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The European Commission proposed recently the 2027 annual EU budget at €200 billion (in commitments): the draft budget reflects the mid-term review of the 2021-2027 Cohesion policy. The EU member states will use these financial resources to implement their new priorities in the areas of competitiveness, defence, affordable housing, water resilience and energy transition, by providing the opportunity for the states’ co-financing. The draft will have to be formally adopted by the European Parliament and the Council by the end of 2026.
Background
The EU draft budget for 2027 comes after a series of critical developments over the past years, including a global pandemic, an energy crisis and rising inflation, the return of war on the European continent, as well as growing geopolitical tensions. Over the last months, the crisis in the Middle East has affected a wide range of economic sectors, due to increased energy prices which have led to a more volatile outlook for economic growth and inflation in Europe.
Economic security, and a strong and competitive economy, are at the core of the Union’s priorities. Therefore, the draft budget-2027 includes increased funding for flagship programs – such as Erasmus+, the Connecting Europe Facility, and the Single Market Program– while continuing to provide support to agriculture, not only to safeguard the Union’s food security but also to promote economic stability and the development of rural areas.
The draft for 2027 includes the expenditures covered by the appropriations under the long-term budget ceilings financed from own resources. Two amounts for each program are proposed in the draft – 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. This budget draft for 2027 is the last one under the current Multiannual Financial Framework (MFF). It will ensure financing for important EU programs, in the run-up to the next long-term budget adoption, i.e. the MFF 2028-2034.
The proposed general level of payments for 2027 of about €212 billion is indeed 7% higher than for 2026. This reflects the character of the EU budget as an investment budget, with payments taking place over a longer period of time, in function of progress made with the implementation of projects and actions.
Note. Commitments are the total volume of contractual obligations for future payments that can be made in a given year. Commitments must then be honored 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.
Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1311
Main Budget-2027 priorities
Among main “committed” priorities are the following (in billion euros):
= Cohesion, Resilience and Values – 75.761,2
= Economic, social and territorial cohesion – 58. 483,4; including – Natural Resources and Environment – 57 235,5 and – Resilience and Values – 17. 277,8
= Single Market, Innovation and Digital – 21. 901,5
= Neighborhood and the World – 15. 467,7
= European Public Administration – 13. 659,3
= Migration and Border Management – 5. 789,3
= Security and Defence – 3. 066,4
= Ukraine Support Loan – 1. 150,0
= Thematic special instruments – 5. 874,1
Total appropriations – 199. 905,0
More on Commission’s priorities in: https://commission.europa.eu/priorities-2024-2029_en
Commission’s comments on the draft’s priorities:
= €54 billion for the Common Agricultural Policy, and €0.8 billion for the European Maritime, Fisheries and Aquaculture Fund, to support European farmers and fishers, but also to strengthen the resilience of the agri-food and fisheries sectors, providing 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 the Union’s priority projects.
= €14.5 billion to invest in people, and reinforce social cohesion through the European Social Fund Plus (ESF+).
= €15.5 billion to support the EU’s partners and interests around the world: it includes €10.1 billion under the Neighborhood, 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 €2 billion for Humanitarian Aid (HUMA).
= A further €4 billion will be available in grants under the Ukraine Facility, complemented by €2.2 billion in loans. Moreover, €90 billion in loans will be made available to Ukraine over the period 2026–2027 through the new Ukraine Support Loan instrument. The draft also includes €1.15 billion to cover the related debt service costs.
= €13.8 billion for research and innovation, of which mainly €12.8 billion for Horizon Europe, the Union’s flagship research program. The draft also continues to include the financing of the European Chips Act under Horizon Europe and through the redeployment of other programs.
= €4.7 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 Program to shape the Union’s digital future, and €278 million for InvestEU.
= €2.3 billion for space, mainly for the European Space Program, which will bring together the Union’s action in this strategic field.
= €17.3 billion for resilience and values, including €4.5 billion for Erasmus+ to create education and mobility opportunities, €417 million to support artists and creators across Europe, and €315 million to promote justice, rights and values.
= €2.3 billion for environment and climate action, including €846 million for the LIFE program to support climate change mitigation and adaptation, and €1.3 billion for the Just Transition Fund to make sure no one is left behind in the green transition.
= €3.4 billion for protecting the EU borders, including €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 the EU values and priorities.
= €2.3 billion to address defence challenges, including €1 billion to support capability development and research under the European Defence Fund (EDF), €844 million for the European Defence Industry Program (EDIP), €115 million to stimulate defence innovation under the proposed AGILE program and €256 million to support Military Mobility.
= €1 billion to ensure the functioning of the Single Market, including €622 million for the Single Market Program, and €212 million to strengthen anti-fraud, and supporting taxation and customs measures.
Source and citation from: https://ec.europa.eu/commission/presscorner/detail/en/qanda_26_1312
Additional EU-wide integration priorities
= According to Commission, the draft-2027 supports the Union’s priorities of competitiveness, security, defence, asylum and migration management, the clean and digital transitions, preparedness and resilience. It includes increased funding for flagship programs 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.
= The draft will provide almost €22 billion to fund priority interventions in research and innovation, space, strategic infrastructure, as well as 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 program to develop fusion energy, where funding was concentrated in the early years of this current MFF in line with specific investment needs, and by the reprofiling of the Horizon program in the MFF mid-term revision.
= 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, the pattern of gradually increasing payment needs and correspondingly increasing GNI contributions to balance the budget is well-known over time.
= Considering the increase of interest rates since 2022, a new ‘cascade mechanism’ has been put in place as of 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.