Millions of students, thousands of researchers, cities, businesses, regions and NGOs benefit from the EU's long-term budget.

It contributes to healthier and safer food, new and better roads, railways and airports, a cleaner environment and better security at the EU's external borders. By pooling resources, Europe becomes stronger and it is possible to fund projects that improve the lives of citizens. As Europe faces the devastating social and economic consequences of a coronavirus pandemic, an ambitious EU budget that meets citizens' expectations is more important than ever. 

What is the EU's long-term budget?

The EU's long-term budget, also known as the Multiannual Financial Framework (MFF), sets the limit for EU investment in various areas for a period of at least five years. The last long-term budget was adopted for a period of seven years.

One of the reasons for the existence of a long-term budget is the predictability of project financing. It is needed, for example, by researchers on scientific projects that have been running for several years.

In order to respond to unpredictable and emergency situations, such as the COVID-19 pandemic, the long-term budget must be flexible and include instruments that allow money to be used where it is most needed. For example, the EU Solidarity Fund exists to provide financial assistance to a Member State in the event of a major disaster, while the European Globalization Adjustment Fund helps jobseekers who have become redundant due to structural changes in world trade or the economic crisis. Since the onset of the coronavirus crisis, EU funds have been made available to combat the socio-economic effects of the pandemic and to support the health systems of the Member States.

Unlike national budgets, the EU is more of an investment budget. For example, it does not fund primary education or national defense. Instead, the focus is on key areas that add value to Europeans by boosting growth and competitiveness or showing solidarity by supporting those hardest hit by the corona crisis.

What does the EU spend money on?

The budget supports research and innovation, investment in trans-European networks and the development of small and medium-sized enterprises (SMEs), which aim to boost growth and create new jobs in the EU.

The EU's Common Agricultural Policy, as well as the Common Fisheries Policy and the Environment, receive the most funding under the current long-term budget. This is followed by investment in "cohesion" programs aimed at reducing disparities in the level of development of EU regions. International humanitarian aid and development projects are also financed through the long-term budget.

Learn more about programs supported by a long-term budget, as well as projects in your region.

How is the long-term budget financed?

The long-term EU budget has a complex structure and several sources of revenue.

These include:

· Contributions from EU countries

· Import duties on products outside the EU

· Penalties for companies that violate EU competition rules

To help EU countries save money, especially in light of the consequences of the coronavirus, Parliament wants to reform the way the EU budget is financed and has called for new sources of revenue.

Due to the expected decline in the gross national income of EU member states in the light of the pandemic and to finance the recovery, Parliament approved an increase in the so-called "own resources ceiling", especially the largest amount the EU can ask Member States to finance.

What will be the budget for 2021-2027?

In the negotiations, Parliament provided an additional 15 billion euros to strengthen key EU programs such as the EU for health, Horizon Europe (research and innovation) and Erasmus + (youth and education), which improve life across Europe. An additional billion euros will allow flexibility in resolving possible future crises.

At least 30 per cent of the EU budget and the € 750 billion recovery fund will be used for climate goals. Parliament has also ensured increased budgetary oversight of the recovery fund. For the budget for 2021-2027. the final consent of Parliament is needed, as well as the unanimous support of the Council. Parliament approved the seven-year budget by a vote on 16 December, and the Council adopted it the following day. Together with the COVID-19 pandemic recovery package, it will allow the EU to invest 1.8 trillion euros.

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