REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2020-2024)
Date: 2019-06-26
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, 26.6.2019  COM(2019) 305 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2020-2024)  
 
 
1. 

INTRODUCTION 

This  report  provides  a  long-term  forecast  of  future  inflows  and  outflows  covering  the  next  five 
years (2020-2024) 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 Agreement on the withdrawal of the United 
Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic 
Energy Community2. 

The scope of the forecast captures the elements of the current and the next financial frameworks. It 
is based on the level of appropriations for 2020 as included in the Draft Budget for that year. For 
the  years  2021-2024,  the  commitments  presented  in  the  Commission’s  proposal  for  the  next 
Multiannual Financial Framework3 are taken into account.  

Compared  to  the  forecast  of  last  year4  which  covered  the  period  2019-2023,  this  new  forecast 
captures  one  additional  year  (2024).  The  estimates  for  the  payments  on  the  commitments  of  the 
current  financial  framework  are  updated  to  take  account  of  the  actual  implementation  results  for 
2018,  the 2019 budget and its proposed amendments (the Draft Amending Budgets N°15, N°26 and 
N°37), and the Draft Budget for 20208. 

As for the payments in relation to the post-2021 commitments, given that the negotiations for the 
next  Multiannual  Financial  Framework  are  on-going  those  estimates  remain  consistent  with  the 
parameters  of  the  Commission  proposal  for  the  future  financial  period,  as  reflected  in  last  year’s 
report. 

2. 

RESULTS OF THE FORECAST 

2.1.  Payments 

2.1.1.  Payments until the end of the current financial framework (2020) 

The report includes the estimates from the Draft Budget 2020, the last year of the current financial 
framework. The forecast  for the 2020 payment  levels  is  in  total  EUR 7  billion lower than in  last 
year’s long-term forecast report. This is mainly in relation to Headings 1b, 2 and 4. For the funds in 
shared management, the Draft Budget is built on the latest implementation projections provided by 
Member  States  in  January  2019,  which  are  slightly  lower  than  their  projections  of  July  2018  on 
which last year’s forecast was based. In the external action field, the Draft Budget 2020 is actually 
below the level of the previous year, predominantly due to the lower payments for the Facility for 
Refugees in Turkey. 

1 Financial Regulation applicable to the general budget of the Union and its rules of application, Regulation (EU, 
Euratom) 2018/1046 of 30.7.2018. 
2 OJ C66 I, 19.2.2019, p.1. 
3 COM(2018)321 to 328 of 2.5.2018 
4 COM(2018)687 final of 10.10.2018 
5 COM(2019)300 final of 15.4.2019 
6 COM(2019)320 final of 15.5.2019 
7 COM(2019)205 final of 22.5.2019 

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Almost  all payments  in  2020 relate to  the  commitments made under the  2014-2020 programmes. 
Less  than  1%  of  the  payments  will  cover  commitments  outstanding  from  the  pre-2014  financial 
framework under Headings 1a and 4. The bulk of the 2007-2013 programmes under the cohesion 
policy is expected to be closed by the end of 2019 with no further payments anticipated in 2020. 

2.1.2.  Payments in the next financial framework (2021-2024) 

Overall, for the first four years of the next financial framework payments are expected to total some 
EUR 687 billion. This amount is not evenly distributed across the  years but follows the expected 
parallel evolution of: 1) the phasing-in of payments for the new spending programmes (around 62% 
of  the  4-year  payments’  total)  and  2)  the  payments  for  outstanding  commitments  from  the  2014-
2020 period (the remaining 38% of the payments). 

Payments in relation to new commitments 

There is no change in the forecast compared to last year’s report in relation to new commitments. 
As  in  last  year,  these  payments  follow  the  Commission  proposal  for  the  2021-2027  Multiannual 
Financial  Framework  of  2  May  2018  and  its  underlying  assumptions  (see  details  in  Section  3. 
Forecast Assumptions). An update of those estimates would only be possible when the negotiations 
on the next financial framework and accompanying sector-specific legislation are concluded.  

This  is  the  case  especially  for  the  negotiations  relevant  to  the  Common  Provisions  Regulation, 
which  determines  the  implementation  speed  for  cohesion  policy  –  the  biggest  spending  area 
delivered  through  differentiated  appropriations.  Changes  in  the  implementing  modalities  of  the 
cohesion policy funds compared to the Commission’s proposals would significantly influence the 
payments’ estimates for the whole EU budget.  

For example, any reduction of the annual retention rate compared to the Commission proposal or 
the clearance of pre-financing at the time of the programmes’ closure rather than annually would 
lead  to  additional  payment  needs  during  the  forecast  period.  The  automatic  de-commitment  rules 
may also have a significant impact on the payment profiles. Any extension of the deadline for the 
submission of payment claims beyond the Commission  proposal  would delay the implementation 
of the cohesion policy and postpone payments to the following financial framework.  

The  pre-financing  rates  for  the  cohesion  policy  funds  (both  the  2014-2020  and  the  2021-2027 
funds)  will  particularly  impact  the  first  years  of  the  next  financial  framework.  The  Commission 
proposals  for  the  next  Common  Provisions  Regulation  and  for  amending  the  current  Common 
Provisions Regulation take account of the funding requirements at the beginning of the new period 
as well as the constraints of an own resources ceiling corresponding to 1.20% of EU gross national 
income.  While  the  Commission  has  proposed  to  increase  the  own  resources  ceiling  to  reflect  the 
gross national income base for 27 Member States, the current level may  still be applicable in the 
first years  of the next financial framework due to the likely lengthy ratification process for the new 
Own Resources Decision. 

8 SEC(2019)250 of 5.6.2019 

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Payments on pre-2021 commitments 

The proposed level of payments in the  Draft Budget 2020 also has an impact on the payment needs 
in  the  following  years.  The  lower  level  of  payments  for  2020  compared  to  previous  forecasts  is 
expected to lead to additional needs in the following years. As a consequence, the overall payment 
estimates for 2021 to 2024 are by around EUR 5 billion above the payment ceiling proposed by the 
Commission for the next period, of which EUR 4 billion would fall in 2024.  

These additional needs will, in combination with the impact of the future implementing modalities 
for the cohesion policy funds, have to be taken into account in setting the payment ceilings for the 
next financial framework or would automatically lead to a need for mobilising special instruments, 
in  particular  the  Contingency  Margin,  which  –  according  to  the  Commission's  proposal  –  would 
allow for mobilising payments of up to 0.03% of EU gross national income in a given year (to be 
offset against the ceilings in later years). 

2.1.3.  De-commitments 

The overall amount of de-commitments forecast for 2020-2024 is EUR 8 billion. Around 77% of 
the de-commitments relate to the programmes of the 2014-2020 period (EUR 6 billion) while the 
de-commitments of the programmes originating before 2014 continue to phase out as is the case for 
the  related  payments.  No  de-commitments  are  anticipated  for  the  commitments  proposed  for  the 
2021-2027 financial framework. 

The de-commitment levels vary across Headings as the forecast takes into account de-commitments 
already made and de-commitments identified at the time of the Draft Budget 2020 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 imprecise. To estimate the size of the de-commitments until 2024 
only, the forecast de-commitments are broken down proportionally to the related annual payments.  

A specific forecast is made for the 2014-2020 European Structural and Investment (ESI) funds – it 
takes account of the experience with the 2007-2013 programmes’ closure. 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 spread over 2024-2026. As only 2024 
is  within  the  scope  of  this  report,  the  tentative  assumption  is  that  roughly  one  third  of  all  de-
commitments on the 2014-2020 ESI funds could fall in that year.  

Compared to last  year’s  report, the 5-year de-commitment estimate increases by around EUR 1.6 
billion. This is the combined effect of the increased de-commitment forecast for Headings 1b and 2, 
and  decreases  across  the  other  Headings.  The  increase  for  Headings  1b  and  2  is  the  mechanical 
effect of including one extra year (2024) which was not covered by last year’s report. The decreases 
in  the  other  Headings  are  also  mainly  due  to  the  shift  by  one  year  of  the  reporting  period.  For 
instance,  in  2018  under  Heading  1a  EUR  0.7  billion  was  de-committed  in  relation  to  pre-2014 
programmes and accordingly this amount is no longer included in future estimates. For Heading 3 
there  is  a  reduction  of  the  anticipated  de-commitments  to  reflect  the  amendments  of  the  relevant 

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legislation9. For Heading 4, the decrease is a combined effect of the shift of one year and updating 
the assumptions for future years in line with the Draft Budget 2020. 

2.1.4.  Evolution of the level of outstanding commitments 

The build-up of outstanding commitments (or RAL for reste-a-liquider) is a natural consequence of 
the  implementation  of  the  EU  budget  with  differentiated  appropriations  and  the  nominally 
increasing volume of the EU budget over the years. The RAL at the start of the reporting period is 
expected to stand at around EUR 291 billion and to reach EUR 303 billion at the end of the current 
financial framework.  For comparison,  the end-2020 RAL forecast  with  last  year’s report stood at 
EUR 295 billion. This increase in the RAL forecast is mostly the result of updating the year 2020 
with the actual Draft Budget projections. 

By  the  end  of  2024,  the  RAL  is  projected  at  around  EUR  313  billion,  which  results  in  a  8% 
increase in nominal value over the five analysed years. However, the annual evolution of the RAL 
volume  is  not  even  as  the  RAL  develops  in  function  of  the  ratio  of  annual  payments  to  annual 
commitments. Payments come close to commitments in 2023-2024 mostly 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, payments  in  2023  are expected to be almost  at  the 
level of commitments, and for 2024 to even exceed commitments. This would result in keeping the 
RAL stable at the end of 2023 and even slightly decreasing it in 2024.  

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  2020-2024  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 past experience of interim payment 
claims submitted as  a percentage of the overall envelope. The performance review takes place in 
2019  and  the  related  commitments  set  aside  since  2014  would  lead  to  first  payments  in  2020. 
Specific payment profiles are used for each of the funds. 

For  the  2021-2027  cohesion  policy  funds,  the  relevant  provisions  included  in  the  2  May  2018 
Commission proposal for the next financial framework are also used for this report (0.5% as annual 
pre-financing for each  year from 2021 to 2026, 10% retention rate, no performance reserve). The 

9  Regulation  (EU)  2018/2000  of  the  European  Parliament  and  of  the  Council  of  12  December  2018  amending 
Regulation  (EU)  No  516/2014  of  the  European  Parliament  and  of  the  Council,  as  regards  the  recommitment  of  the 
remaining  amounts  committed  to  support  the  implementation  of  Council  Decisions  (EU)  2015/1523  and  (EU) 
2015/1601 or the allocation of those amounts to other actions under the national programmes (OJ L 328, 21.12.2018) 

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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,  as  amended  to  allow  for 
certain  derogations  for  the  first  commitment  tranches.  Any  changes  in  those  assumptions  would 
impact payments in relation to the 2021-2027 cohesion policy funds. 

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 following 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 2020 and the accompanying schedules 
of payments by individual budget lines.  

For the new generation of spending programmes, the annual payment needs have been calculated 
using statistical data for the actual implementation over 10 years (2007-2017) of the corresponding 
current  programmes  and  their  related  2007-2013  legacy.  For  programmes  with  no  legacy,  the 
payment estimate is based on the implementation experience of similar type of activities adjusted 
for the specific elements of the new programmes. 

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 2020, 
and  the  proposed  expenditure  ceilings  for  Heading  7  in  2021-2024  are  fully  transformed  into 
payments. 

The  same  applies  also  for  subsidies  to  decentralised  agencies,  which  are  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  2020, 
customs duties are projected to grow over the period 2021-2024 at the same rate as nominal gross 
national income 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 
Multiannual  Financial  Framework  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 

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lending  operations,  and  miscellaneous  revenue  –  as  well  as  surpluses  from  previous  years  are 
difficult  to  project,  given  their  inherent  volatility.  Therefore,  the  amount  considered  in  the 
Commission proposal on the financial framework 2021-2027 (i.e. EUR 1.9 billion in line with the 
Draft Budget 2019) is assumed to remain nominally constant over the period covered by the report 
(2020-2024). 

4.  CONCLUSIONS 

This year’s forecast report covers the first four years of the next Multiannual Financial Framework, 
for  which  negotiations  are  still  on-going.  The  payment  forecast  is  therefore  based  on  the 
Commission's proposals of May 2018. Developments in two areas will be particularly important for 
payments in the next financial framework: 

First,  the ongoing negotiations on the proposals  for the next  financial framework show diverging 
views on key elements influencing future payment needs. These relate in particular to the cohesion 
policy  funds  –  accounting  for  roughly  one  third  of  the  budget  –  and  to  their  implementation 
parameters, such as pre-financing rates and de-commitment rules. Given there is no consensus on 
those  elements  at  this  stage,  the  current  forecast  remains  based  on  the  Commission  proposal  of 
2018. 

Second,  the  payment  forecast  depends  on  the  implementation  of  the  current  financial  framework 
and the level of outstanding commitments at the start of 2021. For most of the expenditure headings 
the 2020 Draft Budget is below the level forecast last year. This automatically shifts payments to 
the post-2020 period, which come in addition to the payments assumed at the time of proposing the 
payment ceilings for the years 2021-2027. 

These developments will have to be taken into account in the negotiations for the next Multiannual 
Financial  Framework.  The  payment  ceilings  under  negotiation  may  need  to  be  adjusted  to 
accommodate the additional needs resulting from the higher level of outstanding commitments at 
the end of 2020 and from amendments of the implementation modalities for future programmes. 

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Table 1 – Long-term forecast of future inflows and outflows of the EU budget over 2020-2024  

Annex 1 

In EUR billion, current prices 

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 2021-2024 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 

MFF 2014-
2020 
(EU28) 

COM proposal MFF 2021-2027 (EU27) 

2020 

2021 

2022 

2023 

2024 

168,8 

172,4 

167,7 

153,2 

153,2 

22,1 

50,0 

58,0 

3,7 

9,0 

10,3 

166,7 

159,4 

166,7 

159,1 

87,7 

14,3 

48,5 

15,0 

2,3 

7,6 

0,0 

71,3 

7,9 

5,3 

41,3 

1,6 

0,8 

3,3 

173,7 

164,0 

173,7 

164,2 

76,9 

9,5 

47,6 

11,7 

1,2 

6,8 

0,0 

87,3 

14,3 

6,9 

44,8 

2,2 

1,6 

6,2 

179,4 

177,3 

179,4 

178,1 

56,7 

6,0 

36,9 

7,3 

0,5 

6,0 

0,0 

182,9 

180,9 

182,9 

185,2 

42,8 

4,3 

28,0 

5,2 

0,3 

5,0 

0,0 

121,4 

142,4 

17,2 

31,1 

47,7 

2,9 

2,0 

8,6 

21,7 

39,6 

49,9 

4,5 

2,9 

11,6 

12,2 

7. European Public Administration 

11,0 

11,4 

11,8 

Other special instruments** 

0,4 

Total payment appropriations including special 
instruments 

153,6 

159,1 

164,2 

178,1 

185,2 

INFLOWS 

Own Resources ceiling in percentage of the EU 
Gross National Income 

Own Resources ceiling expressed in EUR billion*** 

Total own resources: 

of which net amount of traditional own resources 

of which national contributions**** 

Other revenue 

1,20% 

1,29% 

1,29% 

1,29% 

1,29% 

203,9 

151,6 

22,2 

129,5 

2,0 

191,4 

157,2 

21,8 

135,4 

1,9 

197,1 

162,3 

22,4 

139,8 

1,9 

202,9 

176,2 

23,2 

153,1 

1,9 

209,2 

183,3 

23,9 

159,3 

1,9 

153,6 

Total revenue 
* Payments for the potential use of margins (including also through the Global Margin for Commitments  - Union Reserve) 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  2020  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 2020 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. 
*** Calculated on the basis of the latest economic forecast for the gross national income of the EU28 for 2020, and of the EU27 for 2021-2024 
****  National  contributions  include  the  gross  national  income-based  own  resource,  the  Value  Added  Tax-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. 

185,2 

159,1 

164,2 

178,1 

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Table 2 - De-commitments forecast over 2020-2024 

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 2020-
2024 

(a) 

(b) 

(a+b) 

-0,3 

-0,8 

-0,2 

-0,1 

-0,3 

0,0 

-1,8 

-1,1 

-2,3 

-1,3 

-1,1 

-0,3 

0,0 

-6,1 

-1,5 

-3,1 

-1,5 

-1,2 

-0,6 

0,0 

-8,0 

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 2020 to 2024 

RAL end-2019* 

Commitments 2020-
2024 

Payments 2020-2024 

De-commitments 

RAL end-2024 

(a) 

290,6 

(b) 

870,4 

(c ) 

839,8 

(d) 

-8,0 

(a+b-c+d) 

313,2 

in EUR billion, current prices 

Of which on: 

2014-2020 MFF 

290,6 

167,7 

417,3 

-8,0 

32,9 

2021-2027 MFF 

n/a 

702,7 

422,5 

- 

280,2 

* The performance reserve set aside during 2014-2019 is included in the RAL, but no payments are foreseen against 
those commitments before 2020. The RAL does not include outstanding commitments generated from revenues from 
third countries' contributions 

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