the long-term budget is managed as follows:
- 56% is jointly managed by national authorities and the Commission (‘shared management’)
- 37% is managed by the Commission, its agencies and offices outside the EU (‘direct management’)
- 7% is managed by other international organisations, national agencies and non-EU countries (‘indirect management’)
- for NextGenerationEU, 90% of the funds are channelled via the Recovery and Resilience Facility, implemented by direct management and worth a total of €648 billion.
The ultimate responsibility for implementing the budget lies with the Commission, which must ensure that every euro spent is recorded and accounted for. If incorrect payments have been made, the Commission works with the countries concerned to recover the money.
The annual EU budget is subject to internal and external checks both during and after its implementation – by the Commission, the European Court of Auditors and the European Parliament. In addition, the European Anti-Fraud Office can investigate fraudulent use of the EU budget.
