Brussels, 7 June 2022
The Commission has today proposed an annual EU budget of €185.6 billion for 2023, to be complemented by an estimated €113.9 billion in grants under NextGenerationEU. The EU budget will continue to mobilise significant investments to boost Europe’s strategic autonomy, the ongoing economic recovery, safeguard sustainability and create jobs. The Commission will continue to prioritise green and digital investments while addressing pressing needs arising from recent and current crises.
Commissioner Johannes Hahn, responsible for the EU Budget, said:
“We are continuing to put forward extraordinary amounts of funding to support Europe’s recovery and to tackle current and future challenges. The budget remains an important tool the Union has at its disposal to provide clear added value to people’s lives. It helps Europe shape a changing world, in which we are working together for peace, prosperity and our European values”.
The draft budget 2023, boosted by NextGenerationEU, is designed to respond to the most crucial recovery needs of EU Member States and our partners around the world. These financial means will continue to rebuild and modernise the European Union and strengthen Europe’s status as a strong global actor and reliable partner.
Additional proposals to finance the impact of the war in Ukraine both externally and internally will be tabled later in the year, on the basis of a more precise needs assessment, as per the European Council conclusions of 31 May 2022.
The budget reflects the EU’s political priorities, which are crucial to ensure a sustainable recovery and to strengthen Europe’s resilience. To that end, the Commission is proposing to allocate (in commitments):
- €103.5 billion in grants from NextGenerationEU under the Recovery and Resilience Facility (RRF) to support economic recovery and growth following the coronavirus pandemic and to address the challenges posed by the war in Ukraine.
- €53.6 billion for the Common Agricultural Policy and €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 in light of expected global food supply shortages.
- €46.1 billion for regional development and cohesion to support economic, social and territorial cohesion, as well as infrastructure supporting the green transition and Union priority projects.
- €14.3 billion to support our partners and interests in the world, of which €12 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.5 for the Instrument for Pre-Accession Assistance (IPA III), and €1.6 billion for Humanitarian Aid (HUMA).
- €13.6 billion for research and innovation, of which €12.3 billion for Horizon Europe, the Union’s flagship research programme. It would receive an extra €1.8 billion in grants from NextGenerationEU.
- €4.8 billion for European strategic investments, of which €341 million for InvestEU for key priorities (research and innovation, twin green and digital transition, the health sector, and strategic technologies), €2.9 billion for the Connecting Europe Facility to improve cross-border infrastructure, and €1.3 billion for the Digital Europe Programme to shape the Union’s digital future. InvestEU would receive an extra €2.5 billion in grants from NextGenerationEU.
- €4.8 billion for people, social cohesion, and values, of which €3.5 billion Erasmus+ to create education and mobility opportunities for people, €325 million to support artists and creators around Europe, and €212 million to promote justice, rights, and values.
- €2.3 billion for environment and climate action, of which €728 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. The Just Transition Fund would receive an extra €5.4 billion in grants from NextGenerationEU.
- €2.2 billion for spending dedicated to space, mainly for the European Space Programme, which will bring together the Union’s action in this strategic field.
- €2.1 billion for protecting our borders, of which €1.1 billion for the Integrated Border Management Fund (IBMF), and €839 million (total EU contribution) for the European Border and Coast Guard Agency (Frontex).
- €1.6 billion for migration-related spending, of which €1.4 billion to support migrants and asylum-seekers in line with our values and priorities.
- €1.2 billion to address defence challenges, of which €626 million to support capability development and research under the European Defence Fund (EDF), as well as €237 million to support Military Mobility.
- €927 million to ensure the smooth functioning of the Single Market, including €593 million for the Single Market Programme, and close to €200 million for work on anti-fraud, taxation, and customs.
- €732 million for EU4Health to ensure a comprehensive health response to people’s needs, as well as €147 million to the Union Civil Protection Mechanism (rescEU) to be able deploy operational assistance quickly in case of a crisis.
- €689 million for security, of which €310 million for the Internal Security Fund (ISF), which will combat terrorism, radicalisation, organised crime, and cybercrime.
- €138 million for secure satellite connections under the proposal for a new Union programme, the Union Secure Connectivity Programme.
- Budgetary means for the European Chips Act will be made available under Horizon Europe and through redeployment from other programmes.
The draft budget for 2023 is part of the Union’s long-term budget as adopted by the Heads of State and Governments at the end of 2020, including subsequent technical adjustments, seeks to turn its priorities into concrete annual deliverables. A significant part of the funds will therefore be dedicated to combatting climate change, in line with the target to spend 30% of the long-term budget and the NextGenerationEU recovery instrument on this policy priority.
Background
The draft EU budget for 2023 includes expenditure under NextGenerationEU, to be financed from borrowing at the capital markets, and the expenditure covered by the appropriations under the long-term budget ceilings, financed from own resources. For the latter, 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. The proposed EU budget for 2023 amounts to €185.6 billion in commitments and €166.3 billion in payments. All amounts are in current prices.
The actual NextGenerationEU payments – and funding needs for which the European Commission will seek market financing – may be different, and will be based on precise estimates evolving over time. The Commission will continue to publish six-monthly funding plans to provide information about its planned issuance volumes in the months to come.
With a budget of up to €807 billion in current prices, NextGenerationEU helps the EU recover from the immediate economic and social damage caused by the coronavirus pandemic and enables us to respond to current and future crises such as the war in Ukraine. The temporary instrument helps build a post-COVID-19 EU that is greener, more digital, more resilient and better fit for the current and forthcoming challenges. 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.
More Information
2021-2027 long-term EU budget & NextGenerationEU
Questions and answers: Draft annual budget 2023
1. What are the priorities of the draft budget for 2023?
The EU budget is the centrepiece of the Union’s recovery efforts, aiming to help Europe shape a changing world. The budget for 2023 aims to boost the recovery from the coronavirus pandemic, to put Europe on the path towards a sustainable future, to protect and create jobs, and to strengthen the Union’s strategic autonomy. This is expressed in tangible support for people in need in Europe and its neighbourhood, companies and hard-hit sectors, reinforcement of the single market and investments in future-oriented sectors. Additional proposals to finance the impact of the war in Ukraine both externally and internally will be tabled later in the year, on the basis of a more precise assessment of the needs.
The combined EU budget 2023 and NextGenerationEU will make available some €300 billion in funding to help rebuild and modernise our continent, fostering the green and digital transitions, and making sure we create a stronger and more resilient Europe, which plays an active role in the world.
In parallel, the EU budget will continue to support Europe’s political priorities, whose contribution to a sustainable recovery is more relevant than ever. The Commission remains committed to 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 2023 will enable the Commission to deliver on all of these priorities.
2. How does the draft budget for 2023 relate to NextGenerationEU?
NextGenerationEU is giving the EU budget the additional financial means necessary to respond decisively to the urgent challenges caused by the coronavirus pandemic. It has extraordinarily been put in place for a temporary period to be used for crisis response and recovery measures. The funds it is generating are channelled through the EU budget to support investment and reform priorities, and are reinforcing programmes that are key to the recovery.
To finance NextGenerationEU, the Commission will borrow up to €807 billion on the capital markets via a diversified funding strategy. The funds will be disbursed via grants or loans, either through the Recovery and Resilience Facility or through several EU budget programmes which receive top-ups from NextGenerationEU.
To date the Commission has raised €113.5 billion in long term funding. Some €100 billion have been paid out to EU countries under the Recovery and Resilience Facility, and a few more billions under other budgetary programmes.
Payments under NextGenerationEU will continue until end-2026.
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.
For instance, 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 year N+1, N+2, N+3, etc., depending on when the invoices are reimbursed.
4. What is an external assigned revenue?
The EU budget is governed by the principle of universality. This means that there is no direct link between the source of the revenue collected (for instance the VAT or the GNI resources) and the expenditure that it finances.
There is an exception to this rule and this is the assigned revenue, meaning specific revenue, which is collected to finance specific expenditure.
The types of existing external and internal assigned revenue are listed in Article 21 of the Financial Regulation – the rules governing how the EU budget is spent.
5. What is the Union doing to support Ukraine and its people against Russia’s invasion?
The Union has responded swiftly and united in solidarity with Ukraine and its people following Russia’s invasion in February 2022.
Since the Russian aggression started, the EU has mobilised around €4.6 billion to support Ukraine’s overall economic, social and financial resilience in the form of macro-financial assistance, budget support, emergency assistance, crisis response and humanitarian aid. This includes €1.2 billion in emergency macro-financial assistance provided since February 2022, and military assistance measures provided under the European Peace Facility, amounting to €2 billion, that will be used to reimburse Member States for their in-kind military support to Ukraine.
Additionally, the European Investment Bank and the European Bank for Reconstruction and Development have provided loans of some €1.7 billion, backed by the EU budget.
The EU stands ready to provide further macro-financial assistance loan under a new exceptional programme for Ukraine of up to €9 billion in 2022 as agreed by in the European Council on 30-31 May.
As per the European Council conclusions of 31 May 2022, additional proposals to finance the impact of the war in Ukraine both externally and internally will be tabled later in the year, on the basis of a more precise assessment of the needs.
6. What happens next?
Following adoption by the College, the European Commission submits the draft 2023 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 Parliaments 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 25 October and 14 November.
For More Information
Press release: Draft annual budget 2023
2021-2027 long-term EU budget & NextGenerationEU
Proposed EU budget for 2023 struggles to meet current challenges, say MEPs
Budget MEPs found that the proposed 2023 budget is not equipped for current geopolitical and other challenges and demand an urgent revision of the Multiannual Financial Framework.
In a meeting with Members of the Committee on Budgets on Tuesday, Johannes Hahn, the Commissioner responsible for the EU Budget, presented an EU budget of €185.6 billion for 2023, to be complemented by an estimated €113.9 billion in grants under the “NextGenerationEU” recovery plan.
Nicolae Ştefănuță (RENEW, RO), general rapporteur for the EU budget 2023, commented on the proposal: “Today we are moving from speeches to numbers and to concrete solutions. The European Parliament wants a budget worthy of the response that citizens expect and the current geopolitical situation demands. The EU’s budget is limited and we need a revision of the MFF today to fill the EU’s empty treasury. The EU cannot be a serious player in the current crises without money. This is the mission we as MEPs have set ourselves, and we hope that member states understand the gravity of current events and that democracy and EU security depend on the Union’s budget.”
Parliament’s priorities
MEPs will now look into the proposal in detail. Among Parliament’s priorities, based on the EP’s guidelines for the preparation of the 2023 budget from April, were the economic recovery, health, youth and climate action, and dealing with the impact of the invasion of Ukraine. MEPs stressed in their guidelines, adopted with a big majority, that “the Union requires sufficient resources to respond to major crises as well as the long-term challenges in its neighbourhood and throughout the world, while recalling that (…) a revision of the current MFF is indispensable”.
Watch the presentation by Commissioner Hahn and the debate in the Committee on Budgets
Next steps
Parliament will vote its position for the budgetary negotiations during October. The 21-day conciliation period then runs from 25 October to 14 November. If no agreement between Parliament and Council has been found by the end of the conciliation period, the Commission must propose a second draft budget, and negotiations continue. The full calendar for the budgetary procedure 2023 is available here.
Background
On 7 June, Johannes Hahn, Commissioner responsible for the Budget and Human Resources, has presented to the Members of the Committee on Budgets the Commission’s Draft Budget for the year 2023, right after its adoption by the college of Commissioners. The proposed annual budget amounts to €185.6 billion in commitments and €166.3 billion in payments. All amounts are in current prices.
In line with Article 314 TFEU, this presentation kicks off the annual budgetary procedure, whereby Parliament is expected to respond to Council’s position on the draft budget in the autumn.
Further information
ECR: EU must brace for crisis-ridden 2023, says Bogdan Rzońca
At the presentation of the draft 2023 budget by Budget Commissioner Johannes Hahn to the European Parliament’s Budget Committee, ECR Group budget spokesperson Bogdan Rzońca called for greater financial flexibility, saying that the EU should take precautions to avert the global food shortage.
“I believe that what we will face in the coming months and in 2023 will be a food crisis. Now, we know that grain stocks around the world will last around eight to ten weeks”, Rzońca said.
In addition, funds should be earmarked to help refugees from Ukraine.
“Due to the war in Ukraine, there are neighbouring regions that require additional support due to the influx of millions of refugees. I believe that in some areas we have to avoid the usual dogmas in order to cope with crisis situations”, Rzońca added.
Small and medium-sized enterprises should also benefit more from economic development measures, according to Rzońca.
Source – ECR – via e-mail