EU Budget 2023: Empowering Europe to continue shaping a changing world – The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology

(Credit: Unsplash)

This article is brought to you in collaboration with the European Commission.


The Commission today proposed an annual EU budget of €185.6 billion for 2023, which will be complemented by grants estimated at €113.9 billion under NextGenerationEU. The EU budget will continue to mobilize significant investment to strengthen Europe’s strategic autonomy, the ongoing economic recovery, safeguard sustainability and create jobs. The Commission will continue to prioritize green and digital investments while responding to pressing needs resulting from recent and current crises.

Commissioner Johannes Hahn, responsible for the EU budget, said: “We continue to provide extraordinary financing to support Europe’s recovery and meet current and future challenges. The budget remains an important tool at the Union’s disposal to bring clear added value to citizens’ lives. It helps Europe shape a changing world, in which we work together for peace, prosperity and our European values”.

The 2023 draft budget, boosted by NextGenerationEU, is designed to meet the most crucial recovery needs of EU Member States and our partners around the world. These financial means will continue to rebuild and modernize the European Union and strengthen Europe’s status as a strong global player and reliable partner.

Additional proposals to finance the impact of the war in Ukraine, both externally and internally, will be presented later this year, based on a more precise assessment of needs, in line with the conclusions of the European Council of May 31, 2022.

The budget reflects the political priorities of the EU, which are essential to ensure a sustainable recovery and to strengthen Europe’s resilience. To this end, the Commission proposes to allocate (in commitments):

  • €103.5 billion in grants from NextGenerationEU under the Recovery and Resilience Facility (RRF) to support economic recovery and growth following the coronavirus pandemic and to address the challenges posed by the war in Ukraine.
  • 53.6 billion euros for the Common Agricultural Policy and EUR 1.1 billion for the European Maritime, Fisheries and Aquaculture Fund, for European farmers and fishermen, but also to strengthen the resilience of the agri-food and fisheries sectors and to provide the necessary flexibility for crisis management given expected global food supply shortages.
  • 46.1 billion euros for regional development and cohesion to support economic, social and territorial cohesion, as well as infrastructure supporting the green transition and the Union’s priority projects.
  • €14.3 billion to support our partners and interests around the worldincluding €12 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.5 billion for the Instrument for Pre-Accession Assistance (IPA III ) and €1.6 billion for humanitarian aid (HUMA) .
  • 13.6 billion euros for research and innovation, including €12.3 billion for Horizon Europe, the Union’s flagship research programme. It would receive an additional €1.8 billion in grants from NextGenerationEU.
  • 4.8 billion euros for European strategic investments, including €341 million for InvestEU for key priorities (research and innovation, dual green transition and digital transition, health sector and strategic technologies), €2.9 billion for the Connecting Europe Facility to improve cross-border infrastructure, and €1.3 billion for the Digital Europe program to shape the Union’s digital future. InvestEU would receive an additional €2.5 billion in grants from NextGenerationEU.
  • 4.8 billion euros for people, social cohesion and valuesincluding €3.5 billion Erasmus+ to create education and mobility opportunities for people, €325 million to support artists and creators across Europe and €212 million to promote justice , rights and values.
  • 2.3 billion euros for environment and climate action, including €728 million for the LIFE program to support climate change mitigation and adaptation, and €1.5 billion for the Just Transition Fund to ensure the green transition works for all. The Just Transition Fund would receive an additional €5.4 billion in grants from NextGenerationEU.
  • 2.2 billion euros for expenses dedicated to spacemainly for the European space programme, which will bring together the Union’s action in this strategic area.
  • 2.1 billion euros for protect our bordersincluding €1.1 billion for the Integrated Border Management Fund (IBMF) and €839 million (total EU contribution) for the European Border and Coast Guard Agency (Frontex ).
  • 1.6 billion euros for migration-related expensesincluding 1.4 billion euros to support migrants and asylum seekers while respecting our values ​​and our priorities.
  • 1.2 billion euros to deal with defense challenges, including €626 million to support capability development and research under the European Defense Fund (EDF), as well as €237 million to support military mobility.
  • 927 million euros to ensure the good functioning of the single market, including 593 million euros for the single market programme, and almost 200 million euros for work on the fight against fraud, taxation and customs.
  • 732 million euros for EU4Health to ensure a global health response to the needs of populationsand €147 million to the Union’s Civil Protection Mechanism (rescEU) to be able to rapidly deploy operational assistance in the event of a crisis.
  • 689 million euros for Securityincluding 310 million euros for the Internal Security Fund (ISF), which will fight against terrorism, radicalization, organized crime and cybercrime.
  • 138 million euros for secure satellite connections under the proposed new Union programme, the Union Secure Connectivity Programme.
  • The budgetary means for the European chip law will be made available within the framework of Horizon Europe and by redeployment from other programmes.

The draft budget for 2023 is part of the Union’s long-term budget as adopted by the Heads of State and Government at the end of 2020, including subsequent technical adjustments, seeks to translate its priorities into concrete annual deliverables. A significant part of the funds will therefore be devoted to the fight against climate change, in line with the objective of devoting 30% of the long-term budget and the NextGenerationEU recovery instrument to this political priority.

Background

The the draft EU budget for 2023 includes spending under NextGenerationEU, to be financed by borrowing on the capital markets, and expenditure covered by appropriations within the framework of the long-term budgetary ceilings, financed from own resources. For the latter, two amounts for each program are proposed in the draft budget – commitments and payments. “Commitments” refer to funding that may be agreed upon in contracts in a given year; and “payments” to the money actually paid. The proposed EU budget for 2023 amounts to €185.6 billion in commitments and €166.3 billion in payments. All amounts are in current prices.

Actual payments from NextGenerationEU – and the funding needs for which the European Commission will seek funding from the market – may differ and will be based on accurate estimates that change over time. The Commission will continue to publish semi-annual funding plans to provide information on its expected issue volumes in the coming months.

With a budget of up to 807 billion euros in current prices, NextGenerationEU helps the EU recover from the immediate economic and social damage caused by the coronavirus pandemic and enables us to respond to current and future crises such as the war in Ukraine. The temporary instrument contributes to building a post-COVID-19 EU that is greener, more digital, more resilient and better adapted to current and future challenges. Contracts/commitments under NextGenerationEU can be concluded until the end of 2023, payments related to the loan will follow until the end of 2026.

Mary I. Bruner