REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2019-2023)
Date: 2018-10-10
Institutions: Directorate-General for Budget, European Commission
Subjects: EU budget, EU expenditure, Member States' contribution, budget policy, budgetary resources, long-term forecast, multiannual financial framework, own resources

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 10.10.2018  COM(2018) 687 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2019-2023)  
 
 
1. 

INTRODUCTION 

This  report  provides  a  long-term  forecast  of  future  inflows  and  outflows  covering  the  next  five 
years (2019-2023) as required by Article 247(1)(c) of the Financial Regulation1. The analysis takes 
into account the principles and terms set out in the draft Withdrawal Agreement2 between the EU 
and  the  United  Kingdom.  It  does  not  assess  the  impact  on  the  long-term  forecast  of  a  failure  to 
conclude or ratify the Withdrawal Agreement. 

The scope of the forecast captures the elements of the current and the next financial frameworks. It 
is  based  on  the  level  of  commitment  appropriations  for  2019  and  2020  as  included  in  the  Draft 
Budget 2019 and the accompanying financial programming for 2020. For the years 2021-2023 the 
commitments  presented  in  the  Commission’s  proposal  for  the  next  Multiannual  Financial 
Framework (MFF)3 are taken into account.  

New  information,  following  the  MFF  proposal  of  2  May  2018,  is  also  reflected  as  follows:  the 
Member  States’  updated  forecasts  for  the  implementation  of  the  2014-2020  European  Structural 
and  Investment  Funds4  (ESI  Funds)  provided  by  31st  July  2018;  amendments  to  the  2018  budget 
(i.e.  the  Draft  Amending  Budget  N°55  and  the  results  of  the  global  transfer  exercise)  and  the 
Amending Letter No.1 to the Draft Budget 2019. The initiatives announced on 12 September 20186 
to  further  strengthen  the  European  Border  and  Coast  Guard  Agency  and  the  European  Asylum 
Agency have been taken into consideration, as well. 

2. 

RESULTS OF THE FORECAST 

2.1.  Payments 

2.1.1.  Payments until the end of the current MFF (2019-2020) 

For  the  year  2019,  the  forecast  payments  follow  the  levels  proposed  in  the  Draft  Budget  2019, 
(including  the  Amending  Letter  No.1).  The  payments  for  2020  have  been  assessed  taking  into 
account the implementation in 2014-2017 and the first half of 2018, the information made available 
at the time of the Draft Budget 2019 preparation, as well as the Member States’ updated forecasts 
for  the  implementation  of  the  2014-2020  ESI  Funds.  For  the  final  year  of  the  current  MFF,  it  is 
expected  that  all  spending  programmes  will  reach  cruising  speed.  The  bulk  of  the  2007-2013 
programmes under the cohesion policy is expected to be closed by the end of 2019. 

2.1.2.  Payments in the next MFF (2021-2023) 

The  forecast  payments  in  2021-2022  ensure  compatibility  with  the  Own  Resources  ceiling  of 
1.20% of EU GNI. While the Commission has proposed to increase the Own Resources ceiling to 

1 Financial Regulation applicable to the general budget of the Union and its rules of application, Regulation (EU, 
Euratom) 2018/1046 of 30 July 2018. 
2 TF50(2018)33 – Commission to EU 27, 28 February 2018 
3 COM(2018)321 to 328 of 02.05.2018 
4 European Regional Development Fund (ERDF), European Social Fund (ESF), Cohesion Fund (CF), European 
Agricultural Fund for Rural Development (EAFRD) and European Maritime and Fisheries Fund (EMFF). 
5 COM(2018) 537 of 10 July 2018 
6 COM(2018)631 final of 12.09.2018 and COM(633) final of 12.09.2018 

- 1 - 

 
                                                 
 
take account of the GNI base for 27 Member States, the current level may still be applicable due to 
the lengthy ratification process of the new Own Resources Decision.  

At the start of the next programming period (2021-2022) half of all payments (51%) would cover 
the  outstanding  commitments  of  the  previous  financial  frameworks  (RAL  for  'Reste  à  liquider'). 
Further  35%  of  the  payments  would  cover  non-differentiated  appropriations  where  payments 
immediately  follow  commitments  (i.e.  the  1st  Pillar  of  the  Common  Agricultural  Policy, 
expenditure  under  Heading  7  "European  Public  Administration",  the  subsidy  to  decentralised 
agencies).  The  remaining  14%  would  result  from  the  launch  of  the  new  generation  of  spending 
programmes. 

As of 2023, more than half of the outstanding commitments of the period pre-2021 would be paid 
out  and  thus  the  share  of  payments  on  pre-2021  commitments  will  decrease.  In  parallel,  the 
implementation  of  the  2021-2027  programmes  is  expected  to  enter  into  cruising  speed  with  a 
substantial increase in payment levels in 2023 compared to the first two starting years (68% of the 
total payments up from 45% in 2021). 

2.1.3.  De-commitments 

The  overall  amount  of  de-commitments  forecast  for  2019-2023  is  EUR  6.4  billion.  Around  two 
thirds of the de-commitments relate to the programmes of the 2014-2020 period (EUR 4.3 billion) 
while the de-commitments of the RAL originating before 2014 are gradually phasing out as is the 
case for the payments on that RAL. No de-commitments are anticipated for the commitments of the 
2021-2027 MFF proposal. 

The  de-commitment  levels  vary  across  headings  as  the  forecast  is  built  taking  into  account  de-
commitments  already  made  and  de-commitments  identified  at  the  time  of  the  Draft  Budget  2019 
preparation. In principle, de-commitments are forecast for the entire duration of the programming 
period.  Since  for  most  programmes  and  actions  no  automatic  de-commitment  rules  exist,  any 
annual breakdown of de-commitments would be highly approximate. To estimate the size of the de-
commitments  up  until  2023  only,  the  de-commitments  on  the  end-2018  RAL  were  broken  down 
proportionally  to  the  related  annual  payments.    Potential  de-commitments  for  the  2019  and  2020 
commitments  would  mostly  take  place  after  2023,  in  line  with  the  general  closure  cycle  of 
programmes. 

A specific forecast is made for the 2014-2020 ESI funds – it takes account of the experience with 
the  2007-2013  programmes’  closure  and  also  the  expected  de-commitment  timing.  As  the  actual 
year of de-commitment depends on the specific closure dates for each Member State and given the 
n+3  de-commitment  rules  in  place,  the  de-commitments  are  likely  to  be  spread  over  2024-2026. 
Therefore, there is no impact on the forecasting period of this report.  

2.1.4.  Evolution of the level of outstanding commitments (RAL) 

The RAL at the start of the reporting period is expected to stand at around EUR 276 billion and to 
reach  EUR  295  billion  at  the  end  of  the  current  financial  framework.  By  the  end  of  2023  it  is 
projected  at  around  314  billion,  which  results  in  a  14%  increase  in  nominal  value  over  the  5 
analysed years. However, the annual evolution of the RAL volume is not even as the RAL develops 
in function of the ratio of the annual payment to the annual commitments. This ratio is 90% for the 
year 2019 and increases to 99% in 2023. Payments come close to the commitments in 2023 mostly 

- 2 - 

 
due to the combination of the first automatic de-commitment target for the new programmes under 
the  Common  Provision  Regulation  and  the  n+3  de-commitment  target  for  the  last  tranche  of  the 
2014-2020  ESI  Funds  and  the  closure  of  these  programmes.  As  a  result,  the  growth  of  the  RAL 
volume in 2023 compared to the previous year would be limited to below 1%. 

2.2.  Revenue 

The  EU  budget  is  financed  by  own  resources  and  other  revenue.  The  overall  amount  of  own 
resources  needed  to  finance  the  budget  is  determined  by  total  expenditure  less  other  revenue. 
Accordingly,  the  forecast  of  the  EU  budget  revenue  for  2019-2023  is  based  on  the  principle  that 
expenditure must be matched by revenue; therefore total revenue must equal total expenditure. 

3. 

FORECAST ASSUMPTIONS  

3.1.  Specific assumptions by main spending elements  

3.1.1.  2014-2020 ESI funds and cohesion policy funds 2021-2027 

The  payments  forecast  for  the  2014-2020  ESI  funds  is  based  on  the  past  experience  of  interim 
payment  claims  submitted  as  a  percentage  of  the  overall  envelope.  The  performance  review  will 
take  place  in  2019  and  the  related  commitments  set  aside  since  2014  would  only  lead  to  first 
payments in 2020. Specific payment profiles are used for each of the funds. Some acceleration in 
the  implementation  speed  compared  to  the  current  levels  is  still  assumed  for  the  last  year  of  the 
2014-2020 MFF as the cruising speed is achieved. 

For  the  2021-2027  cohesion  policy  funds,  all  the  relevant  provisions  of  the  Common  Provisions 
Regulation  have  been  taken  into  account  (pre-financing,  clearance,  no  performance  reserve).  The 
interim payment claims’ profiles were estimated on the basis of statistics on the amounts claimed 
per year in the 2007-2013 programmes with n+2 de-commitment rules. 

3.1.2.  Direct payments and market measures under the Common Agricultural Policy 

As regards the appropriations for the European Agricultural Guarantee Fund, they are mostly non-
differentiated and the bulk related to direct payments to farmers is usually reimbursed to Member 
States during the first months of the budget year. 

3.1.3.  Other programmes and funds 

For  all  other  spending  items  (e.g.  research  and  innovation,  large  scale  infrastructure  projects, 
internal and external policies) the forecasts for the payments on the commitments authorised in the 
current financial framework are based on the Draft Budget 2019 and the accompanying schedules 
of payments by individual budget lines (as presented in Working document Part XII7).  

For the new generation of spending programmes, the annual payment needs have been calculated 
using statistical data for the actual implementation over the last 10 years (from 2007 until 2017) of 
the  corresponding  current  programmes  and  their related  2007-2013  legacy.  For  programmes  with 

7 COM(2018)600 – May 2018. 

- 3 - 

 
                                                 
 
no legacy, the payment estimate is established on the implementation experience of similar type of 
activities adjusted for the specific elements of the new programme. 

3.1.4.  Administration 

Administrative  expenditure  (2014-2020  Heading  5,  2021-2027  Heading  7)  is  based  on  non-
differentiated appropriations; the amounts for commitments as presented in the Draft Budget 2019, 
the 2020 financial programming and the proposed expenditure ceilings for Heading 7 in 2021-2023 
are fully transformed into payments. 

The  same  applies  also  for  the  subsidy  to  the  decentralised  agencies,  funded  outside  the 
administrative heading. 

3.2. Assumptions for forecasting revenue 

3.2.1.  Traditional own resources and national contributions 

From  2018,  traditional  own  resources  include  only  customs  duties  as  the  collection  of  the  sugar 
production  charge  ended  in  2017.  Starting  from  the  level  included  in  the  Draft  Budget  2019, 
customs duties are projected to grow over the period 2020-2023 at the same rate as nominal GNI of 
each Member State.  

National contributions (in  the  form  of  the  Gross  National Income-based  own  resource,  the  VAT-
based  own  resource  and  new  own  resources  included  in  the  Commission  proposal  for  the  MFF 
2021-2027) fill the gap to balance revenue and forecasted expenditure.  

3.2.2.  Other revenue 

Most of the components of ‘other revenue’ – including staff contributions, revenue accruing from 
the administrative operation of the institutions, contributions and refunds in connection with Union 
agreements and programmes, interest on late payments and fines, revenue from EU borrowing and 
lending  operations,  and  miscellaneous  revenue  –  as  well  as  surpluses  from  previous  years  are 
difficult to project, given their inherent volatility. Therefore, the amount budgeted for other revenue 
in the Draft Budget 2019 is assumed to remain nominally constant over the period 2020-2023. 

4.  CONCLUSIONS 

The present forecast shows that the payment ceilings in 2019-2020 as well as in the MFF proposal 
for  the  years  2021-2023  are  compatible  with  the  expected  payment  needs  for  the  2014-2020 
programmes on the one hand, and the smooth phasing in of the 2021-2027 spending programmes 
on the other hand.  

The main driver influencing the forecast of budget payments is the pace of implementation of the 
2014-2020 ESI funds. Even if the implementation is expected to be at a cruising speed in 2020, the 
delays accumulated since the start of the current programming period have an impact on the level 
of outstanding commitments (the so-called reste à liquider or RAL) at the start of the new period.  

Therefore,  the  implementation  of  the  ESI  Fund  in  2019-2020  will  continue  to  be  carefully 
monitored as any further delays may increase the payment needs post-2020, to be covered within 
the proposed ceilings for payments, which have to cover also the payment requirements of the new 
generation of spending programmes at the start of the next financial framework. 

- 4 - 

 
Table 1 – Long-term forecast of future inflows and outflows of the EU budget over 2019-2023  

In EUR billion, current prices 

MFF 2014-2020 (EU28) 

COM proposal MFF 2021-2027 
(EU27) 

DB 2019 

2020 

2021 

2022 

2023 

Annex 1 

164,1 

166,7 

164,9 

148,1 

148,1 

20,5 

47,0 

57,6 

3,5 

9,5 

10,0 

168,8 

172,2 

167,8 

160,1 

160,1 

23,0 

52,1 

59,6 

4,1 

11,0 

10,3 

OUTFLOWS 

Commitments ceiling 

Payments ceiling 

Commitment appropriations 

Payment appropriations 

of which payments pre-2021 commitments 

1a. Competitiveness for growth and jobs 

1b. Economic, social and territorial cohesion 

2. Sustainable Growth: Natural Resources 

3. Security and citizenship 

4. Global Europe 

5. Administration  

of which payments on 2021-2023 commitments* 

1. Single Market, Innovation and Digital 

2. Cohesion and Values  

3. Natural Resources and Environment 

4. Migration and Border Management 

5. Security and Defence 

6. Neighbourhood and the World 

7. European Public Administration 

Other special instruments** 

0,4 

p.m. 

166,7 

159,4 

166,7 

159,4 

88,1 

13,9 

48,5 

15,2 

1,7 

8,9 

0,0 

71,2 

7,8 

5,2 

41,3 

1,8 

0,8 

3,3 

11,0 

p.m. 

173,7 

164,0 

173,7 

164,0 

76,6 

9,0 

47,8 

11,8 

0,7 

7,3 

0,0 

87,3 

14,2 

6,8 

44,8 

2,4 

1,5 

6,2 

11,4 

p.m. 

179,4 

177,3 

179,4 

177,3 

56,0 

6,4 

36,7 

7,3 

0,2 

5,4 

0,0 

121,4 

17,1 

31,1 

47,8 

3,1 

2,0 

8,6 

11,8 

p.m. 

Total payment appropriations including special 
instruments 

148,5 

160,1 

159,4 

164,0 

177,3 

INFLOWS 

Total own resources: 

of which net amount of traditional own resources 

of which national contributions*** 

Other revenue 

146,6 

21,5 

125,1 

1,9 

158,2 

22,2 

136,0 

1,9 

157,5 

21,8 

135,7 

1,9 

162,1 

22,4 

139,6 

1,9 

175,4 

23,2 

152,3 

1,9 

160,1 

148,5 

Total revenue 
* Payments for the potential use of margins and also for the Union Reserve (corresponding to the assumed de-commitments) have 
been added in the total for each heading, tentatively distributed in proportion to the headings' margins. 
** The following amounts correspond to the payments foreseen in the Draft Budget 2019 for the European Globalisation Adjustment 
Fund,  the  European  Union  Solidarity  Fund  and  the  Emergency  Aid  Reserve.  Due  to  their  specific  nature,  the  use  of  those 
instruments beyond 2019 cannot be forecast.  
The appropriations for those instruments are considered outside the Multiannual Financial Framework ceilings for the purposes of 
the calculation of the corresponding margins. This is also the case for the appropriations related to the Flexibility Instrument. 
***  National  contributions  include  the  Gross  National  Income-based  own  resource,  the  VAT-based  own  resource  and  new  own 
resources  included  in  the  Commission  proposal  for  the  MFF  2021-2027.  Any  United  Kingdom  contribution  for  outstanding 
obligations at the end of 2020 would constitute other revenue and hence reduce national contributions, accordingly. 

159,4 

164,0 

177,3 

- 5 - 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
  
  
  
  
  
  
Table 2 - De-commitments forecast over 2019-2023 

Decommitments* 

1a. Competitiveness for growth and jobs 

1b. Economic, social and territorial cohesion 

2. Sustainable Growth: Natural Resources 

3. Security and citizenship 

4. Global Europe 

5. Administration  

in EUR billion, current prices 

On pre-2014 
commitments 

On 2014-2020 
commitments 

TOTAL 2018-
2023 

(a) 

(b) 

(a+b) 

-1,0 

-0,1 

-0,4 

-0,2 

-0,4 

0,0 

-2,1 

-1,0 

-0,2 

-0,1 

-2,1 

-0,9 

0,0 

-4,3 

-1,9 

-0,3 

-0,5 

-2,3 

-1,3 

0,0 

-6,4 

TOTAL 

* No de-commitments are anticipated in relation to the commitments proposed for the 2021-2027 financial framework 

Table 3 – Change in the total outstanding commitments from 2019 to 2023 

RAL end-2018* 

Commitments 
2018-2023 

Payments 2018-
2023 

De-
commitments** 

RAL end-2023 

(a) 

276,3 

(b) 

852,6 

(c ) 

809,0 

(d) 

-6,0 

(a+b-c-d) 

313,8 

in EUR billion, current prices 

Of which on: 

2014-2020 MFF 

Total de-commitments 
and amount paid by 
other fund sources 

276,3 

332,8 

529,1 

-7,9 

72,1 

2021-2027 MFF 

De-commitments, 
subsequently re-used 

n/a 

519,8 

279,9 

1,9 

241,8 

* The performance reserve set aside during 2014-2018 is included in the RAL, but no payments are foreseen against 
those commitments before 2020 
** This is the net result of the de-commitments expected up until 2020 (which reduce the RAL) and the de-commitments 
post-2020 (which via the Union Reserve mechanism may lead to new commitments); the figure also includes amounts 
to be covered by other fund sources (i.e. recoveries) 

- 6 -