The EU budget
Trade, environment, climate, digitalisation, agriculture, regional development and police cooperation are some of the areas in which the EU member states cooperate. In order to implement the policies that the EU countries have agreed on, funding is needed. All countries therefore contribute to the common EU budget. Most of the money from these contributions is returned to the member states in the form of support and subsidies. In order to reduce differences between countries, EU member states with a weaker economy receive more financial support than countries with a strong economy.
Facts about the EU budget
- The EU budget for 2025 amounts to approximately EUR 199 billion.
- During the period 2021–2027, sizeable resources are being invested in climate and digitalisation measures.
- The EU countries have introduced a special fund to deal with the consequences of the COVID-19 pandemic.
- EU member states with a weak economy receive more support than countries with a strong economy.
- Sweden pays a larger contribution than it gets back in the form of support and subsidies.
The EU budget is designed to reduce differences
It costs money to implement the activities that the EU countries have decided on together. The EU therefore has its own budget which is financed by means of annual contributions from the EU member states. This money is used, for example, to reduce wealth inequality between different member states.
A budget for joint initiatives in the EU member states
The money in the EU budget is used for many different areas. A large share of the money goes to research, climate measures, regional development and agricultural support. During the next few years, a significant amount of money will be used to deal with the financial consequences of the COVID-19 pandemic. Budget funds will also be used for the transition to a greener and digital Europe. Just over 90 per cent of the money in the EU budget is returned to the member states in the form of EU support.
The long-term budget establishes long-term goals
In order to obtain an overview of revenue and expenditure over a longer period, the EU has a long-term budget – the multiannual financial framework. This normally covers a period of seven years. It is determined by the Council of the European Union and approved by the European Parliament. The multiannual financial framework establishes how much money the EU may spend in total during the period, and the expenditure areas that make up the budget. Another decision also establishes the sources of EU revenue – the EU’s own resources. The decision regarding the EU’s revenue must be approved by the Riksdag and all the other national parliaments in the EU member states.
The current multiannual financial framework for 2021–2017 started to apply on 1 January 2021.
The long-term EU budget 2021–2027 and recovery package on the Council website
Recovery fund for the consequences of the COVID-19 pandemic
During the planning of the current multiannual financial framework, many member states were hard hit by the COVID-19 pandemic. The member states’ heads of government and state therefore decided to introduce a special recovery fund which will help to deal with the economic and social consequences of the pandemic in the member states.
For the recovery fund to start to apply, the Riksdag and all the other national parliaments in the EU had to approve the decision on EU revenue – the EU's own resources. This process was completed in May 2021.
About the recovery package for the EU on the European Commission website
The EU budget is financed by contributions – own resources
The EU budget is financed by means of own resources, which largely consist of contributions paid by the governments of the EU member states. The size of the contribution depends on each country's individual preconditions. Despite the extent of the EU budget, it only makes up a small share of the total economy of the EU member states.
In connection with the most recent decision on own resources, the European Commission was also given the opportunity to borrow money to finance the above-mentioned recovery package.
The various components of the contribution to the EU
- One part of the contribution is based on the size of the country's economy and gross national income (GNI).
- One part of the contribution is based on the country's value added tax (VAT) revenue.
- One part of the contribution is based on revenue that the country derives from customs duties.
- One part of the contribution is estimated on the weight of non-recycled plastic packaging waste in a country.
Greater financial equality among the EU member states
One of the ideas behind EU cooperation is to even out financial and social differences between the countries. A large share of the budget therefore goes to regional support, primarily to EU member states with a weak economy. Together with support to agriculture and fisheries and the environment and climate, regional support is the largest expenditure area. The EU also supports research, digitalisation, police cooperation, border control and student exchanges between universities in the EU member states.
The EU member states’ contributions and backflows
The money that is paid back to the member states from the budget in the form of various kinds of support is known as backflow. Countries with a weaker economy receive more in backflows than the amount they pay in their contribution to the EU, while countries with a stronger economy receive less than they pay in their contribution. This is because the EU aims to level out the differences between countries.
Sweden's contribution to the EU and support from the EU
Between 2019 and 2023, Sweden paid between 37–52 billion SEK per year to the EU and via the central government budget it received between SEK 12–18 in returns by way of EU subsidies. In addition, a number of authorities, organisations, universities and other institutions of higher education in Sweden also receive EU support via various EU projects and networks.
More on Sweden's contribution to the EU and support from the EU
The European Parliament and the Council decide
It is the two EU institutions the European Parliament and the Council of the European Union that determine the budget for each year. They hold negotiations on the EU’s priorities and how much these are allowed to cost. This may involve lengthy discussions both in the Council and in the European Parliament.
As regards the long-term budget, the European Council draws up the guidelines, but the Council of the European Union decides. The European Parliament must then approve the budget before it starts to apply.
If the member states are unable to agree in the Council of the European Union, the toughest issues may need to be resolved by the heads of state and government in the European Council.
The use of the EU's money is scrutinised
The European Commission must inform the European Parliament and the Council of how the money in the EU budget has been used. The implementation of the budget is scrutinised by the European Court of Auditors, the EU institution responsible for ensuring that the EU’s money is used and accounted for in the correct way. If everything has been managed correctly, this management is approved by the European Parliament, after the Council of the European Union has had a say.