On Wednesday 19 June, the European Commission presented its budget proposal for 2025, amounting to €199.7 billion in commitment appropriations. The budget proposed last year was €189.3 billion (see EUROPE 13196/13).
This budget will be complemented by an estimated €72 billion of disbursements under NextGenerationEU, the EU’s post-pandemic instrument, financed from borrowing on the capital markets.
This 2025 budget proposal is part of the 2021-2027 Multiannual Financial Framework, subject to a mid-term revision in February 2024. Its role is to translate long-term priorities into annual budgets (see EUROPE 13360/36).
The Commission assures that it will “provide – in line with the MFF mid-term revision – continued support for Syrian refugees in Türkiye and the wider region, the Southern Neighbourhood including the external dimension of migration, as well as the Western Balkans”. “Stable and predictable to Ukraine” is also confirmed.
Financing EU priorities. According to the proposal, the Common Agricultural Policy (CAP) will remain the largest beneficiary of the amounts allocated (in commitment appropriations), with €53.8 billion, as in 2024.
Spending on space – mainly the European Space Programme – on European strategic investments and on environment and climate action remains unchanged compared to the 2024 budget proposal made by the Commission in June 2023 (see EUROPE 13196/13).
Among the other priorities, those benefiting from an increase are: regional development and cohesion; support for partners and interests in the world (€16.3 billion); migration-related spending; border protection; the functioning of the Single Market, security and defence; EU4Health and secure satellite connections under the new Union Secure Connectivity Programme.
Financed by the Reserve Fund, the Ukraine Facility will receive a further €4.3 billion in the form of grants in 2025. This amount will be complemented by €10.9 billion in the form of loans. The ‘Balkans Facility’ could be launched as early as this year.
The use of the cascade mechanism in 2025, a first. The 2025 budget will be the first to use the cascade mechanism, which is designed to pay interest under NextGenerationEU and which was introduced at the mid-term revision of the MFF in February 2024.
This new occurrence was the subject of questions from MEP Margarida Marques (S&D, Portuguese) during Commissioner Johannes Hahn’s presentation of this 2025 budget proposal to the European Parliament’s Committee on Budgets on Wednesday 19 June.
The Portuguese MEP felt that it was “excessive” to cover half of the cost overruns through flexibility, as this could also be used to find additional funds and protect the Commission’s programmes, rather than to repay the debt. Fabienne Keller (Renew Europe, French) also felt that it was “essential to preserve the flexibility of the budget“.
To this question, the Commission’s Director-General for Budget, Stéfanie Riso, replied that there would be a choice between flexibility mechanisms and decommitments, i.e. the money not used by the programmes to repay the interest. In her view, we need to “rely more on decommitments”.
Finally, Margarida Marques expressed concern about an extension of the NextGenerationEU Recovery Plan into 2026 and 2027, which would have “repercussions on debt costs”. This is because flexibility and decommitments can finance programmes rather than repay interest.
Parliament’s initial comments. During the debate in the European Parliament’s Committee on Budgets, the rapporteur on the general guidelines for the preparation of the 2025 budget, MEP Victor Negrescu (S&D, Romanian), acknowledged that the Commission’s proposal retained “measures and objectives that can be found in the European Parliament’s guidelines” (see EUROPE 13365/11), despite the “narrow margins”.
On the Greens/EFA side, Germany’s Rasmus Andresen felt that the budget did not meet the needs associated with health problems, when, in his view, “more should be done at European level”.
The EPP group’s chief negotiator, Poland’s Andrzej Halicki, pointed out that “we will have to take account of farmers’ objections”, given that they have been demonstrating throughout Europe in 2024, and that Poland will take over the rotating EU presidency in January 2025. Andrzej Halicki is also seeking clarification on how the recently adopted European Pact on Migration and Asylum will be adequately funded under the 2025 budget.
The European Parliament will adopt its position in October. Budget negotiations will take place at the end of the year. In the meantime, a “polite exchange” is due to take place at a summer trilogue with the Hungarian Presidency in July.
Further information: https://aeur.eu/f/cqu (Original version in French by Florent Servia)