The EU Signs Off Its Last Normal Budget: €199.7 Billion, and a Defence Line of €3.1 Billion

The Council and the European Parliament reached agreement on the EU's annual budget for 2027 on the night of 10 November, and the Commission published the full breakdown the following day. Total commitments are €199.71 billion. Total payments are €211.5 billion, which the Commission describes as almost 5 per cent above 2026.

The formal vote in plenary is scheduled for 24 November. Until then the deal is political, not legal, and the numbers below are the ones both institutions have signed up to in the conciliation text.

Where the money goes

Cohesion, resilience and values takes the largest share at €75.76 billion in commitments, of which €58.48 billion is economic, social and territorial cohesion and €17.28 billion is resilience and values. Natural resources and environment follows at €57.11 billion, including €40.42 billion of market-related expenditure and direct payments under the Common Agricultural Policy. The CAP line in total comes to €53.8 billion, with a further €0.8 billion for the maritime, fisheries and aquaculture fund.

Single market, innovation and digital is €22.01 billion; neighbourhood and the world is €15.54 billion; European public administration is €13.87 billion. Migration and border management is €5.81 billion, and the Commission notes that the first full year of the Pact on Migration and Asylum brings €1.1 billion in additional funding for migration management to member states. Thematic special instruments add €5.87 billion.

Payments are where the strain shows. Cohesion programmes are running at full speed at the end of the programming period, which is why payment appropriations outrun commitments by almost €12 billion. That gap is financed through higher gross national income contributions from member states. The Commission is explicit about it in its own questions and answers: rising payment needs mean rising national contributions, and the pattern is normal at the end of a long-term budget period.

The defence number

Security and defence is €3.08 billion in commitments. Within the defence-specific lines, €2.3 billion goes to addressing defence challenges: €1 billion for capability development and research under the European Defence Fund, €844 million for the new European Defence Industry Programme including the Ukraine Support Instrument, and €266 million for military mobility.

That is the whole of the Union's own defence spending for a year, at a moment when the Commission is telling governments that Europe needs to be ready for the battlefields of the next decade. The gap is filled elsewhere: through the SAFE instrument's loan capacity, through the European Peace Facility's off-budget logic, through national budgets, and increasingly through the debate about joint borrowing that the next framework will have to settle.

It is worth reading the €844 million EDIP line carefully. The Ukraine Support Instrument sits inside it, which means part of the Union's money for Ukrainian defence industrial capacity is booked as a line item in the EU's own defence programme, not as external aid. That is a quiet constitutional shift in how Ukraine is financed, and it will be harder to unwind than a bilateral pledge.

Ukraine inside the framework

The budget carries €4 billion in non-repayable support under the Ukraine Facility, complemented by €2.2 billion in loans, plus a separate €650 million line for the Ukraine Support Loan. The Commission frames the whole budget as including major support to Ukraine through both instruments.

The distinction matters for the argument now running between member states. Money inside the framework is money all 27 have already agreed to raise. Money promised bilaterally, or through a new instrument, is money that four governments have signalled they will not pay. Germany's demand, set out in Friedrich Merz's letter to António Costa, is that the next framework make contribution compulsory and universal. The 2027 budget shows how much can be delivered without reopening that question, and how far short of the €70 billion gap it falls.

What it signals for 2028-2034

Three things travel from this document into the next negotiation. First, cohesion remains the biggest single block and its payments are rising, which is exactly what the frugal coalition says has to stop. Second, defence inside the EU budget is small and fragmented across the EDF, EDIP and military mobility, which is the argument for a dedicated defence instrument in the next framework. Third, Ukraine is now partly a budget line, which makes any future settlement about its financing a question about the Union's own ceilings rather than about foreign policy.

Piotr Serafin, the budget commissioner, described the deal as maintaining continuity in the Union's actions in the last year of the current framework. Continuity is the right word. This is the budget of a Union that has not yet decided what it wants to be after 2027.

What to watch

The 24 November plenary vote, where the Parliament will approve a text it has spent the autumn criticising. Whether the €1.1 billion migration top-up arrives before or after the Commission's new return-hub proposals need funding. And whether the December European Council treats this budget as a template or as the thing to be dismantled.