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Long-term EU budget 2014-2020

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Multiannual financial framework 2014-2020

The Council adopted the regulation on the current multiannual financial framework (MFF), the EU's long-term budget, on 2 December 2013. It applies from 1 January 2014. 

The regulation sets the limits, or ceilings, for the EU’s expenditure – as a whole and for key areas.

Revision of the 2014-2020 MFF 

A proposal to revise the current MFF is ongoing to allow for additional spending in 2020 to tackle the COVID-19 crisis.

The MFF regulation has been revised twice before, in 2015 and in 2017.

In 2015, it was amended due to the late adoption of EU programmes managed together by the European Commission and the member states. €21.1 billion of unused commitments from 2014 were transferred to subsequent years.

In 2017, a series of changes were introduced as part of the compulsory mid-term review of the MFF. One aim was to strengthen the capacity of the EU budget to react to unforeseen events. Another was to further orient the budget towards growth and jobs, and address the migration crisis without modifying MFF ceilings.

Overall spending limits

The MFF for 2014-2020 enables the European Union to spend up to €959.51 billion in commitments and €908.40 billion in payments over the course of its duration (all amounts on this page are indicated in 2011 prices, excluding technical adjustments).


This is less than under the MFF for 2007-2013. The reduction reflects the Council's desire to take into account the significant pressure on member states' budgets after the financial crisis.

Ceilings for main areas of expenditure

The EU's expenditure for 2014-2020 is divided into six broad categories, or "headings".

The categories of spending and the respective ceilings for EU spending (commitments) are as follows:

1. Smart and inclusive growth

1a. Competitiveness for growth and jobs 

Expenditure ceiling: €125.61 billion (increase of more than 37% compared to the previous MFF)

EU funding under this subheading includes:

  • support for research and innovation
  • investment in trans-European networks
  • development of small and medium-sized enterprises (SMEs)

1b. Economic, social and territorial cohesion 

Expenditure ceiling: €324.94 billion.

It is aimed at reducing disparities between the levels of development of the EU's regions and supporting the EU’s cohesion policy.

2. Sustainable growth: natural resources

Expenditure ceiling: €372.93 billion

EU funding under this subheading includes:

  • the common agricultural policy (CAP)
  • the common fisheries policy
  • environmental action

3. Security and citizenship

Expenditure ceiling: €15.67 billion

The measures financed include actions related to:

  • asylum and migration
  • external borders
  • internal security

4. Global Europe

Expenditure ceiling: €58.70 billion

This expenditure is dedicated to the EU's action at international level, including humanitarian aid and development assistance. The exception is the European Development Fund which receives direct financial support from member states.

5. Administration

Expenditure ceiling: €61.63 billion

This amount has been cut by €2.5 billion compared to the previous MFF as a result of the EU's effort to consolidate public finances.

6. Compensations

€27 million was made available in 2014 to ensure that Croatia does not contribute to the EU budget more than it benefits from it during the first year following its accession to the European Union.

Special instruments

Emergency aid reserve

The annual amount of the reserve is €280 million.

The reserve is used to finance humanitarian aid, civilian crisis management and protection operations in non-EU countries in order to cope with unforeseen events.

EU solidarity fund

Ceiling: €500 million

The fund is designed to provide financial assistance in the event of a major disaster in a member state or a country holding accession negotiations with the EU.

In March 2020, the Council amended the scope of the EU Solidarity Fund to include public health emergencies. This would help member states and accession countries meet people's immediate needs during the coronavirus pandemic.

Flexibility instrument 

Ceiling: €471 million

This instrument is used for clearly identified needs that cannot be financed within the limits of the MFF ceilings.

European globalisation adjustment fund

It can mobilise up to an annual amount of €150 million.

The fund is intended to help workers who have been made redundant - as a result of either major structural changes in world trade patterns or the global financial and economic crisis - in their efforts to find new employment.

Contingency margin

This is a last-resort instrument to react to unforeseen circumstances. It amounts to 0.03% of the EU's gross national income, representing around €4 billion.

Any amounts made available are fully balanced out by a corresponding lowering of MFF expenditure ceilings for the current year or future years. 

Specific flexibility to tackle youth unemployment and strengthen research

Reprioritisations allowed for spending an additional €2.543 billion on youth unemployment and research.

The scheduled amount is fully balanced out within and/or between headings in order to leave the total annual ceilings and the total allocation per heading unchanged.

EU revenue: own resources 2014-2020

The current own resources decision was adopted by the Council on 26 May 2014.

According to these rules, the EU may raise own resources for payments up to the limit of 1.20% of the sum of all the member states' gross national income (GNI).

For the current seven-year budgeting cycle, the following types of own resources have been established:  

  • traditional own resources: mainly customs duties and sugar levies 
  • VAT-based own resource: a uniform rate of 0.3% is applied to the value added tax base of each member state, with the taxable VAT base being capped at 50% of GNI for each country
  • GNI-based own resource: resulting from a uniform rate applied to the gross national income of member states; this rate is adjusted every year in order to balance revenue and expenditure

Collection costs

EU member states are responsible for the collection of traditional own resources and making them available to the Commission.

During the 2014-2020 period, they retain 20% of traditional own resources paid to the Commission by way of collection costs.

Corrections

Some countries receive reimbursements ⁠– or rebates ⁠– that serve to reduce the difference between what they pay into the EU budget and what they receive from it. The corrections for the 2014-2020 period are detailed below.

The UK correction: worth €5 billion in 2018

The UK is reimbursed 66% of the difference between its contribution to the EU budget and the amount it gets back from the budget.

The remaining EU member states share the cost of the UK correction in proportion to their relative share of the EU's GNI. However, 'rebates on the rebate' - as they are commonly known - have been granted to four member states:

  • Germany
  • Austria
  • the Netherlands
  • Sweden

Since 2002, these member states are paying only 25% of their normal financing share of the UK correction. 

Lump-sum corrections 

Lump-sum corrections – or reductions on the annual GNI-based contributions – have been granted to four member states during the 2014-2020 period (in 2011 prices):

  • Denmark – €130 million
  • the Netherlands – €695 million
  • Sweden – €185 million
  • Austria – €30 million in 2014, €20 million in 2015 and €10 million in 2016

Reduced VAT rate 

A reduced VAT rate – 0.15% instead of 0.3% – applies for three member states:

  • Germany
  • the Netherlands
  • Sweden

See also

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