The Commission has today proposed an annual EU budget of €189.3 billion for 2024. The budget will be complemented by an estimated €113 billion in payments for grants under NextGenerationEU, the EU’s post-pandemic recovery instrument. Their combined firepower will keep driving Europe’s ongoing economic recovery and create jobs, while strengthening Europe’s strategic autonomy.
The EU faced exceptional challenges in the last years, including fast rising inflation, which put considerable pressure on the ability of the budget to further respond to new developments. Nevertheless, the draft budget for 2024 continues to provide key funding to the EU’s political priorities as planned. Green and digital spending will continue to be prioritised to make Europe more resilient and fit for the future.
The draft budget 2024 directs funds to where they can make the greatest difference, in line with the most crucial recovery needs of the EU Member States and our partners around the world. The funding will help modernise and strengthen our Union, by fostering the green and digital transitions, creating jobs and strengthening Europe’s role in the world.
The Commission will continue to stand by Ukraine for as long as it takes. Following Russia’s war of aggression against the country, the EU budget has been fully mobilised to support Ukraine, and EU Member States welcoming refugees, however its availabilities have been exhausted. The Commission will assess future support to Ukraine in the context of the forthcoming review of its long-term budget 2021-2027.
To address the EU’s various other priorities, the Commission proposes to allocate the following amounts to the various Commission priorities (in commitments):
- €53.8 billion for theCommon Agricultural Policyand €1.1 billion for the European Maritime, Fisheries and Aquaculture Fund, for Europe’s farmers and fishers, but also to strengthen the resilience of the agri-food and fisheries sectors and to provide the necessary scope for crisis management.
- €47.9 billion forregional development and cohesionto support economic, social and territorial cohesion, as well as infrastructure supporting the green transition and Union priority projects.
- €15.8 billionto support our partners and interests in the world, of which €11.4 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.1 billion for the Instrument for Pre-Accession Assistance (IPA III), and €1.7 billion for Humanitarian Aid (HUMA).
- €13.6 billion forresearch and innovation, of which €12.8 billion for Horizon Europe, the Union’s flagship research programme. The Draft Budget also includes the financing of the European Chips Act under Horizon Europe and through redeployment from other programmes.
- €4.6 billion forEuropean strategic investments, of which €2.7 billion for the Connecting Europe Facility to improve cross-border infrastructure, €1.3 billion for the Digital Europe Programme to shape the Union’s digital future, and €348 million for InvestEU for key priorities (research and innovation, twin green and digital transition, the health sector, and strategic technologies).
- €2.1 billion forspending dedicated to space, mainly for the European Space Programme, which will bring together the Union’s action in this strategic field.
- €10.3 billion forpeople, social cohesion, and values, of which €3.96 billion for the rising borrowing costs for NGEU (to be kept under close review), €3.7 billion Erasmus+ to create education and mobility opportunities for people, €332 million to support artists and creators around Europe, and €215 million to promote justice, rights, and values.
- €2.4 billion forenvironment and climate action, of which €745 million for the LIFE programme to support climate change mitigation and adaptation, and €1.5 billion for the Just Transition Fund to make sure that the green transition works for all.
- €2.2 billion forprotecting our borders, of which €1.1 billion for the Integrated Border Management Fund (IBMF), and €874 million (total EU contribution) for the European Border and Coast Guard Agency (Frontex).
- €1.7 billion formigration-related spending, of which €1.5 billion to support migrants and asylum-seekers in line with our values and priorities.
- €1.6 billion to addressdefencechallenges, of which €638 million to support capability development and research under the European Defence Fund (EDF), €241 million to support Military Mobility, €260 million for the new short-term defence instrument (EDIRPA) and €343 million to support the production of ammunition.
- €947 million to ensure thefunctioning of the Single Market,including €602 million for the Single Market Programme, and €200 million for work on anti-fraud, taxation, and customs.
- €754 million for EU4Health to ensure acomprehensive health response to people’s needs, as well as €230 million to the Union Civil Protection Mechanism (rescEU) to be able deploy operational assistance quickly in case of a crisis.
- €726 million forsecurity, of which €315 million for the Internal Security Fund (ISF), which will combat terrorism, radicalisation, organised crime, and cybercrime.
- €213 million forsecure satellite connectionsunder the new Union Secure Connectivity Programme.
The draft budget for 2024 is part of the Union’s long-term budget as adopted at the end of2020, including subsequent technical adjustments, and seeks to turn its priorities into concrete annual deliverables. The budget remains on track to dedicate 30% of the long-term budget and the NextGenerationEU recovery instrument on combatting climate change.
Background
Thedraft EU budget for 2024 includesthe expenditure covered by the appropriations under the long-term budget ceilings, financed from own resources. These are topped up byexpenditure under NextGenerationEU, financed from borrowing on the capital markets. For the “core” budget, two amounts for each programme are proposed in the draft budget – commitments and payments. “Commitments” refer to the funding that can be agreed in contracts in a given year; and “payments” to the money actually paid out. All amounts are in current prices.
With a budget of up to €807 billion in current prices,NextGenerationEU helps repair the immediate economic and social damage caused by the coronavirus pandemic and make the EU fit for the future. The instrument helps build a post-COVID-19 EU that is greener, more digital, more resilient and better prepared for the current and forthcoming challenges. The centrepiece of NextGenerationEU is the Recovery and Resilience Facility (RRF) – an instrument for providing grants and loans to support reforms and investments in the EU Member States. The contracts/commitments under NextGenerationEU can be concluded until the end of 2023, the payments linked to the borrowing will follow until the end of 2026.
For More Information
Questions and Answers on draft annual budget 2024
Quotes
The EU budget continues to provide Europe with the means to tackle current and future challenges. Yet, the EU budget, like national budgets, is facing constraints due to rising costs while the financing needs are not decreasing. The 2024 EU budget has been tailored to keep supporting the green and digital transition of the Union and remains one of the most powerful tools delivering added value to people’s lives.
Q&A: Draft annual budget 2024
Brussels, 7 June 2023
1. What are the priorities of the draft budget for 2024?
The Commission has today proposed an annual EU budget of €189.3 billion in commitments for 2024. The budget will be complemented by an estimated €113 billion in payments for grants under NextGenerationEU, the EU’s post-pandemic recovery instrument. The EU budget for 2024 provides key funding to the Union’s political priorities, notably to boost the recovery from the coronavirus pandemic, to put Europe on the path towards a sustainable future, to protect and create jobs.
The EU budget 2024, topped up by NextGenerationEU funding, contributes to the recovery and modernisation of our continent, fostering the green and digital transitions for a secure and more resilient Europe, which plays a strong role in the world.
In this context, the EU budget will continue to support the six headline ambitions set out by President von der Leyen: the European Green Deal; a Europe fit for the digital age; an economy that works for all; promoting our European way of life; a stronger Europe in the world and a new push for democracy. The budget for 2024 will enable the Commission to deliver on all these priorities.
2. How does the draft budget for 2024 relate to NextGenerationEU?
NextGenerationEU provides the EU budget with the additional means necessary to respond decisively to the urgent challenges caused by the coronavirus pandemic. The funds can be used to support investment and reform priorities under the Recovery and Resilience Facility and reinforce programmes that are key to the recovery. It also funds actions to build resilience for the future, for example, through an enhanced RescEU as part of the EU Civil Protection Mechanism.
To finance NextGenerationEU, the Commission is borrowing up to €807 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 Recovery and Resilience Facility or through several EU budget programmes which have received top-ups from NextGenerationEU. As of today, the Commission has disbursed €153.36 billion to EU countries under the RRF, on top of further support to other EU programmes benefitting from NextGenerationEU funding (€23.9 billion as of end-December 2022).
3. What are commitments and payments?
Commitments are the total volume of contractual obligations for future payments that can be made in a given year. Commitments must then be honoured with payments, either in the same year or, particularly in the case of multi-annual projects, over the following years.
Payments are the actual money paid in a given year from the EU budget to cover commitments of current and previous years.
When the EU decides to co-fund the building of a bridge, the total amount which the EU agrees to cover is a commitment. The bills for the work done are the payments that are paid over the coming years in line with the implementation life cycle of the project. The commitment is made in year N. The payments from the EU budget may follow in the same year N, but also in following years, depending on the financial rules on when the invoices are reimbursed.
4. What happens next?
Following adoption by the College, the European Commission submits the draft 2024 EU budget to the European Parliament and the Council, which take the final decision together.
The Council usually adopts its opinion on the budget by the end of July, and the European Parliament announces its official position in the autumn.
A specific conciliation committee is convened, usually in late autumn, to reconcile the positions of the Parliament and the Council. It has to agree within 21 days on a common budget, which both institutions should afterwards approve. This year, the period runs between 24 October and 13 November.
The Commission intends to present a mid-term review of the long-term budget to the European Parliament and the Council in the coming weeks.
5. The Commission is due to present an MFF review/revision on 20 June. How will this impact the draft budget for 2024?
Over the past years, the EU budget has been instrumental to enable the EU response to challenges – from the post-pandemic recovery through support for Ukraine following Russia’s war of aggression and investments in the EU’s strategic autonomy.
This has put the EU budget under strain and stretched EU budget flexibilities to the maximum.
The Commission committed in 2020 when the EU long-term budget was agreed to undertake and present a review of the functioning of the EU long term budget in relation to its implementation and remaining availabilities, against the background of the many additional challenges that the EU budget is confronted with since 2020, and the prospects looking forward.
The outcome of this analysis will be presented on 20 June 2023. Any possible implications for the 2024 budget may subsequently be considered as part of the budgetary procedure.
6. What is your proposal for Ukraine?
The Commission will continue to stand by Ukraine for as long as it takes. Following Russia’s war of aggression against the country, all EU budget flexibilities have been mobilised to support Ukraine and EU Member States welcoming refugees. The Commission will assess future support to Ukraine in the context of the forthcoming review of its long-term budget 2021-2027.
7. Borrowing costs for the grant component of NGEU have increased compared to the initial forecasts. How is this reflected in the DB for 2024?
The borrowing costs for the NGEU disbursements are financed under the long-term budget ceilings. Due to rising interest rates on the markets, the funding costs for NextGenerationEU borrowing operations are significantly higher than originally planned, as is the case for other issuers. This will require use of the flexibilities in the long-term budget.
This is exactly what the proposal for a draft budget 2024 entails – making best use of existing flexibilities to address the borrowing costs. This has also been the case until now.
For More Information
Press release on draft annual budget 2024
2021-2027 long-term EU budget & NextGenerationEU
EU as a borrower
Source – EU Commission