COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2023-2027)
Date: 2022-06-30
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, 30.6.2022  SWD(2022) 175 final  COMMISSION STAFF WORKING DOCUMENT   Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Long-term forecast of future inflows and outflows of the EU budget (2023-2027) {COM(2022) 315 final}  
 
 
Table of Contents 

TABLE OF CONTENTS .......................................................................................................................................................... 2 

1. 

2. 

Introduction .................................................................................................................................................................................................... 3 

Forecast assumptions by main spending elements ............................................................................................................. 3 

2.1.  2014-2020 European Structural and Investment (ESI) Funds and 2021-2027 cohesion policy funds3 

2.2.  Rural Development .................................................................................................................................................................................... 4 

2.3.  Direct payments and market measures under the Common Agricultural Policy ............................................... 4 

2.4.  Other programmes and funds ........................................................................................................................................................... 4 

2.5.  Administration .............................................................................................................................................................................................. 5 

2.6.  Special Instruments .................................................................................................................................................................................. 5 

3. 

Assumptions for forecasting revenue ........................................................................................................................................... 6 

3.1.  Applicable legislation ............................................................................................................................................................................... 6 

3.2.  Traditional own resources .................................................................................................................................................................... 6 

3.3.  National contributions ............................................................................................................................................................................. 6 

3.4.  Other revenue ............................................................................................................................................................................................... 6 

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1.  Introduction 

This  document  accompanies  the  report  from  the  Commission  on  the  long-term  forecast  of  future  inflows  and 
outflows of the EU budget over 2023-2027 and provides additional technical information on the assumptions used 
for establishing the forecast results.  

2.  Forecast assumptions by main spending 

elements  

2.1.  2014-2020 European Structural and Investment (ESI) Funds and 

2021-2027 cohesion policy funds  

The completion of the legislative process for the Common Provisions Regulation and all linked sectoral legal bases, 
and the priority given by Member States to the implementation of the Recovery and Resilience Facility (for which the 
timespan for commitments and payments is shorter than for cohesion policy) have delayed the adoption of 2021-
2027  operational  programmes.  Unlike  the  2014-2020  Multiannual  Financial  Framework  (MFF),  no  new  national 
programmes were adopted in the first year of the MFF and 100% of the commitment appropriations allocated for 
cohesion policy in the 2021 budget had to be reprogrammed under the provisions of Article 7 of the MFF Regulationi 
to the years 2022 to 2025 in equal proportions.  

This  forecast  for  the  2021-2027  cohesion  policy  funds  mainly  follows  the  2014-2020  experience  of  interim 
payment claims (submitted as a percentage of the overall envelope), with certain adjustments. Based on the latest 
expectations, the re-programming under Article 7 of the MFF would lead to almost a full year delay compared to the 
previous period implementation pace. Under the assumption that Member States will recuperate around half of the 
delay already with the launch of the new programmes, partial catching up could be observed in 2024. Over 2025-
2026, implementation is projected in line with 2018-2019, i.e. the fourth and fifth years of the programming cycle. 
This assumption may need to be revised when the implementation of the new period actually starts and the impact 
of the simplifications introduced in the new legislative framework can be fully factored in. An update in relation to 
the Commission proposal for REPowerEUii may also be needed once it is adopted and depending on Member States’ 
decisions to transfer funds from cohesion policy to the RRF.  

Given  the  high  level  of  uncertainty, two  alternative  scenarios for  the  implementation  are  considered.  The  positive 
scenario assumes that Member States are able to absorb fully the additional one year delay of 2023. In 2024, the 
payment claims should be submitted in line with what was observed in 2017, as well as the delayed claims from 
the  second  and  third  year  of  the  MFF.  As  of  2025,  implementation  would  follow  the  speed  of  the  2014-2020 
programming  period.  A  stylised  negative  scenario  would  consider  that  Member  States  do  not  catch  up  on  the 
additional delay. In this case, the full implementation profile observed in 2014-2020 may be shifted by one year. 
The resulting de-commitments (due to the automatic de-commitment rules) would amount to close to 10%, starting 
already in 2026. As Member States are expected to take all possible measures to avoid such situation, this is not a 
likely scenario.  

The forecast  for payments in relation to the 2014-2020  programming period is largely based on past experience, 
information  regarding  the  implementation  on  the  ground  and  Member  States’  January  2022  forecasts.  The 
payments  in  2023  reflect  the  Draft  Budget  proposal.  For  the  subsequent  years,  a  key  determining  factor  for 

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implementation are the proposed measures accelerating implementation and facilitating full absorption, under the 
CARE initiative as well as the earlier Coronavirus Response Investment Initiatives (CRII and CRII+). The end of the last 
accounting  year  is on  30  June  2024  and  the  last  payment  claims  should  be  submitted  by  31  July  2024.  Closure 
payments are expected to be limited in 2024 and beyond. 

2.2.  Rural Development 

The  latest  information  available  suggests  that  the  implementation  of  the  new  Common  Agricultural  Policy  (CAP) 
Strategic Plans will start in 2023, one year ahead of the historical implementation profile observed for the 2014-
2022 programmes. The acceleration by one year can be explained by the fact that there is no re-programming due 
for  the  first  annual  tranche  of  the  new  period,  unlike  in  2014-2020.  Declarations  of  expenditure  under  the  new 
European  Agricultural  Fund  for  Rural  Development  (EAFRD)  period  are  expected  already  in  2023,  with  a  payment 
pattern for the following years based on historical data and adapted to the N+2 automatic de-commitment rule. The 
pre-financing of the new programmes will also start in 2023, applying to the 2023-2027 envelopes. The forecast 
for the completion of the 2014-2022 programmes takes into account the impact of the exceptional temporary relief 
measure for farmers and SME’s affected by the Russian invasion of Ukraine, which frontloads payments of EUR 450 
million  from  2024-2025  to  2023.  The  implementation  after  2023  is  extrapolated  based  on  the  pattern  of 
implementation in the preceding years. Closure is expected in 2026, respecting the applicable N+3 de-commitment 
rule.  

Even  if  all  EAFRD  commitments  over  2014-2022  correspond  to  the  previous  programming  period,  in  the  current 
report the forecast is split between the payments related to commitments up to 2020 and commitments as of 2021 
in order to separate payments according to the relevant MFF periods (as the commitments of 2021 and 2022 count 
against the new MFF ceilings). To that end, the payments across the two periods are split assuming that as of 2024, 
all payments would be counted against budgetary commitments made in 2021-2022. 

2.3.   Direct payments and market measures under the Common 

Agricultural Policy 

The  appropriations  for  the  European  Agricultural  Guarantee  Fund  (EAGF)  are  mostly  non-differentiated,  i.e. 
commitments  made  in  a  given  year  are  fully  matched  by  payments  in  the  same  year’s  budget.  The  bulk  of  the 
allocations is related to direct payments to farmers, which are usually reimbursed to Member States during the first 
months  of  the  following  budget  year.  The  commitments  (on  the  basis  of  which  the  payments  are  projected)  are 
aligned  to  the  financial  programming  accompanying  the  Draft  Budget  2023.  The  transfers  between  pillars  of  the 
Common Agricultural policy resulted in a net  transfer of EUR 825 million from pillar I (EAGF) to pillar II (EAFRD) in 
2023, which has also been taken into account for the payment estimations. 

2.4.  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 payments on the commitments authorised in the current financial framework are based 
on the Draft Budget 2023 and the accompanying schedules of payments by individual budget lines, as provided in 
Working  Document  XIII  accompanying  the  Draft  Budget.  The  expected  average  pattern  of  implementation  for  the 
next two commitment tranches (2022 and 2023) is extrapolated to the commitments for the years 2024 to 2027. 

These  commitments  are  expected  to  follow  the  financial  programming  accompanying  the  2023  Draft  Budget 
including, where relevant, the additional top-ups stemming from the programme specific adjustment mechanism of 
Article  5  of  the  MFF  Regulation.  For  Horizon  Europe,  the  European  Parliament  and  the  Council  agreed  to  make 

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available again over the MFF period an amount of EUR 500 million in 2018 prices in appropriations resulting from 
total  or  partial  non-implementation  of  research  programmes,  in  accordance  with  Article  15(3)  of  the  Financial 
Regulation.  In  addition,  in  the  context  of  the  European  Chips  Act,  the  Commission  has  proposed  to  increase  by  a 
further EUR 400 million the appropriations made available again as per Article 15(3) of the Financial Regulation,  to 
compensate  Cluster  4  ‘Digital,  Industry  and  Space’  of  Horizon  Europe  for  the  amounts  redeployed  to  the  Digital 
Europe Programme. The forecast of outflows also takes into account those additional commitments. 

As  for  Heading  6  -  Neighbourhood  and  the  World,  the  war  in  Ukraine  is  associated  with  a  greater  level  of 
uncertainty, which will likely require EU budget support to respond to the increasing volatile circumstances. In 2021, 
there  has  been  positive  progress  on  the  programming  of  the  external  action  instruments  and  the  kick-off  of 
implementation. Yet, it is still premature to assess fully the long-term budgetary effects of the novel architecture of 
the instruments (mostly the Neighbourhood, Development and International Cooperation Instrument - Global Europe) 
in respect of the potential re-use of de-commitments, carry-over provisions and of the mobilisation of the emerging 
challenges  and  priorities  cushion  post-2023.  At  this  stage,  no  de-commitments  for  the  programmes  having  the 
possibility to re-sue them are forecast since the effect over time would be neutral.  

The forecast of the payments for the completion of activities stemming to the period before 2021 is set  based on 
the experience built over the past MFF periods and takes into account the latest project information. 

2.5.  Administration 

Administrative expenditure (Heading 7) is implemented as non-differentiated appropriations, i.e. commitments made 
in a given year are fully matched by payments in the same year’s budget. The present forecast transforms fully the 
financial programming of commitment appropriations into payments. 

The  same  approach  is  applied  to  the  majority  of  the  EU-funded  decentralised  agencies  (all  of  which  are  outside 
Heading 7). 

At the same time, despite very strict reprioritisation, all administrative expenditure, and in particular under Heading 
7, is and will be under pressure in 2022-2023 and going forward due to the high levels of inflation and rising energy 
prices. 

2.6.  Special Instruments 

Special instruments fall under two categories: 

- 

Thematic instruments – traditionally set up to provide support in specific unforeseen events such as natural 
disasters, mass redundancies, humanitarian and other crises. Due to their nature, forecasting over a longer 
time horizon is not possible, with the exception of the Brexit Adjustment Reserve for which  expenditure is 
programmed  over  2021-2023  and  in  2025,  in  line  with  the  relevant  legal  actiii.  The  present  report  thus 
includes the expenditure planned in the Draft Budget 2023. 

-  Non-thematic  instruments  –  subject  to  specific  conditions,  they  make  it  possible  to  allocate  additional 
amounts  for  specific  MFF  programmes.  Their  mobilisation,  and  consequently  the  related  payment  needs, 
cannot  be  forecast.  For  the  Flexibility  Instrument,  the  payments  stemming  from  past  mobilisations  are 
provided in the Communication  on the technical adjustment of the  MFF for 2023 and  are included in the 
overall payment. 

The expenditure covered by the mobilisation of special instruments is counted in addition to the MFF ceilings and is 
excluded for the purpose of the establishing the margins for commitments and payments. 

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3.  Assumptions for forecasting revenue 

3.1.  Applicable legislation 

The  revenue  forecast  presented  in  this  report  is  based  on  the  parameters  of  the  Own  Resources  Decision  2020iv, 
effective since 1 January 2021, for all years of the reporting period (2023-2027). 

3.2.  Traditional own resources 

Customs  duties  are  projected  to  grow  over  the  period  2024-2027  at  the  same  rate  as  nominal  Gross  National 
Income of each Member State starting from the level of gross customs duties projected for the Draft Dudget 2023. 
25% of the customs duties will be retained by Member States as collection costs. 

3.3.  National contributions 

National  contributions  fill  the  gap  between  traditional  own  resources  and  other  revenue  on  the  one  hand  and 
forecast  expenditure  on  the  other.  They  have  for  a  long  time  included  the  Gross  National  Income-based  own 
resource and the Value Added Tax-based own resource. The Own Resources Decision introduced a new own resource 
based  on  non-recycled  plastic  packaging  waste.  The  parameters  for  the  own  resources  in  the  Own  Resources 
Decision determine the Member States’ share in the total amount of national contributions that is needed to balance 
the EU budget. 

3.4.   Other revenue 

Other revenue of the EU budget traditionally includes 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 borrowing and lending operations,  and miscellaneous revenue – 
as well as surpluses from previous years. Given their inherent volatility, most of those components are difficult to 
forecast.  Therefore,  the  amount  included  in  the  Draft  Budget  2023  (i.e.  EUR 2 billion)  is  assumed  to  remain 
nominally constant over the period covered by the report. 

Since  2021,  in  addition  to  the  above-mentioned  items,  other  revenue  of  the  EU  budget  includes  the  United 
Kingdom’s contribution related to outstanding commitments (RAL) for which the United Kingdom is  liable, pension 
obligations and other components of the financial  settlement, as laid down in the Withdrawal  Agreement v. This is 
also reflected in the proposed financing of the Draft Budget 2023. 

The contribution of the United Kingdom related to outstanding commitments on 31 December 2020 is determined 
by applying the  United Kingdom’s financing share to the  forecast RAL payments for each year of the  2023-2027 
period.  The  resulting  annual  contribution  takes  into  account  the  payment  modalities  set  out  in  Article  148  of  the 
Withdrawal Agreement. 

The forecast of other revenue includes the United Kingdom’s contribution to pension liabilities for Members and EU 
high-level  public  office  holders  as  specified  in  Article  142(5)  of  the  Withdrawal  Agreement.  The  United  Kingdom 
contribution  to  staff  pensions  (an  estimated  EUR  261  million  in  the  Draft  Budget  2023)  enters  the  EU  budget  as 
external assigned revenue and is therefore not part of the long-term forecast of other revenue. 

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i Council Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 
to 2027, OJ L 433I, 22.12.2020, p. 11. 

ii COM(2022) 231 final, 18.5.2022 

iii Regulation (EU) 2021/1755 of the European Parliament and of the Council of 6 October 2021 establishing the 
Brexit Adjustment Reserve, OJ L 357, 8.10.2021, p. 1–26. 

iv Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European 
Union, OJ L 424/1, 15.12.2020. 

v All components of the United Kingdom contribution are laid down in Article 148 of the Withdrawal Agreement. The 
forecast  only  includes  components  which  are  quantifiable  at  this  stage,  namely  the  provisional  United  Kingdom 
contribution  to  the  financing  of  payments  resulting  from  outstanding  commitments  prior  to  2021  for  which  the 
United  Kingdom  is  liable  under  Article  140  and  pension  liabilities specified  under  Article  142.5  of  the  Withdrawal 
Agreement  as  well  as the  amounts  the  Union  owes to  the  United  Kingdom  under  Article  145  (European  Coal  and 
Steel Community) and Article 146 (Union investment in the EIF). 

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