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 (2024-2028)
Date: 2023-06-20
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, 20.6.2023  SWD(2023) 218 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 (2024-2028) {COM(2023) 390 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 .................................................................................................................................................................................... 3 

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

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

2.5.  Administration .............................................................................................................................................................................................. 4 

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 2024-2028 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 RRF (for which the timespan for commitments 
and payments is shorter than for cohesion policy) delayed the adoption of 2021-2027 operational programmes. In 
2021,  the  first  year  of  implementation,  not  a  single  national  programme  was  adopted  and  100%  of  the 
commitment  appropriations  allocated  for  cohesion  policy  were  reprogrammed  in  equal  proportions  to  the  years 
2022 to 2025 under the provisions of Article 7 of the MFF Regulation.  

The forecast for the 2021-2027 cohesion policy funds follows the profile of submission of interim payment claims 
as  a  share  of  the  overall  envelope  observed  in  2014-2020  with  certain  adjustments.  Firstly,  the  re-programming 
under  Article 7 of the  MFF  would lead to a full year delay compared to the  previous period implementation pace. 
Furthermore, the payments planned in the budget 2023 and the draft budget 2024 are considered in the forecast, 
confirming the delay in implementation compared to the programmes 2014-2020. According to the central scenario 
considered in this forecast, in 2025 Member States submit payment claims following the acceleration observed in 
2018  compared  to  the  2017  (3rd  and  4th  years  of  the  programming  cycle).  In  2026  and  2027  the  submission  of 
payment  claims  speed  to  reach  the  historical  profile  of  the  2014-2020  programming  period.  In  2028  the  full 
cruising speed is reached until programme closure.  

Given  the  high  level  of  uncertainty  and  the  absence  of  a  relevant  comparable  historical  base,  two  alternative 
scenarios  are  also  presented  in  this  forecast.  The  upside-optimistic  scenario  assumes  that  over  2025-2027  the 
implementation  is  projected  in  line  with  2018-2019  -  the  4th  and  5th  years  of  the  programming  cycle  implying  a 
partial catching-up of the Article 7 re-programming. From 2028 until closure a constant annual implementation at 
full cruising speed is projected. A downside scenario considers that Member States do not catch up with the delay. In 
this case, the observed implementation profile in 2014-2020 is shifted by one year until 2028 to project a scenario 
in the delay persists. The full cruising speed is only reached afterwards.  

Under the three scenarios it is assumed that Member States will use all the available administrative possibilities to 
avoid  decommitments  given  the  more  elevated  risks  than  in  the  past.  Therefore,  it  is  assumed  that  from  2025 
Member States will submit payment claims by the end of the year that would reduce the amount of decommitments 
to one fifth of the projected results following each of the scenarios. The remaining amounts representing four fifths 
of the projected decommitments would be give rise to recoveries as internal assigned revenue in the following year 

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and used as payment appropriations equally in this same year and the following one.  Excluding this administrative 
possibility of over-submitting payment claims would multiply the de-commitments by five.  

The forecast for payments in relation to the 2014-2020 programming period is based on the information provided 
by  Member  States  in  January  2023  forecasts.  The  payments  in  2024  reflect  the  Draft  Budget  proposal.  For  the 
subsequent  years,  a  key  determining  factor  for  implementation  are  the  proposed  measures  accelerating 
implementation  and  facilitating  full  absorption,  under  the  CARE,  FAST-CARE  and  SAFE  initiatives  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 after 2024. 

2.2.  Rural Development 

The  submission  of  payment  claims  of  the  European  Agricultural  Fund  for  Rural  Development  under  the  new  CAP 
starts in 2023, the first year of implementation, one year earlier than the historical implementation profile of the 
2014-2022  period.  The  EAFRD  pre-financing  under the  new  CAP  applied  to  2023-2027  envelopes  starts in  2023. 
The  payment  pattern  for  the  period  2025-2028  is  based  on  the  historical  data  adapted  to  a  shorter  period 
compared to the previous programmes and to the N+2 automatic de-commitment rule.  

As regards the forecast for the completion of the 2014-2022 programmes, in 2025  the same implementation as 
last year’s forecast is assumed with most of the remaining interim payments. Closure and a small share of interim 
payments are 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, this forecast splits 
the payments related to commitments prior to and after 2020 to differentiate payments according to the relevant 
MFF periods and ceilings. To that end, the forecast assumes 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 

Most  of  the  appropriations  for  the  European  Agricultural  Guarantee  Fund  (EAGF)  are  non-differentiated,  i.e.,  both 
commitments and payments match in the same annual budget. The bulk of appropriations are direct payments to 
farmers, which are usually reimbursed to Member States during the first months of the following budget year. The 
commitments  on  which  the  payment  forecast  is  based  aligns  with  the  financial  programming  accompanying  the 
Draft Budget 2024. Member States communicatedi the transfers between pillars of the Common Agricultural policy, 
which  resulted  in  a  net  transfer of  EUR 4  783 million  from  pillar I  (EAGF)  to  pillar II  (EAFRD)  in  the  period  2024-
2027, was considered 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 2024 and the accompanying payment schedules of the 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 (2023 and 2024) is extrapolated to the commitments for the years 2025 to 2028. 

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These  commitments  are  expected  to  follow  the  financial  programming  accompanying  the  2024  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 
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.  

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 
and 2022, 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-2024.  At  this  stage,  no  de-commitments  for  the  programmes 
having the possibility to re-use them are forecast since the effect over time would be neutral.  

The forecast for payments completing activities before 2021 is based on the experience from past MFF periods and 
the latest project information. 

2.5.  Administration 

Administrative  expenditure  (Heading  7)  is  implemented  as  non-differentiated  appropriations,  i.e.,  commitments 
match  payments  in  the  same  annual  budget.  The  forecast  translates  the  financial  programming  of  commitment 
appropriations into payments. 

Most of the EU-funded decentralised agencies (all of which are outside Heading 7) follows the same approach. 

All administrative expenditure, and in particular under Heading 7, is and will be under pressure in 2023-2024 and 
going forward due to the high levels of inflation and rising energy prices, even with strict reprioritisation. 

2.6.  Special Instruments 

Special instruments fall under two categories: 

- 

Thematic  instruments  –providing  support  in  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  actii.  The  present  report  thus  includes  the 
expenditure planned in the Draft Budget 2024. 

-  Non-thematic instruments – allocating additional amounts for specific MFF programmes subject to specific 
conditions.  Their  mobilisation  and  the  subsequent  payment  needs  cannot  be  forecast.  For  the  Flexibility 
Instrument,  the  payments  stemming  from  past  mobilisations  are  included  in  the  overall  payment  as 
provided in the Communication on the technical adjustment of the MFF for 2024. 

The expenditure covered by the mobilisation of special instruments is counted in addition to the MFF ceilings and is 
excluded for the purpose of 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  2020iii, 
effective since 1 January 2021, for all years of the reporting period (2024-2027). 

3.2.  Traditional own resources 

Customs  duties  are  projected  to  grow  over  the  period  2025-2027  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 Budget 2024. 
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  2020  introduced a new own 
resource based on non-recycled plastic packaging waste. The parameters for the own resources specified 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  2024  (i.e.,  EUR 2 billion)  is  assumed  to  remain 
nominally constant over the forecast period. 

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 iv. This is 
also reflected in the proposed financing of the Draft Budget 2024. 

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  2024-2027 
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  282  million  in  the  Draft  Budget  2024)  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 Member States decided to transfer funds between direct payments and rural development. The result was set out 
in Commission Delegated Regulation 2023/813 of 8 February 2023 

ii 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. 

iii 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. 

iv 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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