Questions and answers on Draft Annual Budget 2026

Full overview of the Commission proposal for the Draft Annual Budget 2026

The Commission proposes to allocate the following amounts to the various EU priorities (in commitments):

• €53.80 billion for the Common Agricultural Policy and €0.80 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.
• €42.09 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.
• €14.51 billion to support investments in our people and social cohesion through the European Social Fund Plus (ESF+).
• €15.51 billion to support our partners and interests in the world, of which, among others, €10.11 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.20 billion for the Instrument for Pre-Accession Assistance (IPA III) and €0.50 billion for the Growth Facility for the Western Balkans, as well as €1.93 billion for Humanitarian Aid (HUMA).
• A further €3.89 billion will be available in grants under the Ukraine Facility complemented by €6.70 billion in loans.
• €14.12 billion for research and innovation, of which mainly €12.97 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.
• €4.59 billion for European strategic investments, of which, for instance, €3.02 billion for the Connecting Europe Facility to improve cross-border infrastructure, €1.00 billion for the Digital Europe Programme to shape the Union's digital future, and €299 million for InvestEU.
• €2.33 billion for spending dedicated to space, mainly for the European Space Programme, which will bring together the Union's action in this strategic field.
• €15.13 billion for resilience and values, of which, €4.3 billion Erasmus+ to create education and mobility opportunities for people, €396.0 million to support artists and creators around Europe, and €332.6 million to promote justice, rights, and values.
• €2.18 billion for environment and climate action, of which €802.9 million for the LIFE programme to support climate change mitigation and adaptation, and €1.26 billion for the Just Transition Fund to make sure that the green transition works for all.
• €2.69 billion for protecting our borders, of which €1.2 billion for the Integrated Border Management Fund (IBMF), and €1.13 billion (total EU contribution) for the European Border and Coast Guard Agency (Frontex).
• €2.32 billion for migration-related spending, of which €2.08 billion to support migrants and asylum-seekers in line with our values and priorities.
• €1.99 billion to address defence challenges, of which mainly €1.0 billion to support capability development and research under the European Defence Fund (EDF) and €251.3 million to support Military Mobility.
• €1.02 billion to ensure the functioning of the Single Market, including €622 million for the Single Market Programme, and €207 million for work on anti-fraud, taxation, and customs.

How is the draft budget reflecting the new Commission priorities?

The draft budget 2026 includes funding for flagship programmes contributing to the Competitiveness Compass, the Clean Industrial Deal, the Union of Skills and the EU Startup and Scaleup Strategy, as well as a series of simplification measures through Omnibus proposals.

How is defence financed in the draft budget for 2026?

The Union is facing unprecedented security challenges, which need to be addressed urgently, including through a swift adoption of the proposed European Defence Industry Programme (EDIP), which aims at strengthening the competitiveness and responsiveness of the European Defence Technological and Industrial Base, while ensuring the availability and supply of defence products. The defence priorities will also be served by the additional funding available under the European Defence Fund (EDF), for projects related to the Strategic Technologies for Europe Platform (STEP).

On 22 April the Commission made a proposal incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan/Readiness 2030. To boost the defence capabilities in the Member States, the newly adopted Security Action for Europe (SAFE) instrument enables the Commission to provide the Member States with €150 billion in loans backed by the EU budget, available until 31 December 2030.

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 the current, and previous years.

For instance, when the EU decides to co-fund the building of a bridge in a Member State, 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 (N+x).

How are the increased borrowing costs for NextGenerationEU covered?

Considering the increase of interest rates since 2022, a new ‘cascade mechanism' has been put in place as from 2025 to cover the additional needs for the NGEU interest payments. It includes several steps to finance the additional costs, by making use of availabilities to redirect existing funding within the budget, mobilising special instruments within the long-term budget, and the mobilisation of a new and exceptional instrument over and above the MFF ceilings if financing for the interest payments cannot be found within the existing EU budget.

In the draft budget for 2026, and in line with the approach agreed with Parliament and Council for the 2025 budget, the Commission proposes to finance the additional needs for the borrowing costs through a combination of the unallocated margin in heading 2b (resilience and values), the Flexibility Instrument, and the EURI instrument for the remaining amount, which is fully covered by past decommitments. Therefore, there is no need to recourse to the so-called ‘financial backstop' (a contingency measure to ensure that there is sufficient funding available to address unforeseen circumstances or to stabilize financial systems when necessary.)

How does the draft budget for 2026 relate to the upcoming proposals for the next long-term budget?

The Commission proposes the draft budget for 2026 in line with the current long-term budget, which runs until the end of 2027. The Commission proposal for the next long-term budget as of 2028 will follow in July this year, building on the lessons learnt from the current long-term budget, in particular as regards the need for more flexibility to respond to new and unforeseen developments.

For more information

EU budget 2026: Providing crucial funding for EU priorities in times of global volatility