Headings: spending categories

We asked EU budget opinion leaders what the EU budget should be spent on in the future. Watch the videos to see what they said, and keep reading to learn what the EU budget is spent on at the moment.

Views expressed in the videos are personal views of the speakers based on their professional background. They do not represent the views of the organisation they represent.

The EU’s 2021-2027 long-term budget, together with NextGenerationEU, represents a combined firepower of €2.018 trillion in current prices to help repair the economic and social damage caused by the coronavirus pandemic and steer the transition towards a modern and more sustainable Europe. The package consists of the long-term budget for 2021-2027 (the Multiannual Financial Framework) of €1.211 trillion in current prices, combined with the temporary recovery instrument, NextGenerationEU, of €806.9 billion in current prices.

Allocations per heading (all amounts in € billion):

The EU wants to step up investment in areas such as research and innovation, digital transformation, strategic infrastructure, and the Single Market, as they will be key to unlocking future growth. Programmes under this heading will help us tackle common challenges such as decarbonisation and demographic change, and boost the competitiveness of enterprises and SMEs. Some examples:

• The new European research programme Horizon Europe will be reinforced to fund vital research in health, resilience, and the green and digital transitions. It will help Europe remain at the forefront of global research and innovation.
• InvestEU will be one of the programmes to kick-start the European economy. It will mobilise public and private investment through an EU budget guarantee, provide technical advice and connect worldwide investors with projects that need funding. Alongside providing crucial support to companies, it will also ensure that the focus of investors will shift towards EU policy priorities, such as the European Green Deal, digital transition, and greater resilience.
• The Single Market Programme will help maintain a well-functioning single market driving recovery. The Single Market is the beating heart of the EU, where people, goods, services and money can move almost as freely as within a single country. In the next long-term EU budget, a dedicated Single Market Programme will empower and protect consumers, and enable Europe’s many small and medium-sized enterprises (SMEs) to thrive.
• The new EU Space programme will ensure that the EU remains a global leader in the space domain. Space technology, data and services have become indispensable in people's lives, and play an essential strategic role for Europe. The programme will foster a strong and innovative space industry, and establish a unified and simplified system of governance.

The main programmes under this spending category aim to strengthen the cohesion among EU Member States. In this way, they reduce disparities in EU regions, within and across Member States, and promote sustainable territorial development.

In addition, through investment in young people, health and actions to protect EU’s values, the programmes seek to make Europe more resilient to the various challenges that our continent is and will be facing in the future.

The Recovery and Resilience Facility and REACT-EU, the two main programmes under NextGenerationEU, are also included in this heading.

Some examples:

• The European Social Fund+ (ESF+) will support youth employment, up- and re-skilling of workers, and poverty reduction.
• Building on its popularity and success, the new Erasmus+ programme will continue to create opportunities for the education, training and mobility of young people.
• The RescEU programme will continue to protect people from disasters, manage risks stemming from emergencies, as well as ensure resilience at EU level. Actions taken under this programme vary from providing a fleet of firefighting planes and helicopters to cope with forest fires, to ensuring stockpiling of medical equipment and field hospitals in order to respond to health emergencies.
• The new REACT-EU programme will also increase resilience at EU level. REACT-EU builds on the measures taken as an immediate response to the coronavirus outbreak. Under the Cohesion policy, REACT-EU will provide funds rapidly (with 50% pre-financing) to regions and Member States most impacted by the crisis to contribute to a green, digital and resilient recovery of the economy.

The EU budget is and will continue to be a driver of sustainability: investing in sustainable agriculture and maritime sectors, alongside with climate action, environmental protection, food security and rural development.

Part of the programmes under this spending category support Europe’s farming, agricultural and fisheries sectors and seek to make them more competitive. Other programmes are dedicated exclusively to the EU’s environmental and climate objectives.

• The Common Agricultural Policy (CAP) will be reformed and modernised, which will allow maintaining a fully integrated Single Market for agricultural goods in the EU, while making it more sustainable.
• The CAP also includes direct payments to farmers, who are paid on average 40% less than all other non-agricultural jobs. Direct payments guarantee a safe, high-quality, and affordable supply of EU-produced food.

• The LIFE programme is the EU’s funding instrument for the environment and climate action. It finances in particular projects linked to nature, water, air, climate change mitigation and adaptation to improve EU quality of life. Thanks to LIFE, 1.5 million people now benefit from improved air quality, while 42% of targeted species are progressing towards conservation status.

• To address the social and economic consequences coming from the objective to reach climate neutrality in the EU by 2050, a Just Transition Fund will help the most vulnerable coal- and carbon-intensive regions address the economic and social costs of the climate transition.

Programmes under this heading tackle the challenges linked to migration and the management of borders. Support to strengthen our external borders will be increased to safeguard the asylum system within the EU, and support to Member States will be boosted to step up the management and integration of migrants. Some examples:

• A reinforced Asylum and Migration Fund will help national authorities with receiving asylum seekers and migrants in the period immediately after their arrival on EU territory. Moreover, it will help develop a common asylum and migration policy, and ensure effective returns.
• The Integrated Border Management Fund will help ease the shared responsibility of securing the external borders by providing financial support to Member States. At the same time, it will safeguard the free movement of people within the EU.

This heading includes programmes that strengthen the security and safety of European citizens, improving Europe’s defence capacities, and providing the tools to respond to crises. Beyond internal security challenges, Europe faces complex external threats that no Member State can meet on its own. To be ready to protect its citizens, Europe also needs to enhance its strategic autonomy, and build well-designed and streamlined defence instruments. Some examples of programmes under this heading:

• The Internal Security Fund was reinforced to develop networks and common systems for efficient cooperation between national authorities. The Fund will also improve the capacity of the EU to face security threats such as terrorism, radicalisation, organised crime, and cybercrime.
• Financial support to help the decommissioning of certain nuclear power plants will ensure nuclear safety in Europe.
• The European Defence Fund will promote defence cooperation between industries of all sizes, including SMEs, and between EU countries. The aim is to support innovation, and develop state-of-the-art defence technology and products. This, in turn, will lead to savings for Member States.

Programmes under this heading invest in the EU’s external action in its neighbourhood, in developing countries and the rest of the world. The heading also includes assistance for countries preparing for accession to the EU.

Thanks to this funding, the EU can keep and even strengthen its role as a global player, while remaining, together with its Member States, the world’s leading development and humanitarian aid donor.

• Most instruments that fund the EU’s external action are being merged into a Neighbourhood, Development and International Cooperation Instrument (NDICI). In this way, the financing of the EU’s external action becomes more coherent, transparent and flexible.
• With this instrument, the EU will focus on strategic priorities both geographically and thematically. The funding under NDICI will focus on the European Neighbourhood, Africa and the Western Balkans, as well as countries that are most in need. It will cover security, migration, climate change and human rights.
• An instrument for pre-accession will help the candidate countries on their path to fulfil the accession criteria.
• Humanitarian aid will continue saving lives in times of increasing humanitarian needs. It will help addressing the most acute humanitarian needs: from worsening natural disasters due to climate change to challenges caused by the coronavirus pandemic and other infectious diseases, conflicts, and the global refugee crisis.

The European public administration is small in comparison with national and even many regional and local administrations. However, it plays a crucial role in helping the EU to deliver on its priorities, and to implement policies and programmes in the common European interest.

This heading covers mainly the administrative expenditure of all EU institutions, as well as the pensions of the retired EU officials.