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The budget for 2025 includes expenditures depicted in the EU-wide long-term budget ceilings and oriented towards financing the NextGenerationEU program and other European integration priorities. The budget will allow the member states to deliver on the EU political commitments agreed in the mid-term revision of the Multiannual Financial Framework. The annual EU Budget for 2025 will amount to about €200 billion.
Background
The EU institutions continue fulfilling the EU-wide political commitments and provide the financial means to tackle current and future challenges in the member states, such as green and digital transitions, increasing socio-economic resilience, addressing the consequences of Russia-Ukraine military conflict and the continued crisis in the Middle East, etc. The budget is, actually, a result of agreement between the EU co-legislators in striking a good balance between European urgent financing needs and the continuity of successful programs.
Moreover, the budget 2025 also includes an additional amount of €3 billion in payment appropriations to respond to the recent floods and other national disasters.
The annual budget for 2025 should now be formally adopted by the Council of the European Union and by the European Parliament; the vote in the Parliament, which will mark the end of the process, is scheduled for the end of November 2024.
Some of the EU budget-25 priorities are financed from borrowing on the capital markets. There are two amounts for each program in the budget – commitments and payments: the former refers to the funding that can be agreed in contracts in a given year, and the latter (“payments”) refers to the money actually paid out.
Reference to: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5866
European financial situation
Beside the annual and long-term budgets, the EU is dependent on the global financial markets through using borrowing facilities: hence, all EU-Bond issuances (executed by the European Commission) and funds are borrowed on global capital markets to support its policy priorities – from green and digital recovery through to support for external actions.
Generally, the Commission uses the proceeds of EU-Bond issuances to fund EU policy programs: main policy program presently funded by EU-Bonds is the NextGenerationEU recovery plan (NGEU), which is expected to raise up to €712 billion (out of a maximum program envelope of €806.9 billion) by 2026. The EU also issues EU-Bonds to finance loans for Ukraine: under the Ukraine Facility, the EU will raise up to €33 billion in EU-Bonds during 2024-2027 to finance these loans. EU borrowing is executed using multiple instruments, including EU-Bonds, EU-Bills, and NextGenerationEU Green Bonds. The Commission also makes use of different funding techniques, such as syndications and auctions. The Commission communicates its planned funding volumes to the market through bi-annual funding plans covering the next six months of operations.
To finance NGEU, the Commission is borrowing up to €712 billion on the capital markets until end 2026. To obtain the necessary funding under optimal financial terms, the Commission uses a unified funding approach. The funds are disbursed via grants or loans, either through the RRF or through several EU budget programs; presently, the Commission has disbursed more than €269 billion (€174.69 billion in grants and € 94.71 billion in loans) to the EU member states under the RRF, on top of further support to other EU programs benefitting from NGEU funding with €64.5 billion. By issuing up to 30% of all NextGenerationEU funds in the form of green bonds, the EU-27 will become the largest green bonds issuer in the world.
More on EU as a borrower in: https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations_en.
Additionally: https://ec.europa.eu/commission/presscorner/detail/en/qanda_24_5867
Financing EU-wide priorities
The EU annual-25 budget is going to provide financial assistance to implement the EU-wide socio-economic and political priorities, as well as addressing urgent member states’ needs” and facilitate support for the emerging situations in the states to financing flagship EU programs such as Horizon Europe and Erasmus+, providing strong reinforced support to European competitiveness through Strategic Technologies for Europe Platform, STEP.
The annual EU budget for 2025 allocates the available € 200 billion to numerous EU integration priorities (in euros) according to the following amounts:
= First is the “cohesion, resilience and European values” part with about 78 billion; it is the largest priority in funding, which includes: a) economic, social and territorial cohesion with 66,4 billion and b) resilience and values with 11,6 billion;
= Second in importance is the position of “natural resources and environment” with 56,7 billion (including market related expenditure and direct payments of about 40 billion);
= The third in line is the “Single Market, innovation and digital transition” with 21,4 billion;
The rest budget positions are: = Neighbourhood and the EU in the world – 16,3 billion; = European public administration with about 13 billion; = Migration and border management with about 4,8 billion; = Security and defence with 2,6 billion; = as well as the so-called “thematic special instruments” with about 6,7 billion.
Detail figures on budget distribution in: https://ec.europa.eu/commission/presscorner/detail/en/qanda_24_5867
General source: Commission’s press release at: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5866
Additional references: all annual budget websites, e.g. Documents; plus, Annual budget procedure; Revision of the EU budget 2021-2027; Long-term EU budget & NextGenerationEU; and EU budget in motion.