The budget
What is the budget of the European Union?
Where does he come from? How is it spent?
The Multiannual Financial Framework
The European budget shall be adopted annually by the European Parliament and EU Council. However, it must be part of the Multiannual Financial Framework (MFF).
Established by the Treaty of Lisbon, and defined every 7 years by a Council Regulation adopted unanimously, the MFF shall cap expenditure and revenue over the given period. It gives long-term visibility to EU policies.
The current MFF, 2021-2027, has benefited from an exceptional envelope, the European Recovery Plan (Next Generation EU), following the VOCID crisis. Voted in December 2020, it amounts to €1824 billion (2018 prices).
A mid-term review, decided in March 2024, increased this envelope by €64.6 billion, mainly to Ukraine (€50 billion in loans and grants).
EU resources
The budget is financed by different types of resources, since the European Union itself does not levy taxes directly:
- A contribution from the Member States calculated on their Gross national income (GNI) provides 2/3 of the budget.
- A VAT-based own resource (11% of the EU budget) This is the transfer by Member States of a fraction of the amount of VAT they collect on their territory (0.3% for 2021-2027).
- Customs duties (11% of the EU budget), from goods from third countries to the EU.
- The EU complements its budget with fines imposed on undertakings not complying with the competition rules or bytax on the remuneration of EU staff.
With €27 billion paid out in 2023, France is the second largest contributor to the European Union. the European budget, after Germany. It is also one of the main beneficiaries of EU spending, behind Poland, but ahead of Spain. It remains a net contributor (7 billion euros in 2018, or about 106 € / resident).
To finance the €750 billion recovery plan, the EU has for the first time contracted a loan which it will start to repay from 2028 onwards. New own resources have been decided or are under consideration.
New own resources of the European Union
