Revision of EU long-term budget in 2024: EU helps Ukraine
The war in Ukraine and inflation depleted the reserves in the EU's long-term budget, but the EU is stepped up to meet the challenges.
What is the EU long-term budget?
The EU long-term budget, also known as the Multiannual Financial Framework (MFF), is the seven-year financial plan that determines how much money the EU can invest in different priorities, such as supporting farmers, regions, businesses, students or researchers.
The long-term budget sets limits for the EU’s annual spending. The current framework covers the period 2021-2027. As it spans so many years, it was reviewed in 2023-2024 to see what changes were needed. The Parliament and the Council agreed on changes to the long-term budget.
Why the EU long-term budget was reviewed and adjusted
Many unforeseen developments took place since the EU adopted its current long-term budget at the end of 2020.
The war in Ukraine dramatically changed the geopolitical situation on the continent. The EU has sent financial and humanitarian aid and agreed to increase production of ammunition and missiles for Ukraine. Millions of Ukrainian refugees have sought protection in EU countries.
The rise of interest rates, initiated by central banks to stem inflation, led to a substantial increase in the EU's borrowing costs linked to the post-Covid recovery plan.
Other challenges facing the EU have included the persistent migration inflows and the need to secure the EU’s autonomy in critical industries.
Changes at the mid-term revision of the EU long-term budget
Here are some of the major changes that were made to the budget during the 2023-2024 revision:
- A total of €50 billion in support for Ukraine (including loans of €33 billion and grants of €17 billion).
- For migration and external issues, the budget revision allocated an additional €2 billion for migration and border management, and €3.1 billion for EU initiatives in neighbouring regions and across the globe. An additional €4.5 billion was redeployed from other EU external policy programmes.
- An additional €3.5 billion was set aside to counter unexpected problems until 2027. A total of €1.5 billion in new funds went to defence investments.
Some of the funds for the new priorities were added, while others were reallocated from existing programmes.
Legislative steps
Decisions on the long-term budget are taken unanimously by the heads of EU states and governments in the European Council, after obtaining the consent of Parliament. In practical terms, representatives of the Council and Parliament negotiate and reach an agreement. This deal was finalised in February 2024.
In February 2024, both Council and and Parliament voted in favour of approving the budget changes, which then took effect.
