Intense deliberations on the EU’s next multiannual financial framework for 2028‑34 are currently under way. However, the positions of Member States are still very controversial. This regular article looks at how EU finances developed in the previous year and what net positions this resulted in for Member States.

As in the previous year, expenditure within the regular EU budget amounted to just over 0.8 % of EU gross national income (EU GNI) in 2025. The expenditure structure shifted towards spending on cohesion policy. In addition, the temporary off-budget entity, NextGenerationEU (NGEU), will continue to finance additional expenditure until the end of 2026. In 2025, just under 0.3 % of EU GNI went to Member States as NGEU grants. That was lower than in the previous year (just over 0.4 %). In particular, Member States made fewer calls on the Recovery and Resilience Facility (RRF), the main NGEU programme. For 2026, around one-third of the RRF grant allocation is still available for request (0.7 % of EU GNI). As things stand, the European Commission is likely to disburse most of these funds by the end of 2026.

Member States finance the EU budget mainly through contributions, which change broadly in proportion to GNI. As a result, contribution levels are similar across countries in terms of economic performance. By contrast, payments from the EU budget and from NGEU, as measured in terms of GNI, vary much more widely, resulting in different net positions of Member States. Germany was once again among the seven net contributors in 2025. Its net contribution was €26 billion, or just under 0.6 % of GNI. Among the 20 net recipients, Latvia received the highest net grants, at over 3 % of GNI.

NGEU is financed by EU borrowing. The EU budget has to date funded only the interest payments. From 2028 onwards, it is also intended to cover the repayment of the debt raised for the NGEU grants. After the end of the programme, this is expected to amount to around €420 billion (2.2 % of 2025 EU GNI). In its draft for the next seven-year financial framework starting in 2028, the European Commission estimates debt service totalling €149 billion (in 2025 prices). This corresponds to an annual average of 0.1 % of 2025 EU GNI. 

To finance debt service, Member States will have to either make higher contributions to the EU budget or reduce other expenditure within the EU budget. The deferral of repayments being discussed in some quarters would merely shift the burden into the future and narrow the scope for future action. Joint EU borrowing therefore does not solve distribution issues, but merely postpones them. These discussions highlight the limited overall willingness of Member States to pay higher net contributions to the EU or to forego net returns. Joint EU debt should be presented in a transparent manner and taken into account in the European fiscal rules. If debt levels rise at the EU level, national borrowing should decline accordingly.

The financial relationships between the Member States and the EU encompass both the regular EU budget and the temporary off-budget entity NGEU. The regular EU budget covers one calendar year and funds joint European tasks and programmes. Every seven years, Member States also set a multiannual financial framework (MFF) for that timespan. It defines focal points of spending and imposes ceilings on the ongoing national funding contributions to the annual EU budgets. The current MFF is for the period from 2021 to 2027. It accounts for around 1 % of EU GNI 1 per year.

NGEU temporarily supplements the regular EU budget and differs from it mainly in the way in which it is financed. Member States adopted NGEU in response to the COVID‑19 pandemic. Unlike the regular EU budget, they initially finance the agreed NGEU grants and loans via joint European borrowing. 2 As agreed, this is to be repaid from the regular EU budget at the start of the new financial framework in 2028. The bulk of NGEU funding is channelled through the RRF, which accounts for all NGEU loans and around 80 % of the grants. 3 The European Commission disburses the funds to the Member States when they submit payment requests and have achieved the agreed milestones and targets. 

NGEU will change the fiscal balances (surpluses and deficits) at the EU level far beyond the end of the programme. The regular EU budget is generally balanced. Credit-financed NGEU grants have led to deficits at the EU level between 2021 and 2026. Repayments of the debt raised for this purpose will begin from 2028 onwards. The EU budget will therefore have to generate surpluses until 2058 in order to make the repayments. Member States will have to provide the funds required for this as well as for the interest expenditure by paying higher contributions or by cutting EU budget expenditure elsewhere.

This regular article is aimed at presenting the financial relationships of the Member States in a transparent manner not too long after the end of the respective fiscal year. To this end, it would be helpful if the data were published as promptly and predictably as possible. Since the European Commission stopped reporting the net contributions to the EU budget itself, it has not published the underlying data on a fixed date. Previously, the data were released simultaneously with the publication of the annual financial report at the end of June. In recent years, the publication date has moved around and tended to get later and later. If the data were made available sooner, this would allow for more up-to-date reporting.

Expenditure within the regular EU budget rose in 2025. 4 It amounted to around €157 billion, compared with €146 billion in the previous year. After rounding, however, it amounted to 0.8 % of EU GNI in both years. Operating expenditure 5 amounted to €139 billion, while administrative expenditure was €13 billion. Debt service for NGEU grew significantly to €5 billion (2024: €2.1 billion).

The rise in operating expenditure was mainly driven by spending on cohesion policy, which increased significantly (+⁠ €8 billion) after a sharp decline in the previous year. It rose to around €43 billion, thus accounting for just under one-third of operating expenditure (see Chart 4.1). Agricultural expenditure, once again the largest spending category, was virtually unchanged at €56 billion. Together, the two policy areas accounted for 71 % of operating expenditure.

However, spending on cohesion policy was well below the level seen between 2021 and 2023. The renewed increase was probably mainly due to Member States making less use of RRF funds in 2025 than in the previous year. At the same time, the continued low level lines up with the typical disbursement pattern within a financial framework. Experience has shown that Member States call up more cohesion funding at the beginning and towards the end of a financial framework.

Member States’ contributions to the EU budget also rose (+⁠ €4 billion) owing to the higher expenditure volume. They amounted to roughly €132 billion in 2025. As usual, the largest share was attributable to GNI-based own resources (€102 billion). In addition, there were VAT-based own resources (€24 billion) and plastics own resources (€7 billion). Otherwise, the EU budget predominantly received customs revenue of €23 billion.

As usual, there was significantly less variation in Member States’ contributions than in EU budget grants (see Chart 4.2). Contributions are mostly based on Member States’ economic performance. By contrast, the return flows depend on the respective expenditure programmes, with economically weaker Member States (measured in terms of GNI per capita) generally receiving higher grants. 

The distribution of NGEU grants across Member States again varied widely in 2025. An amount of €49 billion, or just under 0.3 % of EU GNI, was disbursed in 2025. Of this amount, €40 billion was attributable to the RRF (including REPowerEU). As a percentage of their respective GNI, Bulgaria, Greece and Croatia received the highest grants (between 1.8 % and 1.1 %; see Chart 4.3). By contrast, Hungary, Germany, Denmark, Malta, Ireland and Lithuania each received less than 0.1 %.

The RRF is a key driver of the distribution of NGEU grants. It accounts for the largest share of NGEU grants. The large differences in the disbursement of RRF funds are due, firstly, to varying amounts of funding being allocated to the Member States. Secondly, Member States request the disbursements in line with their reform and investment progress. As a result, the funds are often disbursed in larger tranches rather than continuously (see Chart 4.3).

In total, Member States called up around 11 % of the allocated RRF funds in 2025 (see Chart 4.4). That was less than the average of previous years (14 %). Again, there were significant differences in the pace of disbursements between Member States. In 2025, four countries did not call up any, or any significant, funds (Hungary, Lithuania, Germany and Malta). By contrast, Austria received the most in relative terms, at 53 % of the funds allocated to it for the entire term. 

Cumulatively, only around two-thirds of the total RRF grants allocated had been disbursed by the end of 2025 (see Chart 4.4). The share of the funds disbursed up to then also continued to differ significantly between Member States. The amounts disbursed to Hungary were particularly small as the country had only received pre-financing up to that point. The Council had linked regular RRF disbursements to special milestones – in relation to the rule of law and the protection of the EU’s financial interests. 6 Hungary had not yet submitted any regular payment request by the end of 2025.

The payment flows described are reflected in the net contributions of the Member States. These constitute the difference between grants received and payments made by a Member State. 7 They therefore show the direct financial redistribution by the European budgets, but do not reflect the macroeconomic benefits or the total costs of EU membership. 

Looking at the EU budget and NGEU combined, seven Member States were net contributors in 2025 (see Chart 4.5 for the individual countries, broken down into EU budget and NGEU). Germany made the highest net contributions, at 0.6 % of GNI, followed by the Netherlands (0.4 %) and Denmark, France and Ireland (around 0.3 % each). 20 Member States were net recipients from the EU budget and NGEU. Latvia received the highest net grants, at over 3 %, followed by Greece and Bulgaria, at over 2 %, and Croatia, at 2 %. For Austria, Italy and Spain, NGEU reversed the sign of their net positions. Overall, they were net recipients, but net contributors to the EU budget.

The European Commission is expected to disburse most of the remaining RRF grants by the end of 2026. By 30 September 2026, all Member States had submitted their final payment requests. 8 The European Commission is now assessing whether they have fulfilled the agreed milestones and targets. If the requirements have been met, the European Commission can disburse the appropriate funds by the end of 2026. 9 After November 2025, all Member States made further adjustments to their recovery and resilience plans to avoid forfeiting the remaining funds. The European Commission had given Member States this additional flexibility, effectively lifting the programme’s time limit. 10 For example, Member States can make any remaining RRF resources available as capital to national development and promotional banks. These institutions can subsequently use the funds for additional eligible investments. 

At the start of the new financial framework in 2028, repayments of the debt raised for NGEU grants are set to begin from the EU budget. The European Commission is planning a total of €149 billion (in 2025 prices) for the NGEU debt service from 2028 to 2034. 11 This corresponds to an annual average of 0.1 % of 2025 EU GNI, or just over 9 % of the budget volume proposed by the European Commission. In current prices, it is planning to spend €24 billion per year on debt service. If interest costs rise even further beyond their currently expected level, repayments will be lower than planned. As a result, a larger share of repayments will be shifted into future financial frameworks. That the NGEU debt service would restrict future fiscal headroom was known when NGEU was adopted and does not come as a surprise. Member States now have to agree on whether they want to finance these resources by making higher contributions to the EU budget or by reducing other expenditure within it. For either variant, the debt burden will ultimately be borne by the population of the Member States.

The debt burden is one of the factors making negotiations on the next financial framework difficult and controversial. In July 2025, the European Commission proposed a financial framework totalling just under €2 trillion, or 1.26 % of EU GNI per year. Germany and other net contributors are now calling for significant cuts, especially in traditional spending on cohesion and agricultural policy. 12 At the same time, they want to give greater weight to spending on other priorities, such as competitiveness and defence, in the EU budget. No agreement has been reached so far.

If repayment of NGEU debt is postponed, this will shift burdens further into the future and could undermine credibility. Such a postponement is being discussed. However, deferring repayment will not reduce the burden, but instead allocate it to future budgets and exacerbate the financial problems there. There are no signs that the pressure on public finances in the EU will ease elsewhere in the future. On the contrary, public finances are likely to come under even greater pressure in future, for example as a result of demographic change and increasing geopolitical challenges. When agreeing on NGEU, Member States resolved that repayments should not be a burden in the current financial framework. Instead, repayment is to be addressed in the coming financial framework. The credibility of such repayment promises will be undermined if repayment is postponed before its financial burden has even been felt. 

The EU budget is to be geared more towards joint European tasks. However, this does not mean that the EU will have to take on additional debt. In some areas, there are good reasons for taking joint action at a European level. Examples include basic research, cross-border infrastructure, foreign policy and development aid, migration to the EU, border protection, energy security and climate action. It would therefore be welcome if these areas were to be given greater focus in the EU budget. The Member States will, however, be able to finance these tasks within the regular EU budget by reprioritising expenditure or making higher contributions. 

If the EU incurs debt under certain conditions, such as for NGEU, this should be reported in a transparent manner. For example, when they report the Maastricht debt level, the Bundesbank and the Dutch central bank also publish the national share of EU debt. 13  

In addition, European fiscal rules should also limit joint EU debt so that it does not endanger sound public finances. This is another reason for looking at the fiscal burden holistically. The additional EU debt will ultimately have to be serviced by the Member States. It therefore should not supplement national fiscal headroom. Instead, higher EU debt should lead to a corresponding reduction in national borrowing. 

A recent proposal from the Bundesbank shows how this can be achieved without revisiting the European fiscal rules, which have just been reformed. 14 In the case of EU borrowing, the proposal suggests that, where debt is not already included in national debt levels, Member States should transfer the corresponding volume of national bonds to the EU. This would make the fiscal burden of joint borrowing visible in the national deficit and debt ratios. In addition, national fiscal headroom would shrink automatically.

Council of the European Union (2022), Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Hungary, 5 December 2022.

De Nederlandsche Bank (2025), What is the Dutch share of EU debt?, 10 November 2025.

Deutsche Bundesbank (2026), Commentaries: Economic conditions and Public finances, Monthly Report, April 2026.

Deutsche Bundesbank (2025), EU finances: Member States’ financial relationships with the EU in 2024 and the multiannual financial framework for 2028‑34, Monthly Report, October 2025.

Deutsche Bundesbank (2024), EU budget and NextGenerationEU off-budget entity: Member States’ financial relationships in 2023, Monthly Report, September 2024.

Euronews (2026), Magyar says EU must decide whether to 'survive or win' and slams Brussels' lack of leadership, 31 August 2026.

European Commission (2026a),, Consolidated annual accounts of the European Union: Integrated Financial and Accountability Reporting 2025, Publications Office of the European Union, 1 July 2026.

European Commission (2026b), EU spending and revenue 2021‑2027, interactive chart showing the EU spending and revenue for the 2021‑2027 period by year and by country.

European Commission (2026c), Report from the Commission to the European Parliament and the Council on the implementation of the Recovery and Resilience Facility, Brussels, 7 October 2026.

European Commission (2025a), NextGenerationEU – The road to 2026, Communication from the Commission to the European Parliament and the Council, COM(2025) 310 final, Brussels, 4 June 2025.

European Commission (2025b), A dynamic EU Budget for the priorities of the future – The Multiannual Financial Framework 2028‑2034, COM(2025) 570 final, Brussels, 16 July 2025. 

European Court of Auditors (2026), Annual reports on the implementation of the EU budget and on the activities funded by the 9th, 10th and 11th European Development Funds (EDFs) for the 2025 financial year.

Frederiksen, M., F. Merz, R. Jetten, C. Stocker and P. Orpo (2026), Five EU leaders: Europe must spend better, not just more, Politico, 18 September 2026.

Lemmer, A., A. Mahle, K. Wendorff (2026), Mind the gap: Bringing EU debt into the Stability and Growth Pact, VoxEU, 22 October 2026.