COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Mid-term revision of the multiannual financial framework 2021-2027
Date: 2023-06-20
Institutions: European Commission, Secretariat-General
Subjects: budgetary procedure, commitment of expenditure, financial management, general budget (EU), multiannual financial framework

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 20.6.2023  SWD(2023) 336 final  COMMISSION STAFF WORKING DOCUMENT   Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS  Mid-term revision of the multiannual financial framework 2021-2027 {COM(2023) 336 final}  
 
 
Contents 

EXECUTIVE SUMMARY ....................................................................................................................................................................................................... 5 

1. 

2. 

INTRODUCTION ......................................................................................................................................................................................................... 6 

IMPLEMENTATION: SPENDING PRIORITIES AND CHALLENGES ....................................................................................................... 7 

2.1.  A transformative budget ............................................................................................................................... 7 

2.2. 

The Union budget response to the COVID-19 pandemic and energy crisis .................................. 10 

2.3.  Digital transition ............................................................................................................................................ 14 

2.4.  Cohesion policy and the green and digital transition ......................................................................... 16 

2.5.  Common Agricultural Policy ....................................................................................................................... 18 

2.6. 

Protecting EU citizens: responding to emergencies ............................................................................. 19 

2.7. 

The fallout of Russia’s war against Ukraine ......................................................................................... 21 

2.7.1. 

Support to Ukraine and Ukrainians ................................................................................ 21 

2.7.2. 

The fallout of the war in the EU and third countries ..................................................... 24 

2.8.  An EU budget for long-term competitiveness ....................................................................................... 28 

2.9. 

Security and defence .................................................................................................................................... 30 

2.10.  Migration and border management .......................................................................................................... 33 

2.11.  The economic context: inflation and interest rates ............................................................................ 34 

2.11.1. 

Inflation ......................................................................................................................... 34 

2.11.2. 

Interest rates ................................................................................................................ 35 

3. 

IMPLEMENTATION: HORIZONTAL ELEMENTS ......................................................................................................................................... 37 

3.1. 

,MFF state of play: current availabilities and past usages ............................................................... 37 

3.2.  Borrowing and lending ................................................................................................................................. 40 

3.3.  Rule of Law ...................................................................................................................................................... 42 

3.4. 

Performance and Mainstreaming .............................................................................................................. 43 
CONCLUSIONS ....................................................................................................................................................................................................... 49 

ANNEXES ................................................................................................................................................................................................................... 50 

4. 

5. 

5.1.  Overview of MFF 2021 – 2027 .................................................................................................................. 50 

Table 5.1.1 – Comparison between the adopted and the current multiannual financial framework ceilings 
for commitments and payment appropriations ..................................................................................... 50 

Table 5.1.2 Redeployments and flexibilities implemented since 2020 ................................................... 53 

Figure 5.1.1 – Expenditure ceiling for commitment appropriations 2021-2027 as a proportion, by heading 
and sub-heading ............................................................................................................................... 55 

Figure 5.1.2 – Expenditure ceilings for commitment appropriations and MFF top-ups ............................. 56 

Table 5.1.3 – Sustainability of the ceilings for commitment appropriations (EUR million, current prices) .... 57 

Table 5.1.4 – Adopted MFF ceilings and other elements of the December 2020 MFF agreement .............. 58 

Table 5.1.5 – Evolution of the payment ceilings .................................................................................. 60 

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5.2.  Overview of availabilities and flexibilities ............................................................................................ 61 

Table 5.2.1 – Adopted availabilities and flexibilities in the MFF 2021-2027 ........................................... 61 

Table 5.2.2 – Remaining availabilities and flexibilities in the MFF 2021-2027 ........................................ 63 

Table 5.2.3 – Availabilities and flexibilities mobilised, used or planned in the MFF 2021-2027 ................ 65 

Table 5.2.4 – Summary presentation of adopted, current, and mobilised or used availabilities ................. 67 

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EXECUTIVE SUMMARY  

Since the adoption of the Multiannual Financial Framework (MFF) 2021-2027, the Union has 
faced  a  series  of  unexpected  challenges.  Barely  out  of  the  pandemic,  the  Union  was  faced  with 
Russia’s  brutal  invasion  of  Ukraine  with  huge  humanitarian,  economic,  social,  budgetary  and  political 
consequences. The ensuing energy crisis was a yet another call to accelerate the clean-energy transition, 
and a red-alert to reduce the energy dependency from Russia. More broadly, geopolitical instability has 
brought further pressures to migration and to the Union’s external action activities. The macro-economic 
environment has changed dramatically. Because of the energy crisis and supply chains bottlenecks from 
the  post-COVID-19  pandemic,  inflation  increased  sharply,  and  in  turn  pushed  up  interest  rates,  which 
made  borrowing  costs  rise  for  all  bond  issuers,  including  the  EU.  As  a  consequence,  NGEU  borrowing 
costs will be substantially higher than foreseen at the time of adoption of the MFF.  

The  Commission  has  acted  swiftly  to  address  these  challenges,  by  using  all  means  at  its 
disposal,  including  redeployments,  reprogramming  and  budgetary  flexibilities.  The  EU  and  its 
Member  States  have  shown  unwavering  solidarity  with  people  fleeing  the  war  in  Ukraine  and 
immediately mobilised support to the Ukrainian people and the Ukrainian government. Cohesion policy 
funding  provided  support  to  refugees  from  Ukraine  through  the  CARE  and  Fast-CARE  initiatives,  and 
addressed  the  energy  crisis  through  the  package  of  SAFE  (Supporting  Affordable  Energy)  measures. 
Remaining RRF loans (EUR 225 billion), additional grants (EUR 20 billion) and Brexit Adjustment Reserve 
transfers  are  mobilised  under  REPowerEU  plan,  to  accelerate  the  energy  transition  and  to  diversify 
energy  supply,  reducing  the  energy  dependency  from  Russia.  Among  other  measures,  substantial 
reprogramming of existing MFF funds took place under the Chips Act to secure the supply chain of semi-
conductors. The proposed Act in Support of Ammunition Production (ASAP) to facilitate the ramp-up of 
ammunition  production  capacity  within  the  EU  is  financed  with  redeployments  from  the  European 
Defence  Fund  for  2024  and  from  resources  initially  foreseen  for  the  European  Defence  Industry 
Reinforcement through common Procurement Act (EDIRPA) in 2023 – 2024.  

As a result, the existing budgetary flexibility under the MFF is largely depleted. With the Draft 
Budget 2024, the annual allocation of the Flexibility Instrument  is fully used to cover the sharp increase 
in  NGEU  borrowing  costs.  The  annual  amounts  of  the  Solidarity  and  Emergency  Reserve  in  2021  and 
2022 were fully used as well to tackle needs from the war in Ukraine, as well as natural disasters, and 
could not cover  all the requests. Almost three quarters of the 2021-27 budgetary margins have been 
either used or planned, and the NDICI Cushion for emerging challenges and priorities by around 80%, 
notably to support Ukraine, but also for vaccines and the Syrian refugees package, inter alia. The loss of 
flexibility poses constraints for the remainder of the MFF horizon.  

The  Union’s  budget  needs  to  provide  sustainable  support  to  its  key  priorities.  The  European 
Union  is  committed  to  firmly  and  fully  stand  with  Ukraine  and  to  continue  to  provide  strong  political, 
economic, military, financial and humanitarian support to Ukraine and its people. Financing is required 
for  Ukraine’s  immediate  needs,  short-term  recovery  and  for  long-term  reconstruction.  The  Macro-
Financial Assistance Plus instrument only covers 2023 and can only finance the most urgent immediate 
budgetary  needs.  It  can  neither  cover  all  the  areas  that  the  Union  committed  to  support,  nor  provide 

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long-term  support  for  fast  recovery.  Migration  has  picked  up  after  the  pandemic,  putting  strains  on 
Member States’ reception and integration capacities. Addressing the root causes of migration, improving 
border  management,  and  maintaining  effective  migration  partnerships  with  third  countries  –  whether 
countries  of  origin  and  transit,  or  those  hosting  large  numbers  of  refugees  –  will  need  additional 
financial  support.  Targeted  investment  in  strategic  technologies  is  needed  to  foster  long-term 
competitiveness.  Leveraging  on  existing  instruments  and  governance  frameworks  will  speed-up  the 
implementation and allow to mobilise quicker higher amounts of financial support Finally, in the current 
context of high volatility in financial markets the EU budget should have the necessary flexibility to cater 
for higher borrowing costs, which is a legal obligation.  

New  emergencies  and  increasing  priorities  have  put  a  strain  on  the  resources  of  the  EU 
administration  Many  additional  tasks  have  been  given  to  the  Union  since  2020  without  a 
corresponding  increase  in  staff.  Severe  measures  of  reprioritisation  and  cost  savings  operations  have 
been applied. However, the situation has reached a critical point where these additional tasks cannot be 
delivered without additional resources. In addition, the high inflation affects the Union’s legal obligations 
related to indexed contracts.  

A targeted MFF revision is therefore necessary to address urgent needs. The revision shall equip 
the MFF with the means to ensure that the Union can meet its legal obligations and address the most 
urgent priorities.  

This Staff Working Document builds on the information available at the time of the presentation of the 
Draft  Budget  2024,  the  Annual  Budget  and  Performance  Report  for  2022,  and  the  2023  Long-Term 
Forecast of Inflows and outflows of the EU budget.1  

1. 

INTRODUCTION  

The  multiannual  financial  framework  (MFF)  2021-2027  and  NextGenerationEU,  adopted  in 
December 2020 during the COVID-19 crisis, marked a watershed moment in the history of the 
EU budget. It came with an unprecedented size of EUR 2 trillion,2 a new instrument to support recovery 
and resilience funded by EU borrowing on financial markets and, after more than three decades, a new 
own resource and a roadmap to propose additional new own resources. Moreover, it was adopted with a 
new  genral  regime  of  conditionality,  as  respect  for  the  rule  of  law  is  key  for  the  sound  financial 
management of the Union budget and the effective use of the Union funding. 

The  MFF  and  NextGenerationEU  provide  a  well-designed  support  to  the  EU  economy  for  its 
recovery from COVID-19, while minimizing the risks of lasting socio-economic divergences or 

1  Statement  of  estimates  of  the  European  Commission  for  the  financial  year  2024,  SEC(2023)  250  –  June  2023; 
COM(2023)406  Annual  Management  and  Performance  Report  for  the  EU  Budget  –  Financial  Year  2022;  COM(2023)390 
Report from the European Commission to the European Parliament and the Council  – Long-Term Forecast of future Inflows 
and Outflows of the EU budget (2024-2028) 
2 All figures in this document are in current prices, except when indicated otherwise. 

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scarring effects of the pandemic. In addition, they aim at fostering the EU’s recovery and resilience 
by  accelerating  the  green  and  digital  transitions.  Thanks  to  strong  and  coordinated  EU  action,  the  EU 
reached its pre- crisis GDP in less than 2 years, while it took 7 years for the EU to go back to its pre-
crisis GDP after the global financial crisis.  

However, the economic and geopolitical context has dramatically changed since the adoption 
of  the  MFF  and  NextGenerationEU.  Russia’s  unprovoked  and  unjustified  war  of  aggression  against 
Ukraine and its fallout brought new challenges to the EU. The war is causing enormous suffering and 
destruction in Ukraine and has had significant economic reverberations in the rest of the world and the 
EU, with lower growth and record-high inflation that is only now starting to recede. The modest growth in 
the EU registered in the first quarter of 2023 dispelled fears of a winter recession, but inflation remains 
high, which might call on monetary authorities to act more forcefully to stem inflationary pressures.3 The 
high inflation also has a negative impact on the real value of all budgets, including the EU budget. 

The EU budget has been one of the main tools of response to these unforeseen challenges, requiring  – 
as  discussed  in  this  Staff  Working  Document  –  significant  reprogramming  and  use  of  flexibilities. 
However,  the  EU  budget’s  overall  flexibility,  availabilities  and  possibilities  for  reprogramming  are  now 
reaching their limits, undermining the MFF’s ability to address current and future challenges.    

At the time of adoption of the MFF, the Commission committed to present a mid-term review 
by  1  January  2024.  As  per  the  Commission’s  declaration,  the  review  ‘may,  as  appropriate,  be 
accompanied by relevant proposals for the revision of the MFF Regulation’.  

This  Staff  Working  Document,  together  with  the  Communication  COM  (2023)336,  presents 
the  main  elements  and  outcomes  of  the  review  and  sets  the  ground  for  a  necessary  and 
targeted  revision  of  the  MFF.  This  analysis  builds  on  the  information  available  at  the  time  of  the 
presentation of the Draft Budget 2024, as well as the Annual Budget and Performance Report for 2022 
and  the  2023  Long-Term  Forecast  of  Inflows  and  outflows  of  the  EU  budget4  to  assess  the 
implementation  of  the  MFF  and  evaluate  the  challenges  for  the  remainder  of  the  MFF  in  light  of  the 
evolving economic and geopolitical context. 

2. 

IMPLEMENTATION: SPENDING PRIORITIES AND CHALLENGES 

2.1.  A transformative budget 

The MFF and NextGenerationEU were adopted at a time when the Union was confronted with 
several challenges that required common action. Not only Europe was facing the largest shock in 
modern history with the COVID-19 pandemic, but additional structural changes driven by technological, 

3 European Commission (2023) “European Economic Forecast – Spring 2023“, European Economy – Institutional Paper 200 
4  Statement  of  estimates  of  the  European  Commission  for  the  financial  year  2024,  SEC(2023)  250  –  June  2023; 
COM(2023)406  Annual  Management  and  Performance  Report  for  the  EU  Budget  –  Financial  Year  2022;  COM(2023)390 
Report from the European Commission to the European Parliament and the Council – Long-Term Forecast of future Inflows 
and Outflows of the EU budget (2024-2028) 

5 

 
 
 
                                                           
demographic  and  the  climate  crisis,  and  scarce  resources  posed  significant  challenges.  New  security 
threats  as  well  as  war  in  Europe's  neighbourhood,  and  global  geopolitical  instability  characterized 
already the external environment.  

The composition of the current long-term budget responded to this wide array of challenges. 
The  EU  budget  expenditure  has  been  traditionally  dominated  by  agriculture  and  cohesion  policy,  with 
other instruments and policies gradually gaining ground. For the period 2021-2027 about one third of 
the MFF is  allocated to new and reinforced priorities. Research, defence, healthcare, migration, among 
others, represent 31.9% of the current multiannual framework, up from 23.2% in the MFF 2014-2020 
(Graph 1). When NextGenerationEU - a temporary and exceptional instrument - is included, the share of 
these new policies and priorities is above 50%. 

Graph 1. Share of the main policy areas in the multiannual financial frameworks excluding (upper chart) 
and including NextGenerationEU (lower chart) 

60%

50%

40%

30%

20%

10%

Common Agricultural 
Policy

Economic, Social and 
Territorial Cohesion

New and reinforced 
priorities

Administration

31,9%
30,9%

30,5%

6,7%

0%
1988-1992 1993-1999 1995-1999* 2000-2006 2007-2013 2014-2020 2021-2027

60%

50%

40%

30%

20%

10%

Common Agricultural Policy 

Economic, Social and 
Territorial Cohesion

New and reinforced priorities

Administration

56,1%

20,8%
19,0%

4,1%

0%
1988-1992 1993-1999 1995-1999* 2000-2006 2007-2013 2014-2020 2021-2027

Source: European Commission. 

NextGenerationEU  is  the  most  innovative  element  both  from  the  point  of  view  of  its 
composition and its financing. Over the period 2021-2026, the recovery instrument will inject up to 
around  EUR  807  billion  to  the  EU  economy  to  repair  the  economic  and  social  damage  caused  by  the 
COVID-19  pandemic  and  to  support  a  greener,  more  digital,  and  more  resilient  EU,  better  fit  for  the 
current  and  forthcoming  challenges.  NextGenerationEU  is  financed  via  common  Union  borrowing  on 

6 

 
 
 
 
financial  markets.  Whereas  the  EU  was  already  a  well-established  issuer  on  financial  markets,  with 
NextGenerationEU it becomes a major issuer and for the first time it is borrowing to finance spending 
programmes (Section 4.2).  

The EU budget provides a substantial impulse to investment in Europe. The EU budget’s impact 
on investment is compounded by Member States’ co-financing and in many cases by the leverage effect 
of  financial  instruments  crowding  in  funds  from  partnering  institutions  and  private  investors.  Net 
investment had declined dramatically after the global financial crisis and struggled to recover in the run-
up to the current MFF. The InvestEU programme,5 building on the success of its predecessor, leverages 
on the budget and brings together different prior financial instruments, generating economies of scale, 
thus making a more efficient use of guarantees to crowd-in private investors (Box 1).  

By providing financial support to key European policies and priorities, the long-term budget 
aims  at  accelerating  Europe’s  economic  structural  transformation.  The  EU  budget  is  not  only 
supporting growth and investment on a durable manner, it also boosts the implementation of structural 
reforms that improve the functioning of the economy, bringing further EU added value. The focus is on 
the green and digital transitions and ensuring that these occur in an inclusive way.  

Box 1. InvestEU two years on 

The promotion of investment for recovery, green growth, employment, and well-being across 
Europe is one of the EU’s top priorities. The InvestEU programme is endowed with an EU budgetary 
guarantee of EUR 26.2 billion. This is expected to mobilise more than EUR 372 billion over the period 
2021-2027  to  support  investments  in  key  EU  policy  priority  areas,  including  the  green  and  digital 
transitions, research and innovation, the European health sector, strategic technologies, and projects of 
common European interest.  

InvestEU  implementation  is  on  track.  As  of  June    2023,  the  Commission  has  signed  guarantee 
agreements with 11 implementing partners, already allocating EUR 22.3 billion out of the total available 
guarantee. This alone should mobilise more than EUR 290 billion in private investment. The investment 
committee has approved 94 operations worth EUR 11.51 billion of the EU guarantee.  

Member  States  can  transfer  additional  resources  to  InvestEU,  up  to  5%  of  their  shared 
management funds and up to 4% of the Recovery and Resilience Plan’s total financial allocation under 
the  Recovery  and  Resilience  Facility.  This  additional  EU  guarantee  will  be  implemented  in  accordance 
with InvestEU rules and will be used exclusively for the benefit of the Member State concerned (‘Member 
State  compartment’).  This  may  bring  benefits  in  terms  of  policy  implementation  and  higher  leverage. 
Member States can benefit from ready-made or tailor-made products, a single set of rules including in 
specific  cases  simplified  state-aid  rules.  Up  to  date,  there  are  EUR  1.7  billion  additional  guarantees 
mobilised through contributions by six Member States under their compartments. 

EU  support  under  InvestEU  has  been  reinforced  by  EUR  1.4  billion  additional  EU  guarantee 
through blending operations from nine sectoral programmes. This either increases the amount of 

5 Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 establishing the 
InvestEU Programme and amending Regulation (EU) 2015/1017. 

7 

 
 
                                                           
the EU guarantee granted, provides a self-standing financial product or may provide a certain amount of 
grants  to  de-risk  the  investments.  The  most  recent  example  is  the  Green  Premium  Agreement  that 
provides  to  the  EIB  an  indicative  contribution  from  the  EU  Innovation  Fund  (EUR  220  million),  and 
Horizon Europe (EUR 200 million) of up to EUR 420 million to be used to co-invest in projects selected by 
Breakthrough Energy Catalyst up to EUR 820 million between 2022-2026 to accelerate the deployment 
and rapidly commercialise innovative technologies that will help deliver European Green Deal ambitions 
and the EU's 2030 climate targets.  

2.2.  The Union budget response to the COVID-19 pandemic and energy crisis 

In  early  2020,  the  COVID-19  pandemic  swept  across  the  globe  leading  to  loss  of  lives,  a 
sudden  exceptional  economic  contraction  and  a  steep  increase  in  uncertainty,  prompting 
Member States and the EU to intervene at large scale. Lockdown measures to contain the virus 
severely affected economic activity. All Member States were impacted by this major shock although in a 
different  way  depending,  inter  alia,  on  the  spread  of  the  virus  among  the  population,  the  type  and 
severity of the containment measures and the sectoral composition of the economy. To counter these 
negative  effects  and  underlying  risks,  the  ECB  provided  large-scale  liquidity,  European  state-aid  rules 
were relaxed, and the general escape clause of the Stability and Growth Pact was activated for the first 
time to enable Member States to provide immediate budgetary support to their economies.  

The  EU  budget  also  contributed  to  the 
immediate  response,  through  substantial 
reprioritization and redeployments (Table 5.1.2). The Coronavirus Response Initiative (CRII) and the 
Coronavirus Response Investment Initiative Plus (CRII+) provided immediate liquidity to Member States' 
budgets and made possible the frontloading of cohesion policy funding within the 2014-2020 cohesion 
policy  programmes.  The  CRII  introduced  a  range  of  simplifications,  liquidity  measures  and  flexibilities 
designed to help Member States respond to urgent needs for the healthcare sector, small and medium-
sized  enterprises  (SMEs)  and  labour  markets.  CRII+  provided  the  possibility  to  apply  100%  EU  co-
financing to operations for one year6 and facilitated the redirection of available funds from the 2020 
allocation. As a result of these measures, Member States spent over 10% more of their cohesion policy 
funding  in  2020  than  they  had  planned  before  the  pandemic  and  most  of  the  available  funds  were 
mobilised by the end of 2021 (Graph 2). 

The EU budget also backed loans to fund short-time work schemes and similar measures to 
effectively  safeguard  employment  and  avoid  scarring  in  the  labour  markets.  The  temporary 
Support  to  mitigate  Unemployment  Risks  in  an  Emergency  (SURE)  instrument  introduced  in  2020 
provided  close  to  EUR  100  billion  in  loans  to  19  Member  States7,  financed  by  the  issuance  of  social 
bonds. As a result of the measures taken at Member State and EU level, unemployment in the EU-27 
went up by substantially less than what could have been expected given the fall in domestic production. 

6 The CARE package extended the 100% EU co-financing for relevant operations by one additional year.   
7 Belgium, Bulgaria, Cyprus, Estonia, Greece, Spain, Croatia, Hungary, Ireland, Italy, Lithuania, Latvia, Malta, Poland, Portugal, 
Romania, Slovenia, Slovakia, Czechia. 

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Member States are estimated to have saved EUR 9 billion in interest payments thanks to EU borrowing 
to finance SURE, which had lower rates than most of the EU Member States.8 

Graph 2. The EU Budget’s immediate response to COVID-19 through CRII and CRII+ (EUR billion) 

Source: European Commission. 

In May 2020, the Commission put forward a recovery plan that included a revised proposal 
for  the  2021-2027  MFF  and  the  recovery  instrument  NextGenerationEU.  Despite  the  decisive 
actions to contain the immediate impact of the crisis, concerns remained that the crisis might trigger a 
situation  of  prolonged  sluggish  growth,  high  unemployment  and  a  permanently  weakened  business 
sector. For the EU as a whole, the crisis entailed fundamental risks that the single market level-playing 
field could become permanently uneven and widen a gap in living standards. The process of economic 
integration and convergence could also be jeopardised.  

At  the  centre  of  NextGenerationEU  is  the  Recovery  and  Resilience  Facility  (RRF),  which 
provides  up  to  EUR  723.8  billion  in  grants  and  loans  for  reforms  and  investments.  The  RRF 
provides financial support to Member States for reforms and investments establishing for the first time 
a  very  strong  link  between  Europe’s  must-do’s  for  economic  prosperity  as  defined  in  Member  States’ 
Country Specific Recommendations and EU financial support for investments. Payments are subject to 
the  delivery  of  agreed  milestones  and  targets.  This  set-up  incentivises  the  implementation  of  major 
economic,  social  and  environmental  reforms,  which,  in  turn,  increase  the  effectiveness  of  the 
investments  (Box 2). Member States  have flexibility in designing and implementing the measures in a 
way that suits their national conditions, which increases their ownership of plans. Technical support for 
reforms is available to Member States under the Technical Support Instrument.  

NextGenerationEU also reinforces several EU programmes and policies with EUR 83.1 billion. 
These include cohesion policy, under the recovery assistance for cohesion and the territories of Europe 
(REACT-EU),  the  Just  Transition  Fund,  the  European  Agricultural  Fund  for  Rural  Development  (EAFRD), 
InvestEU, rescEU, and Horizon Europe. These can be used until end 2023, as was already the case for the 
original  allocations.  To  provide  the  maximum  possible  assistance  to  the  Member  States,  the 

8  Report  on  the  European  instrument  for  Temporary  Support  to  mitigate  Unemployment  Risks  in  an  Emergency  (SURE) 
following the COVID-19 outbreak pursuant to Article 14 of Council Regulation (EU) 2020/672,‘SURE after its sunset: final bi-
annual report’ (June 2023). 

9 

 
 
 
                                                           
implementing conditions are very generous and flexible, including no national co-financing and a high-
level  of  prefinancing.  As  of  end-2022  almost  the  full  amount  was  programmed  and  committed 
(99.95%), with 36% paid-out to Member States.  

The  macroeconomic  impact  of  NextGenerationEU  is  expected  to  be  sizeable.  European 
Commission  simulations9  suggest  an  impact  of  1.2%  of  GDP  by  2026.  In  particular,  the  synchronised 
fiscal  stimulus  leads  to  important  positive  spillovers  across  countries:  on  average,  GDP  effects  are 
around one-third larger compared to a counterfactual of a fiscal impulse in one individual country. ECB 
analysis points to a somewhat larger growth impact (+1.5% of GDP by 2026)10. In particular, in Italy and 
Spain, two of the main beneficiaries, the public debt-to-GDP ratio may be substantially lower in a decade 
compared to what it would have been without NextGenerationEU.  

Box 2. The Recovery and Resilience Facility two years on 

All Member States have adopted national Recovery and Resilience Plans (RRPs). 22 RRPs were 
adopted in 2021 and 5 in 2022. The RRPs present a comprehensive set of measures with milestones and 
targets whose fulfilment is a condition to disbursements. The positive assessment by the Commission of 
the  RRPs and  endorsement  by  the  Council  depends  on  several  criteria  including  their  consistency  with 
Country Specific Recommendations, the impact on growth and job creation and policy costing, in addition 
to quantitative requirements for their contribution to climate and digital objectives.[1]  

A  key  innovative  feature  of  the  RRF  is  that  it  provides  financial  support  to  productivity-
enhancing  structural  reforms  in  addition  to  investments.  The  RRF  supports  Member  States  in 
addressing relevant country-specific recommendations adopted by the Council as part of the European 
Semester. As such, the RRF provides political momentum and financial incentives for Member States to 
deliver on long-standing and newly emerging reform needs. Meeting such needs is essential to enhance 
the  resilience  and  competitiveness  of  the  European  economy  and  to  contribute  to  upward  social  and 
economic convergence. A breakdown by policy area shows that challenges in the areas of research and 
innovation, education, skills and life-long learning, energy and climate change as well as transport and 
the  business  environment  are  well  covered  in  the  plans.  Member  States’  plans  are,  in  general,  less 
ambitious in policy areas related to taxation or to the long-term sustainability of public finances.  

The  RRF  helps  Member  States  to  deliver  on  jointly  identified  policy  priorities,  including  the 
green  and  digital  transitions  and  the  European  Pillar  of Social  Rights.  About 40%  of the total 
allocation of the RRPs (EUR 230 billion) contributes to measures aimed at reducing net greenhouse gas 
emissions by at least 55% by 2030, and 26% (EUR 131 billion) to measures of digital transformation of 
the European society and economy. The RRF’s contribution to the green transition is further reflected in 
the  mandatory  respect  of  the  “do  no  significant  harm”  principle,  which  is  essential  to  ensure  the 
compatibility of the Facility with the EU’s environmental objectives. Moreover, the Facility also supports 
measures that are contributing to the implementation of the European Pillar of Social Rights, the Union 

9  Pfeiffer,  P.,  Varga,  J.  &  in’  t  Veld  J.  (2022).  Quantifying  spillovers  of  coordinated  investment  stimulus  in  the  EU. 
Macroeconomic Dynamics, 1-23. 
10 Bańkowski (et al), “The economic impact of Next Generation EU: a euro area perspective”, ECB Occasional Paper Series, No 
291, April 2022 (link). 

10 

 
 
                                                           
of  Equality,  and  the  achievement  of  the  2030  targets  in  terms  of  employment,  skills  and  poverty 
reduction - with almost 30% (EUR 138 billion) of the RRPs’ allocation dedicated to social expenditure. 

As of May 2023, EUR 153.4 billion have been disbursed (EUR 106.3 billion in grants and EUR 
47.1 billion in loans) out of around EUR 500 billion committed. This includes EUR 56 billion in pre-
financing,  which  was  quickly  disbursed  to  provide  liquidity  in  response  to  the  crisis.  The  level  of 
disbursements is commensurate to the progress in the achievement of milestones and targets.  

There  are  still  some  EUR  225  billion  of  loan  support  available  for  Member  States  for 
commitment in 2023. Ten Member States have expressed an interest in (additional) RRF loans for a 
total  of  around  EUR  145  billion  for  REPowerEU  objectives  or  other  [2].  Member  States  have  until  31 
August 2023 to request loan support. 

[1] Recovery and Resilience Scoreboard (europa.eu)  
[2] Overview of Member States' intentions to request RRF loan support.pdf (europa.eu) 

The  EU  economy  has  largely  recovered  from  the  COVID-19  induced  shock  halfway  through 
NextGenerationEU  implementation.  In  almost  all  Member  States,  GDP  levels  and  unemployment 
rates have returned to pre-pandemic levels by the end of 2022. This strong recovery contrasts with the 
experience after the global financial crisis. This can be explained by both the nature of the shock as well 
as the coordinated policy response.  

However, Russia’s war of aggression against Ukraine massively disrupted the global energy 
system and halted the recovery. The war is causing enormous suffering in Ukraine (section 2.7) and 
Russia’s  weaponization of energy supply caused economic hardship on EU  households and firms as  it 
pushed energy prices at historical highs and heightened energy security concerns. It also brought to the 
fore the EU’s over-dependence on fossil fuel imports from Russia (gas, oil and coal). As a result, in March 
2022, EU leaders agreed in the European Council to phase out Europe’s dependency on Russian energy 
imports as soon as possible and the Commission presented the REPowerEU plan in May 2022. 

REPowerEU,  as  a  new  chapter  in  RRF  plans,  strengthens  the  joint  effort  to  end  Europe’s 
dependence  on  Russian  fossil  fuels  and  to  accelerating  the  green  transition  and  is  mainly 
financed  through  redeployments.  REPowerEU  entered  into  force  in  March  2023.  In  addition  to  the 
remaining RRF loans, the financial envelope is increased by EUR 20 billion in grants from the sale of EU 
Emission  Trading  System  allowances.  It  allows  for  voluntary  transfers  from  the  Brexit  Adjustment 
Reserve  and  higher  pre-financing  for  a  faster  impact.  Member  States  are  to  prepare  dedicated 
REPowerEU chapters complementing their existing RRPs with a massive scaling-up and speeding-up of 
renewable  energy  in  power  generation,  industry,  buildings,  and  transport  accelerating  energy 
independence and the green transition. It is a further step forward under the European Green Deal - the 
EU's long-term growth plan to make Europe climate neutral by 2050.11 

11  For  more  on  the  European  Green  Deal  and  Fit  for  55:  https://commission.europa.eu/strategy-and-policy/priorities-2019-
2024/european-green-deal/delivering-european-green-deal_en 

11 

 
 
 
 
                                                           
2.3.  Digital transition 

The  digital  transformation  has  been  affecting  the  economy,  security  and  society,  further 
accelerated by the COVID-19 pandemic. One of the side effects of the pandemic has been a boost 
to internet-based ways of doing things, in particular e-commerce and teleworking but also e-government 
and  e-health  services,  the  development  of  new  business  models,  home-work  arrangements,  and 
teleworking  at  a  larger  scale.  This  underscores  the  critical  importance  of  digital  infrastructure  and 
connectivity. As a result, it has led to a greater recognition of the need to invest in digital technologies 
and  skills  to  ensure  Europe's  competitiveness  and  resilience  in  the  digital  age.  Several  investment 
programmes in the MFF are supporting digitisation efforts. A stock-taking exercise conducted in 
2023 shows that in 2021-2022, the EU budget contributed to the digital transition by EUR 28.6 billion12 
(EUR 131.9 billion including the RRF) (Graph 3). The EU budget is supporting all key dimensions of the 
Digital Compass for the EU’s Digital Decade13 (Graph 4). 

Digital  transformation  is  one  of  the  key  investment  areas  of  the  2021-2027  MFF  and 
NextGenerationEU.  The  Digital  Europe  programme’s  (DEP)  has  financed  the  deployment  of  common 
data spaces built on innovative, secure and energy efficient cloud-to-edge capabilities. It also promoted 
the  testing  and  adoption  of  trustful  artificial  intelligence  technologies  and  invested  in  cybersecurity, 
including  by  deploying  a  secure  quantum  communication  infrastructure  (EuroQCI).  31%  of  Horizon 
Europe's budget is dedicated to the digital transformation, under the ‘Digital, industry and space’ cluster. 
The digital strand of the Connecting Europe Facility (CEF Digital), in its first programme call, is supporting 
38  selected  projects  to  receive  EU  funding  to  support  safe,  secure  and  sustainable  high-performance 
infrastructure,  totalling  EUR  150  million.  CEF  Digital  also  contributes  to  the  increased  capacity  and 
resilience of digital backbone infrastructures in all EU territories. The second round of CEF-Digital calls, 
worth EUR 240 million, attracted 69 proposals that are currently being evaluated. The Transport strand 
of the CEF is also making a key contribution by supporting the digitisation of transport in particular the 
European Rail Traffic Management System (ERTMS). As a result of the first Transport calls for proposals 
for ‘Actions related to smart and interoperable mobility’, 31 actions with programme co-funding of more 
than EUR 500 million have been awarded. 

Graph 3. Estimated contributions to the digital transition of the MFF and NextGenerationEU in 2021 and 
2022 in EUR million (left scale) and in percentages of their total implementation (right scale) 

12 The exercise aggregates the contributions of the EU budget programmes using different tracking methodologies. A fully-
fledged digital tracking methodology will be put in place in the coming years. The contributions are based on the annual voted 
budget, contributions from partners and third countries and NextGenerationEU. The overall amount may be larger as due to 
methodological limitations some programmes’ contributions are underestimated (i.e. InvestEU, CAP). 
13 
digital-targets-2030_en  

https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/europes-digital-decade-

12 

 
 
                                                           
Source: European Commission based on the first stock-taking exercise. 

The execution rate of the programmes supporting the digital transformation has been high, 
which  reflects  their  strong  demand.  The  execution  rate  is  currently  nearly  99%  of  the  voted 
commitment appropriations, and implementation in these programmes is expected to gain cruising speed 
in  2023.  This  is  despite  the  late  adoption  of  the  relevant  legal  bases,  which  required  postponing  by 
several months actions initially planned to start in late 2021 and in 2022.  

Graph 4. Estimated contributions of the MFF and NextGenerationEU to the digital transition in 2021 and 
2022 by key digital dimensions (EUR billion)  

Source: European Commission based on the first stock-taking exercise. 

The  Commission  has  proposed  several  initiatives  to  develop  secure  and  resilient  supply 
chains in strategic sectors as a response to the evolving geopolitical landscape, including in 
the  digital  area  with  the  European  Chips  Act.  The  Chips  Act  will  mobilise  over  EUR  43  billion  of 
public and private investments to ensure that the EU has the tools, skills and technological capabilities to 
become  a  global  leader  in  semiconductor  technologies  and  applications,  to  secure  its  supply  of 
semiconductors and to reduce its dependencies. Given the very limited financial availabilities within the 
MFF, achieving a budget of EUR 3.3 billion has been extremely complex and necessitated a combination 
of multiple funding sources: the original Commission proposal’s redeployments from Horizon Europe and 

13 

 
 
 
 
the Digital Europe Programme for EUR 2.9 billion14; EUR 100 million from the 2023 margin of Heading 1; 
EUR 125 million through redeployment of the pre-existing strands of the Digital Europe Programme to 
the  new  Semiconductor  objective;  EUR  50  million  through  redeployment  from  ITER  in  2024;  EUR  50 
million of future margins to be allocated to Digital Europe during the annual budgetary procedure and 
EUR 75 million from decommitments. 

To  address  the  emerging  challenges  in  the  digital  sector,  there  have  been  significant 
redeployments  and  extensive  utilisation  of  margins,  which  are  by  now  depleted.  For  the 
remainder  of  the  MFF,  margins  under  heading  1  stand  at  EUR  215  million  in  total  over  2024-2027 
(ranging from EUR 10 million in 2026 to EUR 167 million in 2024), i.e. one fifth of the amounts in the 
adopted MFF15 (Table 5.2.2 and section 3.1). In combination with the momentum gained in programme 
implementation, these limited margins render it unfeasible to rely on further redeployments or margins 
to finance new future requirements.  

2.4.  Cohesion policy and the green and digital transition  

EU cohesion policy aims at strengthening social, economic and territorial cohesion across EU 
regions,  mostly  through  investments  and  creating  employment  opportunities.  For  the  2021-
2027 MFF, the total funding under Cohesion policy amounts to EUR 392 billion16, roughly a third of the 
EU budget. Cohesion policy programmes are delivered through the European Regional Development Fund 
(ERDF), the European Social Fund Plus (ESF+), the Cohesion Fund (CF) and the Just Transition Fund (JTF).  
In addition, REACT-EU aims to foster crisis repair capacities in the context of the COVID-19 pandemic, by 
completing resources available under the 2014-2022 programmes as discussed in Section 2.2. Due to 
their size, cohesion policy funds have played a key role in addressing the fallout of COVID-19 and the 
war  in  Ukraine,  through  increased  flexibility  and  unprecedented  reprogramming  of  2021-2020 
programmes,17 and are supporting the Green Deal Industrial Plan.18 The new Cohesion funds are tuned 
towards  a record contribution on climate objectives, increasing their climate contribution from 20%  in 
2014-2020 to 31% in 2021-2027 (see section 3.4). 

Cohesion  policy  funds  present  flexibilities  that  allow  to  adjust the  programming  to  specific 
needs, while reflecting EU key priorities. Member States can transfer up to 25% of the respective 
initial allocations between the three funds (ERDF, CF and ESF+). In the Partnership Agreements adopted 
before  the  end  of  2022,  only  a  limited  number  of  Member  States  opted  for  transfers  to  funds  and 
instruments outside of cohesion policy (Bulgaria, Czechia, Germany, Greece, Finland, Malta and Portugal) 
for  a  total  of  EUR  918  million  (i.e.  0.25%  of  the  total  cohesion  envelope),  while  almost  all  used  the 
possibility of transfers between the three Cohesion policy funds. Moreover, Member States can transfer 

14  Excluding  the  EUR  400  million  of  redeployment  from  Horizon  Europe  to  Digital  Europe  to  be  compensated  by  re-
commitments. 
15 The margin in Heading 1 for 2021-2027 at the beginning of the MFF was equal to EUR 1.06 billion (see Table 5.2.1). 
16 Includes the full allocation for the ERDF, ESF+, Cohesion fund (includng CEF) and the Just Transition Fund. The amounts 
presented in table 5.1.1 are net of the transfers to other funds as presented in the Draft Budget 2024. 
17 As discussed in Section 2.2 concerning COVID-19 and 2.7 on the war in Ukraine. 
18  Communication  from  the  Commission  to  the  European  Parliament,  the  European  Council,  the  Council,  the  Economic  and 
Social Committee and the Committee of the Regions ʺA Green Deal Industrial Plan for the Net-Zero Ageʺ, COM(2023)62 final. 

14 

 
 
 
                                                           
up  to  5%  to  other  funds  implemented  in  shared  management,  and  to  several  funds  and  instruments 
implemented  in  direct  management.19  In  addition,  to  respond  quickly  to  future  exceptional  or  unusual 
circumstances,  a  flexibility  mechanism  has  been  inbuilt  into  the  Cohesion  policy  funds  regulations  to 
allow temporary measures as an emergency response. 

The  framework  governing  the  2021-27  Cohesion  Funds  has  been  simplified  compared  to 
previous  programming  period.  In  addition  to  the  above-mentioned  flexibilities,  the  number  of 
objectives has been reduced from eleven in 2014-2020 to five (Graph 5). Other simplifications aim at a 
faster and better implementation, and higher legal certainty for managing authorities and beneficiaries. 
Member States are encouraged to use Simplified Cost Options in the form of unit costs, lump sums and 
flat  rates,  as  well  as  financing  not  linked  to  the  costs  based  on  the  achievement  objectives.  
Furthermore, the number of verifications follow a proportionate risk-based approach, instead of covering 
100%  of  operations,  reducing  control  burden  and  total  administrative  costs  by  2-3%  .  Enabling 
conditions, ensuring that Member States put in place strategies and mechanisms for the efficient  and 
effective implementation of the specific objectives, have also been streamlined and reduced compared 
period.   
to 

programming 

previous 

the 

Graph 5. Cohesion policy budget (EU amount, EUR billion) 

By Policy Objective, 2021-2027 period 

Source: European Commission, cohesion open data platform. 

The  late  adoption  of  the  MFF  and  the  sectoral  legal  bases  is  weighing  on  implementation. 
None of the 2021-2027 programmes under the Common Provisions Regulation were adopted in the first 
year  and  most of  them  were  adopted  only  towards  the  end  of  2022,  with  9  programmes  adopted  in 
carry-over  at  the  beginning  of  2023.  As  a  result,  in  line  with  Article  7  of  the  MFF  Regulation,  the 
Commission adopted an adjustment of the MFF, reprogramming commitment appropriations of EUR 49 

19  Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  laying  down  common  provisions  on  the 
European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the 
European  Maritime,  Fisheries  and  Aquaculture  Fund  and  financial  rules  for  those  and  for  the  Asylum,  Migration  and 
Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy. 

15 

 
 
 
 
 
 
                                                           
billion from 2021 from shared management funds20, that could not be used in 2021 nor carried over to 
2022. 

Furthermore,  the  implementation  of  the  new  generation  of  cohesion  policy    lags  behind 
compared to the previous MFF . The implementation of the 2021-2027 cohesion programmes started 
in 2022 with the disbursement of part of the pre-financing. In 2023 and 2024, additional pre-financing 
and first interim payments will be disbursed, though at slower pace than in the previous programming 
period. Several factors explain such delayed implementation. First, the late adoption of the  legal bases 
mentioned above.  Second,  the prioritisation  of re-programming under the 2014-20 framework  , crises 
related  measures  under  CRII,  CRII+,  REACT-EU,    the  Recovery  and  Resilience  Facility,  with  shorter 
timeframes  for  programming  and  implementation.  Given  these  delays,  cohesion  programmes  for  the 
period 2021-2027 are forecast to face important risks of de-commitments from 2025 unless Member 
States undertake additional efforts to catch up with the one-year implementation gap.21   

Delivering  on  the  green transition  should  leave  no-one  behind.  The implementation of the Just 
Transition Fund, a brand-new instrument financed by both MFF and NGEU resources to support climate 
transition  in  those  regions  mostly  affected  by  the  transition  towards  climate  neutrality,  is  delayed.  A 
total of EUR 10.9 billion (55% of the total allocation of the Just Transition Fund) will need to be paid 
within the next three years given the 2026 deadline for payments under NextGenerationEU. Furthermore, 
almost  no  payments under  the  MFF  ceilings  are planned  in  the  budget  2023  and  in  the  draft  budget 
2024,  which  increases  the  risk  of  decommitments  unless  Member  States  substantially  accelerate  the 
implementation in years 2025 and 2026.22 The Social Climate Fund (SCF) will provide EUR 65 billion to 
Member  States  over  the  period  2026-2032  to  support  policies  to  address  the  social  effects  for  the 
introduction of the emissions trading system for buildings and road transport on vulnerable households, 
vulnerable micro-enterprises and vulnerable transport users.  The fund will exceptionally and temporarily 
be financed from the revenues generated from the new ETS for  buildings and road transport.  

2.5.  Common Agricultural Policy  

The  total  allocation  for  the  Common  Agricultural  Policy  (CAP)  under  the  2021-2027  MFF 
including NextGenerationEU amounts to EUR 386.6 billion, about one third of the MFF. Its first 
pillar, the European agricultural guarantee fund (EAGF) has an allocation of EUR 291 billion. Up to EUR 
270  billion  will  be  provided  for  income  support  schemes,  with  the  remainder  dedicated  to  other 
measures  supporting  agricultural  markets.  The  total  allocation  for  the  ‘second  pillar’,  the  European 
agricultural  fund  for  rural  development  (EAFRD),  amounts  to  EUR  95.5  billion.  This  includes  EUR  8.1 
billion from NextGenerationEU.  

20 European Regional Development Fund, the European Social Fund, the Cohesion Fund, the Just Transition Fund, the European 
Agricultural  Fund  for  Rural  Development,  the  European  Maritime  and  Fisheries  Fund,  the  Asylum  and  Migration  Fund,  the 
Internal Security Fund and the Border Management and Visa Instrument under the Integrated Border Management Fund. 
21 COM(2023)390 Report from the European Commission to the European Parliament and the Council – Long-Term Forecast 
of future Inflows and Outflows of the EU budget (2024-2028) 
22 COM(2023)390 Report from the European Commission to the European Parliament and the Council – Long-Term Forecast 
of future Inflows and Outflows of the EU budget (2024-2028) 

16 

 
 
 
                                                           
The  CAP  2023-2027  increased  flexibilities  for  the  Member  States  under  their  national  CAP 
Strategic Plans. Member States have used possibility to transfer a maximum of 25% of their national 
envelopes  between  the  two  CAP  pillars:  the  transfers  between  pillars  of  the  CAP  communicated  by 
Member States will result in a net transfer of EUR 4.8 billion from pillar I (EAGF) to pillar II (EAFRD) for 
the years 2024-2027.23 Member States can also apply additional flexibilities for certain purposes, such 
as supporting environment and climate objectives, supporting young farmers and where countries have 
below-average  direct  payments.  Moreover,  the  CAP  includes  a  reserve  amounting  to  at  least 
EUR 450 million a year that has been already mobilised to provide exceptional market support for eggs 
and poultry as well as emergency support for cereal and oilseeds (see also Section 2.7.2).   

Member  States  have  more  ambitious  environment  and  climate  actions  than  in  the  previous 
programming period in their strategic plans. They had to take into account European legislation on 
climate change, energy, water, air, biodiversity and pesticides including the European Green Deal targets. 
Three out of ten of the CAP’s specific objectives directly concern the environment and climate – covering 
climate  change,  management  of  natural  resources,  and  biodiversity.  CAP’s  contribution  to  the  climate 
objective is on track, but a more substantive contribution to biodiversity would be necessary to meet the 
MFF biodiversity targets (see section 3.4). 

By  the  end  of  2022,  all  the  strategic  plans  for  the  CAP  2023-2027  were  approved  and 
implementation  started  in  January  2023.  The  transitional  provisions  extending  the  2014-2020 
programmes  allowed  the  continuation  of  the  implementation  in  2021  and  2022.24  As  for  the  EAFRD, 
implementation  accelerated  on  NextGenerationEU  financing,  while  the  implementation  of  the  EAFRD-
supported projects presented some under-execution in 2021 and 2022. The 100% co-financing rate of 
the NextGenerationEU part may explain that. With the 2014-2022 EAFRD programmes continuing their 
course and the implementation of the new CAP plans starting, the payments are projected to run steadily 
in the coming years. 

2.6.  Protecting EU citizens: responding to emergencies 

From the onset of the COVID-19 pandemic, the EU took measures to protect its citizens and 
tackle  the  health  crisis.  As  soon  as  April  2020,  all  availabilities  remaining  in  the  2014-2020  MFF 
were  mobilised  to  provide  EU  emergency  support  for  the  coronavirus  health  response,  e.g.  medicines, 
vaccines  and  protective  equipment,  as  discussed  in  Section  2.2.  The  updated  proposal  for  the  2021-
2027 MFF presented by the Commission in May 2020, together with NextGenerationEU, included a new 
programme,  “EU4Health,  significant  reinforcements  of  the  Union  Civil  Protection  Mechanism 
(UCPM)/rescEU and a scale-up of the Union’s budgetary capacity to address future health crises or major 
disasters, which clearly represent cross-border challenges.  

23 In the 2014-2022 period, the net transfer from the EAGF to the EAFRD amounted to EUR 5.9 billion, on average EUR 0.65 
billion per year. 
24 As set out in the transitional regulation adopted on 23 December 2020. 

17 

 
 
 
                                                           
 
EU4Health significantly strengthens EU financial support in the health area, with a budget of 
more than EUR 5.5 billion in 2021-2027. In comparison, budget related to health had a budget of 
around  EUR  450  million  in  the  previous  MFF.  The  COVID-19  pandemic  spotlighted  the  fragility  of  the 
national and local health systems and the need for a coordinated strong action at Union level: EU4Health 
thus  contributes  to  building  strong  foundations  for  a  European  Health  Union.  In  addition,  the 
Commission’s  Health  Emergency  Preparedness  and  Response  Authority  (HERA)  started  operating  in 
October 2021 aiming at  anticipating threats and potential  health crises, through intelligence gathering 
and building the necessary response capacities.  

The  Union  Civil  Protection  Mechanism/rescEU  has  an  overall  budget  of  EUR  3.3  billion  from 
the MFF and NextGenerationEU, five times larger than in the previous MFF. The reinforcements 
under NextGenerationEU contribute exclusively to build EU preparedness and response capacity to health 
and chemical, biological, radiological and nuclear (CBRN) threats. As  the number and intensity of forest 
fires increased in recent years, EUR 195 million of the UCPM envelope was frontloaded to 2021-2023 
from to 2024-2027 to accelerate the procurement of Canadairs and helicopters and to accelerate the 
availability of forest fire-fighting ground assets. The UCPM has been under strong pressure to respond 
rapidly to major emergencies like the consequences of the war in Ukraine.  For instance, the transport of 
in-kind  assistance  from  Member  States  and  third  countries  to  Ukraine,  the  medical  evacuations  of 
patients, as well as the establishment and operability of 3 UCPM hubs in Poland, Romania and Slovakia 
required a budgetary reinforcement of EUR 124.5 million. 

EU  response  to  emergencies  has  been  reinforced  with  the  Solidarity  and  Emergency  Aid 
Reserve (SEAR). This thematic special instrument with a maximum annual financial envelope of EUR 
1.2 billion (in 2018 prices) mobilises  financial resources over and above the ceilings of the MFF 2021-
2027  to  act  for  emergency  situations  provoked  by  major  natural  disasters  or  public  health  crises  in 
Member States and accession countries. Moreover, it can also support non-EU countries suffering from 
conflicts,  refugee crisis or natural disasters. 

The  MFF  Regulation  establishes  three  periods  of  the  year  for  the  utilisation  of  the  SEAR: 
During  the    first  period,  from  1st  January  to  31st  August,    75%  of  the  annual  SEAR  allocation  can  be 
mobilised,    which  is  equally  split  between  the  Union  Solidarity  Fund  (EUSF)  and  the  Emergency  Aid 
Reserve (EAR). The remaining 25% is held in reserve until 1st October. During the second period, from 1st 
September  to  30th  September,  any  unspent  amounts  from  the  first  period  for  any  of  the  SEAR 
components can be used. The third period, from 1st October to 31st December, enables the utilisation by 
any of the SEAR components of the unspent amounts from the first and second periods and the reserved 
25%.  All  these  rules  resulted  in  complicated  decision-making,  increased  the  ompetition  between  the 
different strands and challenged the planning.   

The SEAR amounts are rapidly used and seem insufficient to cover all needs. The requests from 
major  emergencies  under  the  EUSF  (COVID-19,  earthquakes,  floods  in  Germany,  Belgium,  the 
Netherlands, Luxembourg, Austria and Italy, and recently the earthquake in Türkyie)25 and for emergency 
response (e.g. Humanitarian Aid in Ukraine and Moldova and impact of the food crisis worldwide, support 
to  Member  States  in  the  reception  of  refugees  and  civil  protection  following  the  Russian  war  of 

25 Candidate Countries are eligible for support of the EUSF. 

18 

 
 
                                                           
aggression against Ukraine) have been much  higher than available resources. The aid granted to the 20 
applications by Member States and candidate countries for COVID-19 represented 53% of the potential 
aid amounts. The aid granted to Germany, Belgium, Luxembourg, the Netherlands, and Austria following 
the 2021 summer floods, to Greece for the earthquake in Crete and to Spain for the volcanic eruption in 
La Palma had to be reduced  by 63% compared to the potential aid amounts.  

2.7.  The fallout of Russia’s war against Ukraine 

2.7.1. 

Support to Ukraine and Ukrainians 

The  unprovoked  and  unjustified  Russian  war  of  aggression  against  Ukraine  has  caused 
terrible  human  suffering  and  massive  destruction  of  towns  and  communities.  Lives  and 
livelihoods are being lost, with millions of people forced from their home countries in search of safety. 
Such dramatic events have also changed the level and type of approach initially planned from the EU 
budget to Ukraine before the invasion. Before the start of the invasion in February 2022, the estimated 
EU budget support to Ukraine was around EUR 160 million per year (or EUR 1.1 billion for 2021-2027).  

The EU and its Member States have shown unwavering solidarity with people fleeing the war 
in  Ukraine  and  immediately  mobilised  support  to  the  Ukrainian  government  to  maintain  its 
basic functions. The planned programmes for Ukraine have been redesigned and adapted to respond 
to the needs generated by the war, through budgetary top-ups, frontloading, redeployments and using 
available  flexibilities.  For  example,  of  the  EUR 1 billion originally  programmed  for  provisioning  of  MFA 
loans under the Neighbourhood, Development and International Cooperation Instrument – Global Europe 
(NDICI – Global Europe) for 2021-2027, EUR 648 million have been used for Ukraine (EUR 7.2 billion in 
loans) and EUR  20  million for Moldova  (EUR 220 million  in loans). EUR 2.6 billion  from NDICI cushion 
over 2021-2027 have been planned to finance support to Ukraine, including the provisioning of the EIB 
repurposed loans and the interest rate subsidy on the MFA1 and MFA2 loans in 2022.    

All  in  all,  since  the  beginning  of  the  Russian  invasion,  the  EU,  its  Member  States  and  the 
European  Financial  Institutions  have  mobilised  EUR  38.3  billion  in  financial  assistance  to 
Ukraine, under a Team Europe approach (Graph 6). This includes EU budget support of EUR 30.5 
billion  and  bilateral  support  from  EU  Member  States  of  EUR  7.8  billion.  The  military  assistance  to 
Ukrainian Armed Forces from EU Member States amounts to around EUR 15 billion, including the support 
from the European Peace Facility and a military training mission for Ukrainian soldiers. The total Team 
Europe support to Ukraine therefore amounts to EUR 53 billion. Together with EUR 17 billion mobilised 
by  the  EU  and  its  Member  States  to  support  people  fleeing  Ukraine,  this  brings  the  total  support  to 
Ukraine and its people to EUR 70 billion. 

For  2023,  the  backbone  of  the  EU  support  to  Ukraine  is  the  EUR  18  billion  Macro  Financial 
Assistance Plus (MFA+) Instrument that will help the  functioning of the Ukrainian State and 
its  vital  services.  EUR  7.5  billion  were  already  disbursed  as  of  May  2023.  This  highly  concessional 
instrument  offers  flexibility  and  very  favourable  terms  for  Ukraine,  catering  to  the  country’s  current 
situation and ensuring swift action to support the Ukrainian people. To secure the funds for the loans, 
the  Commission  borrows  on  capital  markets  through  its  unified  funding  approach.  The  borrowing  for 

19 

 
 
 
Ukraine  for  MFA+  is  guaranteed  by  the  headroom  of  the  EU  budget,  which  provides  the  most  robust 
financial  safeguard.  This  is  a  change  as  the  headroom  was  previously  used  only  to  guarantee  the 
borrowing for financial assistance programmes to Member States. 

Graph 6. Team Europe’s financial assistance to Ukraine since 2022 

The EU budget gave decisive support to the millions of people that have fled the war, seeking 
refuge in EU countries and in the Republic of Moldova. The Temporary Protection Directive26, which 
had been adopted following the conflicts in former Yugoslavia, was triggered for the first time by the 
Council on 24 February 2022 to offer quick and effective assistance to people fleeing the war in Ukraine. 
4 million refugees  from Ukraine registered for temporary protection or similar schemes in the EU.  EU 
Home  Affairs  Funds  were  granted  more  flexibility  to  facilitate  the  use  of  unspent  2014-2020  funds. 
EUR 400 million were made available through Emergency Assistance under the Asylum Management and 
Integration  Fund  (AMIF)  and  Border  Management  and  Visa  Instrument  (BMVI)  Thematic  Facilities  for 
frontline Member States, to assist with the first reception and early integration of Ukrainians entering 
the  EU.  The  AMIF  Regulation  was  also  amended  to  provide  additional  flexibility  and  funding  from 
contributions made by Member States and by other public or private donors. 27   

Humanitarian needs increased dramatically during the past years, because of a multitude of 
crises  and  natural  disasters  worldwide.  According  to  the  2022  Global  Humanitarian  Overview 
(published  before  the  start  of  the  war  in  Ukraine),  the  number  of  people  in  need  of  humanitarian 
assistance  and  protection  globally  has  reached  274  million,  a  significant  increase  compared  to  235 
million in 2021 and 168 in 2020. This has been further aggravated by the Russian invasion of Ukraine, 
which triggered the fastest-growing refugee crisis in the world. Over 8 million people have left Ukraine 
according  to  OHCHR  and  about  5  million  moved  within  the  country  according  to  the  International 
Organization for Migration (IOM), most of them women and children. Meanwhile, many others are still 
stranded in affected areas, either unwilling or unable to leave as a consequence of military action.  

26 Council Directive 2001/55/EC  of 20 July 2001  on minimum standards for giving temporary protection in the event  of  a 
mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving such 
persons and bearing the consequences thereof. 
27 OJ L 112, 11.4.2022, p. 1–5 

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Humanitarian  aid  remains  one  of  the  most  pressured  instruments  under  the  EU  external 
action spending policy. It continuously relies on ad-hoc budgetary reinforcements from other funding 
sources, i.e. margins, redeployments, Solidarity and Emergency Aid Reserve (SEAR), recommitments from 
European  Development  Fund,  to  provide  support  given  several  emergencies  such  as  Syrian  refugees, 
COVAX,  famine,  fighting  hunger  in  Afghanistan,  crises  in  West  and  Central  Africa,  etc.  This  trend  is 
unlikely to slow down, also due to the impact of the war in Ukraine on worldwide food security and the 
recent Türkiye and Syria earthquakes. Since February 2022 the European Commission has allocated EUR 
733  million  for  humanitarian  aid  programmes  to  help  civilians  affected  by  the  war  in  Ukraine.  For 
Ukraine,  the  EU  has  mobilised  EUR  485  million  for  2022  (EUR  685  million  including  the  first  half  of 
2023), that is 2.5 times higher than in the previous years (2014-2021). 

Cohesion  policy  funds  have  been  mobilised  extensively  to  support  Ukrainian  refugees  and 
hosting  Member  States.  Amendments  concerning  2014-2020  and  2021-2027  programmes  were 
adopted, in the Cohesion's Action for Refugees in Europe Packages (CARE and FAST CARE), with a view of 
alleviating  the  budgetary  pressure  on  Member  States  and  allowing  faster  and  more  flexible  use  of 
available funding to provide emergency support to people fleeing Ukraine and arriving to their territory. 
This  includes  investments  in  education,  employment,  housing,  health,  and  childcare  services,  including 
basic  material  assistance  like  food  and  clothing.  Moreover,  cohesion  policy  funds  have  also  been 
provided  flexibility  through  the  Supporting  Affordable  Energy  (SAFE)  initiative  –  enabling  support  for 
SMEs most exposed to the negative effects of the energy crisis as well as for vulnerable households. 

In  total,  Member  States  received  EUR  7  billion  of  additional  pre-financing,  equally  split  in 
2022  and  2023  between  REACT-EU  and  2021-2027  programmes,  and  EUR  6.7  billion  of 
payments were frontloaded due to the 100% co-financing ending on 30 June 2022. Easier re-
programming and cross eligibility between ERDF,  ESF and CF for the 2014-20 programmes were also 
available.  Under  the  2014-2020  programmes,  Member  States  can  also  declare  expenditure  based  on 
unit cost at a rate of EUR 100 per week per registered refugee for a maximum of 26 weeks. Based on 
the  information  from  Member  States,  the  uptake  of  this  simplification  amounts  to  around  EUR  489 
million  as  of  30  April  2023.  Furthermore,  Member  States  can  also  programme  resources  under  a 
dedicated  priority  benefitting  from  the  possibility  of  100%  co-financing  to  support  the  socioeconomic 
integration of refugees. As of end-April 2023, such measures dedicated  EUR 1 095 million and EUR 721 
million for the programmes under the 2014-2020 and  2021-2027 periods.  

To provide emergency assistance to Ukrainians, the European Commission is coordinating the 
largest ever operation under the Union Civil Protection Mechanism (UCPM). Also, thanks to the 
EU budget, all 27 EU countries, plus Norway, Türkiye, North Macedonia, Iceland, and Serbia, have offered 
in-kind assistance ranging from medical supplies and shelter items to vehicles  and energy equipment. 
The EU has established logistical hubs in Poland, Romania, and Slovakia to channel suppliest to Ukraine 
more  efficiently.  To  date,  more  than  88,0500  tonnes  of  aid  have  been  delivered.  Given  the  immense 
need  for  emergency  equipment  in  Ukraine,  the  EU  has  deployed  assistance  from  its  rescEU  medical 
stockpiles,  including  power  generators,  medical  equipment,  temporary  shelter  units,  specialised 
equipment  for  public  health  risks  such  as  chemical,  biological,  radiological  and  nuclear  threats. 
Furthermore,  the  EU  is  coordinating  medical  evacuations  of  Ukrainian  patients  in  urgent  need  of 
treatment, transferring them to hospitals across Europe to receive specialised care.  

21 

 
 
The Erasmus+  programme  is  also  supporting the education  of the  many  children  and  young 
people  fleeing  Ukraine  following  the  Russian  invasion.  As  set  out  in  the  Commission 
Communication  on  ‘Welcoming  those  fleeing  war  in  Ukraine:  readying  Europe  to  meet  the  needs’5, 
Erasmus+  will  play  a  key  role  to  help  the  education  and  training  systems  by  supporting  learners  and 
teachers, schools, vocational education and training institutes, higher education institutions, as  well as 
youth  organisations  and  NGOs.  In  2023,  the  programme  has  been  reinforced  by  EUR  100  million  to 
pursue these objectives.  

2.7.2. 

The fallout of the war in the EU and third countries  

The war provoked a massive shock to the global and EU economy, especially to energy and 
food  markets,  affecting  vulnerable  economies  and  pushing  up  prices.  This  has  especially 
affected the grain and oilseeds markets for which both Russia and Ukraine are major exporters. Support 
under NDICI and Humanitarian Aid has been provided to deal with the global repercussions on the food 
markets, often thanks to the mobilisation of special instruments. In addition, EUR 600 million were made 
available again by the EDF to promote food security in Africa, Caribbean and Pacific (ACP).  

Increased  input  costs  and  food  inflation  resulting  from  the  war  continue  weighing  on 
agricultural markets and consumers’ purchasing decisions in the EU. Farm income increased on 
average, though with significant sectoral and regional disparities, as  high commodity prices counter for 
the rising input costs28￼. As part of its Communication “Safeguarding food security and reinforcing the 
resilience of food systems” of 23 March 2022, the Commission adopted exceptional EU budget support 
measures of EUR 500 million to farmers that could be topped up with national resources up to EUR 1.5 
billion. This measure has been taken up well by Member States with an implementation of EUR 492,2 
million (98,4%). Private storage aid for pig meat was also activated for a total amount of EUR 17 million 
over 2022 and 2023. In addition, the Commission has granted an exceptional and temporary derogation 
to  allow  the  production  of  crops  on  land  set  aside  within  the  EU,  while  maintaining  full  greening 
payments for farmers.  

Market  access  granted  to  Ukraine  and  the  EU  Solidarity  Lanes  are  crucial  for  Ukraine’s 
resilience  and  to  ensure  that  exports  reach  markets  around  the  world.  However,  the 
unexpected surge in imports in neighbouring countries risks disrupting the markets for some 
agricultural  goods.  As  of  April  2023,  the  Commission  has  proposed  two  support  packages  to  the 
affected countries using the resources of the crisis reserve under the CAP. The first package providing 
emergency  support  for  cereal  and  oilseed  sectors  in  Bulgaria,  Romania  and  Poland  amounted  to  EUR 
56.3  million  from  the  agricultural  reserve,  with  the  possibility  for  Member  States  to  top  it  up  with 
national contributions of up to 100%. The second package amounts to EUR 100 million in support also 
from  this reserve to Bulgaria, Romania, Poland, Hungary, and Slovakia. Member States can complement 
it with national contributions of up to 200%. 

28 Short-term outlook report: war in Ukraine continues to impact EU farmers (europa.eu) 

22 

 
 
                                                           
Exceptional temporary aid under the EAFRD was introduced in May 2022 to support farmers 
and  SMEs  affected  by  the  consequences  of  Russia’s  invasion  of  Ukraine.  This measure allows 
Member  States  to  amend  their  rural  development  programmes  up  to  5%  of  their  2021-2022  EAFRD 
allocation  to  provide  liquidity  support  in  the  form  of  one-off  lump  sums  to  farmers  and  agri-food 
businesses affected by significant increases in input costs.  The measure has been activated in 26 rural 
development programmes in 10 Member States for a total planned amount of some EUR 409 million, 
representing an uptake of 30% of the maximum possible allocation.  

The  EU  also  provides  substantial  support  to  Moldova,  an  EU  candidate  country  since  June 
2022. EUR 782 million of financial assistance have already been pledged, including EUR 250 million to 
help Moldova to overcome the energy crisis. Russia’s war of aggression against Ukraine has particularly 
affected Moldova with over 600,000 refugees entering the country and around 80,000 still on Moldovan 
territory. Relative to its population of just over 2.5 million, Moldova is the country hosting most refugees 
per  inhabitant.  During  these  times  of  heightened  vulnerability,  the  EU  has  been  standing  firmly  with 
Moldova, an associated country with the EU and key partner in the Eastern Partnership. 

Since  May  2022,  the  European  Commission  has  implemented,  hand  in  hand  with  Ukraine, 
Moldova  and  bordering  EU  Member  States,  several  actions  under  the  'Solidarity  Lanes' 
initiative  to  help  Ukraine  export  its  agricultural  production.  This  helps  counter  the  threat  to 
global food security following Russia's invasion and its blockade of Ukrainian ports. The Solidarity Lanes 
initiative  benefits  from  substantial  EU  budget  support.  The  European  Commission,  EU  Member  States 
and  International  Financial  Institutions  have  pledged  to  mobilise  EUR  1  billion  for  Solidarity  Lanes  to 
increase global food security and provide a lifeline for Ukraine's economy. By end 2023, the Commission 
together  with  Member  States  will  dedicate  EUR  250  million  in  grants  through  the  EU  budget  and 
EUR 50 million to support the infrastructure developments needed to increase further the capacity of the 
Solidarity  Lanes,  financed  by  NDICI-Global  Europe  and  Connecting  Europe  Facility.  In  addition,  the 
European Investment Bank and the European Bank for Reconstruction and Development intend to invest 
up  to  EUR  300  million  each  on  projects  that  respond  to  the  Solidarity  Lanes  objectives  and 
USD 100 billion from World Bank Group. 

The  urgency  for  the  EU  budget  to  respond  to  Russia's  invasion  of  Ukraine  has  significantly 
depleted the availabilities, margins and flexibilities of the EU budget for external policy. This 
reduces  the  capacity  of  the  Union  to  support  react  on  other  fronts  requiring  external  action  funding. 
Whereas Heading 6 is larger in the MFF 2021-2027 compared to the previous period (+17% in current 
prices), most of this reinforcement is the result of the budgetisation of the European Development Fund 
(EDF). Moreover, NDICI has a decreasing profile over the period, which implies that the geographic lines 
(especially for Neighbourhood) will be reduced.  

The most evident example of the depleting flexibilities is represented by the use and planning 
of  the  NDICI-Global  Europe  cushion.  The  emerging  challenges  and  priorities  cushion  caters  for 
unforeseen needs and priorities. It can be used to top-up the three pillars of the instrument (geographic, 
thematic  and  rapid  response  pillars).  The  cushion,  which  built  on  the  previous  experience  under  the 
European Development Fund, has increased the Union’s ability to respond to unforeseen needs. However, 

23 

 
 
this ability has now been greatly diminished early in the multiannual cycle. The overall financial envelope 
of the cushion was EUR 9.5 billion. In 2021-2023, the cushion has been fully used, and 61% is already 
planned  in  2024-27.  Hence,  at  mid-term,  almost  80%  has  been  used  or  planned  (Table  5.2.4  in  the 
annex).  One  third  of  the  cushion  expenditure  was  used  or  programmed  for  Ukraine,  EUR  2.6  billion.  A 
high amount has also been used or programmed for global support for vaccines (EUR 1.3 billion) and the 
Syrian refugees package (EUR 1.2 billion).  

Besides the global humanitarian needs described above, the other main (non-exhaustive) challenges and 
sources of pressure on Heading 6 of the MFF can be summarised below.  

  Syrian refugees:  the needs  regarding refugees  in Türkiye on the ground are not decreasing. It is 
unlikely that Turkish authorities will be able take over the costs for the refugees any time soon, also 
given  the  expected  reconstruction  needs  related  to  the  recent  earthquakes  affecting  Türkiye  and 
Syria. The needs of Syrian refugees might increase even further considering the massive number of 
displaced people following such natural disaster and will not only affect refugees in Türkiye itself 
but  also  Syria,  Jordan,  Lebanon,  Iraq.  The  needs  for  2024-2027  are  largely  uncovered.  Given  the 
significant  pressure  on  all  headings  of  the  budget  and  the  depleted  flexibilities,  including  in  the 
NDICI cushion, it would be very difficult to cover these needs with the current availabilities.  

  The  financial  impact  of  Moldova  and  Georgia  as  EU  accession  countries,  which  is  still 
under  assessment.  The European Council in its conclusions of 23 March 2023 stressed that ‘[…] 
The  European  Union  will  continue  to  provide  all  relevant  support  to  the  Republic  of  Moldova, 
including to strengthen the country’s resilience, security, stability, economy and energy supply in the 
face  of  destabilising  activities  by  external  actors,  as  well  as  support  on  its  accession  path  to  the 
European Union. The European Council invites the Commission to present a support package ahead 
of its next meeting. 

  External  aspects  of  migration:  indicatively  10%  of  NDICI  will  support  management  and 
governance  of  migration  and  forced  displacement,  as  well  as  address  the  root  causes  of 
irregular migration and forced displacement when they directly target specific migration challenges. 
However,  following  the  closure  of  the  Trust  fund  for  Africa,  there  is  growing  expectations  on 
preserving  at  least  the  same  levels  of  funding  for  the  Southern  Mediterranean  route  (EUR  208 
million  per  year),  to  which  the  Commission  had  also  committed.  This  creates  a  gap  of  around 
EUR 100 million/year (including for 2024) in the Neighbourhood South line of NDICI. This is a point 
of  further  attention following  the  EUCO  of  9  February  2023,  which  put  an  accent  on  the  need  to 
increase  returns  by  intensifying  cooperation  with  countries  of  origin  and  transit  covering  all 
migratory routes, ‘also with adequate resources’, including under NDICI.  

  Provisioning for guarantees: the geographic lines of NDICI and IPA cover the additional needs for 
provisioning  of  the  former  External  Lending  Mandate,  Euratom  legacy  and  Macro-Financial 
Assistance  legacy  loans,  which  come  on  top  of  the  provisioning  of  the  External  Action  Guarantee 
under the current MFF. Since NDICI has a decreasing financial profile in the MFF, this means that the 
geographic  lines  (especially  for  Neighbourhood)  will  be  affected  by  these  increased  needs.  More 
generally,  MFA  has  proved  an  effective  tool  for  supporting  neighbouring  countries  experiencing 
balance  of  payments  difficulties.  However,  limited  remaining  availabilities  in  the  Common 
Provisioning Fund to provision for additional Macro-Financial Assistance loans imply that there will 

24 

 
 
be little to no room for more measures of this type under the current MFF, in particular given the 
proposal of a EUR 900 million MFA loan to Tunisia. 

Box 3. Future EU support to Ukraine 

The  Ukrainian  economy  contracted  in  2022  by  around  35%,  according  to  the  World  Bank. 
Over  one  year  since  the  start  of  the  Russian  invasion,  no  sector  in  Ukraine  has  remained 
untouched by the war. If the war continues through 2024, Ukraine will still need budgetary support for 
its functioning and immediate needs. The IMF estimates Ukraine’s financing gap at  USD 81.6 billion in 
2024-2027 (assuming the war winds down in the first half of 2024). Fully fledged reconstruction will be 
possible  only  when  the  war  is  over,  but  some  early  reconstruction  and  fast  recovery  operations  are 
already  starting.  The  overall  needs  for  the  reconstruction  of  Ukraine  are  not  yet  known  and  the 
distinction between immediate and long-term needs is increasingly blurred. Nevertheless, it is important 
to design the main building blocks of this international effort already at this stage. 

A  major  global  financial  effort  will  be  required  to  rebuild  Ukraine  once  the  war  is  over.  A 
second joint assessment, Rapid Damage and Needs Assessment (RDNA229), released in March 2023 by 
the Government of Ukraine, the World Bank Group, the European Commission, and the United Nations, 
estimates  that  the  cost  of  reconstruction  and  recovery  in  Ukraine  has  grown  to  USD  411  billion 
(equivalent  of  EUR  383  billion).  The  estimate  covers  the  one-year  period  since  the  start  of  Russia’s 
invasion of Ukraine on 24 February 2022. The cost of reconstruction and recovery is expected to stretch 
over  10  years  and  combines  needs  for  both  public  and  private  funds.  The  EU  is  already  contributing 
substantially to boost the country’s ongoing resilience, but more support will be needed in the medium to 
long-term:  to  re-establish  the  foundations  of  a  free  and  prosperous  country,  anchored  in  European 
values  and  well-integrated  into  the  European  and  global  economy,  and  to  support  it  on  its  European 
path.  Given  the  scale  of  the  challenge,  the  recovery  efforts  need  to  be  an  inclusive  multi-stakeholder 
process, involving both public and private sectors, as well as international organisations and international 
financial institutions (IFI).  

In  this  regard,  the  Multi-agency  Donor  Coordination  Platform  to  support  Ukraine's  repair, 
recovery  and  reconstruction  process,  launched  on  26  January  2023,  is  a  key  forum.  The 
Platform  allows  for  close  coordination  among  international  donors  and  financial  organisations  and 
ensures  coherent,  transparent,  and  accountable  support.  It  aims  to  ensure  enhanced  coordination 
amongst all key players providing short-term financial support but also longer-term assistance for the 
reconstruction phase. In this way, it builds on the results of the Conferences in Lugano, Berlin and Paris, 
to  help  bridge  the  gap  between  needs  and  resources  as  well  as  on  the  May  2022  Commission’s 
communication on ‘Ukraine relief and reconstruction’30. 

A structural solution is needed to support Ukraine for the remainder of the current MFF. The 

29  World  Bank;  Government  of  Ukraine;  European  Union;  United  Nations.  Ukraine  -  Rapid  Damage  and  Needs  Assessment: 
February 2022 – 2023 (English). Washington, D.C. : World Bank Group. 
http://documents.worldbank.org/curated/en/099184503212328877/P1801740d1177f03c0ab180057556615497  
30 COM/2022/233 final 

25 

 
 
 
                                                           
 
solution will need to strike the right balance between the flexibility to adapt to the evolving 
situation on the ground and predictability of financing. As a candidate country Ukraine needs to 
pursue  further  significant  reforms  on  its  EU  path.  This  will  likely  work  as  an  essential  leverage  for 
Ukraine to attract support and investments for its reconstruction. It will also ensure that investments do 
not  create  stranded  assets  but  are  converging  towards  climate,  environmental  and  digital  EU  policies 
and standards, which will help Ukraine emerge stronger and more resilient from the devastation of the 
Russian  invasion.  Therefore,  the  reconstruction  of  Ukraine  is  to  be  guided  and  framed  by  the  EU 
enlargement  process.  This  means  investments  need  to  go  hand  in  hand  with  the  reforms  supporting 
Ukraine  in  pursuing  its  European  path.  They  should  also  be  implemented  in  line  with  the  EU  acquis 
framework,  including  continuing  on  rule  of  law  reforms  and  fight  against  corruption  as  well  as  core 
standards and principles, based on the European Green Deal and supporting the digital transformation. 

2.8.  An EU budget for long-term competitiveness 

Strengthening the competitiveness and resilience of the European economy through the green 
and  digital  transformations  has  been  the  EU  compass  over  the  last  years.  With 
NextGenerationEU, the EU has closed the gap with pre-pandemic output levels already in the summer of 
2021. The funds directed to the twin green and digital transformation are making the economy more 
competitive  and  sustainable.  The  unprecedented  efforts  by  the  Member  States  to  implement  crucial 
reforms are making the EU more resilient. 

Together  with  a  strong European Single  Market, further  efforts  in this  direction  can  enable 
the EU to be at the frontier on key technologies. The European Green Deal has set the EU green 
transition  ambitions,  including  the  climate  targets  towards  net-zero  by  2050.  The  Fit  for  55  package 
provides  a  concrete  plan  to  put  the  European  economy  firmly  on  track.  This  requires  massive 
investments  both  from  the  private  and  public  sectors  and  a  strong  industrial  base  to  support  this 
transition.  The  EU  industry  has  also  proven  its  inbuilt  resilience  but  is  being  challenged  from  high 
inflation,  labour  shortages,  post-COVID  supply  chains  disruptions,  rising  interest  rates,  and  spikes  in 
energy costs and input prices. This is paired with strong competition on the fragmented global market. 

The  Green  Deal  Industrial  Plan  seeks  to  enhance  the  competitiveness  of  Europe's  net-zero 
industry, support the fast transition to climate neutrality and create quality jobs. To do so, it 
aims to provide a more supportive environment for the scaling up  of the EU's manufacturing capacity. 
The  plan  is  based  on  four  pillars:  a  predictable  and  simplified  regulatory  environment,  speeding  up 
access  to  finance,  enhancing  skills,  and  open  trade  for  resilient  supply  chains.  In  March  2023,  the 
Commission adopted a new Temporary State aid Crisis and Transition Framework. Member States have 
more  flexibility  to  design  and  directly  implement  support  measures  in  sectors  that  are  key  for  the 
transition  to  climate  neutrality.  Member  States  are  also  currently  amending  their  RRPs  to  include 
REPowerEU chapters to finance companies and boost their competitiveness.  

New  initiatives  such  as  the  Chips  Act,  the  Critical  Raw  Materials  Act  and  the  European 
Hydrogen Bank, aim at making our economies more digital and greener without creating new 
dependencies. The EU Chips Act builds on Europe's strengths – world-leading research and technology 

26 

 
 
 
organisations  and  networks  as  well  as  host  of  pioneering  equipment  manufacturers  –  and  address 
outstanding weaknesses (section 2.3). The Critical Raw Materials Act aims to ensure the EU's access to a 
secure, diversified, affordable and sustainable supply of critical raw materials. Raw materials are vital 
for  manufacturing  key  technologies  for  our  twin  transition  –  like  wind  power  generation,  hydrogen 
storage  or  batteries.  The  objective  is  to  strengthen  cooperation  with  reliable  trading  partners  globally 
and reduce the EU's current dependencies on just one or a few countries. 

A quicker deployment of financial support is needed. This could be achieved via a leveraging 
and reinforcement of existing EU instruments under a new Strategic Technologies for Europe  
(STEP) platform. The EU has several funds and programmes on- and off-budget to provide support to 
deep and digital technologies, clean technologies, and biotechnologies. The European Council 

 recommended to “ensure full mobilisation of available funding and existing financial instruments and 
deploy  them  in  a  more  flexible  manner,  so  as  to  provide  timely  and  targeted  support  in  strategic 
sectors”.31  Leveraging  on  existing  instruments  and  governance  frameworks  would  speed-up  the 
implementation and allow to mobilise quicker higher amounts of financial support. The goal should be to 
preserve  a  European  edge  on  critical  and  emerging  technologies  relevant  to  the  green  and  digital 
transitions,  from  computing-related  technologies,  including  microelectronics,  quantum  computing,  and 
artificial intelligence; to biotechnology and biomanufacturing, and net-zero technologies.  

Box 4. Boosting technological competitiveness: the  Strategic Technologies for Europe  (STEP) 
platform  

STEP would cover critical and emerging technologies (deep and digital technologies, clean technologies, 
and  biotechnologies)  to  advance  the  green  and  digital  transitions,  supporting  both  the  manufacturing 
side and the relevant value chains, including the skills shortages in these areas.   

Deep and digital technologies - Innovation, and in particular its new wave of deep-tech innovation, is the 
European reply  to  bring  down  greenhouse gas  emissions,  to  make  our  economies  more  digital  and  to 
guarantee  Europe’s  food,  energy  and  raw  materials  security.  The  New  European  Innovation  Agenda, 
adopted  on  5  July  2022,  aims  to  position  Europe  at  the  forefront  of  the  new  wave  of  deep  tech 
innovation and start-ups.  

Clean technologies - EU’s competitiveness in the clean energy sector entails the capacity to produce and 
use  affordable,  reliable  and  accessible  clean  energy  and  compete  in  the  global  clean  energy markets, 
with  the  overall  aim  of  bringing  benefits  to  the  EU  economy  and  people.  The  EU  is  currently  facing 
technological and non-technological challenges, such as high energy prices, critical raw materials supply 
chain disruptions and skills shortages. According to the 2022 Competitiveness Progress Report  – which 
the Commission published in the context of the Governance of the Energy Union framework - “The rapid 
development  and  deployment  of  home-grown  clean  energy  technologies  in  the  EU  is  key  to  a  cost-
effective, climate friendly and socially fair response to the current energy crisis.” Considering that half of 
the greenhouse gas emissions reductions expected by 2050 require technologies that are not yet ready 
for  the  market,  research  and  innovation  activities  are  crucial.    More  public  and  private  investments  in 
clean  energy  research  and  innovation,  scale-up  and  affordable  deployment  are  of  pivotal  importance. 
The  EU’s  regulatory  and  financial  frameworks  have  a  crucial  role  to  play  here.  Together  with  the 

31 European Council conclusions, 23 March 2023. 

27 

 
 
                                                           
implementation  of  the  New  European  Innovation  Agenda,  EU  funding  programmes,  enhanced 
cooperation between Member States, and a continuous monitoring of national R&I activities, are crucial 
to design an impactful EU R&I ecosystem, and to bridge the gap between research and innovation and 
market uptake, thus reinforcing EU competitiveness.   

Biotechnologies - Biotechnology and life sciences are key for the modernisation of the European industry. 
They  are  used  in  a  variety  of  industrial  sectors  such  as  healthcare  and  pharmaceuticals,  agriculture, 
materials, and bioeconomy. Reaping the full benefits of biotechnology can help the EU economy grow 
and provide new jobs, while also supporting sustainable development, public health, and environmental 
protection.  Vaccine  manufacturers  have  played  a  key  role  in  reversing  the  course  of  the  COVID-19 
pandemic.  And  while  Europe  continues  to  be  a  leader  in  life  science  innovation,  its  biotech  industry 
remains approximately a quarter of the size of the US in terms of both the number of companies and 
the value of venture financing. In addition, financing – both at the earliest stages and later on – is more 
limited in Europe than in the US. This constrains companies’ ability to invest in larger diversified pipelines 
and leaves them reliant on their initial investors.   

2.9.  Security and defence 

Financing  from  the  EU  budget  focuses  on  the  defence  industry’s  competitiveness,  given 
limitations in the Treaties to finance defence more broadly32. There is significant added value of 
EU  action  in  defence  industry  investments,  as  persistent  underinvestment  over  the  years  has  had  a 
negative  impact  on  the  European  defence  industry.  Furthermore,  defence  spending  in  the  EU  suffers 
from inefficiencies due to duplications, lack of interoperability and technological gaps between the EU 
and other global spenders, though the aggregated spending is among the highest in the world. With the 
MFF 2021-2027, the importance of defence and security in the EU budget has been strengthened. The 
European Defence Fund started operating in 2021 with a  budget of EUR 7.95 billion, allocated in two 
windows:  a  research window (EUR 2.7  billion) and a  capability window  (EUR 5.3  billion). The MFF also 
allocated EUR 1.69 billion to dual (civilian and military)-use transport infrastructure to enable  military 
mobility within the EU.  

Heading 5, dedicated to Security and Defence, is the smallest of all MFF headings. This heading 
was  a  novelty  of  the  2021-2027  MFF,  and  Russia’s  war  of  aggression  against  Ukraine  has  clearly 
demonstrated the added value of increased EU efforts in this policy area. The initial margin of EUR 680 
million has been mostly depleted for the new needs that were also covered a with redeployments, as 
discussed in this section.  

In  response  to  Russia’s  aggression,  Member  States  have  announced  increases  in  their 
national  defence  budgets,  which  can  be  more  effectively  used  with  EU  coordination  and 
cooperation. In its absence, these additional investments could deepen the existing fragmentation of 

32 Article 41.2 of the Treaty on European Union (TEU) states that ‘Operating expenditure [on Common Foreign and Security 
Policy]  shall  (…)  be  charged  to  the  Union  budget,  except  for  such  expenditure  arising  from  operations  having  military  or 
defence implications and cases where the Council acting unanimously decides otherwise. (…) As for expenditure arising from 
operations having military or defence implications, Member States whose representatives in the Council have made a formal 
declaration [of abstention] shall not be obliged to contribute to the financing thereof.’ 

28 

 
 
 
                                                           
the European defence sector. As a result, the European Commission and the High Representative of the 
Union  for  Foreign  Affairs  and  Security  Policy  put  forward  several  options  for  improving  defence 
capability supply.33 This is consistent with the call for stronger EU action in defence at the Conference on 
the Future of Europe. 

The conflict in Ukraine has also presented a new set of challenges for the European Union's 
cybersecurity  efforts.  The  proliferation  of  cyber-attacks  targeting  both  military  and  civilian  have 
caused  widespread  disruption  and,  in  some  cases,  have  even  endangered  lives..  With  its  new  cyber 
defence  policy,  the  EU  will  enhance  cooperation  and  investments  in  cyber  defence  to  better  protect, 
detect, deter, and defend against the increasing risks of cyber-attacks. The conflict has also exacerbated 
the challenge of the spread of disinformation campaigns and propaganda to influence public opinion and 
destabilize the EU. The Union tackles to the issue through legislation like the Digital services act, that will 
foster  a  co-regulatory  framework  for  online  harms,  or  through  support  to  media  and  information 
awareness  programmes,  that  will  help  to  counter  the  disinformation  spread  through  a  long-term 
structured approach.  

The  EU  has  put  forward  an  ambitious  plan  to  develop  the  new  space-based  Secure 
Connectivity  System  IRIS2.  A  large  part of  the  IRIS²  budget  comes from redeployments  from  other 
programmes under Headings 1, 5 and 6: the Space Programme, CEF-Digital, Digital Europe Programme, 
European Defence Fund and NDICI-Global Europe for a total of EUR 1.2 billion. Margins of Heading 1 and 
Heading 5 are used on top to complete the IRIS² budget.  

industry 
The  Commission  proposed  a  Regulation  establishing  the  European  defence 
reinforcement  through  common  procurement  act  (EDIRPA).  EDIRPA  would  set  up  a  dedicated 
short-term instrument through the EU budget to incentivise common procurement in the field of defence. 
This would support the reinforcement of Member States’ defence capacities in the emergency situation 
caused by Russia’s war of aggression against Ukraine. The Commission tabled its proposal on EDIRPA on 
19 July 2022, with the objective to establish the legal act swiftly. Taking into account the implications of 
the Act in Support of Ammunition Production (ASAP) proposal, EDIRPA will be financed fully through the 
flexibility instrument in 2024.  

On 3 May 2023, the Commission proposed a Regulation on establishing the Act in Support of 
Ammunition Production (ASAP) to facilitate the ramp-up of ammunition production capacity 
in the EU. The financial envelope for ASAP amounts to EUR 500 million in current prices for the period 
from  2023  to  30  June  2025,  financed  from  redeployments  of  EUR  260  million  from  the  European 
Defence Fund programming for 2024 and of EUR 240 million initially foreseen for the European Defence 
Industry Reinforcement through common Procurement Act (EDIRPA) in 2023-2024. The proposed ASAP 
initiative has been designed to complement the already planned EDIRPA and the EDF programme and to 
create  synergies  with  defence-related  initiatives,  such  as  Permanent  Structured  Cooperation  (PESCO). 

33  Joint  Communication  to  the  European  Parliament,  the  European  Council,  the  Council,  the  European  Economic  and  Social 
Committee and the Committee of the Regions on the Defence Investment Gaps Analysis and Way Forward, JOIN(2022) 24 
final.  

29 

 
 
 
                                                           
The  Union  contribution  would  provide  an  appropriate  incentive  for  economic  operators,  leveraging 
additional funding that is expected to bring the total investment to EUR 1 billion.  

Implementation  of  the  defence  programmes  is  proceeding  fast.  In  2021,  the  budget  execution 
was  100%,  with  23  calls  launched  for  15  out  of  17  European  Defence  Fund  categories  such  as  air, 
ground  and  naval  combat,  energy  resilience  and  environmental  transition,  cyber,  space.  Grant 
agreements were signed in 2022. The European Defence Fund work programme 2022 funded 8 calls for 
proposals among 33 R&D topics with an envelope of EUR 924 million.  

The  envelope  for  Military  Mobility  under  CEF  (EUR 1.69 billion  at  the  beginning  of  the  MFF) 
was  frontloaded  and  supported  recent  crises-related  packages.  The  calls launched  for  military 
mobility  in  2021-2022  for  a  total  of  EUR  955  million  were  fully  subscribed.  Calls  address  dual-use 
infrastructure projects, mostly on the railway and roads infrastructures across Europe (e.g. infrastructure 
for 740m trains on the North Sea – Baltic and Orient/East-Med corridors, design and reconstruction of 
road A5 Kaunas – Marijampolė – Suwalki). The second call was advanced from September 2022 to May 
2022 due to the war in Ukraine. As a result of the accelerated procedures used to respond to the crises, 
56% of the funds (EUR 949 million) have already been allocated during the first two calls in 2021 and 
2022. The next third call of  2023 is expected to exhaust the available budget .  

In the future, it will be challenging to finance any additional initiative under Heading 5.  The 
main reasons are that (i) the IRIS² budget will be almost fully mobilised upfront; (ii) CEF-Military Mobility 
expenditure is frontloaded; and (iii) the potential for redeployments between programmes in Heading 5 is 
almost  non-existent.  The  increasing  number  of  emergency  requests  for  projects  and  the  inflationary 
pressure  also  contribute  to  this  challenging  context.  Furthermore,  no  reserves  are  available,  and  the 
margins are exhausted: as of 2023, the remaining margin is just EUR 81 million for 2025-2027, and a 
negative margin of EUR 311 million in 2024 had to be covered via special instruments. 

2.10. Migration and border management 

Migration and border management remain a challenge for the Union and require a European 
response  supported  by  adequate  European  funding.  Unforeseen  crises  have  put  additional 
significant pressure on the European funding for migration and border management. This was the case 
with  the  events  in  Afghanistan  and  Belarus  and  then  with  the  war  in  Ukraine,  which  led  to  an 
unprecedented triggering of the temporary protection directive and to the need to take immediate action 
for the millions of Ukrainians fleeing the conflict.  

The  Pact  on  Migration  and  Asylum,  currently  in  the  interinstitutional  phase,  will  provide  a  new  and 
durable EU framework for migration management. Based on the current state of the discussions on the 
Pact and of the emerging balance between responsibility and solidarity, its successful implementation 
will require substantial additional funding.  

In  February  2023,  the  European  Council  underscored  its  aim  to  develop  a  comprehensive 

approach to migration and, in that context, called on the Commission to mobilise substantial funds for 
the control of external borders.  

30 

 
 
 
Therefore, pressure on  EU funding for migration, asylum and border management continues 
to be high. Although expenditure available to Member States under Heading 4 for the EU-27 is higher 
compared  to  the  programming  period  2014-2020,  the  Commission  has  already  had  to  reinforce  the 
Asylum  Management  and  Integration  Fund  (AMIF)  and  the  Border  Management  and  Visa  Instrument 
(BMVI)  programmes  of  several  Member  States  to  allow  them  to  address  the  challenges  linked  to  the 
events  in  Afghanistan,  Belarus  and  Ukraine  as  well  as  to  meet  more  structural  needs  reflecting  the 
increase in migrant flows.  

Around 70% of the budget for AMIF and BMVI is implemented through national programmes 
under shared management. The national programmes of the EU Member States for 2021-2027 have 
been adopted in the second half of 2022. Pursuant to Article 7 of the MFF Regulation, the total amounts 
corresponding  to  the  allocations  not  used  in  2021  (EUR  676  million)34  were  transferred  in  equal 
proportions  to  each  of  the  years  2022  to  2025,  and  the  corresponding  MFF  ceilings  were  adjusted 
accordingly.  A  new  and  comprehensive  performance  framework  allows  for  a  stronger  monitoring  of 
achieved results and outcomes. 

The AMIF and BMVI will undergo their own respective mid-term reviews in 2024, which will 
adjust automatically Member States allocations for 2025-2027. The MFF 2021-2027 foresees 
that  15%  of  the  budget  under  AMIF  (EUR  1  billion)  and  13%  under  BMVI  (EUR  0.6  billion)  will  be 
allocated to Member States as an in-built reserve for the mid-term review. The amounts will be allocated 
to all Member States based on updated statistics for pre-determined criteria concerning inter alia asylum 
seekers, persons under temporary protection, legal migrants, returns, border crossings, consular offices.  

As  a  novelty  in the  2021-2027  MFF,  30%  of  the  funds  is  implemented  under  the  Thematic 
Facilities. The Thematic Facility under each fund increases the flexibility to respond to evolving needs in 
this  area  and  can  be  implemented  by  the  Commission  directly,  indirectly  or  granted  as  a  top-up  to 
national  programmes  of  Member  States  in  need.  The  AMIF  Thematic  Facility  also  finances  top-ups  to 
national  programmes  in  case  of  resettlement  of  refugees  from  third  countries  and  relocation  of 
migrants between Member States.  

The flexibility within the AMIF and BMVI Thematic Facilities has been extensively used in the 
first part of the MFF programming period. Almost three quarters of the funds available under the 
AMIF and BMVI Thematic Facilities for 2021-2025 are either spent or allocated to actions which are in 
an advanced stage of preparation. Significant redeployment was done to the meet the challenges of the 
unforeseen crises, and the in-built flexibility was used inter alia to support Member States with reception, 
asylum  and  return  systems  under  pressure.  Emergency  assistance  was  also  provided  to  the  Member 
States most affected by the arrival of people from Ukraine.  

For  2026-2027,  EUR  2.1  billion  under  AMIF  and  EUR  1.7  billion  under  BMVI  remain  to  be 
programmed  and will be  used to deal with the continued  and increasing  pressure on migration and 
border management, to actions linked to the Pact implementation, while a substantial buffer will need to 
be kept to deal with unforeseeable crises. 

34 Respectively EUR 397 million of the AMIF (8% of total 2021-2027 allocation to the Member States) and EUR 279 million of 
the BMVI (9% of total 2021-2027 allocation to the Member States) 

31 

 
 
                                                           
The  Home  Affairs  Agencies  will  also  be  called  to  increasingly  contribute  to  support  Member 
States and the Commission in dealing with such increased migration pressure and in enhancing border 
protection.  In  particular,  the  European  Union  Agency  for  Asylum  (EUAA)  will  be  required  to  have  an 
increasingly  key  role  in  supporting  Member  States’  asylum  and  reception  systems,  particularly  at  the 
border. 

2.11. The economic context: inflation and interest rates  

2.11.1.  Inflation  

In  the  course  of  2022,  inflation  in  Europe  has  reached  levels  unseen  in  the  last  40  years. 
These developments result from spiralling energy prices, due to the war in Ukraine, coupled with strong 
demand as the global economy recovered from the COVID-19 crisis and supply bottlenecks. With energy 
being a key input to much of economic activity, energy price increases gradually passed through to other 
inflation  components.  Headline  inflation  started  declining  in  the  first  quarter  of  2023  amid  sharp 
deceleration of energy prices; however, core inflation (i.e. headline inflation excluding energy and food) 
continued to rise in early 2023, reaching 6.6% in March, and only slightly declined to 6.5% in April.  

The  high  inflation  might  reduce  the  purchasing  power  of  the  MFF  by  EUR  74  billion  for  the 
seven-year  period.  The  ceilings  of  the  Multiannual  Financial  Framework  (MFF)  for  2021-2027  are 
expressed in 2018 prices. As stipulated in article 4(2) of the MFF Regulation35, the adjustment to current 
prices is done on the basis of a fixed annual deflator of 2%. This long-standing adjustment mechanism 
in use since 2007 has the advantage of providing predictability for the Union programme resources over 
the duration of the MFF. This is important for regional authorities, partners and beneficiaries for mid- to 
long-term investments supported by the Union programmes and policies. For Member States,  this also 
gives predictability for the planning of their national budget contributions. For the EU budget, the fixed 
deflator gives predictability to future margins, which can then be used in the event of additional needs 
related to existing or new initiatives. However,  because  of the unprecedented gap between  actual  and 
forecast inflation up to 202736 and the fixed 2% deflator, the real value of the MFF for the whole 7-year 
period  would  be  substantially  lower  based  on  the  current  forecasts.37  This  is  an  important  difference 
between  the  EU  budget  and  Member  States’  budgets:  in  the  case  of  the  EU,  only  the  own  resources 
ceiling  adjusts  to  inflation.  The  revenues  called  from  Member  States  instead  depend  on  the  actual 
expenditures,  and  these  are  limited  by  the  MFF  expenditure  ceilings  which  adjust  based  on  the  fixed 

35 Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for 
the years 2021 to 2027, OJ L 433I , 22.12.2020, p. 11 
36 As measured by EU GDP deflator 
37 When actual inflation is below 2% (which has been the case until 2020), the MFF ceilings as adjusted can potentially result 
in a stronger purchasing power of the EU budget, but it is ultimately up to the budgetary authority (European Parliament and 
Council) to act upon it. 

32 

 
 
   
                                                           
deflator.38  In  the  case  of  national  budgets,  inflation  affects  the  nominal  value  of  both  revenues  and 
expenditures. 

The high inflation leads to higher implementing costs for EU budget programmes, an erosion 
of the purchasing power of the operational budgets as their real value is reduced, and higher 
administrative  expenditures  in  all  EU  bodies.  For  programmes  distributing  grants,39  the  high 
inflation means that less activities can be financed, thus reducing the ambition of EU activities. Similarly, 
programmes with pre-allocated envelopes per Member State the national and regional authorities will be 
able to finance less projects and to provide less direct support. For the few programmes that procure a 
given  infrastructure  or  service  (e.g.  Space  programme,  ITER,  civil  protection),  the  costs  sought  by  the 
developers and operators are likely to increase, such that the Commission may not be able to procure 
the full infrastructure or service. For the European Public Administration, it is particularly problematic due 
to  the  already  very  tight  ceilings  and  contractual  obligation  and  the  inflation  indexation  of  most 
expenditure in host countries. This is creating a strong pressure on Heading 7 of the MFF, despite the 
exceptional efforts made for savings (see Box 5).  

Box 5. Pressures on Heading 7 – European Public Administration 

The  fixed  deflator  of  2%  for  adjusting  MFF  expenditure  ceilings  is  currently  far  below  the 
actual EU inflation rate, which reached 9.2% in 2022 and is forecasted to be 6.7% in 2023.[1] 
This divergence affects the EU budget as a whole, but is particularly difficult for inflation-indexed areas, 
notably administrative expenditure.  

Most  non-salary  expenditures  are  indexed  to  inflation.  This  includes  inter  alia  rents,  legally 
indexed  to  inflation.    When  contracts,  for  example  for  IT  services,  security,  cleaning  personnel  are 
indexed  there  is  a  legal  and  financial  obligation  to  pay  the  increases,  and  when  new  contracts  are 
launched the costs reflect the indexation of wages and other costs encountered by the service provider. 
Efficiency  gains  are  constantly  sought,  for  instance  through  pooling  resources,  an  example  being  the 
CERT-EU, an interinstitutional body dealing with cybersecurity, as well as through constantly identifying 
opportunities for synergies and efficiencies across services and functions, but there is a minimum which 
must be maintained for the proper functioning of the Institutions. 

As  per  legal  requirement,  the  remuneration  of  European  staff,  as  well  as  the  pensions  of 
retired  employees,  is  automatically  linked  to  that  of  Member  States.  As  defined  in  the  Staff 
Regulations  [2],  it  takes  account  of  inflation  in  Belgium  and  Luxembourg  and  the  purchasing  power 
development of government officials in 10 Member States [3]. When the purchasing power of the salaries 
of Member States officials increases or decreases, this has a corresponding impact on the salaries of the 
EU  staff and pension beneficiaries. The exceptional inflationary situation in 2022, and the subsequent 
salary increases applied in several Member States, has reduced the margins under the annual ceiling and 
sub-ceiling for the institutions’ expenditure to the point that the expenses can no longer be covered.  

38 The Own Resources Decision instead determines gross reductions to the GNI-based EU-budget contributions of Denmark, 
Germany, the Netherlands, Austria, and Sweden in 2020 prices, which are converted every year into current prices based on 
the most recent Union GDP deflator. 
39  For  instance,  Horizon  Europe,  European  Defence  Fund,  Erasmus,  Creative  Europe,  EU4Health,  CEF,  LIFE,  external  action 
programmes. 

33 

 
 
                                                           
Staffing Issues 

Increasing  priorities  and  demands  put  an  enormous  strain  on  the  resources  of  the  EU 
administration, in a context of stable staffing. The agreement between the co-legislators on new 
initiatives  with  responsibilities  mainly  for  the  Commission  result  in  significant  additional  staff  needs. 
They are related to the Green Deal, Single Market, Cross Border Adjustment Mechanism, Health, Digital 
Agenda,  Inter-operability,  Cybersecurity,  Secure  Connectivity,  Schengen  evaluation  and  monitoring 
mechanism,  European  Peace  Facility  among  others.  These  new  initiatives,  as  shown  in  the  Legislative 
Financial Statements accompanying the agreed legal proposals, should translate into 600 establishment 
posts  until  2027.  In  the  absence  of  staff  reinforcements  until  now,  some  very  severe  measures  of 
reprioritisation have been applied. For instance, more than 900 posts have already been redeployed to 
support  the  new  emerging  priorities,  such  as  Fitfor55  package,  Digital  Services  Act  and  the  Digital 
Markets Act, the war in Ukraine, the COVID-19 pandemic, leaving no space to further adjustments. This 
situation has reached a critical point where these additional tasks on top of the MFF (for which the 
stable staffing principle was agreed), cannot be taken on board without additional resources.  

The  Commission  is  not  the  only  institution  facing  the  challenge  of  addressing  new  tasks  with  stable 
staffing. This is clearly illustrated by the requests of the other Institutions expressed in the context of the 
annual  budgetary  procedures.  Taking  a  proportional  approach,  based  on  the  600  posts  agreed  in  the 
context  of  the  Legislative  Financial  Statements  for  the  Commission,  the  other  institutions  would  need 
some 411 additional posts. However, unlike the Commission, most of the other institutions have received 
some  staff  reinforcement  in  the  course  of  the  annual  budget  procedures  2021-2023.  When  these 
allocated posts are taken into account, some 113 would remain as outstanding needs.  

Furthermore,  as  per  the  preliminary  outcome  of  the  assessment  of  the  cybersecurity-related  needs 
conducted  by  the  Commission  as  part  of  the  follow-up  of  the  Draft  Budget  2023  negotiations,  the 
institutions’ total needs until the end of MFF 2021-2027 are at the level of 172 additional posts. 

Taken all these elements together, the overall deficit in the number of posts  in all the EU  institutions 
covered by Heading 7, necessary to enable them to effectively fulfil the new tasks, equals 885 posts. 

Further Savings Efforts 

The Commission  has  made  exceptional  efforts  for savings  and  intends to  continue  applying 
structural  changes.  Drastic  cuts  have  also  been  introduced  in  case  of  missions,  meetings  and 
representation costs, cumulatively above 30% compared to 2019. Moreover, for all other administrative 
expenditures,  a  new  building  policy,  covering  the  2022-2030  period,  has  been  developed  to  optimise 
surface used which aims at reducing office space from 788.000 m² in 2021 to 722.000 m² by 2024 
and to 575.000 m² by 2030. For the period between August 2022 and March 2023, the total energy 
consumption was reduced by 17% compared with the average for the same period in the last 5 years 
(113.000 MWh).  

These examples illustrate the Commission’s determination to keep the annual increase of the non-salary 
expenditures within the limit of 2% - despite the soaring inflation. Other institutions are exposed to the 
same  constraints.  While  preparing  the  Draft  Budget  2024  the  Commission  has  applied  a  rigorous 
approach  and  not  accepted  any  request  going  beyond  the  2%  limit,  which  led  to  the  total  of 
EUR 164,4 million  cuts  applied  to  all  the  EU  institutions  altogether.  In  addition,  with  a  view  to  ensure 

34 

 
 
stable staffing at the 2023 level, the Commission reduced the requests of the other Institutions by 260 
FTE with a related reduction in budget of EUR 16,3 million. 

Future developments 

Despite the above efforts, in the long-term scenario built on the macroeconomic assumptions 
used for Draft Budget 2024 and the Commission’s long-term projections for the period 2025-
2027, the total underbudgeting of Heading 7 would amount to over EUR 1,9 billion.  

  (EUR million) 

Sub-ceiling margin 

Ceiling margin 

2024 

- 123 

- 148 

2025 

- 327 

- 382 

2026 

- 544 

- 652 

2027 

- 564 

- 718 

2024-2027 

- 1,558 

- 1,900 

This simulation is based on the following assumptions:  

  For non-salary expenditures, the financial programming provided for DB 2024 is included. 
  Salary updates rates of 3,7% in 2023 (average of DB 2024 assumption for 2023 (+4,4%) and 
ECFIN  Spring  2023  forecast  (+3,0%)),  +3,4%  in  2024  (DB  2024  assumption),  +3,8%  in  2025 
and 3% in both 2026 and 2027 (derived from ECFIN Spring 2023 forecast). 
the  number  of  staff  in  the  institutions  is  increased  in  total  by  885  posts  (phased-in:  25%  in 
every year from 2024 to 2027); the related cost is estimated at EUR 346 million.    

 

While  simulating  any  potential  long-term  scenario,  it  is  crucial  to  underline  the  volatility  of  the 
macroeconomic data and an objective difficulty in their appropriate predictions. This, coupled with the 
lasting  impact  of  any  variation  over  subsequent  years,  effectively  hampers  the  precision  in  any  long-
term planning for Heading 7. For instance, if the annual inflation rate taken into account for the salary 
update, or the salary evolution of the Member States’ government officials for the period 2025-2027, 
led to a salary update rate higher of 0,5% compared to the assumptions taken in the table above, the 
total gap in Heading 7 would increase further up by EUR 233 million. 

In conclusion, even according to the most conservative available forecasts, it is evident that the level of 
appropriations  as  agreed  in  MFF  2021-27,  which  was  based  on  2%  annual  deflator,  will  turn  out  not 
sufficient and will require reinforcement. 

[1]  European Commission (2023)  European  Economic Forecast  – Spring 2023. European  Economy - Institutional Paper 200, 
May 2023. 
[2] Regulation No 31 (EEC), 11 (EAEC), laying down the Staff Regulations of Officials and the Conditions of  Employment of 
Other Servants of the European Economic Community and the European Atomic Energy Community. 
[3] Belgium, Germany, Spain, France, Italy, Luxembourg, Netherlands, Austria, Poland, Sweden. 

2.11.2.  Interest rates 

After the launch of the NextGenerationEU bond issuances in 2021, the EU enjoyed favourable 
financing conditions, thanks to  low  global  bond market  rates,  its  high  credit  rating  and  the 
markets’ demand for euro-denominated “safe” assets.  EU transactions have attracted very high 
investor  demand,  anchored  by  the  EU’s  strong  credit  rating.  Since  June  2021,  syndicated  transactions 

35 

 
 
 
 
 
have  been  between  3  to  16  times  oversubscribed.  High  investor  demand  has  helped  the  Commission 
achieve a competitive interest cost for the Member States seeking support under the programme. 

However, since the beginning of 2022, due to increasing uncertainty in financial markets and 
monetary  policy  tightening  to  respond  to  high  inflation,  bond  market  rates  in  the  EU  and 
beyond have increased substantially. As inflation increased in 2022, market interest rates increased 
across the board also as a result of successive monetary policy rate increases. Changing interest rates 
have  important  budgetary  implications:  interest  rates  in  2021  (and  related  budgetary  costs)  were 
substantially  lower  than  what  had  been  foreseen  at  the  time  of  the  adoption  of  the  MFF,  but  the 
situation quickly reversed in 2022. The interest rate risk is felt most acutely under the current MFF since 
all new net issuances will take place before the end of 2026, and the cost of issuance is determined by 
the path and conditions of issuance which is unknown in advance. 

The pace of the increase in interest rates for all issuers including the EU has been one of the 
steepest witnessed in financial markets in the past decades. Interest and debt management costs 
have  increased  substantially  alongside  generally  worsening  market  conditions  since  the  start  of 
NextGenerationEU. Average cost of funding increased from 0.14% in the period from June to December 
2021 to 2.6% for the period July to December 2022. Interest rates on 10-year EU-Bonds have increased 
from 0.09% at the time of the inaugural 10-year NextGenerationEU bond in June 2021 to 1.53% in May 
2022,  and  to  3.09%  in  the  most  recent  issuance  in  April  2023.  Comparable  increases  have  been 
observed for highly rated euro area sovereign issuers. For example, interest rates on 10-year German 
government bonds increased from around -0.20% in June 2021 to close to 1.0% in May 2022, were over 
2.50% in the first quarter of 2023 and stood around 2.30% in early May  (Graph 7). 

Graph 7. Yields on 10-year bonds of EU and selected Member States, 2021-2023 

Source: Bloomberg, European Commission 

The increase in interest rates has substantial budgetary implications. For the MFF 2021-2027, 
an amount of EUR 14.9 billion (in current prices) under Heading 2b is planned for covering the interest 
payments for NextGenerationEU non-repayable support. This amount was defined based on an historical 

36 

 
 
 
mean reversal assumption. The envelope for interest payments was therefore based on the assumption 
that average yields would gradually increase from 0.55% in 2021 to 1.15% in 2027.  

At current market conditions, the initially planned amount for 2024 will not be sufficient for 
the annual payments of NextGenerationEU related interests. The final amount necessary in 2024 
will depend on the interest rates of the borrowings undertaken until the end of 2023 and the volume of 
the operations.  

3. 

IMPLEMENTATION: HORIZONTAL ELEMENTS 

3.1.  MFF state of play: current availabilities and past usages  

Chapter  2  has  shown  that  the  EU  budget  has  been  at  the  forefront  of  the  EU’s  recovery 
efforts  from  the  COVID-19  crisis  and  of  the  response  to  the  fallout  of  Russia’s  war  of 
aggression  against  Ukraine  as  well  as  other  unforeseen  events.  The  need  to  provide  urgent 
financing  to  face  unexpected  events  and  crises  has  resulted  in  increased  re-programming  and 
redeployments within programmes, in particular for cohesion policy, given its ability to deploy substantial 
means  at  regional  and  local  level.  Redeployments  also  played  an  important  role  in  addressing  other 
unforeseen events, in particular the energy crisis: for instance, due to the scale of the challenge and the 
comparatively  very  limited  free  space  in  the  EU  budget,  the  financing  support  for  REPowerEU  came 
mostly from redeployment and repurposing of other funds within and outside the EU budget. 

To respond to unexpected challenges, the flexibilities included in this MFF are being used to 
the fullest, but they are small overall.  Total flexibility at the time of adoption of the MFF ranges 
from  0.45%  to  3.5%  of  the  commitment  ceiling,  depending  on  the  definition  of  flexibility  used.  If  we 
consider only ‘pure’ MFF-relevant budgetary flexibility, i.e. the flexibility instrument and the unallocated 
margins, then this amounts to only 1.05% of the commitments ceiling, i.e. on average EUR 1.82 billion 
per year (Table 3.1.1).40 In particular, unallocated margins, which provide flexibility within each heading 
of the MFF, were equal to only EUR 5.5 billion or 0.45% of the expenditure ceilings at the beginning of 
the MFF. The amount is far lower than the Commission proposal of May 2020 (EUR 28.2 billion) (Table 
5.1.4 in the Annex). 

40 Thematic special instruments can only top up only specific expenditures and programmes, and the other flexibilities (i.e. the 
emerging challenges and priorities cushion under NDICI-GE and the thematic facilities under AMIF, ISF, and BMVI) are bound 
to their respective instruments. 

37 

 
 
 
 
 
 
 
                                                           
Table  3.1.1  –  Comparison  of  different  types  of  flexibilities  and  availabilities  and  the  ceilings  for 
commitments in the adopted MFF41 

Commitment appropriations, in EUR million, in current prices, rounded to the nearest whole number 

Name42 

Amount 

As % of ceilings 

Total Ceilings 

Unallocated margins 

Flexibility Instrument 

Thematic special instruments 

Other flexibilities43 

Total for: 

Unallocated margins and Flexibility Instrument 

Unallocated margins and special instruments (thematic and non-thematic) 

Unallocated margins, special instruments (thematic and non-thematic), and other 
flexibilities 

1 210 894 

 5 489 

 7 219 

 16 453 

 15 074 

 12 707 

 29 160 

 44 234 

0.45% 

0.60% 

1.36% 

1.24% 

1.05% 

2.41% 

3.65% 

The  sustainability  of  most  headings  of  the  MFF  is  challenged  by  the  need  to  address 
unforeseen  events  and  the  evolving  geopolitical  context.  Almost  78%  of  margins  initially 
available  in  the  MFF  for  2023-2027  have  already  been  allocated  or  pre-empted  to  date.  The  quick 
depletion of margins is especially relevant for Heading 1 (Single Market, Innovation and Digital), Heading 
6 (Neighbourhood and the world) and Heading 5 (Security and Defence). In the case of Heading 1, this is 
due  to  in  particular  to  the  Secure  Connectivity  Programme  and  the  Chips  Act  (Sections  2.9  and  2.3), 
which have almost completely used the margins between 2024 and 2027. In the case of Heading 6, the 
mobilisation of available flexibility was necessary to address the humanitarian fallout of Russia’s war on 
Ukraine,  both  in  Ukraine  itself  and  in  developing  countries.  A  similar  situation  concerns  Heading  5 
(Security  and  Defence),  where  margins  for  the  remainder  of  the  MFF  have  already  been  almost 
completely pre-empted (by 84% on average between 2023 and 2027). The sub-ceiling of Heading 2b is 
under very strong pressure due to the increase in the financing costs  of NextGenerationEU,  where the 
margin has been fully depleted up to and including 2024. The margin under Heading 7 is expected to be 
negative until the end of the MFF (see tables in Box 5). 

The resulting negative margins have been covered by mobilising special instruments over and 
above the ceilings of the MFF. Budgetary data from the first two years of the MFF (2021-2022) and 
the adopted budget for 2023 show that special instruments are being used at high pace in the current 
MFF (Table 5.2.2 in the Annex). The Flexibility Instrument is fully mobilised in 2021-2024. Over 90% of 
maximum  amounts  for  special  instruments44  in  2021  have  been  committed,  and  almost  80%  of  the 

41  Sections  5.1  and  5.2  provide  additional  information  about  the  adopted,  current,  and  mobilised/used  availabilities, 
flexibilities, and ceilings. 
42 Special instruments and other flexibilities have either annual envelopes or otherwise specific, legal condition of application. 
43  The  other  flexibilities  considered  are  the  emerging  challenges  and  priorities  cushion  under  NDICI-GE  and  the  thematic 
facility under AMIF, ISF, and BMVI. 
44 Thematic and non-thematic special instruments, excluding the Single Margin Instrument. 

38 

 
 
  
  
  
 
                                                           
amounts for 2022. Concerning 2023, the adopted annual budget has already allocated almost 78% of 
the maximum resources for special instruments. The only instrument that is showing lower mobilisation 
is  the  EGF,  which  however  is  also  the  smallest.  Quick  depletion  of  the  availabilities  for  special 
instruments can be a constraint for the remainder of the MFF, given that there would be limited carry-
over amounts. 

The depletion of budgetary margins in the early years of the MFF poses a serious constraint 
for the remainder of the MFF. The Single Margin Instrument, which allows entering new commitments 
and/or payments over and above the ceilings by using commitment and payment appropriations that are 
left  unused  below  the  expenditure  ceilings  from  previous  years  as  from  2021  and,  as  a  last  resort, 
commitment and payment appropriations from the current or future financial years, is also being used at 
a high pace, which will imply that availabilities in later years of the MFF will be very limited. 

An additional constraint for the remainder of the MFF is given by the payments ceiling, given 
the forecast pattern of payments. The long-term forecast on future inflows and outflows describes 
in detail the forecast evolution of payments, its determinants as well as implications for decomitments 
and  outstanding  payments  (reste-à  liquider).  45  Payments  from  the  EU  budget  are  not  uniformly 
distributed across the years, and unspent amounts in a year then increase the annual ceilings in future 
years.46  In  the  current  programming  period,  the  forecast  payments  for  cohesion  programmes  are 
expected to accelerate towards the end of the MFF, and the EAFRD will peak in 2026. This pattern was 
observed in previous MFFs, but it is more accentuated in this MFF given more important delays at the 
start of implementation (as described also in Section 2.3). 

The MFF payments ceiling appears sufficient to cover the projected payments, except in 2026 
where  the  forecast  points  to  an  overrun  even  considering  all  the  flexibilities  due  to  the 
“capping”  mechanism.  The  total  payment  margin  for  2024-202747  is  estimated  at  EUR  11  billion. 
However, this is not uniformly distributed: in 2024 and 2025, the annual margin is projected at EUR 31 
billion and EUR 9 billion respectively, while the forecast margins for 2026 and 2027 are negative, with 
the payments exceeding the ceiling by an estimated amount of EUR 16 billion and EUR 12 billion. The 
positive margin in 2024 and 2025 will allow transferring unused amounts within certain limits towards 
the end of the period. However, under the current assumptions, the estimated payment needs will exceed 
the  MFF  payment  ceiling  in  2026  by  EUR  0.8  billion  even  taking  the  maximum  cap  of  EUR  13  billion 
under the Single Margin Instrument. In fact, due to the capping mechanism, it would not be possible to 
fully use in the second half of the MFF the estimated margin under the payment ceiling for 2024 and 
2025  and  part  of  the  margin  might  remain  unused.  An  acceleration  in  payments  of  cohesion 
programmes  beyond  the  projected  central  forecast  scenario  could  lead  to  a  larger  breach  of  the 
maximum payment ceiling in that year. 

45 COM(2023)390 Report from the European Commission to the European Parliament and the Council – Long-Term Forecast 
of future Inflows and Outflows of the EU budget (2024-2028). 
46 Article 11(1)(b) of the MFF Regulation. 
47 The payments margin is the difference between the forecast payments under the MFF ceiling and the payment ceiling set 
in the annual technical adjustment (TAJU 2024) 

39 

 
 
 
                                                           
3.2.  Borrowing and lending  

One  of  the  main  novelties  of  the  2021-2027  long-term  budget  is  the  credit  financing  of 
NextGenerationEU. The Own Resources Decision48 empowered the Commission to act on behalf of the 
Union  and  borrow  up  to  EUR  806.9  billion  on  financial  markets  until  2026.  In  addition,  to  ensure 
sufficient headroom for the NextGenerationEU borrowing, the permanent 1.4% Own Resources Ceiling of 
the  EU  budget  was  increased  by  0.6  percentage  points  of  the  EU's  Gross  National  Income  (GNI).  This 
increase provides a sufficiently high ceiling to allow the Union to cover all of its financial obligations and 
contingent liabilities falling due under this programme in a given year.  

The  Commission  is  an  established  actor  in  debt  securities  markets,  with  a  track  record  of 
bond  issuances  over  the  past  40  years.  However,  before  the  start  of  NextGenerationEU  the 
Commission was a relatively small issuer. Moreover, for all programmes prior to NextGenerationEU, the 
Commission  issued  bonds  and  transferred  the  proceeds  directly  to  beneficiary  countries  on  the  same 
terms (i.e. interest rate and maturity) that it received, known as a ‘back-to-back’ funding approach. This 
method  was  sufficient  in  addressing  small  funding  needs,  but  it  reached  its  limits  with  the  SURE 
programme, under which 19 Member States had to be served by a single funding programme of up to 
EUR 100 billion. 

To address the scale of funding needs under NextGenerationEU the Commission put in place a 
pooled funding approach similar to that employed by sovereign issuers. This funding approach – 
named “diversified funding strategy” – enabled the Commission to cope with multiple disbursements of 
loans and grants to Member States at high speed and frequency and with uncertain timing given their 
dependence on the implementation of related plans.  

In December 2022, the European Parliament and the Council adopted an amendment of the 
Financial Regulation49 to allow the Commission to broaden the diversified funding strategy to 
other  EU  borrowing  programmes.  Under  this  ‘unified  funding  approach’,  the  Commission  is  now 
issuing single-branded ‘EU-Bonds’, rather than separately denominated bonds for individual programmes 
such  as  NextGenerationEU,  SURE,  and  MFA.  This  single  EU-Bond  label  allows  the  Commission  to  plan, 
execute and communicate all its issuances in an agile and coherent way. The funding plan and annual 
borrowing  decision  covers  all  programmes  financed  through  the  unified  funding  approach,  giving  the 
European  Parliament,  the  Council  and  investors  a  comprehensive  overview  of  the  EU’s  upcoming 
borrowing.  

The  unified  funding  approach  enables  the  Commission  to  use  the  full  range  of  its  funding 
instruments  (EU-Bonds  and  EU-Bills)  and  funding  techniques  (syndications  and  auctions) 
developed for NextGenerationEU to cover its funding needs for other lending programmes. In 
this  way,  the  Commission  can  obtain  more  attractive  conditions,  which  will  be  passed  on  to  the 

48 Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union 
and repealing Decision 2014/335/EU, Euratom. 
49 Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 

40 

 
 
                                                           
beneficiaries  of  its  funding  programmes,  while  also  having  greater  flexibility  on  the  timing  of 
disbursements to better address beneficiaries’ needs. The Commission collects all proceeds of EU-Bonds 
in  a  central  funding  pool  and  internally  allocates  them  to  various  policy  programmes.50  The 
appropriateness  of  EU’s  funding  method  in  meeting  the  NextGenerationEU  needs  was  confirmed  by 
ECA’s special report on NextGenerationEU debt management (published on 12 June 2023) which noted 
that the Commission’s debt management procedures enabled borrowing of the required funds on time, in 
compliance with regulatory limits and at costs corresponding to its market position.51   

As a result of these developments, the EU has become one of the largest issuers in euro right 
after France, Germany, Italy and Spain. The EU has issued EUR 132.6 billion in 2021 and EUR 118.3 
billion in 2022, up from an annual average of EUR 6.1 billion in 2010-2019. As of end May 2023, the EU 
has  EUR  394  billion  of  bonds  outstanding,  with  the  majority  of  bond  proceeds  allocated  to 
NextGenerationEU. The steep increase in annual issuance volume has been met by strong demand from 
the markets for EU Bonds, with EU’s investor base including more than 100 different investors from 70 
different countries. 

Beyond  providing  funds  to  support  the  EU’s  policy  priorities,  EU  issuances  can  also  have  a 
broader impact on the European capital market. First, they boost the supply of highly rated euro-
denominated  assets,  thus  potentially  strengthening  the  international  role  of  the  euro.  Second,  they 
enable  the  establishment  of  new  EU  securities,  such  as  the  EU  Social  Bonds  linked  to  SURE  and  the 
NextGenerationEU  Green  Bonds,  based  on  dedicated  frameworks  that  ensure  coherence  with  the 
Commission’s overall ESG strategy.  

Graph 8. EU outstanding debt as of end 2022 

Source: European Commission. 

Financing  EU  programmes  through  joint  EU  issuances  requires  continuous  expansion  of  the 
Commission’s  debt  management  architecture.  To  further  boost  secondary  market  liquidity  of  EU 

50 For financial assistance programmes for which the basic acts enter into force on or after 9 November 2022, back-to-back 
funding will remain an option on an exceptional basis when warranted by specific transaction needs. 
51 ECA (2023), “NGEU debt management at the Commission - An encouraging start, but further alignment with best practice 
needed„ , Special Report n. 16. 

41 

 
 
 
                                                           
debt  and  improve  the  efficiency  of  EU  issuances,  the  Commission  is  putting  in  place  mechanisms to 
facilitate  trading  of  EU-Bonds  in  the  secondary  market,  and  price  discovery  through  appropriate 
platforms. Both  enhancements  will  help  markets  to  adapt  to  the  strong  credit  and  large-scale 
characteristics  of  the  EU’s  issuance  programme.  In  addition,  the  Commission  will  continue  to  further 
increase  the  share  of  issuances  via  auctions  to  favour  the  liquidity  of  EU  Bonds  and  support  the 
performance of EU bonds. 

3.3.  Rule of Law 

Since 2021, with the entry into force of the regulation on a general regime of conditionality 
(‘conditionality  regulation’),  the  EU  budget  has  an  additional  layer  of  protection  in  cases 
when breaches of the rule of law principles affect or risk affecting the EU financial interests. 
The  new  conditionality  regime  allows  the  EU  to  take  measures  to  protect  the  EU  budget,  such  as 
suspension  of  payments  or  financial  corrections.  The  instrument  complements  other  tools  and 
procedures  to  protect  the  EU  budget,  for  example  checks  and  audits  or  financial  corrections,  or 
investigations by the EU's anti-fraud office OLAF. The Commission can only recur to the regulation if the 
other Union budget protection tools cannot be used more effectively. 

The  general  regime  of  conditionality  applies  to  all  EU  funds  and  Member  States.  The 
conditionality  includes  a  set  of  clear  and  objective  criteria  for  assessing  whether  the  Union  budget  is 
affected or at risk of being affected due to breaches of the principles of the rule of law in a Member 
State.  These  criteria  link  to  situations  that  may  be  indicative  of  breaches,  such  as  endangering  the 
independence of the judiciary, failing to prevent, correct, or sanction arbitrary or unlawful decisions by 
public authorities ensuring the absence of conflict of interests and limiting prosecution.52  

If  the  conditions  provided  to  initiate  the  general  regime  of  conditionality  are  fulfilled,  the 
European  Commission  proposes  to  the  Council  the  adoption  of  measures  to  protect  the  EU 
budget. The final decision is taken by the Council of the EU. Following a proposal by the Commission, 
measures  adopted  by  the  Council  can  be  adapted  or  lifted  if  the  Member  State  concerned  submits 
further remedial measures that effectively address the relevant concerns. 

In  2022,  the  Commission  continued  to  implement  the  regulation  on  the  general  regime  of 
conditionality.  It  opened  the  procedure  to  protect  the  EU  budget  against  rule  of  law  breaches  in 
Hungary, concerning public procurement related to the use of Union funds by public interest trusts, the 
effectiveness of prosecutorial action and the fight against corruption. On 15 December 2022, based on a 
proposal  from  the  Commission,  the  Council  adopted  measures  to  protect  the  Union  budget  from 
breaches  of  the  principles  of  the  rule  of  law  in  Hungary.  The  Council  decided  to  suspend  55%  of  the 
commitments for three operational programmes in Cohesion Policy, which corresponds to an amount of 
approximately  EUR  6.3  billion  in  total  for  the  period  2021-2027.  The  Council  also  prohibited  entering 

52 Communication from the Commission  - Guidelines on the application of the Regulation (EU, EURATOM) 2020/2092 on a 
general regime of conditionality for the protection of the Union budget, COM(2022)1382 final. 

42 

 
 
 
                                                           
new legal commitments with public interest trusts or entities maintained by them (many of which are 
universities), under any Union programme directly or indirectly managed by the Commission. Pursuant to 
the Conditionality Regulation, Hungary can  submit further remedial measures to demonstrate that the 
conditions  for  budgetary  measures  are  no  longer  fulfilled.  The  Commission  will  continue  to  lead  the 
implementation and enforcement of the Regulation, to identify possible breaches of the rule of law that 
affect  or  seriously  risk  affecting  the  EU  budget  in  a  sufficiently  direct  way  and  assess  whether  the 
conditions to launch the procedure set out in the Regulation are fulfilled. 

3.4.  Performance and Mainstreaming  

The  EU  budget  requires  a  modern,  transparent,  accountable,  and  solid  performance 
framework,  linking  expenditure  to  objectives,  and  allowing  for  the  measurement  of  both 
expenditure and achieved results. The Commission communication of June 2021 ‘The performance 
framework for the EU  budget  under the 2021-2027 multiannual financial framework.’53 described the 
features  and  functions  of  the  performance  framework  for  the  current  MFF,  based  on  better  defined 
objectives,  more  focused  and  meaningful  indicators,  and  high-quality  data.  The  principles  of 
“mainstreaming"  which  allow  to  dedicate  funds  to  a  specific  priority  from  a  multiangle  perspective, 
mobilizing the synergies and leveraging the entire EU budget are also described in the Communication. 
Despite  being  in  the  early  stages  of  implementation,  there  are  already  some  performance  results 
available for the current MFF (Table 3.4.1).54  

Table 3.4.1. Results achieved exclusively with appropriations from 2021-2027 

5.8 million 

142 

2 million 

17 

farmers  benefited 
direct  payments  of 
Common 
Policy 
calendar year. 

from 
the 
Agricultural 
2021 
the 

in 

countries  participated 
in 
Horizon  Europe  in  2021-
44 832 
2022, 
with 
evaluated 
applications 
from 14 182 organisations. 

by 

of  Palestine  refugees  were 
supported 
the 
Neighbourhood 
and 
Development 
Cooperation  Instrument 
(Global 
Europe) 
contribution in 2022 

electoral  processes  and 
democratic 
cycles  were 
supported,  observed  and 
monitored  by  means  of 
electoral  missions  in  2022 
thanks  to  Neighbourhood 
Development 
and 
Cooperation  Instrument 
(Global Europe) 

53 SWD(2021) 133 final. 
54 More detailed information on the performance of each programme and their alignment with political priorities for both the 
2014-2020 and 2021-2027 MFF can be found on https://commission.europa.eu/strategy-and-policy/eu-budget/performance-
and-reporting_en. 

43 

 
 
 
                                                           
60 

125 million 

30% 

1.5 million 

Is the population 
that the European 
Union Solidarity Fund 
helped to support in 
2022 

EU humanitarian air 
bridge flights were 
organised in 2022, 
delivering 842 
tonnes of 
humanitarian 
materials thanks to 
Humanitarian Aid. 

Was the number of 
participants in 2021 
and 2022 in learning 
mobility activities 
(learners and staff) 
thanks to Erasmus+ 

Is the share of 
recipients of the 
European Defence 
Programme that did 
not carry out 
research activities 
with defence 
applications before 
the entry into force 
of the fund 

Source: Programme Performance Statements Draft Budget 2024 and Annual Management and Performance Report 
2022: 
https://commission.europa.eu/strategy-and-policy/eu-budget/performance-and-reporting/programme-
performance-statements_en  

With the inter-institutional agreement (IIA) accompanying the 2021-2027 MFF, the European 
Parliament,  the  Council  and  the  Commission  committed  towards  the  integration  of 
crosscutting  objectives  into  the  EU  budget.  A  key  commitment  is  to  spend  at  least  30%  of  all 
resources available under the 2021-2027 MFF and NextGenerationEU for addressing climate objectives. 
Furthermore, the IIA supports biodiversity objectives with 7.5% of annual spending in 2024 and 10% in 
2026  and  2027.  It  also  commits  to  the  development  of  a  new  gender  equality  expenditure  tracking 
methodology  and  the  pilot  mainstreaming  of  those  objectives  as  of  2023.  In  addition  to  these 
mainstreaming  and  tracking  commitments,  the  IIA  provides  for  an  annual  reporting  on  the 
implementation of the United Nations Sustainable Development Goals in all relevant programmes. 

The projections for climate spending over the period 2021-2027 are above the 30% target, 
with  the  estimated  figures  for  the  Draft  Budget  2024  at  32.6%  for  the  overall  period.  In 
absolute  terms,  the  amounts  devoted  to  climate  objectives  for  the  total  of  the  2021-2027  MFF  and 
NextGenerationEU of EUR 578 billion will more than double the climate expenditures in the 2014-2020 
period (EUR 220.8 billion--which represented 20.6 % of the 2014-2020 MFF envelope) (Graph 9). 

Graph 9. Climate contribution comparison in relative terms in selected funds 

44 

 
 
 
Source: European Commission.  

The climate architecture also supports the achievement of the EU climate ambitions. Starting 
from the experience of MFF 2014-2020, the Commission set targets at programme level to underpin the 
horizontal 30% target, with the “climate adjustment mechanism” proposing corrective actions if targets 
were  not achieved.  Furthermore,  elements  of  the  Taxonomy  for  Sustainable  Finance  have  been put  in 
place  to  track  nominal  expenditure  together  with  the  application  of  the  “do  no  (significant)  harm” 
principle.  In  the  period  2021-2027  almost  all  the  programmes  have  increased  their  contribution  to 
climate compared to the previous period (Graph 9).  

Several programmes contribute to the achievement of the climate target (Graph 10). Cohesion 
programmes and CAP together with NextGenerationEU, in particular the Recovery and Resilience Facility, 
as well as the additional financing for the Just Transition Fund, will contribute to achieving the climate 
transition. Furthermore, the new REPowerEU chapters in the RRF could raise the ambition of this climate 
financing. 

Graph 10. Selected programmes contributing to the achievement of the climate target in 2021-2027 in 
EUR million (left scale) and in percentages of their total implementation (right scale) 

45 

 
 
 
Source: European Commission. 

Data  available  for  the  2021-2027  period  suggest  that  the  financing  for  biodiversity  has 
increased and is on track to devote 7.5% of the budget in 2024, but the targets for the end 
tail of the MFF might be missed. The methodology put forward by the Commission provides a solid 
base to measure biodiversity financing in all the EU budget programmes for mainstreaming biodiversity 
objectives  into  the  EU  budget,  including  the  steering  to  dedicate  more  resources,  going  beyond  the 
simple tracking of relevant expenditure.55 In line with the mainstreaming principles, the EU budget has 
increased the relative and absolute amounts dedicated to biodiversity (graph 11). While the budget is on 
track to achieve 7.5% of its resources to biodiversity in 2024, it is forecast to allocate some 8.6% and 
8.4%  respectively  in  2026  and  in  2027,  against  the  target  of  10%  in  both  years.  Supported  by  other 
stakeholders, the Commission is seeking for ways to ensure that Member States will dedicate sufficient 
funding to biodiversity in the context of cohesion policy funds and the CAP. More detailed information on 
the implementation of the biodiversity ambition in the 2021-2027 MFF, in compliance with article 16 of 
the IIA, is provided in the Programme Performance Statement.56 

Graph 11. Biodiversity contribution comparison in relative terms in selected funds   

55Biodiversity Financing and Tracking, May 2022 study and biodiversity methodology as published by the Commission. 
56 More info available at https://commission.europa.eu/strategy-and-policy/eu-budget/performance-and-
reporting/horizontal-priorities/green-budgeting_en   

46 

 
 
 
                                                           
Source: European Commission. 

In  March  2020,  the  Commission  presented  its  gender  equality  strategy  2020-2025.57  The 
implementation  of  the  strategy  is  based  on  the  dual  approach  of  (1)  key  actions  to  achieve  gender 
equality combined with (2) strengthening the integration of a gender perspective in all EU policies and 
major  initiatives.  In  this  context,  the  Commission  committed  to  analyse  the  impact  of  its  activities  on 
gender equality, and at how to measure expenditures related to gender equality at the programme level 
in  the  MFF  2021-2027.  To  that  effect  the  Commission  is  developing  a  methodology  and  has 
implemented it on a pilot basis. As shown in the Draft Budget for 2024 performance statements, the 
total of the EU budget’s  2022 interventions that are relevant for the promotion of gender equality or 
that have the potential to contribute to it represent 83% of the budget. 

4.  CONCLUSIONS 

This Staff Working Document provided a thorough mid-term review of the 2021-2027 MFF.  It 
has  shown  the  progress  with  implementation  and  the challenges  that  the  EU  budget  has  been  facing 
since its adoption. 

The  2021-2027  MFF  and  NextGenerationEU  adopted  in  December  2020  aimed  at  fostering 
the recovery of the EU from the COVID-19 pandemic and ensuring its resilience, supporting 
the green and digital transition. They were not designed to respond to a succession of crises. 
Nevertheless, the EU budget has been successfully and extensively mobilised to address the fallout of 
Russia’s  war of aggression against Ukraine, the energy crisis, as  well as  other unexpected events and 
natural  disasters,  on  top  of  its  predefined  priorities.  Significant  pressures  on  the  EU  budget  is  also 

57  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee and the Committee of the Regions - A Union of Equality: Gender Equality Strategy 2020-2025, COM(2020) 152. 

47 

 
 
 
 
                                                           
coming from the increase in interest rates. The limited flexibilities that were available at the beginning of 
the MFF have been used to the maximum. Redeployments have been used to an unprecedented extent 
and extremely little room for manoeuvre is left for the reminder of the MFF. 

A targeted revision of the MFF is therefore necessary. The revision shall equip the MFF with the 
means to ensure that the Union can meet its legal obligations and address the most urgent priorities. 
The elements of this targeted revision are outlined in the Communication COM(2023)336. 

48 

 
 
5.  ANNEXES 

5.1.  Overview of MFF 2021 – 2027 

Table 5.1.1 – Comparison between the adopted and the current multiannual financial framework ceilings for commitments and payment appropriations58 

In EUR million, in current prices, rounded to the nearest whole number 

Name 

Description 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

1. Single Market, Innovation and Digital 

2. Cohesion and Values 

2a. Economic, social and territorial 
cohesion 

2b. Resilience and values 

adopted 

current 

difference, of 
which: 

Article 5 MFFR 

adopted 

current 

difference, of 
which: 

Article 5 MFFR 

Article 7 MFFR 

adopted 

current 

difference, of 
which: 

Article 7 MFFR 

adopted 

current 

 20 919 

 20 919 

  0 

  0 

 52 786 

 6 364 

- 46 422 

  0 

- 46 422 

 48 191 

 1 769 

- 46 422 

- 46 422 

 4 595 

 4 595 

 21 288 

 21 878 

  590 

  590 

 55 314 

 67 806 

 12 492 

  886 

 11 606 

 49 739 

 61 345 

 11 606 

 11 606 

 5 575 

 6 461 

 21 125 

 21 727 

  602 

  602 

 57 627 

 70 137 

 12 510 

  904 

 11 606 

 51 333 

 62 939 

 11 606 

 11 606 

 6 294 

 7 198 

 20 984 

 21 598 

  614 

  614 

 60 761 

 73 289 

 12 528 

  922 

 11 606 

 53 077 

 64 683 

 11 606 

 11 606 

 7 684 

 8 606 

 21 272 

 21 272 

  0 

  0 

 63 387 

 74 993 

 11 606 

  0 

 11 606 

 54 873 

 66 479 

 11 606 

 11 606 

 8 514 

 8 514 

 21 847 

 21 847 

  0 

  0 

 66 536 

 66 536 

  0 

  0 

  0 

 56 725 

 56 725 

  0 

  0 

 9 811 

 9 811 

 22 077 

 22 077 

  0 

  0 

 70 283 

 70 283 

  0 

  0 

  0 

 58 639 

 58 639 

  0 

  0 

 11 644 

 11 644 

 149 512 

 151 318 

 1 806 

 1 806 

 426 694 

 429 408 

 2 714 

 2 712 

  2 

 372 577 

 372 579 

  2 

  2 

 54 117 

 56 829 

58 The main ceiling differences for commitments are accounted for by the annual programme-specific adjustments under Article 5 MFFR and the re-programming of shared management 
programmes carried out in January 2022 under Article 7 MFFR. In the case of the sub-ceiling for market related expenditure and direct payments, the differences comes from transfers between 
EAGF and EAFRD, reflected in the annual technical adjustments in accordance with article 2(1) of the MFF Regulation. 

49 

 
 
                                                           
Name 

Description 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

difference, of 
which: 

Article 5 MFFR 

adopted 

current 

difference, of 
which: 

  0 

  0 

 58 624 

 56 841 

- 1 783 

Article 7 MFFR 

- 1 783 

adopted 

current 

difference, of 
which: 

Transfers 

adopted 

current 

difference, of 
which: 

Article 5 MFFR 

Article 7 MFFR 

adopted 

current 

difference, of 
which: 

Article 7 MFFR 

adopted 

current 

difference 

adopted 

 40 925 

 40 368 

  557 

  557 

 2 467 

 1 791 

-  676 

  0 

-  676 

 1 805 

 1 696 

-  109 

-  109 

 16 247 

 16 247 

  0 

 10 635 

3. Natural Resources and Environment 

Of which: Market related expenditure 
and direct payments 

4. Migration and Border Management 

5. Security and Defence 

6. Neighbourhood and the World 

7. European Public Administration 

  886 

  886 

 56 519 

 56 965 

  446 

  446 

 41 257 

 40 639 

  618 

  618 

 3 043 

 3 360 

  317 

  148 

  169 

 1 868 

 1 896 

  28 

  28 

 16 802 

 16 802 

  0 

  904 

  904 

 56 849 

 57 295 

  446 

  446 

 41 518 

 40 693 

  825 

  825 

 3 494 

 3 814 

  320 

  151 

  169 

 1 918 

 1 946 

  28 

  28 

 16 329 

 16 329 

  0 

 11 058 

 11 419 

50 

  922 

  922 

 57 003 

 57 449 

  446 

  446 

 41 649 

 40 603 

 1 046 

 1 046 

 3 697 

 4 020 

  323 

  154 

  169 

 1 976 

 2 004 

  28 

  28 

 15 830 

 15 830 

  0 

 11 773 

  0 

  0 

 57 112 

 57 558 

  446 

  446 

 41 782 

 40 665 

 1 117 

 1 117 

 4 218 

 4 387 

  169 

  0 

  169 

 2 215 

 2 243 

  28 

  28 

 15 304 

 15 304 

  0 

  0 

  0 

 57 332 

 57 332 

  0 

  0 

 41 913 

 40 691 

 1 222 

 1 222 

 4 315 

 4 315 

  0 

  0 

  0 

 2 435 

 2 435 

  0 

  0 

 14 754 

 14 754 

  0 

  0 

  0 

 57 557 

 57 557 

  0 

  0 

 2 712 

 2 712 

 400 996 

 400 997 

  1 

  1 

 42 047 

 291 091 

 40 651 

 284 310 

 1 396 

 1 396 

 4 465 

 4 465 

  0 

  0 

  0 

 2 705 

 2 705 

  0 

  0 

 15 331 

 15 331 

  0 

 6 781 

 6 781 

 25 699 

 26 152 

  453 

  453 

  0 

 14 922 

 14 925 

  3 

  3 

 110 597 

 110 597 

  0 

 12 124 

 12 506 

 12 959 

 82 474 

 
 
Name 

Description 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

Of which: Administrative expenditure of 
the institutions 

Total commitments 

Total payments 

 12 124 

 12 506 

 12 959 

 82 474 

  0 

 9 464 

 9 464 

  0 

 179 725 

 179 725 

  0 

  0 

  0 

 175 674 

 177 126 

 1 452 

  0 

 9 786 

 9 786 

  0 

 185 377 

 185 377 

  0 

  0 

  0 

 179 187 

 180 668 

 1 481 

  0 

 62 991 

 62 991 

  0 

1 210 894 

1 215 871 

 4 977 

 4 971 

  6 

1 195 211 

1 200 596 

- 5 385 

current 

difference 

adopted 

current 

difference 

adopted 

current 

difference, of 
which: 

 10 635 

  0 

 8 216 

 8 216 

  0 

 163 483 

 114 493 

 11 058 

 11 419 

  0 

 8 528 

 8 528 

  0 

 165 892 

 179 765 

  0 

 8 772 

 8 772 

  0 

 168 761 

 182 667 

 11 773 

  0 

 9 006 

 9 006 

  0 

 172 024 

 185 963 

  0 

 9 219 

 9 219 

  0 

 175 632 

 187 881 

- 48 990 

 13 873 

 13 906 

 13 939 

 12 249 

Article 5 MFFR 

  0 

Article 7 MFFR 

- 48 990 

adopted 

current 

difference 

 166 140 

 163 496 

- 2 644 

 1 624 

 12 249 

 167 585 

 166 534 

- 1 051 

 1 657 

 12 249 

 165 542 

 168 575 

 3 033 

 1 690 

 12 249 

 168 853 

 170 543 

 1 690 

  0 

 12 249 

 172 230 

 173 654 

 1 424 

51 

 
 
 
 
 
Flexibility-redeployment  
Non-recovery of unspent pre-financing 
100% co-financing - accounting year 2020-2021 
100% co-financing - accounting year 2021-2022 

Period- Financed  
2014-2020 
2014-2020 
2014-2020 

Total Commission proposal  
8.0 
14.6 
10.0 

Table 5.1.2 Redeployments and flexibilities implemented since 2020 

Proposal  
CRII - EU 2020/460 
CRII Plus - EU 2020/558 

CARE - EU 2022/562 

CARE 2 - EU 2022/613 

Amounts re-programmed to address the migration challenges stemming from 
Russia's military aggression 

2014-2020 

REACT-EU increased pre-financing  
Cohesion programmes increased pre-financing  

NextGenerationEU 
2021-2027 

FAST-CARE - EU 2022/2039 

Amounts programmed to address the migration challenges stemming from 
Russia's military aggression 

SAFE 2023/435 

Amounts that can re-programmed to address the energy crisis 

ASAP COM(2023) 237 final 

Chips Act COM(2022) 46 final. 
Political agreement reached on 
18/04/2023 

Redeployments from EDIRPA  
Redeployments from European Defence Fund  

Redeployments from ITER  
Margin 
De-commitments  

Redeployments and reallocations from Horizon Europe and Digital Europe 

2021-2027 

Union Secure Connectivity 
COM(2023)588   

Redeployments, earmarking and reallocations from Space Programme, Horizon 
Europe, CEF-Digital, Digital Europe Programme, NDICI-Global Europe and 
European Defence Fund  

2021-2027 

2014-2020 

2021-2027 
2021-2027 

2021-2027 
2021-2027 
2021-2027 

2021-2027  

1.1* 

3.5 
3.5 

15.7 

40.0 

0.2 
0.3 

2.9 

0.05 
0.35 
0.08 

1.93 

REPowerEU  

Loans  
Grants  

52 

NextGenerationEU 
2022-2026 

225**  
20.0*** 

 
 
 
BAR  

CPR transfers - existing transfer possibility from cohesion policy funds 

2021-2027 

2021-2027 

Decentralised agencies  

Redeployments from programmes for additional tasks in decentralised agencies  

2021-2027 

* Actual re-programming  
** from remaining loans  
*** ETS resources (12bn from Innovation Fund and 8 bn from Member States allowances) 

5.4 

17.9 

1.1 

53 

 
 
  
  
  
  
  
 
 
 
Figure 5.1.1 – Expenditure ceiling for commitment appropriations 2021-2027 as a proportion, by heading and sub-heading 

In EUR billion, in current prices, rounded to the nearest billion 

1. Single Market, Innovation and Digital 

2a. Economic, social and territorial cohesion 

2b. Resilience 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 

54 

 
 
Figure 5.1.2 – Expenditure ceilings for commitment appropriations and MFF top-ups 
The MFF top-ups considered are commitments made available again under Article 15(3) FR, Article 5 MFFR, and NextGenerationEU. On Article 5 – legend: Article 5 MFFR 2025-
2027 not yet included in technical adjustments. 

55 

 
 
 
 
Table 5.1.3 – Sustainability of the ceilings for commitment appropriations (EUR million, current prices) 

In EUR million, current prices, rounded to one decimal place 

Name 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

1. Single Market, Innovation and Digital 

2a. Economic, social and territorial cohesion 

2b. Resilience 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 

Total 

  101.7 

-  1.6 

-  432.3 

  49.9 

  164.0 

  97.7 

-  784.0 

  192.2 

-  612.4 

  32.9 

  30.8 

-  30.0 

  283.9 

-  52.2 

  83.0 

-  907.4 

  274.8 

-  284.2 

  147.6 

  12.5 

-  517.2 

  35.7 

  86.7 

-  170.6 

- 1 230.7 

  107.7 

  166.6 

  17.8 

- 1 708.2 

  60.1 

  123.3 

-  300.2 

  0.0 

-  176.6 

- 1 528.3 

- 1 817.1 

  13.9 

  1.0 

  55.9 

  47.4 

  37.4 

  30.0 

  108.7 

-  299.7 

-  5.5 

  10.0 

  0.3 

  90.1 

  49.4 

  51.5 

  26.7 

  108.5 

-  392.8 

-  56.3 

  24.1 

  0.6 

  183.2 

  54.0 

  46.5 

  24.1 

  113.1 

-  306.3 

  139.4 

If the figures are negative, it means that the authorised appropriations exceed the ceilings. For the years up to 2024, it means that the mobilisation of special instruments was required. 

If the figures are positive, it means that the authorised appropriations are below the ceilings. 

Years 2021 and 2022 correspond to the final approved budget, year 2023 corresponds to the latest draft amending budget, and years 2024-2027 correspond to the draft budget proposal for 2024. 

56 

 
 
 
 
Table 5.1.4 – Adopted MFF ceilings and other elements of the December 2020 MFF agreement 

In EUR million, in current prices, rounded to the nearest whole number 

Name 

Description 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

1. Single Market, Innovation and Digital 

Article 5 MFFR 

Article 15.3 FR 

NGEU 

Ceiling, of which: 

Re-allocated from 
the margin 

Article 5 MFFR 

NGEU grant 
allocation 

  0 

  76 

 3 587 

 20 919 

  0 

  0 

  723 

  77 

 3 604 

 21 288 

  738 

  79 

 4 295 

 21 125 

  0 

  0 

 1 083 

 1 105 

 156 551 

 129 894 

 104 200 

  753 

  80 

  0 

  767 

  82 

  0 

  782 

  84 

  0 

  796 

  86 

  0 

 4 559 

  564 

 11 486 

 20 984 

 21 272 

 21 847 

 22 077 

 149 512 

  141 

 1 126 

  0 

  144 

 1 149 

  0 

  146 

 1 172 

  0 

  149 

 1 203 

  580 

 6 838 

  0 

 390 645 

2. Cohesion and Values 

NGEU loan allocation 

 191 017 

 194 838 

Ceiling, of which: 

 52 786 

 55 314 

 57 627 

 60 761 

 63 387 

 66 536 

 70 283 

2a. Economic, social and territorial cohesion 

2b. Resilience and values 

3. Natural Resources and Environment 

4. Migration and Border Management 

Re-allocated from 
the margin 

NGEU 

Ceiling, of which: 

Article 5 MFFR 

  249 

  138 

 39 795 

 48 191 

  0 

 10 824 

 49 739 

 1 083 

  141 

  0 

 51 333 

 1 105 

NGEU 

 116 756 

 119 070 

 104 200 

Ceiling, of which: 

Re-allocated from 
the margin 

NGEU 

Ceiling 

Article 5 MFFR 

Ceiling, of which: 

Re-allocated from 
the margin 

 4 595 

  249 

 4 510 

 58 624 

  0 

 2 467 

 5 575 

  138 

 10 012 

 56 519 

  181 

 3 043 

 6 294 

  141 

 4 416 

 56 849 

  185 

 3 494 

  0 

  90 

  92 

  144 

  0 

 53 077 

 1 126 

  0 

 7 684 

  144 

  0 

  146 

  0 

 54 873 

 1 149 

  0 

 8 514 

  146 

  0 

  149 

  0 

 56 725 

 1 172 

  0 

 9 811 

  149 

  0 

 385 855 

 426 694 

 1 120 

 50 620 

 372 577 

 6 838 

  152 

  0 

 58 639 

 1 203 

  0 

 340 025 

 11 644 

 54 117 

  152 

  0 

 1 120 

 18 939 

 57 003 

 57 112 

 57 332 

 57 557 

 400 996 

  189 

 3 697 

  94 

  192 

 4 218 

  96 

  196 

 4 315 

  98 

  198 

 4 465 

  100 

 1 141 

 25 699 

  569 

5. Security and Defence 

Ceiling 

 1 805 

 1 868 

 1 918 

 1 976 

 2 215 

 2 435 

 2 705 

 14 922 

57 

 
 
  
  
  
  
  
Name 

Description 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

Ceiling 

 16 247 

 16 802 

 16 329 

 15 830 

 15 304 

 14 754 

 15 331 

 110 597 

  90 

  92 

  94 

  96 

  98 

  100 

  569 

6. Neighbourhood and the World 

Total commitments 

Re-allocated from 
the margin 

Article 5 MFFR 

Article 15.3 FR 

NGEU grant 
allocation 

  0 

  0 

  76 

 1 987 

  77 

 2 028 

  79 

 164 648 

 143 511 

 112 912 

NGEU loan allocation 

 191 017 

 194 838 

  0 

 2 068 

  80 

  0 

  0 

 2 108 

  82 

  0 

  0 

 2 150 

  84 

  0 

  0 

 2 197 

 12 538 

  86 

  0 

  0 

  564 

 421 070 

 385 855 

Ceiling, of which: 

Re-allocated from 
the margin 

 163 483 

 165 892 

 168 761 

 172 024 

 175 632 

 179 725 

 185 377 

1 210 894 

  249 

  318 

  325 

  472 

  481 

  491 

  501 

 2 838 

58 

 
 
 
Table 5.1.5 – Evolution of the payment ceilings  

Name 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total59 

Payment appropriations, in EUR million, in current prices (unless otherwise specified), rounded to the nearest whole number 

Ceiling in the adopted MFF and technical adjustments 

Adopted MFF ceiling (in 2018 prices)60 

MFF technical adjustment 202161 

MFF technical adjustment 202262, of which: 

 156 557 

 166 140 

 166 140 

 154 822 

 167 585 

 169 209 

 1 624 

Article 5 MFFR top-up 

 149 936 

 165 542 

 165 542 

 149 936 

 168 853 

 168 853 

 149 936 

 172 230 

 172 230 

 149 936 

 175 674 

 175 674 

 149 936 

 179 187 

 179 187 

1 061 058 

1 195 211 

1 196 835 

 1 624 

MFF technical adjustment 202363, of which: 

 163 496 

 170 558 

 168 575 

 168 853 

 172 230 

 175 674 

 179 187 

1 198 573 

Article 5 MFFR top-up 

Adjustment 

- 2 644 

 1 349 

 1 657 

 1 376 

 1 657 

  81 

MFF technical adjustment 202464 

 163 496 

 166 534 

 168 575 

 170 543 

 173 654 

 177 126 

 180 668 

1 200 596 

Remaining under cap65 (current prices) 

Remaining under cap (in 2018 prices) 

Article 5 MFFR top-up 

Adjustment 

- 4 024 

 1 690 

 1 424 

 7 766 

 6 761 

 1 452 

 13 779 

 11 760 

 1 481 

 16 445 

 13 760 

 1 690 

  333 

 37 990 

 32 281 

59 Totals may not tally due to rounding. 
60 Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (OJ L 433I, 22 December 2020, p. 11-22) 
61 Communication from the Commission to the European Parliament and the Council, Technical adjustment of the multiannual financial framework for 2021 in accordance with Article 4 of Council 
Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (COM(2020) 848 final, 18 December 2020) 
62 Communication from the Commission to the European Parliament and the Council, Technical adjustment of the multiannual financial framework for 2022 in accordance with Article 4 of Council 
Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (COM(2021) 365 final, 7 June 2021) 
63 Communication from the Commission to the European Parliament and the Council, Technical adjustment of the multiannual financial framework for 2023 in accordance with Article 4 of Council 
Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (COM(2022) 266 final, 7 June 2022) 
64 Communication from the Commission to the European Parliament and the Council, Technical adjustment of the multiannual financial framework for 2024 in accordance with Article 4 of Council 
Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (COM(2023) 320 final, 6 June 2023) 
65 The cap is enshrined in 11(3) MFFR and updated annually, if applicable, in the technical adjustment of the MFFR. 

59 

 
 
  
  
  
  
  
  
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
 
 
                                                           
5.2. 

 Overview of availabilities and flexibilities 

Table 5.2.1 – Adopted availabilities and flexibilities in the MFF 2021-2027 
Adopted availabilities focus on a specific set of flexibilities, namely unallocated margins, special instruments, and the emerging challenges and priorities cushion 
under NDICI-GE. Other programmes or instruments may have elements of flexibility that are not included in this table. 

Commitment appropriations, in EUR million, in current prices, rounded to the nearest whole number 

Name66 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

1. Single Market, Innovation and Digital 

2. Cohesion and Values 

2a. Economic, social and territorial cohesion 

2b. Resilience and values 

3. Natural Resources and Environment 

4. Migration and Border Management 

5. Security and Defence 

6. Neighbourhood and the World 

7. European Public Administration67 

Total commitment margin 

Unallocated margins 

 221 

- 57 

- 57 

 101 

 106 

 93 

 168 

 257 

 890 

 226 

 57 

 57 

 102 

 17 

 94 

 81 

 256 

 834 

 229 

 59 

 59 

 105 

 19 

 96 

 84 

 256 

 848 

 94 

 60 

 60 

 107 

 21 

 99 

 85 

 255 

 719 

 96 

 61 

 61 

 109 

 21 

 100 

 86 

 254 

 727 

 97 

 62 

 62 

 111 

 22 

 102 

 88 

 252 

 735 

 96 

 63 

 63 

 114 

 19 

 97 

 91 

 256 

 736 

1 059 

 305 

 305 

 748 

 226 

 681 

 684 

1 786 

5 489 

Non-thematic special instruments68 

Flexibility instrument 

 971 

 990 

1 010 

1 030 

1 051 

1 072 

1 094 

7 219 

Thematic special instruments 

66 The degree of flexibility varies depending on the instrument, and depends on the provisions of the applicable legislation. 
67 The margin for heading 7 has been calibrated based on the adopted MFF and the technical update of the financial programming of February 2021. 
68 The Single Margin Instrument (parts 11(1)(a) and 11(1)(c)) has specific provisions that depend on the margins available during the programming period, hence no initial programming can be 
provided. 

60 

 
 
 
 
 
 
 
 
 
 
                                                           
Name66 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

European Globalisation Adjustment Fund (EGF) 

Solidarity and Emergency Aid Reserve (SEAR)69 

Carry-over from the past 

Internal strand 

EUSF 

External strand 

End-of-Year Cushion 

 197 

1 321 

 48 

 143 

 478 

 334 

 318 

 201 

1 299 

 0 

 146 

 487 

 341 

 325 

 205 

1 325 

 0 

 149 

 497 

 348 

 331 

Brexit Adjustment Reserve (BAR) 

1 698 

1 299 

1 325 

Other 

 209 

1 351 

 0 

 152 

 507 

 355 

 338 

 0 

 214 

1 378 

 0 

 155 

 517 

 362 

 345 

1 149 

 218 

1 406 

 0 

 158 

 527 

 369 

 351 

 0 

 222 

1 434 

 0 

 161 

 538 

 376 

 359 

 0 

1 467 

9 515 

 48 

1 065 

3 550 

2 485 

2 367 

5 470 

Emerging challenges and priorities cushion under NDICI-GE 

1 408 

1 538 

1 395 

1 324 

1 249 

1 170 

1 226 

9 310 

69 Carry-overs are not included in the adopted availabilities for years 2022-2027. 

61 

 
 
                                                           
Table 5.2.2 – Remaining availabilities and flexibilities in the MFF 2021-2027 
Current availabilities focus on a specific set of flexibilities, namely unallocated margins, special instruments, and the emerging challenges and priorities cushion under NDICI-GE. 
Other programmes or instruments may have elements of flexibility that are not included in this table. 

Name70 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total71 

Commitment appropriations, in EUR million, in current prices, rounded to the nearest whole number 

1. Single Market, Innovation and Digital 

2. Cohesion and Values 

2a. Economic, social and territorial cohesion 

2b. Resilience 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 

of which: Administrative expenditure of the institutions 

Total commitment margin72 

Flexibility instrument 

Single Margin Instrument 11(1)(a)73 

 102 

 50 

 186 

 98 

 192 

 186 

 627 

Unallocated margins 

 33 

 31 

 31 

 284 

 83 

 275 

 164 

 705 

 132 

 13 

 13 

 32 

 87 

 106 

 26 

 369 

Non-thematic special instruments 

 167 

 18 

 18 

 60 

 123 

 368 

 14 

 56 

 1 

 56 

 47 

 37 

 30 

 109 

- 300 

- 248 

- 6 

 10 

 90 

 90 

 49 

 51 

 27 

 109 

- 393 

- 336 

- 56 

 24 

 183 

 1 

 183 

 54 

 47 

 24 

 113 

- 306 

- 243 

 139 

 347 

 361 

 32 

 329 

 243 

 345 

 81 

 330 

- 893 

- 801 

 814 

1 094 

 566 

1 051 

1 072 

1 094 

3 217 

70 The degree of flexibility varies depending on the instrument, and depends on the provisions of the applicable legislation. 
71 The values for 2021 and 2022 for the remaining unallocated margin are not included in the calculation so as not to overlap with the presentation of the Single Margin Instrument 11(1)(a). 
72 The residual margins for 2021 and 2022 are already considered in the EUR 1 094 million available for the Single Margin Instrument 11(1)(a) in 2023. 
73 The Single Margin Instrument 11(1)(a) has specific regulatory provisions that prevent showing a reliable forecast. The margins from 2021 and 2022 are as of 2023 included in the Single 
Margin Instrument. Hence, only the availabilities for 2023 and 2024 are shown, where the availability in 2024 assumes that no further use of the Single Margin Instrument 11(1)(a) is done in 
2023. The value for 2024 does not include the margin for 2023 to avoid double counting. 

62 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
                                                           
Name70 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total71 

European Globalisation Adjustment Fund (EGF)74 

Solidarity and Emergency Aid Reserve (SEAR)75 

Internal strand 

EUSF 

External strand 

End-of-Year Cushion 

Brexit Adjustment Reserve (BAR)76 

Thematic special instruments 

 200 

 891 

 63 

 497 

 0 

 331 

Other 

 209 

1 351 

 152 

 507 

 355 

 338 

 214 

1 378 

 155 

 517 

 362 

 345 

1 149 

 218 

1 406 

 158 

 527 

 369 

 351 

 222 

1 434 

 161 

 538 

 376 

 359 

1 063 

6 461 

 690 

2 586 

1 462 

1 724 

1 149 

Emerging challenges and priorities cushion under NDICI-GE 

 732 

 452 

 373 

 365 

1 922 

74 The unused amounts of 2021 (EUR 173.4 million) and 2022 (EUR 173.3 million) have lapsed. 
75 The unused amount of 2023 would be carried over to 2024. For the purpose of an accurate multiannual perspective, this amount is presented only in 2023. 
76 Resources under the Brexit Adjustment Reserve can be transferred by Member States to REPowerEU. 

63 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
  
  
 
                                                           
Table 5.2.3 – Availabilities and flexibilities mobilised, used or planned in the MFF 2021-2027 
Current availabilities focus on a specific set of flexibilities, namely unallocated margins, special instruments, and the emerging challenges and priorities cushion under NDICI-GE. 
Other programmes or instruments may have elements of flexibility that are not included in this table. 

Name77 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

Commitment appropriations, in EUR million, in current prices, rounded to the nearest whole number 

1. Single Market, Innovation and Digital 

2. Cohesion and Values 

2a. Economic, social and territorial cohesion 

2b. Resilience 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 

Total commitment margin 

Flexibility instrument 

Single Margin Instrument 11(1)(a) 

European Globalisation Adjustment Fund (EGF)79 

Solidarity and Emergency Aid Reserve (SEAR) 

Internal strand 

EUSF 

Unallocated margins (current - adopted)78 

- 193 

- 27 

 31 

- 57 

 182 

- 17 

- 11 

- 81 

 19 

- 129 

- 97 

- 47 

 13 

- 59 

- 73 

 67 

- 96 

- 84 

- 150 

- 480 

- 119 

 57 

 0 

 58 

- 51 

 79 

 5 

- 168 

- 65 

- 262 

Non-thematic special instruments 

 762 

 368 

1 236 

 280 

Thematic special instruments 

 24 

1 281 

 143 

 803 

 28 

1 340 

 152 

 718 

 6 

 434 

 86 

 0 

 73 

- 42 

 18 

- 60 

- 47 

 103 

- 99 

- 85 

- 255 

- 351 

1 636 

 549 

77 The degree of flexibility varies depending on the instrument, and depends on the provisions of the applicable legislation. 
78 The unallocated margin for 2021 and 2022 has become part of the Single Margin Instrument. 
79 The unused amounts of 2021 (EUR 173.4 million) and 2022 (EUR 173.3 million) have lapsed. 

64 

- 82 

- 5 

 1 

- 5 

- 61 

 17 

- 70 

 22 

- 554 

- 732 

- 87 

 28 

 0 

 28 

- 61 

 29 

- 75 

 20 

- 645 

- 791 

- 72 

 120 

 1 

 120 

- 60 

 27 

- 73 

 22 

- 562 

- 597 

- 578 

 85 

 63 

 24 

- 171 

 306 

- 420 

- 354 

-2 212 

-3 342 

4 002 

 829 

 58 

3 054 

 382 

1 522 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Name77 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

Total 

External strand 

Brexit Adjustment Reserve (BAR)80 

 334 

1 698 

 469 

1 299 

 348 

1 325 

Other 

1 151 

4 322 

Emerging challenges and priorities cushion under NDICI-GE 

1 408 

1 538 

1 395 

 592 

 797 

 797 

 861 

7 388 

80 The unused allocations for the Brexit Adjustment Reserve are assumed to be fully used. 

65 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Table 5.2.4 – Summary presentation of adopted, current, and mobilised or used availabilities 
The amounts for the Flexibility Instrument, the EGF, and SEAR are available annually, subject to the specific legal provisions for each instrument. The amount for the Single 
Margin Instrument is established each year with the technical adjustment of the MFF. This overview presents an illustrative view. 

Evolution and availability of the margin for commitment appropriations 

In order to account for the use of the Single Margin Instrument 11(1)(a) in 2023 and 2024, all margin allocations and uses of the Single Margin Instrument 11(1)(a) presented in 
previous tables have been converted to 2018 prices for comparison purposes. 

Name 

Amount 

Percentage use or programmed 

In EUR million, in 2018 prices, rounded to the nearest whole number 

Margin in the adopted 2021-2027 MFF 

Available 2021 - 2027 margin 

Use 2021-2027 margin 

Margin allocated to the Single Margin Instrument 11(1)(a) 

Use of Single Margin Instrument 11(1)(a) 

Remaining under Single Margin Instrument 11(1)(a) 

Use 2021-2027 margin 

Available 2021 - 2027 margin 

4 891 

1 969 

2 922 

1 245 

 741 

 254 

 488 

 503 

3 664 

1 228 

 503 

 724 

Without considering the Single Margin Instrument 11(1)(a) 

Considering the Single Margin Instrument 11(1)(a) 

2023 

2024 

Under Single Margin Instrument 11(1)(a) 

Unallocated margin 2023-2027 

66 

60% 

75% 

 
 
  
  
  
  
  
  
  
  
  
  
 
Adopted, current, and mobilised or used availability other than the unallocated margin for commitments 

Name 

Initial 

Used/Mobilised81 

Available 

Percentage difference 

Commitment appropriations, in EUR million, in current prices, rounded to the nearest whole number 

Flexibility instrument 

Single Margin Instrument 11(1)(a)82 

European Globalisation Adjustment Fund (EGF) 

Solidarity and Emergency Aid Reserve (SEAR)83 

Brexit Adjustment Reserve (BAR) 

Non-thematic special instruments 

Thematic special instruments 

Emerging challenges and priorities cushion under NDICI-GE84 

Other 

7 219 

1 467 

9 515 

5 470 

9 310 

4 002 

 829 

 404 

3 054 

4 322 

7 388 

3 217 

 566 

1 063 

6 461 

1 149 

55.4% 

27.6% 

32.1% 

79.0% 

1 922 

79.4% 

81 Includes the draft budget proposal for 2024, voted budget 2023 including draft amending budget 1/2023, and proposals for transfers for special instruments. 
82 The comparison is not relevant as the Single Margin Instrument 11(1)(a) is linked to the unallocated margins. The amount is inflated to 2024 prices. 
83 Fully mobilised in 2021 and 2022. 
84 Fully mobilised in 2021, 2022, and 2023. 

67