The EU budget will continue to deliver benefits for Europe in 2025

The Court of Auditors (ECA) published its Annual Report, in which, for the nineteenth consecutive year, the EU’s annual accounts have been given a clean bill of health. The ECA confirmed that the collection of EU revenue was free from material error.

Key milestones for the EU budget in 2025:

Against a backdrop of geopolitical uncertainty, increased global competition and ongoing conflicts, including Russia’s continuing war of aggression against Ukraine, the EU budget remained a key tool for delivering on the Union’s priorities.

In 2025, the EU budget continued to play a vital role in European support for Ukraine. By the end of last year, the EU and its Member States had allocated more than €193,300 million in aid since the start of the war, of which €88,300 million was funded by the EU budget. This support covered humanitarian aid, crisis response, macro-financial assistance, budgetary support, and early recovery and reconstruction.

The EU’s competitiveness was also boosted by the 2025 EU budget through investments in strategic sectors, cross-border infrastructure, research and innovation, totalling €12.9 billion in 2025 for research and innovation. Between 2021 and 2025, the programme generated more than 22,500 peer-reviewed scientific publications, involved more than 130,000 researchers in capacity-building activities, and contributed to more than 10,000 innovative products and intellectual property applications. The programme also supported more than 10,000 SMEs and start-ups, including in areas such as artificial intelligence and advanced materials, during the same period. At the same time, €58,000 million in investment was mobilised, with €11,700 million in grants committed to projects focusing on decarbonisation, battery manufacturing and renewable hydrogen.

NextGenerationEU continued to support economic recovery through Member States’ reforms and investments under the Recovery and Resilience Facility. In 2025, the Commission assessed 34 payment requests totalling €87,300 million. Across the EU, this mechanism has had a real impact on people’s lives by backing ambitious investment agendas in key areas such as the green and digital transitions, healthcare, education and training, and support for businesses.

The budget also continued to support citizens and regions across Europe. In 2025, Member States and regions allocated €3.3 billion from cohesion policy funding to affordable and sustainable housing, €14.5 billion to climate change adaptation and disaster risk management, and €3.1 billion to water resilience. Between 2021 and 2025, the EU budget has funded an additional 1,434 megawatts of renewable energy capacity, broadband access for more than 335,000 homes and more than 1,000 kilometres of new, upgraded or modernised roads across Europe.

At the same time, in 2025, the Common Agricultural Policy continued to support rural livelihoods and productivity, and to foster dynamic rural economies through payments totalling 53,200 million euros, which benefited 5.5 million farmers.

In the field of security and defence, the EU budget helped to strengthen Europe’s capabilities and industrial base. In 2025, 63 projects were launched with over €1,000 million in EU funding, 38 per cent of which went to SMEs. The European Defence Fund allocated around 1,000 million euros to collaborative research, development and innovation in defence, including more than 140 million euros specifically for SMEs developing and testing innovative technologies. The ReArm Europe plan, adopted in 2025, could unlock up to 650.000 million euros of fiscal space through a 1.5 per cent increase in GDP for defence budgets, and includes up to 150,000 million euros in loans to address urgent defence investment needs and capability shortfalls.

In terms of humanitarian action, the EU allocated approximately 2,600 million euros in 2025 through the Humanitarian Aid Programme. This programme supported people affected by natural disasters, conflicts, displacement, food insecurity, extreme poverty, human rights violations and gender-based violence. Palestine was a particular priority, with €220 million committed to support services for the Palestinian people, the recovery and stabilisation of the West Bank and Gaza, and the private sector in Palestine.

The EU budget continued to provide clear added value through its support for cross-cutting priorities. In 2025, nearly 64,000 million euros (33 per cent) was allocated to climate objectives and more than 15,000 million euros (7.8 per cent) to biodiversity, meeting the targets of 30 per cent and 7.5 per cent respectively, as well as over €19 billion for digital priorities and nearly €38 billion for gender equality.

Strict controls safeguard the EU budget:

The Commission takes note of the ECA’s adverse opinion on the regularity of expenditure under the multiannual financial framework. The error rate estimated by the ECA is 3.8 per cent, comparable to last year’s figure (3.6 per cent) and significantly lower than in 2023 (5.6 per cent) and 2022 (4.2 per cent).

An error does not automatically imply fraud or waste. Most errors and irregularities are not fraudulent, and the projects in question continue to deliver positive results in line with the EU’s policy objectives.

The Commission and the ECA play complementary roles in ensuring the transparent and accountable use of EU funds. However, their estimates of the error rate are not directly comparable due to their different mandates.

To safeguard the budget, the Commission works closely with those implementing it on the ground. The Commission relies on thorough checks carried out by Member States and other implementing partners, in addition to its own checks and audits. Furthermore, the Commission promotes awareness of funding rules by engaging directly with beneficiaries of EU funds through campaigns, workshops and other outreach activities.

As regards cost-based programmes, the Commission estimates that it has once again met its objective of keeping the final error rate (i.e. the risk at closure), following all ex-post controls and the application of corrections, below 2 per cent.

In the case of performance-based programmes, the Commission calculates the proportion of expenditure presenting low, medium and high risk, and reports on this transparently, based on the assessment of the proper functioning of national governance systems for the Common Agricultural Policy 2023–2027, as well as on the achievement of expenditure milestones and targets relating to the mechanisms for Moldova, Ukraine and the Western Balkans. Overall, the Commission concluded that the budget for these performance-based programmes is well protected.

In 2025, as a result of its controls and audits, the Commission and the Member States implemented preventive and corrective measures totalling €9,000 million, including interruptions and suspensions of payments and financial corrections.

The Commission also considers that expenditure under the Recovery and Resilience Facility carries a low level of risk. The Commission obtains reasonable assurance of the satisfactory achievement of milestones and targets through comprehensive pre-payment checks (including the analysis of detailed documentation and, where necessary, real-time system checks and on-the-spot visits), as well as ex-post audits. If the Commission considers that the milestones and targets have not been satisfactorily met, it does not pay all or part of the financial contribution to that Member State.

Ensuring the reliability of the accounts and further mitigating risks:

The 2025 accounts were drawn up for the first time in the EU’s new-generation financial system, SUMMA, which aims to modernise, harmonise and standardise the EU’s financial processes. SUMMA incorporates systematic and rigorous controls to ensure that financial information is used accurately, reflects the underlying transactions and is fully consistent with the applicable accounting standards.

To ensure the smooth functioning of the EU’s anti-fraud system and effective cooperation with other key EU institutions involved in the fight against fraud, the Commission launched a review of the EU’s anti-fraud architecturein July 2025 . The results of this review will be presented at the end of 2026.

Background:

The publication of the ECA’s Annual Report and the presentation of the Integrated Financial and Accountability Reports (IFAR) package to the European Parliament mark the start of the annual assessment process, which analyses the financial management and achievements of the EU budget in 2025. The IFAR package comprises five Commission reports providing a comprehensive overview of how the EU budget was used.

 

More information: European Commission