Every year, the Bundesbank analyses how the European Union (EU) budget and the NextGenerationEU (NGEU) off-budget entity impact financially on Member States’ public finances. This exercise presents each Member State’s net contributions. These reveal the extent to which the European budgets represent a burden or a relief for Member States in financial terms. Lower-performing Member States are generally net recipients, because this is how the EU intends to support the economic catching-up process in these countries.

In 2023, the EU budget comprised expenditure of €165 billion, or just under 1% of EU gross national income (GNI). As usual, most resources went towards cohesion and agricultural policy. Alongside this were the NGEU grants, which amounted to €66 billion, or just under 0.4% of EU GNI. These also include, for the first time, NGEU grants to finance the energy transition in the economy (REPowerEU). For this purpose, in the wake of the energy crisis, Member States agreed on additional grants of €20 billion, funded through the sale of allowances under the EU Emissions Trading System (EU ETS).

Ten countries were net contributors to the EU budget and NGEU, led by the Netherlands, Ireland and Germany at just under 0.7% of their respective GNI. The remaining 17 Member States were net recipients. In proportion to GNI, Croatia received the most resources on balance, at more than 4% of its GNI.

The joint EU debt for NGEU grants is a burden on the Member States, which have to service that debt just as they do their national debt. That is why it is important to disclose the European debt, too, in a transparent, detailed and timely manner. It would be helpful if the figures were made available at the same time as the data on national government finances published in the notifications under the Excessive Deficit Procedure (EDP).

The Bundesbank regularly analyses how European budgets impact on the public finances of individual Member States. It does so by providing annual accounts of Member States’ net contributions to the EU budget and the NGEU off-budget entity. 1 The size and structure of these two European budgets must be agreed upon through mutual consent of the Member States. These decisions are usually complex and their financial implications are not always readily apparent.

Net contributions show whether intra-European grants out of European budgets represent a financial burden or relief for Member States on balance. A positive net contribution means that a Member State is a net recipient, i.e. it gets more out of the European budgets than it pays in. Conversely, a negative net contribution means that the Member State is a net contributor. Net contributions can be calculated for NGEU as well. As the Member States are financing NGEU initially through joint borrowing, the financing burden depends on each Member State’s future share of NGEU debt service.

The regular EU budget is financed through current contributions by Member States. These decide on the amount and allocation of expenditure every seven years in negotiations on the multiannual financial framework (MFF). The current MFF runs from 2021 to 2027. The bulk of the expenditure goes to Member States in the form of grants, whilst a small share is used to fund joint spending, such as on border protection or humanitarian aid, for example.

On the expenditure side, the present article considers only operating payments, and only those that go to the EU Member States. One notable exception here is administrative expenditure. The EU budget also funds grants to countries outside the EU for development and humanitarian aid, for example. These payments are likewise not included in the analysis.

Countries with lower economic performance (measured in terms of GNI 2 per capita) generally receive disproportionately high grants out of the EU budget. This expenditure profile essentially determines the net contributions to the EU budget. This is because the Member States’ contributions to the EU budget are roughly proportional to their economic performance.

On the revenue side, this article only factors in current payments by Member States into the EU budget. Customs receipts are another source of revenue for the EU budget. These are collected at the EU’s external borders, however, which is why they cannot be attributed to the Member States. There are other revenue items as well, such as receipts from fines for violating EU competition law or fines paid by Member States.

Unlike the EU budget, NGEU is financed initially via joint European debt taken out by the European Commission. The off-budget entity supplements the regular EU budget for a limited period of six years from 2021 to 2026. Adopted by Member States as a one-off crisis measure in response to the coronavirus pandemic, NGEU comprises grants and loans to EU countries. The centrepiece of NGEU is the Recovery and Resilience Facility (RRF). It accounts for all of the loans and around 80% of the grants. The remaining 20% is covered by instruments within the regular EU budget.

Overall, NGEU comprises grants and loans totalling €730 billion, which are disproportionately disbursed to Member States with below average per capita GNI. 3 Grants of up to €420 billion and loans of €390 billion were allocated initially. Member States did not draw down the available loan volume in full, requesting only €290 billion. 4 In the context of the energy crisis, RRF grants of around €20 billion were added for REPowerEU (see the supplementary information on REPowerEU).

In order to obtain the RRF resources, Member States need to satisfy certain requirements. To this end, they have each agreed national Recovery and Resilience Plans (RRPs) with the European Commission. Member States were normally able to draw down up to 13% of the allocated grants in the form of pre-financing. To obtain any further resources beyond that, they must demonstrate that they have reached their agreed milestones.

To disclose the net contributions resulting from NGEU grants, it is necessary to make assumptions. The Bundesbank assumes that Member States fund the debt taken out for this purpose in proportion with their respective GNI shares. This is a reasonable financing key because Member States currently fund additional expenditure out of the EU budget in accordance with their GNI shares. And it has been agreed that the NGEU debt will be serviced out of the EU budget. The net contributions calculated in this manner are the same as if the Member States funded NGEU annually via the regular EU budget.

The EU budget for 2023 comprised expenditure of around €165 billion, which was €3 billion less than in the previous year. This equated to just under 1% of EU GNI. Just over €11 billion of that figure went towards administrative expenditure. That is just under 7% of total expenditure. Expenditure on servicing NGEU debt came to €700 million.

Operating expenditure stood at €153 billion (net of administrative expenditure and NGEU debt service). As in the previous years, just over one-third of this amount was spent each on cohesion policy and agricultural policy (see Chart 5.2). 5 The remaining amount of nearly €40 billion was distributed across the areas of research and infrastructure, external action, and security and Union citizenship. Just under €20 billion of the operating expenditure went to recipients outside the EU, mainly in the field of external action.

The amounts of spending that went to Member States differed significantly across countries again in 2023 (see Chart 5.3). In relation to their respective GNI, Croatia and Latvia received the most resources, at more than 3½%, while the Netherlands, Germany, Sweden, Denmark and Austria received the least, at less than ½% of their GNI.

Member States’ payments into the EU budget came to roughly €130 billion in 2023. On (unweighted) average, Member States paid just over 0.8% of their respective GNI into the EU budget (see Chart 5.4). 6 Luxembourg was an outlier to the upside, at 1.3% of its GNI, after it had to make substantial backpayments of GNI and VAT own resources for previous years because the assessment bases had been revised. Disregarding this outlier, however, the gap between the countries with the lowest and highest payments was only just under 0.4 percentage point. It was therefore roughly on a par with other years. At €20 billion, customs revenue was down by nearly €4 billion on the previous year. That decline can be explained, at least in part, by reductions in tariffs. 7 However, it also represents a correction of the previous year’s especially high customs receipts. In 2022, imports from third countries were particularly high in terms of value, not least because Member States substituted cheap Russian gas and oil after their import was banned by the EU.

In 2023, disbursed NGEU grants totalled €66 billion, or just under 0.4% of EU GNI, with €48 billion of that figure attributable to the RRF (see Chart 5.5). In relation to their respective GNI, Croatia, Portugal and Greece received the most NGEU resources, at more than 1.5%, while Ireland, the Netherlands, Belgium, Sweden and Finland each received less than 0.1%. The differences are also due to the fact that the allocated RRF grants are paid out at different speeds.

Of the allocated resources, 13% were disbursed as RRF grants in 2023, like in the two previous years. Again, there were significant differences across countries. While nine countries received no RRF grants at all, Estonia, France and Lithuania each obtained more than one-quarter of the total resources allocated to them. Eleven countries received grants for the REPowerEU chapter for the first time: Austria, Czechia, Denmark, Estonia, France, Lithuania, Malta, Poland, Portugal, Slovakia and Slovenia.

At the half-way point of the programme, significantly less than half of the available RRF resources have been disbursed (see Chart 5.6). By the end of 2023, the Member States had, in total, requested just 40% of the RRF resources. Outflows will need to pick up pace to prevent the resources from expiring, because the European Commission is only allowed to disburse them up until the end of 2026. This holds particularly true for countries that had requested no or very little RRF resources by the end of 2023 (Ireland, the Netherlands, Sweden, Hungary and Poland) or only the pre-financing (Belgium and Finland). Germany, meanwhile, had drawn down 21% of the allocated resources by the end of 2023; this does not yet include any funds for REPowerEU. Only Croatia, France and Italy had requested more than half of the resources allocated to them by the half-way point of the programme.

Looking at the EU budget and NGEU as a whole, ten countries were net contributors in 2023 (see Chart 5.7). Net payments were highest in the Netherlands, Ireland and Germany, at just under 0.7% of GNI. Besides these countries, Finland, Sweden, Denmark, Luxembourg, Austria, France and Belgium were net contributors. With the exception of France and Belgium, these countries made net contributions to both the EU budget and NGEU. By contrast, France was a net recipient of NGEU resources and Belgium was a net recipient of resources from the EU budget.

The remaining 17 countries were net recipients from both budgets. Of these countries, Croatia received the highest net grants, at over 4% of GNI, followed by Greece, Slovakia and Lithuania, at more than 3%. These countries were net recipients of resources from both the EU budget and NGEU, as were Latvia, Estonia, Romania, Portugal, Czechia, Slovenia, Malta and Spain. By contrast, Hungary, Bulgaria, Poland and Cyprus were net recipients only from the EU budget, but were net contributors to NGEU. As in the previous two years, Italy was the only Member State to rank among the net recipient countries only on account of NGEU.

The EU budget has a direct impact on the revenue and expenditure sides of Member States’ public finances. NGEU grants, meanwhile, currently affect only the revenue side. This is because, all other things being equal, the NGEU grants received by a country reduce its deficit. At the same time, a deficit is accrued at the European level. The debt taken out for this deficit is recorded at the European level and increases debt there.

Member States are ultimately burdened with the European debt just as they are with their national debt. That is why this debt has to be taken into account when analysing national public finances. It was for this reason that the Bundesbank reported the European debt attributable to Germany together with the German Maastricht debt level in 2023. 8

To make the total debt burden visible, it is important for the European debt to also be disclosed in a transparent, detailed and timely manner. It is to be welcomed that Eurostat published granular data on European debt for the first time in December last year. At first, however, data were only available for 2021 and 2022, which is why the Bundesbank estimated European debt for 2023 so that it could be counted towards Germany’s Maastricht debt level. 9 In July, Eurostat published the figures for 2023 (see the supplementary information on the Maastricht debt of EU institutions in 2023). It would be helpful going forward if these figures were made available together with the Maastricht data for national public finances in the spring.

Busch B., B. Kauder and S. Sultan (2024), The EU and money: Who pays, and who gets?, IW-Report, 34/2024.

Deutsche Bundesbank (2024a), German general government debt up in 2023 by €62 billion to €2.62 trillion, debt ratio down from 66.1% to 63.7%, press release of 28 March 2024

Deutsche Bundesbank (2024b), The Maastricht debt of the EU institutions and its fiscal implications for Germany, Commentaries, Monthly Report, April 2024.

Deutsche Bundesbank (2023), Member States’ financial relationships with the EU budget and the NextGenerationEU off-budget entity in 2022, Monthly Report, October 2023, pp. 79‑86.

Deutsche Bundesbank (2022), Member States’ financial relationships with the EU budget and the Next Generation EU off-budget entity in 2021, Monthly Report, October 2022, pp. 35‑46.

European Commission (2024), European Commission, Directorate-General for Budget, Consolidated annual accounts of the European Union: Integrated financial and accountability reporting 2023, Publications Office of the European Union, p. 141.