Eu budget 2023: the European Commission proposed the draft budget

Trade and Economics - August 23, 2023

The EU budget is a tool that translates European policies into concrete realities. In order to finance activities that can improve collective welfare, all Member States contribute to the EU budget.
The budget is adopted following a democratic procedure: it is prepared by the European Commission, then discussed, amended if necessary, and approved by the EU Council and the European Parliament. In this way, all European institutions participate in the decision-making process.
Once adopted, it is managed jointly by the EU Member States and the Commission or directly by the Commission.

The EU Member States unanimously adopted a financial planning system that applies for a seven-year period. Currently, the reference period is 2021 to 2027.

The EU budget is adopted every year but has to be defined within the limits of the Multiannual Financial Framework (MFF). The Multiannual Financial Framework is a spending programme that sets the maximum annual amounts that the EU can spend in different areas of activity over a given period of seven years. It is therefore through this instrument that the foundations are laid for the EU’s political priorities for the next seven years.

For the period 2021-207, a total budget of € 2.018 trillion has been set aside. All these resources are cointained both in the budget of the MFF and also in the Next Generation Eu.

The main aim is to implement the modernisation process of the European Union with investments in research and innovation. Another theme in which the EU intends to invest also concerns the realisation of a green and digital transition. The EU budget 2021-2027 will also be spent on combating climate change and all its consequences. In addition, importance is given to the protection of biodiversity and gender issues. Digital transformation is also an important pillar in European policy, to which 20 per cent of the NextGenerationEU budget is allocated.

In particular, the NextGenerationEU is a temporary tool aimed at reviving and relaunching the European economy, in particular by making up for the losses caused by the Covid-19 pandemic that has affected the whole of Europe and the world since 2020. This tool is part of a Europe that wants to grow, and in particular it supports the ecological transition, the digital transition, macroeconomic stability and equity.

Until 2027, therefore, the priorities of the EU have already been defined.

Each year, however, the annual budget must be presented and approved so that these priorities can be pursued in the best possible way, with an appropriate allocation of resources that meets with the approval of all EU institutions

On 7 June 2023, the European Commission proposed an annual EU budget of €185.6 billion for 2023, supplemented by subsidies amounting to an estimated €113.9 billion within the framework of NextGenerationEU.

According to what the Commissioner Johannes Hahn, responsible for the EU Budget, said: “We are continuing to put forward extraordinary amounts of funding to support Europe’s recovery and to tackle current and future challenges. The budget remains an important tool the Union has at its disposal to provide clear added value to people’s lives. It helps Europe shape a changing world, in which we are working together for peace, prosperity and our European values”.

The draft budget intends to respond to the recovery needs of the Member States, and through this funding also intends to continue the process of modernisation of the European Union, in order to make it a strong and reliable partner.

The priorities on which the draft budget is based are the following ones:

The entries take into account the needs of a union that had recently weathered a global economic crisis, not without consequences for the economies of individual nations, and subsequently grappled with the pandemic, the war on Ukraine and a disproportionate increase in illegal immigration to its borders.

Recovery and resilience. €103.5 billion has been destinated for this to support the European economy and its recovery and growth after the pandemic crisis and to address the challenges posed by the war in Ukraine.

Common Agricultural Policy. The aim is to support farmers and all those involved in the fisheries, aquaculture, maritime affairs, agri-food sector, also in view of the possibility of possible shortages in food supply worldwide. The total budget allocated to this sector is € 54.7 billion (specifically € 53.6 billion for the Common Agricultural Policy and EUR 1.1 billion for the European Maritime, Fisheries and Aquaculture Fund).

Cohesion. € 46.1 billion will support the process of regional development and economic, social and territorial cohesion, together with support for infrastructure meeting the EU’s green transition criteria.

– €14.3 billion to support our partners and interests in the world, of which €12 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.5 for the Instrument for Pre-Accession Assistance (IPA III), and €1.6 billion for Humanitarian Aid (HUMA).

Research and innovation. In this, the role of the EU programme called Horizon Europe is crucial. To this programme should go € 12.3 billion of the total €13.6 billion for research and innovation.

European Strategic Investments. The total for this priority is € 4.8 billion. Specifically, € 341 million will be allocated to the European InvestEU fund for the key priorities (research and innovation, dual green and digital transition, health sector and strategic technologies), € 2.9 billion for the Connecting Europe Facility with the aim of improving cross-border infrastructure and € 1.3 billion for the Digital Europe programme to shape the digital future of the Union.

Social cohesion and values. Total of € 4.8 billion. In order to give people new opportunities for education and for mobility, 3.5 billion of the total goes to Erasmus+. 325 million to support the work of artists and creators across Europe and 212 million for the promotion of justice, everyone’s rights and fundamental values and principles.

Environment. A total of €2.3 billion is foreseen for this sector, divided as follows: €728 million for the LIFE programme, which supports the fight against climate change; €1.5 billion for the Just Transition Fund to ensure a sustainable green transition for all.

European Space Programme, €2.2 billion.

Borders. In order to protect our borders, the Commission intends to contribute with a total of €2.1 billion. This includes €1.1 billion for the Integrated Border Management Fund (IBMF) and €839 million for the European Border and Coastguard Agency (Frontex)

Migration issue. Almost all of the planned contribution of €1.6 billion will be allocated for migrants and asylum seekers, always within the law, values and priorities of the European Union.

Defence. €1.2 billion for capability development and research, as well as support for Military Mobility.

Single Market. €927 million to ensure the proper functioning of the single market, together with the development of various activities in terms of anti-fraud, taxation, and customs.

Health and Assistance. EU4Health is the programme to achieve a healthier Europe. In this vision, the Commission has decided to allocate € 732 million.

Security. € 689 million for security. The priority is to fight terrorism, radicalisation, organised crime and cybercrime.

Secure satellite connections. €38 million.

In addition to this, it is necessary to underline the fact that this budget also includes expenditure under NextGenerationEU, for a total amount of €113,9 billions.

The draft EU budget for 2023 is a crucial part of the long-term budget adopted by the European Union for the seven-year period from 2021. The main objective remains to transform what has been presented and what has been defined as priorities into a tangible and concrete result within one year, which is precisely the period to which the budget refers to. The Commission’s proposal will now have to be evaluated and approved by the other two European insititutions, that will finally decide whether this draft budget meets to the priorities of the European Union or not.