Questions and answers on the agreement on the EU Annual Budget 2027

Full overview of the Annual Budget 2027:

In the Annual Budget 2027 the following amounts will be allocated to the various EU priorities (in commitments):

• €53.8 billion for the Common Agricultural Policy and €0.8 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.
• €44 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.
• €14.5 billion to support investments in our people and social cohesion through the European Social Fund Plus (ESF+).
• €15.5 billion to support our partners and interests in the world, of which, among others, €10.1 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 €0.5 billion for the Growth Facility for the Western Balkans, as well as €1.99 billion for Humanitarian Aid (HUMA).
• A further €4 billion will be available in non-repayable support under the Ukraine Facility, complemented by €2.2 billion in loans.
• €13.7 billion for research and innovation, of which mainly €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.
• €4.8 billion for European strategic investments, of which, for instance, €3.1 billion for the Connecting Europe Facility to improve cross-border infrastructure, €1.1 billion for the Digital Europe Programme to shape the Union's digital future, and €277.5 million for InvestEU.
• €2.3 billion for spending dedicated to space, mainly for the European Space Programme, which will bring together the Union's action in this strategic field.
• €17.3 billion for resilience and values, of which, €4.5 billion Erasmus+ to create education and mobility opportunities for people, €418 million to support artists and creators around Europe, and €354 million to promote justice, rights, and values.
• €2.3 billion for environment and climate action, of which €855 million for the LIFE programme to support climate change mitigation and adaptation, and €1.3 billion for the Just Transition Fund to make sure that the green transition works for all.
• €3.4 billion for protecting our borders, of which €2 billion for the Integrated Border Management Fund (IBMF), and €1.1 billion (total EU contribution) for the European Border and Coast Guard Agency (Frontex).€2.4 billion for migration-related spending, of which €2.1 billion to support migrants and asylum-seekers in line with our values and priorities.
• €2.3 billion to address defence challenges, of which mainly €1 billion to support capability development and research under the European Defence Fund (EDF), €844 million for the new European Defence Industry Programme (EDIP, including for the Ukraine Support Instrument (USI)) and €266 million to support Military Mobility.
• €1.1 billion to ensure the functioning of the Single Market, including €707 million for the Single Market Programme, and €212 million for work on anti-fraud, taxation, and customs.

 

How much will be allocated in payments?

The total level of payment appropriations will be at €211.5 billion. This total amount reflects the growing needs for payments in 2027, with all EU programmes running at full speed, in particular for cohesion policy.

 

Why is the level of payments in the annual budget 2027 5% higher than in the previous year?

The level of payments for 2027 of €211.5 billion is indeed almost 5% higher than for 2026. Payments take place over a longer period of time, in function of progress made with the implementation of projects and actions.

This is the normal pattern which we have also observed at the end of previous long-term budget periods.

Therefore, these growing needs for payments are known well in advance.

 

What impact will this increase in payments have on contributions from the Member States to the EU budget?

The EU budget is financed wholly from own resources, plus other revenue. Therefore, the increasing needs for payments as described above lead to increasing the Gross National Income (GNI) own resources contributions from the Member States, to ensure that EU budget revenue and expenditure remain in balance. Also here, the pattern of gradually increasing payment needs and correspondingly increasing GNI contributions to balance the budget is well-known over time.

 

How does the Annual Budget 2027 reflect the EU's priorities?

The Annual Budget 2027 supports the Union's priorities of competitiveness, security, defence, asylum and migration management, the clean and digital transitions, preparedness, and resilience.

It includes high levels of funding for flagship programmes which contribute to economic security and a competitive economy. At the same time, it maintains strong support for agriculture, helping safeguard the Union's food security while promoting economic stability and the development of rural areas. Finally, it provides a robust package for external action and humanitarian assistance, and broad support for Ukraine.

 

How does the Annual Budget for 2027 relate to the proposal for the next long-term budget?

The Annual Budget for 2027 is the final annual budget under the current long-term EU budget for the 2021–2027 period.

The negotiations on the next long-term budget 2028-2034, are reaching the final stages as well: the Commission hopes for a swift agreement, also with a view to keeping sufficient time for preparations in the course of 2027.

 

Is there anything from the Annual Budget 2027 that carries over into the next long-term budget?

The Annual Budget 2027 provides adequate funding for the Union's priorities. No costs are carried into the next long-term budget, other than the ‘normal' payments to cover the contractual obligations stemming from the 2027 budget, which is a regular feature of the EU budget as an investment budget (see the question on the difference between commitments and payments below).

In addition, some of the Union's ongoing borrowing operations will have an impact on the next long-term budget for 2028-2034. This concerns in particular the repayment of NextGenerationEU, the Union's post-COVID recovery fund, as well as the funding provided to Ukraine, including through the Ukraine Support Loan as agreed earlier this year.

The Commission has proposed a fixed annual amount to cover the related interest costs and repayment of principal in the long-term budget for 2028-2034, to ensure full predictability.

 

When will the Draft Budget for 2028 be adopted?

The annual budget for 2028 will be proposed by the Commission in 2027, following the agreement on the next Multiannual Financial Framework.

In accordance with the Treaty, the Commission needs to present its proposal by the end of June 2027 at the latest. As with every annual budget, it will then be negotiated by the European Parliament and the Council, with the objective of adoption before the end of 2027.

 

What would happen if there is no timely agreement on the next Multiannual Financial Framework?

The Treaties provide safeguards to ensure the continuity of EU funding if a new Multiannual Financial Framework (MFF) is not agreed in time.

Under Article 312 of the Treaty on the Functioning of the European Union, the ceilings and other provisions corresponding to the last year of the current MFF, 2027, would be provisionally extended until a new framework is adopted.

Consequently, while payments on legal commitments from the 2021-2027 programmes will continue as planned, new budget expenditures would be possible beyond 2027 where there is a corresponding legal basis for them. Funding for programmes without such a legal basis would cease until relevant successor programmes are adopted.

A timely agreement on the next long-term budget is thus crucial to provide predictability for beneficiaries, support new policy priorities, and ensure that the Union can respond effectively to future challenges.

 

Does the budget for 2027 provide adequate funding for Cohesion policy and agriculture?

Cohesion policy and agriculture remain core priorities of the EU budget and both receive increased funding compared to 2026. In the 2027 budget, funding of around €58 billion and €55 billion is provided for Cohesion and agriculture respectively, for a total of around €113 billion.

At the same time, the Union must also respond to new priorities such as security, defence, preparedness, migration management, energy resilience, and competitiveness. The Commission proposal seeks to balance these objectives within the limits of the current long-term budget.

 

Is funding for research, innovation, and space reduced?

The Annual Budget for 2027 will provide around €22 billion to fund priority interventions in research and innovation, space, strategic infrastructure, and the strengthening of the Single Market.

The small reduction compared to the 2026 annual budget is mostly driven by the specific profile of the ITER programme to develop fusion energy, where funding was concentrated in earlier years of this current MFF in line with specific investment needs, and by the reprofiling of the Horizon Europe programme in the MFF mid-term revision. At the same time, additional funding is provided for the Space Programme, the Connecting Europe Facility and the Digital Europe Programme.

 

Is funding for external action reduced?

The Annual Budget for 2027 provides a robust package of €15.5 billion for external action. This is broadly comparable to the 2026 annual budget and reflects the choice to frontload assistance to third countries at the beginning of this MFF.

The funding for external action in the Annual Budget will ensure continued support for Syrian refugees and humanitarian assistance across the world. It will also contribute to finance the €1.6 billion package for Palestine agreed in 2025, as well as provide €200 million in support to Greenland.

 

How will the Annual Budget for 2027 support Ukraine?

The Ukraine Support Loan is a €90 billion limited recourse loan covering military assistance and general budget support, to be disbursed in 2026 and 2027. To complement this support, the Annual Budget for 2027 includes a total of €650 million to cover the loan's debt service costs.

Besides of the Ukraine Support Loan, the 2027 budget will continue to provide broader support to Ukraine. In 2027, €4 billion will be available under the Ukraine Facility in non-repayable support and €2.2 billion in loans. Finally, Ukraine will receive funding from humanitarian aid and the Ukraine Support Instrument under the European Defence Industry Programme (EDIP).

 

How is the new Ukraine Support Loan financed in the Annual Budget for 2027?

The new Ukraine Support Loan will provide Ukraine with urgently needed military assistance and general budget support, for a total amount of €90 billion in 2026 and 2027. The disbursements under the Ukraine Support Loan by the end of the third quarter of 2026 amounted to €14.9 billion, which will lead to debt service costs of €650 million in 2027. These costs are covered by existing availabilities under the Flexibility and Single Margin Instrument. In line with the revised MFF Regulation of April 2026, the mobilisation of the new Ukraine Support Loan special instrument is therefore not needed.

 

Why is the funding for the Ukraine Support Loan falling by half a billion compared to the Draft Budget 2027?

The debt service costs for the Ukraine Support Loan in 2027 are based on the amount of disbursements until the end of September 2026, which amounted to €14.9 billion. This amount is lower than what was forecast at the time of the Draft Budget in June, due to some disbursements having moved to October. Full disbursement of the planned €45 billion by the end of 2026 is however still expected. Debt service costs for remaining disbursements in the fourth quarter of 2026 will be covered by the 2028 budget.

 

How are the increased borrowing costs for NextGenerationEU covered?

Since the increased interest rates in 2022, a new ‘cascade mechanism' has been put in place as from 2025 to cover the additional needs for the NextGenerationEU 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.

For 2027, the final cost of funding supported amounts to €9.9 billion (i.e. additional needs of around €4.9 billion over and above the financial programming for 2027. Following the MFF mid-term revision and in line with the agreement reached on the application of the EURI cascade mechanism in the Conciliation on the 2025 budget, 50% of the additional needs will be financed by existing availabilities and the remaining 50% through the mobilisation of the EURI instrument.

Therefore, the financing for 2027 will be as follows:

• The unallocated margin in heading 2b will be used for an amount of €516 million,

• The Flexibility Instrument for an amount of €1.9 billion – bringing the overall amount in ‘step 2' of the EURI cascade mechanism to the benchmark of 50% of the additional needs;
• The EURI instrument will be mobilised for the remaining amount of around €2.4 billion, fully covered by past decommitments. There will be no need to recourse to the so-called ‘financial backstop'.

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).

 

For more information

Press release