Komisjoni teatis - COM(2026) 824

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EUROPEAN COMMISSION

Strasbourg, 16.6.2026

COM(2026) 824 final

ANNEX 1

ANNEX

to the

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE

COUNCIL AND THE COURT OF AUDITORS

Annual Management and Performance Report for the EU Budget – 2025 financial year

3

Contents

ANNEX 1 – PERFORMANCE OF THE EU BUDGET IN 2025 ....................................................................................... 5

1. EU budget performance monitoring ........................................................................................................................................................ 7

2. EU budget support for reforms ................................................................................................................................................................ 12

3. EU budget supporting the EU’s political priorities in 2025 .................................................................................................... 18

4. Horizontal policy priorities in the EU budget ................................................................................................................................... 48

Annex 1 – Performance of

the EU budget in 2025

Annex 1 – Performance of the EU budget in 2025

7

1. EU budget performance monitoring

The EU budget is at the heart of EU policy action. Over the decades, it has helped improve the quality

of life and livelihoods of people within the EU and beyond. It drives investment in the future, for a cleaner,

digital and more competitive Europe. At the same time, it has provided a vital lifeline in times of crisis: it

helped to overcome a pandemic and save millions of jobs during the lockdowns, assisted people and

companies in getting through energy crises and is providing vital and reliable support for Ukraine in the face

of Russia’s unprovoked and unjustified war of aggression.

The EU budget is an essential tool to deliver on the EU’s priorities. Through its programmes, the

budget supports the EU’s internal and external policies. It creates EU added value by delivering results that

would not be achievable through uncoordinated national spending. EU programmes are tailored to unlock

synergies, catalyse private and public funding and provide a coordinated boost to the EU’s priorities.

Budget implementation in 2025

In 2025, the EU’s long-term budget (the multiannual financial framework) and NextGenerationEU

continued to prove their capacity to underpin the EU’s policy response to multiple crises – such as

Russia’s war of aggression against Ukraine, the energy crisis, supply chain disruptions, unprecedented natural

disasters and humanitarian crises – while at the same time remaining instrumental to the delivery of the

Union’s longer-term priorities. To achieve this, EUR 206.5 billion was committed in 2025 from the EU

budget (1)to promote the EU’s sustainability, competitiveness and prosperity, in particular by investing in the

green and digital transitions. This investment will strengthen the resilience of the EU’s social market economy,

foster job creation and help to build a fairer, more sustainable future for all Europeans.

Multiannual financial framework: 2025 EU budget commitment appropriations by budget

heading (million EUR)

Source: European Commission.

(1) This amount includes EUR 190.9 billion from the final adopted budget; EUR 1.6 billion from appropriations carried

over or made available again from 2024; and EUR 14.1 billion from appropriations stemming from assigned revenues (of which EUR 0.4 billion from NextGenerationEU).

13% 38% 28%

2% 1%

10% 4%4%

Single market, innovation and digital EUR 27 095

Total EUR 206 542

Cohesion, resilience and values EUR 78 884

Natural resources and environment EUR 57 658

Migration and border management

EUR 4 738

Neighbourhood and the world EUR 19 645

Security and defence EUR 2 666

European public administration EUR 8 381

Outside MFF and special instruments

EUR 7 474

Annex 1 – Performance of the EU budget in 2025

8

The state of implementation varies across EU programmes. In their fifth year of implementation,

programmes under direct and indirect management made substantial progress towards achieving their

specific objectives. For shared management programmes, such as under the cohesion policy funds, the

implementation of the 2021-2027 programmes significantly accelerated in 2025. As of the end of 2025,

Member States had selected operations amounting to 64% of their European Regional Development Fund,

Cohesion Fund, Just Transition Fund (including Interreg Europe) and European Social Fund Plus allocation. The

midterm review of cohesion policy programmes in 2025 opened up an opportunity to ensure support to the

most pressing priorities.

In total, EUR 34.6 billion of cohesion policy funds have been reallocated to EU strategic

priorities in 25 Member States:

• EUR 15.2 billion (or 43% of the total) for competitiveness (with the strategic technologies for

Europe platform (STEP) accounting for EUR 15.1 billion);

• EUR 11.9 billion (34%) for defence;

• EUR 3.3 billion (close to 10%) for housing;

• EUR 3.1 billion (9%) for water investments; and

• EUR 1.2 billion (slightly above 3%) for energy security.

NextGenerationEU further boosted the EU budget capacity to support Europe’s economic

recovery with a long-lasting growth impact, and a strong focus on the digital and green

transitions. From 2021 to 2026, the Recovery and Resilience Facility (RRF), which is the core of

NextGenerationEU, is providing EUR 577 billion of funding in grants and loans to Member States (2), including

EUR 16.4 billion funded with revenue from the EU Emissions Trading System and transfers from the Brexit

Adjustment Reserve. In 2025, EUR 95.8 billion of NextGenerationEU funds were disbursed, mostly driven by

the payments under the RRF amounting to EUR 87.3 billion (EUR 40.1 billion in non-repayable support and

EUR 47.2 billion in loans). This brought the total disbursements under the Facility to EUR 393.4 billion, divided

into EUR 237.5 billion in non-repayable support (66% of the total EUR 360 billion RRF non-repayable support

envelope at end 2025) and EUR 155.9 billion in loans (56% of the total EUR 277 billion RRF loan envelope at

the end of 2025).

In 2025, EUR 5.5 billion was paid for commitments made under several EU programmes in the previous

programming period (2014-2020). Most of these payments were associated with cohesion policy (including

the European Regional Development Fund, the Cohesion Fund and the European Social Fund), along with the

European Agricultural Fund for Regional Development and the Connecting Europe Facility.

Monitoring performance

In 2025, EU programmes continued to progress towards achieving their key objectives and

delivering value for all EU citizens. Progress towards the programme objectives is monitored most

notably by means of performance indicators. For those indicators with defined targets and for which

implementation progress allowed an assessment, the vast majority (79%) were considered to be on track to

reach their targets by the end of the implementation of the programmes. Detailed information at the

programme level is available in the programme performance statements, Annex 4 to this report.

(2) As of January 2026.

Annex 1 – Performance of the EU budget in 2025

9

Breakdown of 2021-2027 core performance indicators by progress towards targets

NB: The graph displays progress as measured by the share of the core performance indicators that are on track to meet their respective

targets. It does not include indicators for which the results do not allow an assessment at this stage.

Source: European Commission.

Spending must address the challenges and deliver the expected results on the ground. The table

below shows examples of results from the EU budget achieved under both the 2014-2020 and the 2021-

2027 multiannual financial frameworks.

Examples of results achieved

Climate (3)

• 42 gigawatt-hours of estimated energy efficiency savings per year from private and

public buildings by the InvestEU programme,cohesion policy funds, the LIFE programme and the

Recovery and Resilience Facility, in the 2021-2025 period.

• 124 million tonnes of carbon dioxide equivalent avoided per year, of which almost half

was through NextGenerationEU green bond investment. Additionally, 962 million tonnes of

carbon dioxide equivalent reduction are expected from the Innovation Fund projects, ongoing or

completed at the end of 2025, during their first 10 years of operations.

• 108 additional gigawatt of renewable energy capacity was installed by the InvestEU

programme, cohesion policy funds, the Just Transition Mechanism and the Recovery and Resilience

Facility, in the 2021-2025 period.

Digital

• 20 million additional dwellings were provided with internet access via very-high-capacity

networks by the Recovery and Resilience Facility, InvestEU and cohesion funds by the end of 2025.

• 10 362 terabits per second of additional capacity were created by deployed backbone

networks, including submarine cables, by the Connecting Europe Facility by the end of 2025.

Employment

• More than 50 million individuals were supported in obtaining skills relevant to employment

and 360 000 jobs were created or maintained between 2021 and 2025 with support from the EU

budget (4).

• Around 16 million people participated in European Social Fund Plus activities to improve

their employment situation by the end of 2025.

(3) Aggregated data of core performance indicators, reflecting estimated and expected impact from the EU budget

project as from 2014. (4) Financed by the following 2021-2027 programmes: Fiscalis; customs programme; European Maritime Fisheries and

Aquaculture Fund; Recovery and Resilience Facility; Euratom; European Social Fund Plus; Just Transition Mechanism; Erasmus+; European Globalisation Adjustment Fund for Displaced Workers; creative Europe; European Solidarity Corps; justice programme; Asylum, Migration and Integration Fund; Internal Security Fund; Horizon Europe; InvestEU; single market programme; digital Europe programme; regional policy; European Agricultural Guarantee Fund.

79% 15% 6%

On track Moderate progress Deserves attention

Annex 1 – Performance of the EU budget in 2025

10

The next section of this Annex focuses on the EU budget support for reforms. The third section of this annex

describes how EU programmes have contributed to political priorities. The fourth section of this annex, on

horizontal policy priorities in the EU budget, provides information at the EU budget level on the financing of

initiatives relating to climate, biodiversity, gender equality, the digital transition and the sustainable

development goals (SDGs) (5). Annex 4, Programme performance statements, provides a detailed analysis of

the individual programmes and their performance, presented as a website to enhance reader friendliness.

Making performance information more reliable

The European Commission places great emphasis on the reliability of its performance

information and continually works to further improve its already robust processes for

performance reporting. To maintain high standards, data on core performance indicators are recorded and

managed through a dedicated SAP-based database that incorporates automatic quality control rules to

strengthen data quality and reliability. In addition, climate-related contributions from the EU budget are

directly estimated using data extracted from the Commission’s accounting system, ensuring traceability and

precision.

In 2025, the Commission continued to implement and consolidate a strengthened control

approach to ensure the reliability of performance information on EU programmes. Commission

departments continued to report in their annual activity reports for 2025 (which are an important source of

information for this annual management and performance report) on the results of their controls, based on

the specific guidance and requirements issued in 2023 in response to internal and external audit

recommendations. In 2025, no major shortcomings were reported with regard to the reliability of the

performance information for their respective EU programmes.

Performance framework for the 2028-2034 long-term budget

In 2025, the Commission adopted a proposal for a robust and future-proof long-term budget for

the 2028-2034 period. As part of the modernisation of the EU budget, it introduces for the first time a

regulation establishing a common performance framework applicable to all programmes: the ‘Performance

Regulation’ (6).

The Performance Regulation operationalises the requirements introduced in Regulation (EU,

Euratom) 2024/2509 (the 2024 Financial Regulation), and addresses key lessons learnt from the

2021-2027 period. These include the heterogeneous application of horizontal principles across

programmes, such as the ‘do no significant harm’ principle and gender equality; the fragmentation in the

definition of performance indicators, which has created complexity and made it difficult to aggregate and

monitor results; inconsistencies in the expenditure tracking methodologies; and the multitude of performance

reports, which has increased complexity and reduced transparency.

The proposed Performance Regulation equips the future budget with a simpler, more robust and

unified performance framework to monitor how the budget is spent and the results it achieves.

(5) As provided for in point 16(d–g) of the interinstitutional agreement for the 2021-2027 multiannual financial

framework. (6) Proposal for a Regulation of the European Parliament and of the Council establishing a budget expenditure tracking

and performance framework, along with other horizontal rules for the Union programmes and activities, COM(2025) 545 final of 16 July 2025, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A52025PC0545&qid=1753797488776.

Annex 1 – Performance of the EU budget in 2025

11

This will increase transparency, accountability and consistency, reduce administrative burden and ensure more

effective delivery of EU priorities.

Harmonised horizontal

provisions and

principles

A single approach to

implement climate and

environment, the do no

significant harm

principle, social policies

and gender equality

Common methodology

to track EU budget

expenditure

A single methodology

to monitor the

expenditure supporting

climate mitigation,

climate adaptation,

environment and social

objectives

Common list of

performance indicators

Streamlined output and

result indicators,

moving from over

5 000 to around 900

indicators, and allowing

aggregation at the EU

budget level

A single report on

performance

From 32 programme-

specific reporting

requirements to a single

performance report: the

Annual Management and

Performance Report

The single gateway

portal

Merging over 30 portals

and dashboards into a

single entry point for

funding opportunities and

EU budget performance

information

Streamlined

evaluations

Implementation report

replacing midterm

evaluation

The proposed Performance Regulation also includes the ‘single gateway’ portal, which will provide a single

entry point for EU funding opportunities and for performance information, which is currently spread across

multiple platforms. The portal will enhance accessibility and transparency for potential beneficiaries and users

of information on the implementation and performance of the EU budget.

Annex 1 – Performance of the EU budget in 2025

12

2. EU budget support for reforms

The EU budget supports reforms alongside investment in Member States and partner countries.

While investment finances tangible projects that promote growth and development, reforms serve as

enablers, helping enhance the impact and effectiveness of investment, and act as catalysts for change and

for aligning policies with the EU’s strategic priorities.

Within the EU, the synergy between reforms and investments is particularly embodied in the

Recovery and Resilience Facility, where disbursements are based on the achievement of predefined

milestones and targets. In addition, several EU programmes have built-in conditionalities to ensure that EU

money is spent effectively and in line with broader EU objectives. EU programmes providing funding to

Member States or regions, namely under cohesion policy, have strengthened the link with EU priorities in

various forms. Financing from the EU budget should contribute to these shared priorities to deliver EU added

value. Where Member States need support, the Technical Support Instrument provides tailored expertise and

guidance to design and implement complex reforms. In external action, the EU uses conditional budget

support and investment facilities to promote reforms and investments in neighbouring and candidate

countries, along with other partner countries. In partner countries, the joint support for reforms and

investments is particularly relevant in the Instrument for Pre-Accession Assistance, the Ukraine Facility, the

Reform and Growth Facility for the Western Balkans, and the Reform and Growth Facility for Moldova.

Recovery and Resilience Facility

The midterm evaluation of the Recovery and Resilience Facility highlighted the key role played by

the facility in supporting reforms in Member States. The Recovery and Resilience Facility introduced

new stimulus and financial incentives for implementing critical and long-awaited reforms, thanks to the

requirements from the RRF Regulation and the novel link between reforms and investments. The

implementation of reform measures has generally been frontloaded compared with that of investments, as

reforms often serve a ‘preparatory’ function vis-à-vis the relevant investments, notably to maximise the

impact of the latter.

Reform measures under the Recovery and Resilience Facility are distributed across its six policy pillars, with a

greater number of measures under the pillars covering growth and resilience-enhancing policies (see chart

‘Milestones and targets per Recovery and Resilience Facility pillar associated with reforms’). The pillars

represent EU priorities consistent with the country-specific recommendations (CSR) addressed to Member

States by the Council of the European Union in the context of the European semester.

The country-specific recommendations assessment, published as part of the 2025 European semester spring

package (COM(2025) 200 final), demonstrates an increase in the implementation of country-specific

recommendations adopted in 2019 and 2020 compared with the implementation before the Recovery and

Resilience Facility. By June 2025, the share of country-specific recommendations adopted in 2019-2020 and

recording at least some progress reached 79%. By comparison, before the Recovery and Resilience Facility,

62% of the country-specific recommendations adopted in 2015-2016 had recorded at least some progress in

2021 (i.e. after the same amount of time for implementation). This shows that the incentives provided by the

Recovery and Resilience Facility, with its performance-based approach and emphasis on reforms, contributed

to reinforcing the implementation of country-specific recommendations.

Annex 1 – Performance of the EU budget in 2025

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Milestones and targets per Recovery and Resilience Facility pillar associated with reforms

NB: The graph shows the number of reform milestones and targets per Recovery and Resilience Facility pillar categorised as ‘preparatory and regulatory process’ or ‘delivery on the ground’.

Source: European Commission.

During its first four years of implementation, the Recovery and Resilience Facility supported the delivery of a

wide range of key reforms across Member States, including reforms.

• Legislation has entered into force to encourage tax compliance and improve the effectiveness of audits

and controls. One reform improved the quality of the databases used to produce compliance letters (i.e.

notices through which the Italian tax authorities report discrepancies). As a result, the tax revenue

generated by compliance letters has increased by 30% compared to 2019 (Italy).

• Introduction of reforms to improve fiscal sustainability in the medium and long term. These include

improving the long-term fiscal sustainability of the pension system through changes to the first pay-as-

you-go pension pillar and improving the functioning of the second pension pillar, along with enhancing

fiscal discipline through binding multiannual expenditure ceilings (Slovakia).

• Streamlining and simplifying permitting procedures for renewable energy and electricity infrastructure.

The legislation reduces administrative burden, sets clear deadlines, removes restrictions on self-

consumption and improves network capacity allocation (Spain).

• Ensuring access to medical care, by establishing a reimbursement system for nurses to incentivise them

to work in remote areas, and by increasing the share of people admitted in nursing training (Estonia).

• Enabling policymakers to better assess and limit regulatory burdens on SMEs, promoting a more

supportive environment for their growth (Ireland).

Cohesion funds

Under cohesion policy, reforms are supported via the enabling conditions. These ensure that the necessary

conditions for the effective and efficient use of the funds are in place. These cover:

• policy and strategic frameworks, to ensure that the strategic documents at the national and regional

levels which underpin investments are of high quality and in line with EU standards;

• regulatory frameworks, to ensure that implementation of operations co-financed by the funds complies

with the EU acquis.

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800

Green transition

Digital transformation

Smart, sustainable and inclusive growth

Social and territorial cohesion

Health, and economic, social and institutional resilience

Policies for the next generation

Preparatory and regulatory processes Delivery on the ground

Annex 1 – Performance of the EU budget in 2025

14

The progress in the fulfilment of these conditions since the adoption of programmes in 2022 is significant. At

the end of December 2025, only 1.3% of the European Regional Development Fund / Cohesion Fund /

European Social Fund Plus allocations remain blocked by unfulfilled enabling conditions, compared with

22.3% at the time of adoption.

The midterm evaluation of the 2021-2027 programming period showed that enabling conditions allowed to

set up strategic policy frameworks, systems and other arrangements for the effective and efficient

implementation of the funds.

Technical Support Instrument

By bringing together expertise from different backgrounds, such as from international organisations, the

private sector and other Member States, the Technical Support Instrument helps Member States to carry out

reforms that create jobs, inclusive societies and sustainable growth.

In 2025, the Technical Support Instrument continued to support smart, sustainable and socially responsible

reforms in a wide range of policy areas while strengthening all types of administrative capacities, especially

the internal administrative mechanisms for reforms across the EU. For instance, the Technical Support

Instrument multi-country sustainability in local public finances project focuses on developing the foundations

for ‘SDG budgeting’ in local governance systems. The project supported the delivery of city-specific and joint

reports assessing SDG budgeting practices, while developing tailored methodologies, key perfomance

indicators and action plans with a view to improving budgeting coherence, transparency and resource

allocation. This helped lay the groundwork for institutionalised SDG-oriented financial management benefiting

around five million residents and serving as a transferable model for other EU municipalities.

The Technical Support Instrument contributed to reinforcing Member States’ competitiveness drivers,

improving the functioning of the single market and Member States’ ability to deliver reforms for trade and

open strategic autonomy (see Technical Support Instrument – 2024 annual report for more details). For

example, the public administration cooperation exchange multi-country flagship project aims to promote

cooperation and cross-border exchanges among Member States to build administrative capacity and prepare

the next generation of policymakers in the EU, giving more than 800 civil servants the opportunity to to

exchange experience between 2023 and 2025. It leverages Technical Assistance and Information Exchange

(TAIEX) between administrations of different Member States.

In 2026, the instrument is expected to focus on supporting Member States in the implementation of complex

country-specific recommendations.

External action

The Instrument for Pre-accession Assistance III is designed as a performance-based instrument,

differentiating assistance in scope and intensity according to the performance of beneficiaries, thereby

incentivising commitment to fundamental reforms. This approach aligns with the 2020 communication on the

revised enlargement methodology (7), which proposed increased funding for countries making progress on

agreed reform priorities. Performance assessment is embedded in the annual bilateral programming process,

drawing on Commission enlargement reports, external expert assessments, implementation track records and

reporting against the Instrument for Pre-accession Assistance III Results Framework indicators.

(7) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions – Enhancing the accession process – A credible EU perspective for the Western Balkans, COM(2020) 57 final of 5 February 2020, https://enlargement.ec.europa.eu/enhancing-accession- process-credible-eu-perspective-western-balkans_en.

Annex 1 – Performance of the EU budget in 2025

15

In the case of the Ukraine Facility, the Council’s Implementing Decision (EU) 2024/1447 of 14 May 2024 on

the approval of its assessment of the Ukraine plan (8) sets out a detailed roadmap of conditions, in the form

of qualitative and quantitative steps linked to reforms and investment. Fulfilment of these conditions can

trigger direct EU support for Ukraine’s budget (Pillar I of the Ukraine Facility). The Ukraine plan includes 151

steps organised around 15 sectoral chapters (public administration reform; public financial management;

judiciary; fight against corruption and money-laundering; financial markets; management of public assets;

human capital; business environment; decentralisation and regional policy; energy; transport; agri-food;

management of critical raw materials; digital transformation; green transition and environmental protection)

and three horizontal chapters (reconstruction and modernisation processes across all levels of the

government; mechanisms and arrangements to protect the financial interests of the EU; and stakeholders’

consultation during the preparation of the Ukraine plan).

Ukraine fulfilled a total of 45 steps due during 2025 across several chapters of the plan, triggering the

disbursement of EUR 10.7 billion in non-repayable support and loans. Since the roll-out of the Ukraine Facility,

it has disbursed a total of EUR 26.8 billion against 68 steps (including the five steps reflected in the

memorandum of understanding for the exceptional bridge financing).

Ukraine reform accomplishments

In 2025, Ukraine accomplished reforms across several areas:

• human capital, agri-food, management of critical raw materials (5 steps each);

• decentralisation and regional policy, digital transformation, green transition and environmental

protection (4 steps each);

• business environment, energy (3 steps each);

• public financial management, judiciary, financial markets, management of public assets, transport

(2 steps each);

• public administration reform, fight against corruption and money-laundering (1 step each).

For example, in the area of green transition and environmental protection, a new law ‘On the basic principles

of state climate policy’ now defines the key mechanisms and goals for climate governance. Another key step

in this area was the adoption of a more ambitious second ‘Nationally Determined Contribution of Ukraine’ to

the Paris Agreement. In the area of human capital, a reform of preschool education now pursues access to

quality preschool education with the aim of increasing the participation of women with preschool children in

the labour force. On decentralisation, Ukraine adopted key amendments to the Law on Local State

Administration; this step directly contributes to public administration reform, a core priority under the

‘Fundamentals’ cluster of the accession process. The fight against corruption and money laundering was

strengthened through the entry into force of a law reforming the Asset Recovery and Management Agency,

which introduced several improvements to the management and functioning of the agency.

(8) Council Implementing Decision (EU) 2024/1447 of 14 May 2024 on the approval of the assessment of the Ukraine

Plan (OJ L, 2024/1447, 24.5.2024, ELI: http://data.europa.eu/eli/dec_impl/2024/1447/oj).

Annex 1 – Performance of the EU budget in 2025

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The Reform and Growth Facility for the Western Balkans and the Reform and Growth Facility for

Moldova are performance-based instruments, with disbursements conditional on the achievement of agreed

reform steps by beneficiaries. In 2025, EUR 396 million was released in pre-financing and disbursements

under the Reform and Growth Facility for the Western Balkans, including EUR 164 million for Albania,

EUR 45 million for Montenegro and EUR 77 million for North Macedonia. In the same year, EUR 288.9 million

in loans was disbursed under the Reform and Growth Facility for Moldova. Moreover, the Reform and Growth

Facility for the Western Balkans works in complement with the Instrument for Pre-accession Assistance III,

which provides technical assistance, including Technical Assistance and Information Exchange and Twinning

support, to help countries build the capacity needed to advance reforms, while the facility creates fiscal

incentives to legislate and implement them.

In delivering on the Global Gateway through the Neighbourhood, Development and International

Cooperation Instrument – Global Europe, the Commission promotes reforms to support the investment-

enabling environment in partner countries, in accordance with the EU policy priorities and in complementarity

with all Team Europe stakeholders. These reforms relate to the countries’ economic governance (e.g. public

procurement, public investment management or debt management) or are considered enablers for successful

Global Gateway projects (e.g. upgrading the regulatory framework for the production/commercialisation of

solar or wind power, or for operators in strategic transport corridors).

The Ukraine Investment Framework (Pillar II of the Ukraine Facility) and the European Fund for Sustainable

Development Plus crowd in private capital to promote investments, respectively in Ukraine and in EU partner

countries. Moreover, budget support promoted regulatory reforms in the energy sectors of Benin, Solomon

Islands and Vietnam. It encouraged renewable energy, notably by allowing EU development finance

institutions to fund these investments directly with EU blending support. In the context of Global Gateway,

such synergies are also sought, for instance, in Jamaica and Kyrgyzstan for digitalisation, Liberia, Rwanda and

Uzbekistan for agriculture value chains and Mauritania for green hydrogen.

In the neighbourhood region, macro-financial assistance financed by Neighbourhood, Development and

International Cooperation Instrument – Global Europe plays an equally important role to promote reforms.

In both Jordan and Morocco, a large budget support portfolio promotes reforms in various sectors such as

renewable energies, circular economy, water, skills, social protection or public administration

modernisation/digitalisation for a more conducive business environment. In Armenia, Egypt, Jordan and

Tunisia, this effort to promote reforms is complemented by dedicated strategic and comprehensive

partnerships. In the neighbourhood region, macro-financial assistance for countries under financial distress

also promotes important economic reforms such as in Egypt and Jordan, where a new macro-financial

assistance operation was established in 2025.

In Palestine (9), the support to the Palestinian Authority (through direct financial support via the EU PEGASE

mechanism) is anchored in the reform agenda of the Palestinian Authority. In other fragile/recovery contexts

in the Middle East and Africa region, the EU contributes to strengthening core administrative and public

finance management functions are always being supported (Iraq, Lebanon, Libya, Yemen and, since 2025,

Syria).

This support to reforms with capacity development is coordinated with the International Monetary Fund, the

World Bank Group, the Organisation for Economic Co-operation and Development and EU Member States.

(9) This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the

individual positions of the Member States on this issue.

Annex 1 – Performance of the EU budget in 2025

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Results under the Neighbourhood, Development and International Cooperation

Instrument – Global Europe (10):

• 110 countries supported by the EU to strengthen revenue mobilisation, public financial

management and/or budget transparency (GERF (Global Europe results framework) 2.19);

• 22 countries and cities with climate change and/or disaster risk reduction strategies: (a)

developed or (b) under implementation (GERF 2.5);

• 2 countries supported by the EU to (a) develop and/or revise, (b) implement digital-related

policies/strategies/laws/regulations (GERF 2.10) a) 4 and b) 1);

• 3 countries supported by the EU to strengthen investment climate (GERF 2.16);

• 356 government policies developed or revised with civil society organisation participation

through EU support (GERF 2.29).

(10) Cumulative data for the Neighbourhood, Development and International Cooperation Instrument – Global Europe

Instrument for the 2021-2025 period.

Annex 1 – Performance of the EU budget in 2025

18

3. EU budget supporting the EU’s political

priorities in 2025

The Competitiveness Compass

Europe's independence will depend on its ability to compete in today's turbulent times.

We have everything it takes to thrive here in Europe – from our Single Market to our

social market economy (11).

Ursula von der Leyen

President of the European Commission

Boosting the EU’s competitiveness

Europe’s prosperity depends on having a competitive, sustainable and resilient economy that

delivers opportunities for its people and businesses, now and in the future. Building on Mario

Draghi’s report on European competitiveness, in 2025 the Commission presented the Competitiveness

Compass, setting out actions aimed at closing the innovation gap, decarbonising the EU’s economy, reducing

dependencies, cutting red tape, removing barriers to the single market, enabling more efficient financing and

mobilising private capital, promoting skills and quality jobs and ensuring better coordination. In 2025, the EU

budget contributed to the achievement of these objectives through various means.

Making business easier and faster through simplification

Complementing the use of the EU budget, in 2025 the EU put forward initiatives to boost

competitiveness by cutting red tape, modernising taxation and supporting fair competition, aiming to

help businesses, especially small and medium-sized enterprises, thrive across borders. The targets are

clear: lower administrative burden by at least 25% for all businesses and at least 35% for small and

medium-sized enterprises – cutting recurring administrative costs by EUR 37.5 billion by 2029.

Horizon Europe is the EU’s flagship research and innovation programme, contributing to the EU’s

efforts to boost its competitiveness. By the end of 2025, Horizon Europe projects produced over 10 000

innovative products, processes, methods and intellectual property rights applications; contributed to industry,

innovation and infrastructure with over EUR 20 billion; and contributed with EUR 12.8 billion to digital

activities, of which EUR 2.5 billion in 2025 alone. Examples of projects financed under Horizon Europe include

research into the safe recycling of hazardous plastics and into improved space weather forecasting (useful for

satellites). Moreover, to facilitate the deployment of clean technologies, clean mobility and waste reduction, in

2025 the Commission allocated EUR 540 million under Horizon Europe to dedicated Clean Industrial Deal

(11) European Commission: Directorate-General for Communication, ‘Speech by President von der Leyen at the

Copenhagen Competitiveness Summit’, news article, 1 October 2025, https://ec.europa.eu/commission/presscorner/detail/en/speech_25_2272.

Annex 1 – Performance of the EU budget in 2025

19

calls (12) and increased the size of the InvestEU guarantee by EUR 2.9 billion (13). Funding of over

EUR 1.25 billion was announced in 2025 for the Marie Skłodowska-Curie actions to support the career and

skills development of researchers.

Horizon Europe also funds European Innovation Council Fund, a venture capital instrument to

help bridge the funding gap for breakthrough technologies in Europe. By the end of 2025, the fund

had invested over EUR 1 billion across 214 companies and projects. This has amounted to the mobilisation of

approximately EUR 3 billion in additional private investment, with a leverage ratio of over 3.5 private euro per

each public euro. The newly launched EIC strategic technologies for Europe platform Scale-Up

scheme provided EUR 300 million in 2025. By the end of 2025, the EIC Accelerator funding stream invested

approximately EUR 1 billion in over 200 companies, including projects on quantum computing,

neurostimulation therapies and cost-effective and environmentally friendly solar electric water propulsion

systems (14).

Horizon Europe: looking ahead

In 2025, the Commission adopted the Horizon Europe work programme for the years 2026-2027,

worth over EUR 14 billion, looking at fostering Europe’s sustainable prosperity and competitiveness.

The work programme includes additional funding for the Choose Europe for Science initiative launched

under the Marie Skłodowska-Curie actions, on top of the EUR 500 million announced in May 2025,

increasing the overall figure for the initiative to nearly EUR 900 million in 2025-2027. This work

programme allocates EUR 634 million to topics relating to critical raw materials, and also supports

research on advanced materials and alternatives to rare earth elements; and over EUR 870 million to

valorisation topics on market, societal and policy uptake of research results (15).

Through the Innovation Fund, the EU has been supporting highly innovative technologies,

processes or products that have a significant potential to reduce greenhouse gas emissions, and

projects aimed at scaling up innovative technologies. By the end of 2025, 197 projects were under

implementation or completed. The grants provided continue to have a leverage effect of approximately five

times, with EUR 11.7 billion of Innovation Fund support enabling around EUR 58 billion in mobilised

investments. In 2025:

• 83 new grant agreements were signed for decarbonisation projects;

• the Innovation Fund 2024 Net Zero Technology Call closed, allocating EUR 2.9 billion to select 61 cutting-

edge net zero technology products;

• the Innovation Fund also committed EUR 643 million to five projects under the call for electric vehicle

battery manufacturing;

• the second Innovation Fund Auction for renewable hydrogen production (Innovation Fund 2024 Auction)

saw the signature of six projects for a total of EUR 270.6 million.

(12) European Commission, ‘Horizon Europe Work Programme 2026-2027 – 14. Horizontal activities’, European

Commission Decision C(2025) 8493 of 11 December 2025, calls HORIZON-CID-2026-01 AND HORIZON-CID-2027- 01, https://ec.europa.eu/info/funding-tenders/opportunities/docs/2021-2027/horizon/wp-call/2026-2027/wp-14- horizontal-activities_horizon-2026-2027_en.pdf.

(13) Regulation (EU) 2025/2005 of the European Parliament and of the Council of 16 December 2025 amending Regulations (EU) 2015/1017, (EU) 2021/523, (EU) 2021/695 and (EU) 2021/1153 as regards increasing the efficiency of the EU guarantee under Regulation (EU) 2021/523 and simplifying reporting requirements (OJ L, 2025/2005, 23.12.2025, ELI: http://data.europa.eu/eli/reg/2025/2005/oj).

(14) European Innovation Council, European Innovation Council and SMEs Executive Agency, EIC Data Hub, filtered for Accelerator funding stream, accessed on 24.4.2026 – https://eic.ec.europa.eu/impact/eic-data-hub_en.

(15) European Commission (n.d.), ‘Horizon Europe 2026-2027 work programmes’, Research and innovation website, Horizon Europe work programmes - Research and innovation.

Annex 1 – Performance of the EU budget in 2025

20

Furthermore, in 2025, through the Innovation Fund, the Commission announced over

EUR 3.5 billion in funding for innovative low-carbon technologies, using revenues from the EU

Emissions Trading System. This includes, among other things, projects aimed at supporting electric vehicle

battery cell production (16), projects aimed at decarbonising industrial processes (e.g. low-carbon cement

production (17)), renewable hydrogen production (18) and a zero-emission ocean-going cruise ship capable of

carrying 400 persons for 30 days (19). Complementing this, the Innovation Fund is also supporting the

European battery value chain: the 2025 battery booster strategy included a EUR 1.5 billion Battery

Booster Facility financed by the Innovation Fund, which will provide interest-free loans.

InvestEU helped to boost investments across Europe by lowering risk for financial institutions

and helping to attract private capital. Through guarantees backed by the EU budget, it supported

projects in areas such as sustainable infrastructure, social investment and skills, small and medium-sized

enterprise, research, innovation and digitalisation. By the end of 2025, the total approved guarantee amount

stood at EUR 26.8 billion. The volume of InvestEU operations approved by implementing partners reached

EUR 80.6 billion and is expected to mobilise investments of EUR 329.1  billion, with 69.2% of this coming from

the private sector. With InvestEU support, by 2025, 91 294 enterprises have been supported and 2.1 million

households and enterprises gained fast-access broadband. InvestEU appoved operations invest in energy, for

example with EUR 500 million in the ‘SG Pan EU Wind Package’ project (20), sustainable infrastructure, for

example with EUR 100 million in the ‘Marguerite III (CDPE)’ project (21), and digital connectivity and

infrastructure, for example with EUR 350 million in the cristal fibre rollout project (22).

In 2025, cohesion policy strengthened Europe’s competitiveness , more so after the midterm review of

the cohesion policy reallocated EUR 15.2 billion to competitiveness, with most investments going to critical

technologies and industries under the strategic technologies for Europe platform to reduce technological

dependencies on non-EU countries. It also included investment in skills development linked to decarbonisation

of production capacities. Cohesion policy supported competitiveness funding for regional- and interregional-

level research and innovation, decarbonisation, energy transition and innovation, including through the

Interregional Innovation Investments Instrument. This instrument supported 70 innovation projects in the

scale-up and commercialisation phase, focusing on integrating less-developed regions into European value

chains, representing EUR 301 million of EU funding invested so far.

To boost the competitiveness of regions most affected by decarbonisation efforts, the

Commission also relied on the Just Transition Mechanism. By the end of 2025, 58.4% of the total

budget of the Just Transition Fund (EUR 15.45 billion), the 1st pillar of the mechanism, was allocated to

selected projects. Under the mechanism’s 2nd pillar, the InvestEU Fund implementing partners reported a total

of EUR 9.13 billion of investment mobilised by its operations. Moreover, the Public Sector Loan Facility, the 3rd

pillar of the Just Transition Mechanism, provided support via a combination of European Investment Bank

loans and grants from the EU budget, which in 2025 amounted to EUR 679 million, supporting investments

(16) European Commission, ‘ACCEPT: Automotive Cells Company European Production Take-off’, Innovation Fund project

factsheet, https://ec.europa.eu/assets/cinea/project_fiches/innovation_fund/101250958.pdf. (17) European Commission, ‘MeCaClay: Green Cement Production through Mechano-Chemical Activation of Clay’,

Innovation Fund project factsheet, https://ec.europa.eu/assets/cinea/project_fiches/innovation_fund/101250933.pdf. (18) European Commission, ‘H2CRI: RFNBO hydrogen production plant in Zaragoza’, Innovation Fund project factsheet,

https://ec.europa.eu/assets/cinea/project_fiches/innovation_fund/101241587.pdf.

(19) European Commission, ‘Swap2Zero’, Innovation Fund project factsheet, https://ec.europa.eu/assets/cinea/project_fiches/innovation_fund/101191050.pdf.

(20) European Commission: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (n.d.), ‘SG Pan EU Wind Package’, InvestEU website, https://investeu.europa.eu/investeu-operations/investeu-operations-list/sg-pan-eu- wind-package_en.

(21) European Commission: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (n.d.), ‘Marguerite III (CDPE)’, InvestEU website, https://investeu.europa.eu/investeu-operations/investeu-operations- list/marguerite-iii-cdpe_en.

(22) European Commission: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (n.d.), ‘Cristal Fiber Rollout’, InvestEU website, https://investeu.europa.eu/investeu-operations/investeu-operations-list/cristal-fibre- rollout_en.

Annex 1 – Performance of the EU budget in 2025

21

worth EUR 868 million. The mechanism supported projects such as a university hospital in Spain (23) and a

rare-earth magnet factory in Estonia (24). Moreover, the Public Sector Loan Facility pillar of the Just Transition

Mechanism provided vital support to public authorities in regions facing socio-economic challenges from the

transition to climate neutrality, via a combination of European Investment Bank loans and grants from the EU

budget, which in 2025 amounted to EUR 86 million, supporting investments worth EUR 868 million.

The EU budget has also been supporting competitiveness via the digital Europe programme,

helping to bring digital technology to citizens, businesses and public administrations. By the end of

2025, the programme delivered achievements such as the following.

• 19 AI factories started to be deployed in 16 Member States, featuring the procurement of 15 new

supercomputers optimised for artificial intelligence, and one major system upgrade for a fivefold

increase in the EU’s artificial intelligence computing capacity. Thirteen AI Factory Antennas were also

selected to extend AI Factory services to SMEs, startups, local research bodies, and public institutions

across Europe.

• Conclusion of contracts for three new supercomputers (Daedalus in Greece; Arrhenius in Sweden and

Alice Recoque in France), along with upgrades of existing ones (Leonardo to Lisa in Italy; Discoverer to

Discoverer+ in Bulgaria).

• Jupiter, the EU’s first EU exascale supercomputer, reached its full performance of one exaflop, or more

than 1 quintillion operations per second.

• The EuroHPC Joint Undertaking procured 6 quantum computers, of which 2 were inaugurated in 2025,

and 2 additional analogue quantum simulators were inaugurated under the HPCQS (high performance

computer – quantum simulator) project.

• 14 common European Data Spaces are being deployed, including infrastructures that can benefit from

interoperable language resources and multilingual data services.

• Five semiconductor pilot lines were launched, where EU industry can test, experiment and validate next-

generation chip technologies and designs.

• 30 competence centres were launched in all Member States (and Norway) to support companies, in

particular SMEs and start-ups, in getting access to semiconductor technologies via training, technology

transfer and development support.

The digital Europe programme budget is also supporting strategic digital technologies, including

semiconductors, via financial instruments. EUR 83.63 million was committed to support strategic digital

technologies, such as AI, quantum or cybersecurity. Under the Chips Fund, EUR 98 million was committed for

investments in semiconductor technologies and applications. These investments are expected to mobilise 14.2

times the amounts committed, facilitating access to finance to key companies across Europe.

In 2025, the digital strand of the Connecting Europe Facility awarded projects totalling

EUR 389 million. Grant agreements concluded in the year included funding for projects concerning the

deployment of global gateways (mainly submarine cables), deployment of 5G large-scale pilots in smart

communities and along major transport paths, and the further deployment of an interconnected European

quantum communication infrastructure (EuroQCI).

In 2025, the Commission financed transport infrastructure with the Connecting Europe Facility.

EUR 3.02 billion was allocated to projects advancing a sustainable, intelligent, eco-friendly and resilient

transport network. Examples of support by the facility include the Rail Baltica standard gauge railway line

(23) European Commission (n.d.), ‘2024-7-ES-SP-CHUAC’, Kohesio website,

https://kohesio.ec.europa.eu/en/projects/Q7421383. (24) European Commission (n.d.), ‘Magnetic plant Narva’, Kohesio website,

https://kohesio.ec.europa.eu/en/projects/Q7423897.

Annex 1 – Performance of the EU budget in 2025

22

development in Estonia, Latvia and Lithuania (25), along with the development of a pan-European network of

publicly accessible and interoperable recharging infrastructure dedicated to electric heavy-duty vehicles (26).

The strategic technologies for Europe platform

The strategic technologies for Europe platform (STEP) is designed to strengthen the EU’s ability

to create and ramp up strategic technologies, making it more competitive globally. As of the end

of 2025 and since its inception in 2024, STEP has cumulatively pooled resources across 11 EU funding

programmes amounting to EUR 24 billion, to support strategic technologies across sectors such as digital

and deep tech innovation, clean and resource efficient technologies and biotech. This is the result of the

combined efforts of the five EU programmes directly managed by the Commission and the reprogramming of

financial envelopes by Member States and EU regions under the cohesion policy. In total for 2025 alone, the

initial budget earmarked by programmes in direct management in support of STEP-relevant technologies

amounted to EUR 5.3 billion, representing a 14.6% year-on-year increase to the figure of EUR 4.6 billion

reported for 2024. Cumulatively, this represents a total budget of around EUR 10 billion allocated to STEP-relevant

calls for proposals across the five EU programmes since the inception of STEP in March 2024.

Resources earmarked for STEP by programmes in direct management, by sector in 2024 and

2025 (in million EUR) (27)

Regarding cohesion policy funds, as of the end of December 2025, 96 STEP amendments were adopted

in 19 Member States, amounting to EUR 13.9 billion. This represents more than a doubling compared to

2024. In 2025, a new STEP Sector for defence technologies was introduced via the cohesion policy

(25) European Commission (2026), ‘Rail Baltica – 1 435 mm standard gauge railway line development in Estonia, Latvia

and Lithuania (Part IX C)’, CEF Transport programme, https://ec.europa.eu/assets/cinea/project_fiches/cef/cef_transport/23-EU-TC-RBGP%20Part%20IX%20C.pdf.

(26) European Commission (2026), ‘MILES General: Mobility Infrastructure for Logistics – Electric & Sustainable in AT, BE, DE, DK, ES, FR, IT, NL, and SE’, CEF Transport programme, 24-EU-TG-MILES General.pdf.

(27) ‘Multi-sector’ refers to the budget allocated to STEP from calls for proposals and tenders which target more than one STEP-relevant sector.

154

4 040

461.3509.2

3 525

745.5 553

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Biotech Cleantech Digital and deep tech Multi-sector

2024 2025

Annex 1 – Performance of the EU budget in 2025

23

midterm review adopted in September 2025 (28) and the Defence Mini-omnibus Regulation adopted in

December 2025 (29).

To date, the Commission has awarded more than 600 STEP Seals to the best-performing projects in their

respective evaluations. Among these, a majority of 451 seals were awarded in 2025 alone. This quality label

will help project promoters in securing complementary funding for their projects, both in case they were

already awarded funding by the Commission to cover part of the project costs or in the case they were not

retained for funding, due to the limited budget of the call.

Total STEP allocations in adopted cohesion policy programmes as of the end of 2025

(in million EUR)

The interim evaluation of STEP was published in July 2025, and it points to STEP’s success in effectively

steering EU investment to innovative technologies and simplifying access to EU funding via a one-stop shop

online portal, the STEP Portal.

(28) Regulation (EU) 2025/1914 of the European Parliament and of the Council of 18 September 2025 amending

Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures to address strategic challenges in the context of the mid-term review (OJ L, 2025/1914, 19.9.2025, ELI: http://data.europa.eu/eli/reg/2025/1914/oj).

(29) Regulation (EU) 2025/2653 of the European Parliament and of the Council of 19 December 2025 amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153 and (EU) 2024/795, as regards incentivising defence-related investment in the EU budget to implement the ReArm Europe Plan (OJ L, 2025/2653, 22.12.2025, ELI: http://data.europa.eu/eli/reg/2025/2653/oj).

10 838

2 075

946

European Regional Development Fund

Just Transition Fund

European Social Fund Plus

Total EUR ​13 859 million

Annex 1 – Performance of the EU budget in 2025

24

A new era for European defence and security

This must be Europe's Independence Moment. I believe this is our Union's mission. To

be able to take care of our own defence and security (30).

Ursula von der Leyen

President of the European Commission

Investing in defence

The EU stepped up its defence efforts in 2025 through the rearm Europe plan, which mobilised new

financial instruments to strengthen Europe’s defence capabilities and close investment gaps for full defence

readiness by 2030. The rearm Europe plan includes Security Action for Europe, which will provide up to

EUR 150 billion in loans to support urgent defence investments and address critical capability gaps. Member

States demonstrated strong interest in the instrument, with 19 Member States submitting national defence

industry investment plans by 30 November 2025, covering 691 projects, 65% of which involved joint

procurement.

The EU also invested in defence collaborative research, development and innovation through the

European Defence Fund. In its 2025 work programme, the European Defence Fund (EDF) allocated close to

EUR 1 billion in funding and received a record 410 project proposals in response, which will lead to funding

projects in the course of 2026. By 2025, EUR 5.1 billion had been committed to defence research and

development, supporting 225 collaborative European Defence Fund projects and including the 2025

commitment. This positions the fund among the EU’s top defence research and development investors. As

part of the EDF, the EU Defence Innovation Scheme (EUDIS) continued to support non-traditional defence

players, including SMEs. Two defence hackathons were organised across 16 locations in Europe and two new

initiatives were launched: the EUDIS Business Accelerator, an eight-month support programme providing

targeted and tailored support to defence and dual use start-ups and small and medium-sized enterprises

(supporting 20 companies in 2025); and EUDIS Matchmaking, establishing a platform to foster connections

between defence innovators, investors, end users, corporates and other relevant defence stakeholders, and

organising four events across Member States in 2025.

In 2025, the Act in Support of Ammunition and Production helped to ramp up the production of

ammunication in the EU, contributing to its strategic autonomy and to the competitiveness of its defence

technological and industrial base. It supported the implementation of 31 projects in areas such as explosives,

powder, shells, missiles and testing and reconditioning, providing total support of about EUR 514 million.

In 2025 the mid-term review of cohesion policy resulted in EUR 11.9 billion shifted toward supporting

defence related projects, from military mobility to defence industry and civil preparedness. Of this amount

EUR 1.3 billion was specifically allocated to support the defence industry’s capacities.

(30) European Commission: Directorate-General for Communication, ‘2025 State of the Union Address by President von

der Leyen’, 10 September 2025, https://commission.europa.eu/strategy-and-policy/state-union/state-union-2025_en.

Annex 1 – Performance of the EU budget in 2025

25

Investing in space capabilities

In a world first, the Galileo open service navigation message authentication function was declared

operational in July 2025, after adding two satellites to its costellation. It introduces a mechanism to

verify the authenticity of navigation data transmitted from Galileo satellites, helping protect against

spoofing (the transmission of false signals), and significantly enhances trust in the EU’s Galileo

satellite system, the only system in the world with this security feature.

Moreover, delivering on the Union Secure Connectivity priority flagship, the development of a multi-

orbital satellite constellation of around 290 satellites – IRIS² (Infrastructure for Resilience,

Interconnectivity and Security by Satellite) – continued at full speed on the basis of a competitive and

innovative public–private partnership established under a 12-year concession contract signed with the

SpaceRISE consortium in 2024. In 2025, several important sub-contracts were signed with core

consortium team members and key suppliers.

The Commission also pursued establishing international agreements with Iceland and Norway for their

participation in the EU secure connectivity programme and in the EU’s governmental satellite

communication programme (GOVSATCOM). A similar process is underway to allow for the opening of

formal negotiations with Ukraine.

For the next multiannual financial framework, the Commission has proposed boosting the defence and

space budget to EUR 131 billion, five times the current budget, within the European Competitiveness

Fund.

Enhancing the EU’s preparedness and crisis management

Learning from past challenges and faced with unprecedented threats, the EU continuously aims

to enhance its ability to anticipate, prevent and respond to them. In 2025, the EU made available

over EUR 245 million for the Union Civil Protection Mechanism. In addition, to support resilience in Member

States and non-EU countries participating in the mechanism, the Commission co-financed 27 prevention and

preparedness projects, including 13 under the single-country grants to disaster risk management authorities

and 14 under the multi-country grants. The European Civil Protection Pool was further strengthened as the

primary reserve of response capacities available for Union Civil Protection Mechanism response operations.

The resources under the European Civil Protection Pool increased by 19.4% in the past year. In 2025,

European Civil Protection Pool capacities were deployed for consular and medical evacuations, forest

firefighting and emergency medical support.

Union Civil Protection Mechanism response to wildfires in 2025

During the 2025 European wildfire season, the Union Civil Protection Mechanism was activated 18

times in response to wildfires, with 16 activations in Europe and two activations outside of Europe.

Countries affected included Albania, Bosnia and Herzegovina, Bulgaria, Greece, Montenegro, Portugal,

Spain and Syria. The Commission also co-financed the stand-by availability of rescEU aerial forest

fire-fighting capacities, including 18 firefighting planes and 4 helicopters in case of requests for

assistance.

Annex 1 – Performance of the EU budget in 2025

26

Forest fires – burnt areas in the EU in 2025 (in hectares)

RescEU, the Commission’s own preparedness reserve, was strengthened in 2025, moving closer

to a fully-fledged aerial firefighting fleet at the European level. The Commission continued the work

with the rescEU transitional arrangement to combat the increasing wildfire threat across Europe. During the

spring of 2025, the Emergency Response Coordination Centre pre-positioned firefighting capacities across the

EU ahead of the summer’s wildfire season.

Helping people cope with natural disasters

In 2025, the European Union Solidarity Fund mobilised EUR 1.3 billion to assist recovery and

reconstruction in six Member States and two accession countries struck by natural disasters in 2024

and 2025. The fund allocated EUR 280 million to Austria, Bosnia and Herzegovina, Czechia, Moldova,

Poland and Slovakia following floods, and made available EUR 1 057 million for Spain (floods) and

France (two cyclones). In the case of Spain, after storm Dana hit the Valencia region in October 2024,

the fund mobilised EUR 946 million, which is the second-largest contribution in the fund’s history.

Enhancing internal security, border control and migration management

To enhance safety and security across Europe, border control, and manage migration, the EU budget funds

actions through a number of funds, such as:

• the Internal Security Fund, focused on preventing and combating terrorism and radicalisation,

organised crime and cybercrime;

• the Asylum, Migration and Integration Fund, promoting efficient management of migration flows;

and

• the Border Management and Visa Instrument, addressing external border management challenges.

The 2025 budget for the Internal Security Fund amounted to EUR 336.6 million. This amount

included EUR 195.5 million for initial allocations to Member States’ programmes, the largest share of which is

destined to strengthen Member States’ capabilities in fighting organised crime and terrorism (41%). The fund

notably advances the interopeprability of communication technology systems and the information exchange

mechanisms across Member states, while also supporting cross-border operations aimed at seizing drugs

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Average (2006-2025) Year 2025

388 624

1 034 552

Average area burnt per year (2006-2025)

Total area burnt in 2025

Annex 1 – Performance of the EU budget in 2025

27

(22 196 kg by 2025) or weapons (302 by 2025). Under the Internal Security Fund’s Thematic Facility, the

Commission has also funded 13 projects starting in 2025, with EUR 30 million to strengthen the protection of

public spaces such as shopping centres, public transportation, entertainment venues and places of

worship (31).

The 2025 budget for the Asylum, Migration and Integration Fund amounted to EUR 1.9 billion. This

amount included EUR 972.9 million for initial allocations to Member State programmes, the largest share of

which is for strengthening and developing the Common European Asylum System (36%). By 2025, the

Asylum, Migration and Integration Fund registered 15 635 participants who applied for long-term status,

107 739 voluntary returnees, 14 602 returnees removed and 4 771 applicants for and beneficiaries of

international protection transferred from one Member State to another.

The 2025 budget for the Border Management and Visa Instrument amounted to EUR 1.2 billion.

The largest share of the EU’s financial contribution to Member State programmes is allocated to European

integrated border management (87%). The common visa policy accounts for 8% of the allocated budget for

Member State programmes, with the main achievements relating to the digitalisation of visa processing.

Considering the rapidly evolving threat landscape and risks at the EU external borders,

additional funding was made available from the Border Management and Visa Instrument to

further enhance border control capabilities, with EUR 169.6 million for the purchase of various

uncrewed equipment to be used for border surveillance at the national level and put at the disposal of the

European Border and Coast Guard Agency (Frontex equipment) and EUR 250 million for the purchase of

drones and counter-drone systems. Under the Border Management and Visa Instrument, EUR 50.55 million

was also made available to support the Schengen-associated countries in the implementation of the EU Pact

on Migration and Asylum. Funding for border management was also provided by the Customs programme,

which helped to kick off the European Union Customs Alliance for Borders expert team, enhancing operational

cooperation among Member State customs authorities.

Moreover, the EU has been enhancing internal security by investing in the security of submarine

data cables. These cables carry 99% of intercontinental internet traffic, making them essential for modern

life and the European economy. In 2025, the Commission intesified efforts to increase the security and

resilience of this critical infrastructure. In the EU action plan on cable security adopted in 2025, the EU set

aside EUR 20 million to strengthen the security of Europe’s submarine cables, via the digital Europe

programme, to support the creation of regional cable hubs and stress-testing of the resilience of undersea

cable infrastructure. Moreover, under the Connecting Europe Facility, 25 projects aimed at boosting the

resilience and security of submarine cables and key terrestrial connections were selected in 2025, totalling

EUR 186 million in EU contributions.

(31) European Commission (n.d.), ‘Projects funded under the Internal Security Fund call for proposals on the protection of

public spaces: ISF-2024-TF2-AG-PROTECT’, https://home-affairs.ec.europa.eu/document/download/cc4034e6-bc2a- 4d71-9238-9f61d465c91b_en?filename=Projects%20funded%20under%20ISF_booklet.pdf.

Annex 1 – Performance of the EU budget in 2025

28

Supporting people, strengthening our societies and our social model

Our economy must work for people and business alike. And if we modernise the

business, the industry, and the workplace, we also have to modernise the labour

market and the working conditions. Europe must deliver for all of its people (32).

Ursula von der Leyen

President of the European Commission

Providing clean and affordable energy

In 2025, the Commission took action aimed at providing immediate relief to consumers while

pursuing a long-term transformation towards a decarbonised, competitive and secure energy

system. In February, the Commission presented an action plan for affordable energy (33). The plan aims to

provide relief to households facing high energy bills and to industries struggling with high production costs.

Overall savings are projected at EUR 45 billion in 2025, rising to EUR 130 billion annually by 2030 and

EUR 260 billion by 2040.

In line with the Affordable Energy Action Plan, the cohesion policy mid-term review promoted a new priority

on energy transition, which aimed at untapping the many bottlenecks in our grid infrastructure and helped

completing the Energy Union. About EUR 1.2 billionhas been reallocated to this new priority for the period

until 2027. Moreover, cohesion policy supported the circular economy by investing in regional and local

waste management systems towards circularity (prevention, reuse, recycling), thus reducing external

dependencies on recyclable materials.

In 2025, the Commission awarded approximately EUR 650 million to 14 cross-border energy

infrastructure projects under the Connecting Europe Facility’s energy strand. Among the projects

selected for funding, six are related to electricity infrastructure, including smart electricity grids, and eight are

hydrogen infrastructure investments. The Connecting Europe Facility also provided the first grant for works

for a hydrogen project.

In July, the Commission and the European Investment Bank disbursed EUR 3.66 billion from the

Modernisation Fund to support 34 clean energy projects. In September, they also launched the Energy

Efficiency for SMEs Initiative, a EUR 17.5 billion financing programme expected to help more than 350 000

companies reduce their energy consumption.

In February 2025, Estonia, Latvia and Lithuania synchronised their electricity grids with the

Continental Europe Network, in cooperation with Poland. This marks the full integration of the Baltic states

into the EU energy market, ending dependence on Belarusian and Russian systems. This flagship project of

(32) European Commission: Directorate-General for Communication, ‘Speech by President von der Leyen in the European

Parliament plenary debate on the Commission Work Programme’, news article, 21 October 2025, https://ec.europa.eu/commission/presscorner/detail/en/speech_25_2462.

(33) Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – Action Plan for Affordable Energy Unlocking the true value of our Energy Union to secure affordable, efficient and clean energy for all Europeans, COM(2025) 79 final of 26 February 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0079

Annex 1 – Performance of the EU budget in 2025

29

the Connecting Europe Facility for Energy, started in 2014, received more than EUR 1.2 billion in funding,

representing 75% of investment costs (34).

The EU has also been supporting clean energy via the LIFE programme. Since its inception in 2021,

LIFE’s clean energy transition has funded 267 projects, with a total EU contribution of EUR 427 million

addressing capacity building, investment mobilisation and market uptake to support the clean energy

transition. Projects include, among other things, research into standardised heat pump solutions for the food

industry and on the use of low temperature renewables and waste heat for district heating.

Investing in people

Between 2021 and 2027, the EU is investing over EUR 150 billion to support people, businesses,

education institutions and others to develop the education and skills needed for a thriving,

competitive European economy. Under the European Social Fund Plus, implementation accelerated, with

project selection reaching approximately EUR 92.5 billion by December 2025, while nearly EUR 7 billion in

interim payments was made to Member States in 2025. The European Social Fund Plus primarily reaches

those who are out of work due to inactivity or unemployment, accounting for 11.8 million participants. More

than half of all participants (8.2 million) are low-skilled, with lower secondary education or less. With

3.6 million children and 3.9 million young people aged 18 to 29 supported, the European Social Fund Plus

provides significant assistance to younger generations. Vulnerable groups also benefit substantially from

European Social Fund Plus support, including 1.3 million persons with disabilities, 2 million third-country

nationals and 312 000 homeless participants to date. In addition, measures addressing material deprivation

have reached 35.2 million end recipients with direct food support or material assistance, or indirect support

through vouchers.

The EU is also investing in people, regions and territories through cohesion policy funds. As of

December 2025, total net payments of EUR 39.9 billion were disbursed under the European Regional

Development Fund and the Cohesion Fund. By the end of 2025, Member States had selected operations

amounting to 63.4% of the allocations for these two funds for the 2021-2027 period (i.e. EUR 185 billion

under the European Regional Development Fund and EUR 30 billion under the Cohesion Fund), which is

expected to lead to an accelaration of payment rates in 2026. Cohesion policy benefits all regions, with an

assessment of the policy under the previous programming period (2014-2020) showing that each euro

funded by it led to almost 3 euro in return (35). By 2025, both funds financed over 3 550 000 megawatt-

hours/year of savings in annual primary consumption, modernised healthcare facilities, enabling them to

serve over 9 million people per year and covered over 26 million people in projects supported by the funds in

the framework of strategies for integrated territorial development.

Via the Union of Skills, the Commission supports people in obtaining high quality education,

training and support lifelong learning. To address skills challenges in Europe, in 2025 the Commission

launched the Union of Skills (36). This strategy focuses on reskilling and upskilling efforts, and improving high

quality education, training and lifelong learning. As part of this, the Commission has also committed to

enhancing the Pact for Skills to help workers across strategic sectors to gain new skills, with an aim of

upskilling 25 million workers by 2030. In 2025, 3.9 million people benefited from training initiatives under the

Pact for Skills. The pact mobilised a network of 277 600 stakeholders, which collectively invested over

(34) European Commission: European Climate, Infrastructure and Environment Executive Agency (n.d.), ‘CEF Energy:

Instrumental funding to achieve the Baltic synchronisation with the Continental European Network’, https://cinea.ec.europa.eu/cef-energy-instrumental-funding-achieve-baltic-synchronisation-continental-european- network_en.

(35) Model simulations for the 2014-2020 ex post evaluation. Exactly EUR 2.9, 15 years after end of period. (36) Communication from the Commission to the European Parliament, the European Council, the Council, the European

Economic and Social Committee and the Committee of the Regions – The Union of Skills, COM(2025) 90 final of 5 March 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025DC0090.

Annex 1 – Performance of the EU budget in 2025

30

EUR 1 billion in upskilling and reskilling activities in 2025, 82% of which invested by public authorities using

national or EU funds and programmes such as Erasmus+, Horizon Europe or the European Social Fund

Plus (37). This is complemented by EUR 5.7 billion for education infrastructure, equipment, skills development

and education cooperation across borders under the European Regional Development Fund (including

Interreg).

Supporting learning and educational mobility

Throughout 2025, the Erasmus+ programme helped to promote transnational learning mobility,

cross-organisational cooperation and to enrich the lives of people in Europe. Since 2021, Erasmus+

has supported more than 3.8 million learners in their mobility activities, with over 1.5 million taking advantage

of Erasmus+ mobility in 2025. In 2025, 321 capacity-building projects were selected, aiming to promote

international cooperation between organisations active in higher education, vocational education and training,

youth and sport within and beyond the EU.

Moreover, since the start of Russia’s war of aggression against Ukraine, the Commission has

mobilised over EUR 200 million through Erasmus+ to support projects promoting educational activities

and facilitating integration into new learning environments of individuals fleeing from the war. Further focus

has been given to sector-specific priorities under ‘partnerships for cooperation’. Since 2023, grants supporting

this priority have amounted to EUR 48 million. Support has also been provided to organisations, learners and

staff in Ukraine. Since 2022, a total of EUR 31 million has been contracted in grants for Ukrainian

organisations focused on capacity-building projects in higher education, vocational education and training,

youth and sport.

Fostering solidarity through volunteering

The European Solidarity Corps provides young people aged between 18 and 30 years (35 in case of

humanitarian aid activities) with the opportunity to take part in volunteering and solidarity activities

either abroad or in their own country. Since 2021, over 120 000 opportunities for young people have

been created, and 12 000 projects have benefited from grants. The European Solidarity Corps has

provided support for projects and activities on four cross-cutting priorities: promoting inclusion and

diversity; contributing to the green and digital transitions; contributing to democratic participation; and

contributing to EU values. In 2025, the Commission expanded this to include the promotion of waste

management and recycling solutions. The volunteering opportunities through the Humanitarian Aid

strand enabled nearly 400 young people to support vulnerable communities in 35 countries.

Investing in culture

The creative Europe programme is the EU’s flagship programme to support the culture and audiovisual

sectors, with a budget for the 2021-2027 period amounting to EUR 2.44 billion, with EUR 364.2 million for

2025. The adoption of the Culture Compass for Europe, a new strategic framework for European cultural

policy, was a major milestone in 2025. With 20 flagship initiatives, the Culture Compass will provide shared

principles for future cultural policy cooperation at the EU level.

With a budget of EUR 182 million, the Media strand attracted 2 165 eligible proposals in 2025. Numerous

works created with the support of the Media strand received international professional recognition, including

(37) European Commission (2025), ‘Pact for Skills Annual Report 2025’, https://pact-for-

skills.ec.europa.eu/document/download/84378a3e-3380-488f-b35a- 9bd97a024ab1_en?filename=Annual%20Report%202025_FINAL.pdf.

Annex 1 – Performance of the EU budget in 2025

31

Oscar nominations for six films released in 2025. The Culture strand attracted a record number of applicants

in 2025 (1 648) with 122 projects selected.

The year 2025 also saw the 40th anniversary celebrations of the European Capitals of Culture initiative. Since

1985, more than 70 cities have used the title to celebrate diversity, strengthen their European identity and

shape their future through culture.

Improving people’s health

EU-level actions on health complement national policies. These actions aim to protect and improve the

health of EU citizens, support the modernisation and digitalisation of health systems and infrastructures,

address territorial disparities in access to quality health services (particularly in disadvantaged, rural and

remote areas), improve the resilience of Europe’s health systems and equip Member States to better prevent

and address future pandemics.

The Commission has also been supporting innovative companies focused on health through HERA

Invest. By the end of 2025, HERA Invest has funded three European innovative small and medium-sized

enterprises, with loans of EUR 20 million each.

In 2025, the Commission also invested in rapid diagnostics to help address the root causes of

antimicrobial resistance. Through the EU4Health programme, financial support of EUR 8.85 million was

provided to five partners from four Member States to develop and bring to the market a diagnostic device

providing results in less than one hour that will help clinicians select the most appropriate treatment for

patients requiring antibiotics.

More than half of the EU4Health’s annual budget for 2025 went to investments in crisis

preparedness and response actions, including serious cross-border threats to health. These actions

include increasing preparedness, prevention and response planning against vector-borne diseases, setting up

EU Reference Laboratories, improving integrated surveillance systems in participating countries and providing

training to (public) health professionals. EU4Health investments have also been supporting the

establishment of the European Health Data Space,developing cross-border digital health

infrastructures, setting up and expanding health data access bodies for enabling the reuse of health data.

EU4Health investments addressing rare diseases have targeted IT tools for diagnosis and

treatment, such as the telemedicine tool Clinical Patients Management System 2.0. In 2025, the

European reference networks system was further developed, supported by EUR 77.4 million in EU4Health

grants for the period 2023-2027. In 2025, 2.7 million patients with rare conditions benefited from access to

diagnosis and treatment in the 24 European reference networks.

Annex 1 – Performance of the EU budget in 2025

32

Europe’s beating cancer plan

Under EU4Health, 24 actions were launched in 2025 under the implementation of the cancer cross-

cutting approach. Actions include, for example, collaborative work in the field of cancer under the Joint

Action ‘Enhancing the Digital Capabilities of Cancer Centres in Europe to Improve Prevention and Care’

to improve e-health, telemedicine and remote monitoring systems, and to enhance access to and

exchange of health data in existing and future cancer centres. Moreover, in 2025, with the support of

EUR 90 million under EU4Health, the Commission launched the EU Network of Comprehensive Cancer

Centres, aimed at ensuring that 90% of eligible cancer patients have access to high-quality prevention,

diagnosis, treatment and care by 2030.

In close alignment and synergy with the Cancer Plan, the EU Cancer Mission under Horizon Europe

continued to deliver results by advancing actions on environmental exposure in young people,

innovative treatments for cancer in children and adolescents, surgical clinical trials and nutrition

interventions for older cancer patients. In 2025, the Cancer Mission developed 25 multi-country clinical

trials, 42 new tools for prevention, detection and treatment and over 850 collaborations across

research, healthcare and policy.

Annex 1 – Performance of the EU budget in 2025

33

Sustaining our quality of life: food security, water and nature

Our democracy must also deliver for those who suffer the impacts of climate change.

We must protect people and nature from devastating wildfires. We must preserve our

precious water, that is the most vital of all natural resources. And we must deploy the

best science to protect our Ocean (38).

Ursula von der Leyen

President of the European Commission

Building a competitive and resilient agriculture and food system

The EU advanced efforts to build a sustainable, competitive and resilient agri-food system,

providing food security and fair living standards for farming and rural communities. The common

agricultural policy (CAP) continued to support the sector through the implementation of the CAP strategic

plans, increasing incomes and building resilience. Particular attention was given to income support for small

farms. In 2025, 5.5 million farmers received direct CAP support.

The December 2025 CAP simplification package supports the competitiveness, resilience and

digitalisation of the agricultural sector with targeted support for young and organic farmers.

These measures could save up to EUR 1.6 billion annually for farmers and EUR 210 million for national

administrations. The package also brings flexibiity and simplification in the handling of payments, certain

requirements and crisis tools.

Moreover, in 2025 the EU provided, under the CAP, emergency support to farmers in disaster-affected

regions (39):

• EUR 73 million in emergency support for farmers affected by climate change and natural disasters in

Czechia, Spain, Croatia, Cyprus, Latvia, Hungary and Slovenia (40);

• EUR 1.7 million in exceptional support for the milk and pig-meat sectors in Germany (41);

• EUR 49.5 million in emergency support for fruit, nut and vegetable farmers affected by climate change in

Bulgaria, Latvia, Lithuania, Hungary, Poland and Romania (42);

(38) European Commission: Directorate-General for Communication, ‘Speech by President von der Leyen in the European

Parliament plenary debate on the Commission Work Programme 2026, news article, 21 October 2025, https://ec.europa.eu/commission/presscorner/detail/en/speech_25_2462.

(39) European Commission (2026), ‘The EU in 2025: General report on the activities of the European Union’, Chapter 5: A Europe fit for the digital age, https://op.europa.eu/webpub/com/general-report-2025/en/chapter5.html#subchapter5-2.

(40) Commission Implementing Regulation (EU) 2025/441 of 6 March 2025 providing for emergency financial support for the agricultural sectors affected by adverse climatic events and natural disasters in Spain, Croatia, Cyprus, Latvia and Hungary, in accordance with Regulation (EU) No 1308/2013 of the European Parliament and of the Council (OJ L, 2025/441, 10.3.2025, ELI: http://data.europa.eu/eli/reg_impl/2025/441/oj and OJ L, 2025/1137, 11.6.2025, ELI: http://data.europa.eu/eli/reg_impl/2025/1137/oj).

(41) Commission Implementing Regulation (EU) 2025/1145 of 10 June 2025 on exceptional support measures for the milk and pigmeat sectors in Germany (OJ L, 2025/1145, 11.6.2025, ELI: http://data.europa.eu/eli/reg_impl/2025/1145/oj).

(42) Commission Implementing Regulation (EU) 2025/2061 of 10 October 2025 providing for emergency financial support for the agricultural sectors affected by adverse climatic events in Bulgaria, Latvia, Lithuania, Hungary, Poland and Romania, in accordance with Regulation (EU) No 1308/2013 of the European Parliament and of the Council (OJ L, 2025/2061, 13.10.2025, ELI: http://data.europa.eu/eli/reg_impl/2025/2061/oj).

Annex 1 – Performance of the EU budget in 2025

34

• EUR 7.3 million to help compensate farmers in areas affected by outbreaks of avian influenza in

Poland (43);

• Exceptional changes to POSEI (the programme of options specifically relating to remoteness and

insularity) to help farmers in Mayotte restart production after Cyclone Chido (44).

Furthermore, the food strand of the single market programme provided more than EUR 240 million in

2025 in the areas of animal and plant disease control, EU reference laboratories and the EU vaccine bank for

animal diseases, reducing risks to food security by ensuring resilience against outbreaks of major

transboundary animal diseases.

Investing in water-smart economy, oceans and fisheries

The midterm review of cohesion policy included a new dedicated priority for water resilience.

These actions aim at improving access to clean water, sustainable water management and water

resilience amid frequent droughts and other climate change impacts, along with reducing water pollution.

EUR 3.1 billion has been reallocated to this priority, on top of EUR 13 billion already under implementation. As

underlined in the Competitiveness Compass and the water resilience strategy, building a water-smart society

is an important pillar for Europe’s economic security.

The EU Maritime Fisheries and Aquaculture Fund contributes to a sustainable blue economy in

coastal, island and inland areas, and to the development of fishing and aquaculture communities. Member

States received EUR 554.9 million in payments. These financed projects such as upskilling and reskilling for

people who work in and around ports (45) and research into the decline in European eel and salmon

populations (46), along with research into optimised trawling gears with a view to lowering fuel

consumption (47). To support ocean conservation, ocean sciences, sustainable fisheries, aquaculture and the

blue economy, the Commission presented the European Ocean Pact at the 2025 UN Ocean Conference,

alongside EUR 1 billion in investment for the ocean (48).

In 2025, the European digital twin of the Ocean became fully operational . It integrated Copernicus

and European marine observation data, allowing for high-resolution modelling of climate adaptation and

sustainable resources management. Moreover, the European Marine Observation and Data Network has

continued to provide marine data on a findable, accessible, interoperable and reusable basis, resulting in

annual benefits of between EUR 150 million and EUR 400 million through increased productivity and

innovation for users and better information on our seas and oceans.

(43) Commission Implementing Regulation (EU) 2025/1485 of 24 July 2025 on exceptional market measures for the eggs

and poultry meat sectors in Poland (OJ L, 2025/1485, 25.7.2025, ELI: http://data.europa.eu/eli/reg_impl/2025/1485/oj).

(44) Regulation (EU) 2025/1276 of the European Parliament and of the Council of 24 June 2025 amending Regulation (EU) No 228/2013 as regards additional assistance to, and further flexibility in respect of, outermost regions affected by severe natural disasters and in the context of the devastation caused by cyclone Chido in Mayotte (OJ L, 2025/1276, 27.6.2025, ELI: http://data.europa.eu/eli/reg/2025/1276/oj).

(45) European Commission: European Climate, Infrastructure and Environment Executive Agency (n.d.), ‘Blue ports: Empowering ports for a greener future’, https://cinea.ec.europa.eu/featured-projects/blue-ports-empowering-ports- greener-future_en.

(46) European Commission: European Climate, Infrastructure and Environment Executive Agency (n.d.), ‘Diaspara project: Unlocking the secrets of Europe’s endangered eel and salmon’, https://cinea.ec.europa.eu/featured-projects/diaspara- project-unlocking-secrets-europes-endangered-eel-and-salmon_en.

(47) European Commission: European Climate, Infrastructure and Environment Executive Agency (n.d.), ‘Decarbonyt – Decarbonising the fishing fleet in the Mediterranean and Black Sea’, https://cinea.ec.europa.eu/featured- projects/decarbonyt-decarbonising-fishing-fleet-mediterranean-and-black-sea_en.

(48) European Commission (2026), ‘The EU in 2025: General report on the activities of the European Union’, Chapter 5: A Europe fit for the digital age, https://op.europa.eu/webpub/com/general-report-2025/en/chapter5.html#subchapter5-2.

Annex 1 – Performance of the EU budget in 2025

35

Horizon Europe’s Mission ‘Restore our ocean and waters’ supported the blue transition and

strengthening the protection and restoration of marine and freshwater ecosystems in all sea basins.  By the

end of 2025, 80 projects worth EUR 400 million were developing innovative solutions in 223 local

demonstration sites.

Promoting a circular economy, climate resilience and biodiversity

The LIFE programme aims to support the EU’s transition to a clean, circular, competitive and

climate-resilient economy. Since 2021, the circular economy and quality of life sub-programme under LIFE

funded 180 projects focusing on resource efficiency, air and soil quality, water resilience and management of

waste and dangerous chemicals. These projects represent an investment exceeding EUR 1 billion, with LIFE

contributing EUR 530 million, and include actions such as the development of new technology to recycle end-

of-life solar panels, the conversion of insect excrement (frass) into fertilisers, along with research into

solutions to stabilise mercury in contaminated soils.

LIFE’s climate change mitigation and adaptation sub-programme financed, up until 2025, 123

projects. Across the programming period, this corresponds to a total project value of EUR 681 million and an

EU contribution of EUR 399.2 million. Projects awarded in 2025 include EUR 66 million to 24 standard action

projects and EUR 25.8 million for strategic projects. Calls for standard action projects and strategic projects

launched in 2025 are set to award EUR 61.5 million and 30 million respectively to successful proposals.

LIFE’s nature and biodiversity sub-programme has financed 170 projects, contributing to improved

conditions for around 560 wild species and more than 2 million hectares of habitats by 2025. Examples

include:

• the EUR 4.8 million mosaic of life project, restoring over 550 hectares of grassland habitats across eight

Natura 2000 sites in Croatia;

• the EUR 8.5 million LIFE riverflow project, improving river connectivity across eight rivers in Latvia and

restoring over 1 034 km of waterways; and

• the EUR 17 million LIFE repeat project, restoring 1 044 hectares of raised bogs and fens in three Natura

2000 sites in the Hannover region.

Cohesion policy funds support climate adaptation, with more than EUR 14 billion allocated for the

2021-2027 period. These investments focus on prevention of climate risks and prioritise nature-based

solutions. As a result, more than 97 million people will benefit from flood protection, and over 288 million

from wildfire protection. Additionally, through the mid-term review, Member States reallocated funds

towards climate adaptation, notably floods and drought risk, under the ‘water resilience’ priority.

Annex 1 – Performance of the EU budget in 2025

36

Protecting our democracy, upholding our values

Europe's independence is about protecting our freedoms. The freedom to decide. To

speak out. To move around a whole continent. The freedom to vote. To love. To pray.

To live in a Union of equality. Our democracy and the rule of law are the guarantors of

those freedoms (49).

Ursula von der Leyen President of the European Commission

Protecting European democracy

In 2025, the EU reinforced democratic resilience against internal and external pressures while

empowering citizens to actively engage in policymaking and shape their communities. Building on the

European Democracy Action Plan and the defence of democracy package, the European Democracy Shield

was presented in November to strengthen democratic institutions, protect the integrity of elections and

support media freedom and pluralism.

The Citizens, Equality, Rights and Values programme helped to support participatory democracy.

In 2025, the programme allocated over EUR 1.9 million to support the European Citizens’ Initiative (ECI)

mechanism, putting citizens at the heart of European democracy by promoting direct participation in EU policy

development. Throughout the year, six new initiatives were registered, amounting to 49 initiatives between

2021-2025, with a record four initiatives reaching the one-million signature threshold, confirming growing

citizen engagement at the EU level (50). 

Building a true union of equality and upholding the rule of law

The citizens, equality, rights and values programme also promotes rights and values enshrined in

the EU treaties and the Charter of Fundamental Rights. By the end of 2025, the programme had

supported 6 737 civil society organisations across all Member States and eligible non-EU countries. The

programme provided operational support and capacity-building actions, particularly support to local, regional,

national and transnational civil-society organisations. Furthermore, between 2021 and 2025, 2 155 funded

projects are expected to reach at least 79 million people. Examples of projects include cooperation between

municipalities and civil society organisations to combat discrimination and promote inclusion, awareness-

raising actions against hate speech and online hatred and transnational citizens’ events encouraging debate

on Europe’s history, democratic values and future and the organisation of transnational events to reflect on

the past, present and future of Europe.

The citizens, equality, rights and values programme also supports award schemes focused on

promoting accessibility, inclusion and equality at the local level. Through the Access City Award and

the European Capitals of Inclusion and Diversity Award, the programme gave recognition to towns and cities

that performed concrete actions in advancing accesibility for persons with disabilities and fostering inclusive,

discrimination-free communities. By doing so, the Commission spotlighted exceptional work at the local level,

sharing good practices and encouraging peer learning among local authorities.

(49) European Commission: Directorate-General for Communication, ‘2025 State of the Union Address by President von

der Leyen’, 10 September 2025, https://commission.europa.eu/strategy-and-policy/state-union/state-union-2025_en. (50) Information on the initiatives can be found at https://citizens-initiative.europa.eu/find-initiative_en.

Annex 1 – Performance of the EU budget in 2025

37

Justice and fundamental rights are also supported by the justice programme. The justice

programme supports judicial cooperation in civil and criminal matters, judicial training and access to justice. In

2025, the programme’s implementation covered action grants on judicial cooperation, judicial training and

access to justice with a total indicative budget of EUR 15.4 million. Moreover, the programme continued to

support actions by the Council of Europe in the area of justice: the network of prison-monitoring bodies, the

delivery of the SPACE report (an annual report on prison statistics providing clear insights into the detention

situations in the Member States) and the Council of Europe’s European Commission for the Efficiency of

Justice annual study on the efficiency, quality and independence of justice systems among the EU Member

States. In addition, procurement contracts, for a total of EUR 9.2 million, were concluded in 2025 to support

development and maintenance of IT tools and key EU policies in the justice field through activities including a

study to support the impact assessment for the revision of the Eurojust Regulation.

Annex 1 – Performance of the EU budget in 2025

38

A global Europe: Leveraging our power and partnerships

The way forward is through partnerships. Partnerships based on common interests

and respect for sovereignty. That is what unites us here today. That is Europe's

approach (51).

Ursula von der Leyen

President of the European Commission

Maintaining the EU’s unwavering support for Ukraine

The EU remains committed to supporting Ukraine and its people. By the end of 2025, the EU and its

Member States had provided around EUR 193.3 billion, of which EUR 88.3 billion enabled by the EU budget. In

2025 alone, the EU covered 84% of Ukraine’s external financing needs. The Commission continued to

coordinate the EU assistance with other partners through the Ukraine Donor Platform.

Financial and economic support

In 2025, the EU disbursed EUR 18.1 billion to Ukraine via an exceptional Macro-Financial

Assistance loan, as part of the G7 Exceptional Revenue Acceleration Loans initiative agreed in

2024. To enable the G7 initiative, the EU set up the Ukraine Loan Cooperation Mechanism to offer Ukraine

non-repayable financial support, financed by leveraging the financial contribution raised on extraordinary

windfall profits stemming from immobilised Russian Central Bank assets. Ukraine can use this support to

repay the EU and other eligible G7 loans, including interest and other related costs.

In addition, the Ukraine Facility continued to support the recovery, reconstruction and

modernisation of Ukraine in line with its EU path. Since its roll-out, the Ukraine Facility has disbursed

EUR 26.8 billion as exceptional financing and under the Ukraine plan. The facility subsidised the borrowing

costs on the loans to Ukraine provided under the facility for the first time in 2025, relieving Ukraine's national

finances by EUR 321 million.

The Ukraine Investment Framework, the investment arm of the Ukraine Facility, has received a

total of EUR 9.5 billion in EU support in the form of EU budgetary guarantee and blending operations and

is expected to mobilise up to EUR 21.8 billion in public and private investment. So far, EUR 6.9 billion has been

allocated to fund investment programmes that directly benefit the people of Ukraine – creating new jobs,

delivering electricity, heat and clean water, supporting affordable housing, building bomb shelters,

rehabilitating war-damaged infrastructure and more.

To restore critical energy capacity and directly reinforces Ukraine's national grid, the EU

supported the relocation of a full thermal power plant from Lithuania to Ukraine in December 2025.

The plant is capable of supplying power to approximately one million Ukrainians – the largest single operation

to date under the Union Civil Protection Mechanism (52).

(51) European Commission: Directorate-General for Communication ‘Keynote speech by President von der Leyen at the

Global Gateway Forum’, news article, 9 October 2025, https://ec.europa.eu/commission/presscorner/detail/en/speech_25_2337.

(52) European Commission, ‘Commission delivers thermal plant to supply power for 1 million Ukrainians’, press release, 22 December 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_3137.

Annex 1 – Performance of the EU budget in 2025

39

The Solidarity Lanes, set out in May 2022, continue to ensure that Ukraine can import the goods

it needs and export agricultural and other products. While the Solidarity Lanes were essential for

Ukraine’s agricultural exports until mid-2023, Ukraine has since successfully fought against Russia to secure

its Black Sea corridor. The EU supports Ukraine’s Black-Sea-linked trade by backing this corridor, which

enables Ukrainian vessels to continue exporting. In parallel, the EU has invested in infrastructure and

coordination to ensure this maritime route remains viable and secure.

The EU continued to use export credit guarantee instruments during the year to support trade.

For example, in June, the first deal under the EU’s Ukraine Export Credit Guarantee Facility was struck,

providing EUR 20 million in guarantees for EU exports to Ukraine via Denmark’s Export–Import Office (53).

To improve transport connections between the EU, Ukraine and Moldova, by 2025 the EU has

mobilised more than EUR 2.3 billion, including EUR 0.6 billion in funding from the Connecting Europe

Facility. For example, in July, the Connecting Europe Facility signed a new project to construct an EU-standard-

gauge railway link from Poland to Sknyliv (near Lviv) in Ukraine for an EU contribution of EUR 73.5 million (54).

In September, Ukraine opened its first EU-standard-gauge railway, enabling direct train travel from Ukraine to

cities like Budapest in Hungary and Vienna in Austria (55).

Humanitarian support to Ukraine

In 2025, the EU continued to provide humanitarian aid in Ukraine and Moldova for emergency

assistance. This included EUR 40 million allocated to help Ukrainians endure a fourth winter of Russia’s war

of aggression, assisting EU humanitarian aid partners in delivering shelter materials, repairing damaged

homes and centres for displaced people and improving access to water, sanitation and heating. Since Russia’s

full-scale invasion in February 2022, the Commission has allocated over EUR 1.2 billion for humanitarian aid

programmes in Ukraine, including EUR 220 million in 2025.

(53) European Commission, ‘First deal under EU’s Ukraine export credit guarantee facility: €20 million for EU exports to

Ukraine through Denmark’s EIFO’, press release, 5 June 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1429.

(54) European Commission (2026), ‘Implementation of the 1435 connectivity PL/UA border – Mostyska II – Sknyliv (Lviv) Stage 1’, CEF Transport programme, https://ec.europa.eu/assets/cinea/project_fiches/cef/cef_transport/24-UA-TG- EUUA1435PLUABCPML1.pdf.

(55) European Commission: Directorate-General for Mobility and Transport, ‘New EU-funded railway line brings Ukraine even closer to EU’, news article, 5 September 2025, https://transport.ec.europa.eu/news-events/news/new-eu-funded- railway-line-brings-ukraine-even-closer-eu-2025-09-05_en.

Annex 1 – Performance of the EU budget in 2025

40

Humanitarian aid for Ukraine and Moldova from the EU and its Member States (2022-2025)

Supporting people in Ukraine

From 2022 to 2025, the EU has provided the following to the people in Ukraine (56):

• EUR 220 million in humanitarian aid funding responding to the needs of the most vulnerable;

• EUR 100 million dedicated to supporting safe access to education for children in Ukraine;

• EUR 60 million for projects aimed at building the capacity of Ukrainian universities, vocational

education and training institutions, and sport and youth organisations under Erasmus+;

• EUR 65 million for free, healthy school lunches for 700 000 primary school students in Ukraine;

• more than EUR 50 million to support Ukraine’s cultural and creative sectors, including over

EUR 11.5 million dedicated to cultural heritage;

• more than EUR 700 000 in mobility grants for artists and cultural professionals;

• EUR 123 million to support civil-society organisations in Ukraine.

Military support and defence research

The EU and the Member States have provided around EUR 69.3 billion in military support since

2022 through the European Peace Facility. EUR 6.1 billion of this has been channelled via the European

Peace Facility. Additionally, the EU has provided EUR 3.7 billion from the proceeds of Russian immobilised

assets, out of which EUR 3.3 billion were channelled to the European Peace Facility and EUR 0.4 billion to the

Ukraine Facility. The EU trains the Ukrainian Armed Forces through the EU Military Assistance Mission in

support of Ukraine, which has so far trained around 85 000 Ukrainian military personnel.

The EU is also providing defence research and innovation instruments, mainly through the

European Defence Fund. In 2025, the EU adopted the regulation to incentivise defence-related investments

in the EU budget, which enabled the association of Ukraine to the European Defence Fund, with the objective

of further enhancing industrial cooperation between the EU and Ukraine. Moreover, the EU announced the

(56) European Commission (2026), ‘The EU in 2025: General report on the activities of the European Union’, Chapter 1:

The EU’s support for Ukraine, https://op.europa.eu/webpub/com/general-report-2025/en/chapter1.html#subchapter1-1.

Over EUR 1.2 billion In humanitarian aid from the EU

Over EUR 3 billion In humanitarian aid from Member States

Over EUR 4.2 billion

in total

Annex 1 – Performance of the EU budget in 2025

41

launch of BraveTechEU, a joint EU–Ukraine initiative aimed at bringing closer together the EU and Ukrainian

defence innovation ecosystems to develop battlefield-proven solutions.

Restrictive measures

The EU adopted four additional packages of sanctions against Russia and Belarus in response to its war of

aggression against Ukraine, further cutting access to critical technology, industrial goods and financial

services, and reducing Russia’s revenue streams, in particular from energy. In order to increase the

effectiveness and impact of the sanctions, the EU continued to put greater emphasis on anti-circumvention

measures in the area of trade and energy, including the targeting of the shadow fleet used by Russia to

evade the oil price cap. In parallel, the EU reinforced its cooperation and outreach to non-EU countries.

EU enlargement and the EU’s wider neighbourhood

In 2025, the EU provided a wide range of support to enlargement countries , including the following.

• EUR 184 million in support disbursed under the Reform and Growth Facility for the Western Balkans.

• As of June, the Western Balkans Guarantee 4 SME Resilience had committed the last of its

EUR 60 million in EU funds, unlocking a total of EUR 886 million in financing to support the sustainable

growth of small and medium-sized enterprises in the region.

• EUR 288.9 million was disbursed under the new Reform and Growth Facility for Moldova.

In 2025, the Commission finalised the programming of the Instrument for Pre-Accession

Assistance III bilateral and multi-country multiannual action plans in favour of the Western

Balkans and Türkiye, with the exception of Kosovo (57). Actions adopted included a multi-country and civil

society facility and media multiannual action plan for 2025–2027 worth EUR 553.9 million; a multiannual

action plan covering bilateral actions in favour of Albania, Bosnia and Herzegovina, Montenegro, North

Macedonia and Serbia for 2025–2027 of EUR 491.9 million; a multiannual action plan in favour of Türkiye for

2025–2027 for EUR 311.7 million; and a multiannual action supporting essential needs for refugees and

migration management in Türkiye for 2025–2027 of EUR 1.15 billion.

Moldova became a candidate country in 2022. The EU has cooperated with Moldova via the framework

of the European Neighbourhood Policy and the Eastern Partnership. In February 2025, in the context of the

energy crisis caused by the insecurity of Russian supplies, the Commission and Moldova agreed on a two-year

comprehensive strategy for energy independence and resilience, providing quick EU support of up to

EUR 160 million to the country. In March, the Reform and Growth Facility for Moldova was created, a new

financing tool of EUR 1.9 billion (2025-2027) to enact the Growth Plan. In June 2025, Moldova received

EUR 270 million in pre-financing loans under the facility, and EUR 24.3 million was released as non-repayable

support. Continued financial support under the facility is conditional upon successful implementation of

reform. In September 2025, having established that Moldova had met four reform indicators from the

Agenda, the Commission made its first regular payment under the facility, unlocking EUR 18.9 million in loans.

The reforms included the development of open and competitive electricity and gas markets, along with

measures to guarantee energy security.

In the Eastern Neighbourhood, the Eastern Partnership continues to be the overarching policy

framework to enhance regional cooperation, promote stability and economic growth and bring

partner countries closer to the EU. Assistance through multi-annual action programmes covering the 2025-

(57) This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion

on the Kosovo declaration of independence.

Annex 1 – Performance of the EU budget in 2025

42

2027 period was approved in July for Armenia, Azerbaijan, Belarus, Georgia and Moldova, totalling

EUR 668.2 million.

In the Southern Neighbourhood, a multiannual cooperation programme was adopted for Libya, with a

budget of EUR 102 million to support governance and stabilisation (EUR 55 million), economic growth and

digital transformation (EUR 23.5 million), along with climate, energy and environmental action

(EUR 23.5 million). Moreover, in 2025, the Strategic and Comprehensive Partnership with Egypt (concluded in

2024) supported Egypt’s green transition and overall social and economic development. The partnership also

includes an ongoing macro-financial assistance operation of up to EUR 4 billion to support Egypt’s financial

situation, out of which EUR 1 billion was disbursed in January 2026. Furthermore, in September 2025, the EU

disbursed the first instalment of the ongoing macro-financial assistance operation to Jordan, amounting to

EUR 250 million. Furthermore, the adoption of the Pact for the Mediterranean provided a new framework

for EU-Southern Mediterranean relations.

In 2025, the volatile situation in the Middle East highlighted the need for a more structured and coordinated

approach to cooperation in the region. The EU presented a proposal for a multiannual comprehensive

programme for Palestine’s recovery and resilience for the period 2025–2027, for an amount of EUR 1.6

billion. Moreover, cooperation and engagement with the Gulf Cooperation Council (GCC) and individual Gulf

countries were strengthened, particularly in the areas of security, climate change, digital cooperation, and the

energy transition. In addition, Syria’s efforts to restart its economy, including through reinforced capacity

building and support to key economic sectors, were supported with EUR 139 million.

The EU’s foreign policy and international relations

International partnerships

The Global Gateway is instrumental in supporting the EU’s international partnerships. In 2025, the

EU and its Member States continued scaling up the Global Gateway strategy. The second Global Gateway

Forum was organised and President von der Leyen announced that the EU, Member States and European

financing institutions, following a Team Europe approach, had mobilised over EUR 306 billion in investments,

exceeding the original EUR 300 billion target.

The 25th anniversary of the EU–African Union partnership was celebrated in 2025. Through the

Global Gateway, by 2025 the EU mobilised EUR 120 billion for projects across Africa. At the G20 Summit in

South Africa, the final pledging event of the Scaling up Renewables in Africa Global Gateway campaign

mobilised EUR 15.5 billion for clean energy and access to electricity across the continent (58).

Throughout 2025, the EU-Latin America and the Caribbean (LAC) Global Gateway Investment Agenda

delivered tangible results, reaffirming the EU’s position as the leading investor in the region. More than 80

projects advanced in their implementation, illustrating the strength of the Team Europe approach and its

concrete impact on the ground, including, for example: regional electricity integration, the EU-LAC high-

performance computing network and the valorisation of sargassum in the Caribbean.

In 2025, a Team Europe Global Gateway investment package mobilised EUR 12 billion for Central Asia and,

at the first-ever EU–Pacific Business Forum, the Commission announced nearly EUR 300 million of Global

Gateway investments dedicated to the entire Pacific region. The EU also introduced a EUR 42 million initiative

(58) European Commission, ‘Europe leads pledging effort in campaign mobilising €15.5 billion for clean energy in Africa’,

press release, 21 November 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2781.

Annex 1 – Performance of the EU budget in 2025

43

to strengthen Asia-Pacific capacities in using Copernicus data for spatial planning and climate change

mitigation.

The European Fund for Sustainable Development Plus contributed to the expansion of the Global

Gateway by sharing the risks of development finance partners when they mobilise their own resources,

thereby attracting additional investors, notably from the private sector. In 2025, the EU budget provided cover

for European Investment Bank loans of approximately EUR 4 billion, which are expected to leverage

EUR 14 billion in total investment. The extended guarantee also covered open architecture guarantees for

EUR 2.5 billion, with an estimated total investment of at least EUR 5 billion. Examples of open architecture

guarantees under the European Fund for Sustainable Development Plus include scaling up sustainable

finance in Africa (59), contributing to a reliable and sustainable energy supply in Africa and the Asia Pacific

region (60) and access to finance for small and medium-sized enterprises, particularly start-ups and woman-

led enterprises, in Africa and the European Neighbourhood (61).

As part of the EU–Overseas Countries and Territories cooperation, the Decision on the Overseas

Association, including Greenland has supported actions up to 2025 amounting to EUR 366.3 million. In

2025, the first three new intra-regional actions were adopted for a total of EUR 4.8 million: one intra-regional

programme for the French Southern and Antarctic Lands, a programme dedicated to culture and a support-

measures programme, both covering all overseas countries and territories. Territorial cooperation continued to

cover several sectors from water to energy, tourism or natural capital. The EU supported, for example, cases

such as the disaster risk reduction policy of Saint Barthélemy, supported with EUR 2.5 million, where by 2025

the territory had acquired four rescue and assistance vehicles, carried out training courses on search and

rescue and installed a tsunami alert system.

Supporting peace and security

Under the Neighbourhood, Development and International Cooperation Instrument – Global

Europe, in 2025 the EU supported 85 crisis response interventions amounting to EUR 228.85 million,

and other interventions related to foreign policy needs totalling EUR 112.45 million. This included responding

to Russia’s war of aggression against Ukraine, supporting the Middle East peace process, addressing instability

in Lebanon, Sudan and Syria and fighting disinformation in the Sahel and Moldova. Moreover,

EUR 121.5 million was provided for resilience and peacebuilding. In the case of Afghanistan, in 2025 the

Commission adopted an EUR 83 million programme to support basic needs and livelihoods under the ‘for

women, by women’ principle and allocated an additional EUR 38.5 million to address the displacement crisis.

To support peace and security in South Asia, the EU launched a EUR 5 million programme ‘Supporting Asian

countries’ resilience to violent extremism in the digital space’ and adopted a regional programme to support

resilience and cross-border cooperation, notably to respond to challenges posed by technology-enabled crime

and terrorism.

Under the common foreign and security policy, in 2025 the EU financed, with a total of EUR 416.7 million,

13 civilian common security and defence policy missions; 13 EU Special Representatives; and 30 ongoing non-

proliferation and disarmament actions, with 12 actions launched in 2025.

(59) European Commission: Directorate-General for International Partnerships (n.d.), ‘African Local Currency Bond Fund’,

https://international-partnerships.ec.europa.eu/funding-and-technical-assistance/funding-instruments/european-fund- sustainable-development-plus/african-local-currency-bond-fund_en

(60) European Commission: Directorate-General for International Partnerships (n.d.), ‘Accelerate the Energy Transition – AccelerET’, https://international-partnerships.ec.europa.eu/funding-and-technical-assistance/funding- instruments/european-fund-sustainable-development-plus/accelerate-energy-transition-acceleret_en

(61) European Commission: Directorate-General for International Partnerships (n.d.), ‘Access to Finance’, https://international-partnerships.ec.europa.eu/funding-and-technical-assistance/funding-instruments/european-fund- sustainable-development-plus/access-finance_en

Annex 1 – Performance of the EU budget in 2025

44

In the context of the Global Alliance to Counter Migrant Smuggling, the Commission launched an

action on the financial and digital dimensions of migrant smuggling as part of a EUR 78 million EU

funding package. The Commission also makes use of funds from the Asylum, Migration and Integration Fund

towards actions under the Global Alliance to Counter Migrant Smuggling, including EUR 10 million in 2025,

and contributed with approximately EUR 12 million through the Internal Security Fund to the Common

Operational Partnership with non-EU countries to counter migrant smuggling and trafficking in human beings.

EU provision of humanitarian aid

The current hardening geopolitical context and the impacts of climate change are exacerbating

tensions, fuelling existing conflicts and extending protracted crises. In this context, the EU remains a

reliable and principled humanitarian actor.

In 2025, the EU continued its support to Palestine (62). The situation in the occupied Palestinian

territory has deteriorated dramatically following the October 2023 terrorist attacks on Israel and the ensuing

military operations by Israel in Gaza and the West Bank, resulting in a catastrophic humanitarian situation,

large-scale destruction and suffering, with the entire population of Gaza (2.1 million) subject to security and

protection risks of unprecedented severity. Under the humanitarian aid programme, EUR 220 million was

committed to address the needs of the occupied Palestinian territories where the entire population of Gaza is

facing acute food insecurity. In April 2025, the Commission presented a proposal for a EUR 1.6 billion

multiannual and comprehensive programme for Palestinian recovery and resilience (2025-2027). Part of the

funds (i.e. EUR 0.5 billion) was committed in 2025.

Furthermore, in 2025 the EU provided EUR 2.56 billion in humanitarian aid to the most vulnerable

people. Overall, the EU and its Member States are providing around 33.8% of the global share of committed

humanitarian aid contributions. Examples of this support include:

• EUR 273 million in response to the crisis in Sudan, which continues to be the world’s largest

displacement crisis;

• EUR 129 million to the African Great Lakes Region, in response to the dramatic escalation of conflict in

the eastern part of the Democratic Republic of the Congo;

• EUR 124 million in humanitarian assistance, chiefly food security and nutrition, to the Central Sahel

region, despite growing humanitarian access restrictions, to address the crisis triggered by forced

displacements to the Gulf of Guinea and Mauritania;

• EUR 55 million to address the conflict in Myanmar, along with over 1 000 metric tonnes of aid via

multiple humanitarian air bridges;

• EUR 39 million in humanitarian aid to Rohingya refugees in Bangladesh;

• EUR 52 million to help people in Venezuela have, among other things, access to health services and

clean water.

(62) The designation of Palestine shall not be construed as recognition of a State of Palestine and is without prejudice to

the individual positions of the Member States on this issue.

Annex 1 – Performance of the EU budget in 2025

45

EU humanitarian aid in 2025

NB: Support for Moldova, Türkiye, Ukraine and South Caucasus includes EUR 2 million for Central Asia, allocated within the Humanitarian

Implementation Plan for Türkiye.

In 2025, over EUR 110 million was allocated for the operational activities of ReliefEU. During

2025, ReliefEU funding was mobilised a total of 118 times in 60 countries, providing a total of

EUR 53.5 million in first-line emergency humanitarian funding. ReliefEU capacities responded to 20 crises

affecting 18 countries.

Total EUR 2.56 billion

EUR 880.5 million Sub-Saharan Africa

EUR 441 million Asia, Latin America, Pacific and Caribbean

EUR 692 million Middle East

and North Africa

EUR 255 million Moldova, Türkiye, Ukraine

and South Caucasus

EUR 293.4 million Non-geographical

allocations

Annex 1 – Performance of the EU budget in 2025

46

Delivering together and preparing our Union for the future

We want a budget that ensures Europe's agency in a fast-changing world. A budget

that is faster and more ambitious. Simpler and more flexible. A strong budget for

Europe's independence moment (63).

Ursula von der Leyen

President of the European Commission

Working on an ambitious budget for the future

In 2025, the Commission adopted its proposal for the 2028-2034 multiannual financial

framework, designed to provide a simpler, more flexible and future-proof budget, and to respond to growing

geopolitical, economic and sustainability challenges. At nearly EUR 2 trillion (equivalent to 1.26 % of the EU

gross national income), with about EUR 25 billion annually (0.11% the EU gross national income) for the

repayment of the loans used to finance NextGenerationEU, it would provide a simpler, more flexible and

more targeted budget to support the EU’s independence, security, prosperity, inclusiveness and resilience in

the coming decade.

The Commission proposal is anchored on three main pillars:

• fostering the achievement of the EU’s priorities at the local, regional and national levels with the new

national and regional partnership plans worth EUR 865 billion;

• delivering on a more competitive Europe though the European Competitiveness Fund and Horizon Europe,

worth EUR 409 billion;

• building long-term, mutually beneficial partnerships with non-EU countries though Global Europe, worth

EUR 200 billion.

These main pillars are complemented by other programmes , including the EU’s flagship programmes

for infrastructure investments (the Connecting Europe Facility) and for investing in people and values

(Erasmus+ and AgoraEU).

Overall, the next proposed multiannual financial framework would:

• provide greater flexibility across the EU budget, thus allowing the EU to act and react quickly when faced

with unexpectedly circumstances or new policy priorities;

• be simpler, with more streamlined and harmonised EU financial programmes, making it easier for people

and businesses to access funding opportunities;

• be more adaptable to local needs, with national and regional partnership plans allowing more targeted

impacts and greater flexibility for supporting economic, social and territorial cohesion across the EU;

• boost competitiveness via greater support for innovation, technological development and for secure

supply chains;

• establish new own resources to ensure appropriate revenues for EU priorities while minimising pressure

on national public finances.

(63) European Commission: Directorate-General for Communication, ‘Speech by President von der Leyen at the European

Parliament plenary debate on the new 2028-2034 Multiannual Financial Framework: architecture and governance’, news article, 12 November 2025, https://ec.europa.eu/commission/presscorner/detail/en/speech_25_2673.

Annex 1 – Performance of the EU budget in 2025

47

The proposal also provides for innovative financing via five new own resources, to reduce

pressure on national budgets. These will provide the EU with the means to fund its priorities while

repaying what the EU has borrowed under NextGenerationEU and limiting the national contributions to the EU

budget. These include revenues from the EU Emissions Trading System, proceeds from the Carbon Border

Adjustment Mechanism, a new own resource based on non-collected e-waste, a tobacco excise duty and a

contribution from companies operating and selling in the EU with a net turnover of at least EUR 100 million.

Proposal for the 2028-2034 multiannual financial framework

865 44%

409 21%

49 2%

200 10%

293

15%

168 8%

Total EUR 2 trillion

European Competitiveness Fund (incl. Horizon Europe), Innovation Fund of EUR 41bn not included

• From 52 to 16 programmes

• Simpler for beneficiaries

• Results-oriented

• More agile

National and regional partnership plans

Erasmus+ & AgoraEU

Global Europe

NB: All amounts in billion EUR, current prices, adjusted with 2% deflator

Other(*)

• Connecting Europe Facility • Civil protection and health • Single market and customs

programme • Euratom research & training • Common foreign and security

policy • Justice • Nuclear safety cooperation

and decommissioning • Association of overseas

countries and territories (incl. Greenland)

• Pericles

NextGenerationEU repayment

(*) Also includes Administration and decentralised agencies

Annex 1 – Performance of the EU budget in 2025

48

4. Horizontal policy priorities in the EU budget

This section provides information on the financing of initiatives relating to the objectives of climate,

biodiversity, gender equality and SDGs, as provided for in point 16(d–g) of the interinstitutional agreement of

16 December 2020 (64). Information on the contribution of the EU budget to the promoting the digital

transition is also provided.

Green budgeting

The Commission uses green budgeting to enhance the transparency of EU funding and support

the achievement of climate and environmental objectives, in line with the Paris Agreement and the

European Green Deal.

To underscore its commitment to its climate and environmental goals, the EU has set quantitative spending

targets for its 2021-2027 multiannual financial framework and NextGenerationEU funding. In particular, the

EU has committed to dedicating at least 30% of its multiannual financial framework and

NextGenerationEU budget to climate-relevant expenditure, and 7.5% of the 2024 annual budget

and 10% of the 2026 and 2027 annual budgets to protecting and enhancing biodiversity.

Expected climate and biodiversity contribution (budgetary commitments) in the 2021-2027

period (million EUR)

NB: As the same action can contribute to more than one objective, it is important to recall that horizontal priorities (e.g. climate and biodiversity figures) cannot be summed up to avoid double counting.

Source: European Commission.

(64) Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European

Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources, (OJ L 433I, 22.12.2020, ELI: http://data.europa.eu/eli/agree_interinstit/2020/1222/oj).

33.0%

37.0% 37.0%

32.9% 33.0%

30.0% 29.4%

3.7% 5.2% 4.5%

7.9% 7.8% 8.1% 8.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

Climate Biodiversity

Climate % Biodiversity %

2021 2022 2023 2024 2025 2026 2027

Annex 1 – Performance of the EU budget in 2025

49

The data available for the 2021-2027 period show that the EU budget, including NextGenerationEU,

is on track to reach its 30% target for climate mainstreaming over the period, thanks to the strong

contribution from the Recovery and Resilience Facility and the REPowerEU plan. The figures presented

in this report use past commitments for the years 2021-2025 and expected commitment appropriations

for 2026-2027 (65).

The Innovation Fund, financed by revenues from the Emission Trading System and channelled through the EU

budget, provides important impetus to the climate objectives. The Modernisation Fund, an off-budget

instrument financed by the Emission Trading System, also contributes to the climate efforts of Member

States.

For biodiversity mainstreaming, while the 2024 ambition was achieved, the 2026 and 2027

targets are projected to fall below the initial ambitions. More details are available in the dedicated

biodiversity section below.

The climate and biodiversity contributions are calculated based on commitment

appropriations, as shown below.

• For direct management, estimates are prepared based on the most updated data available. For

future estimates, work programmes, sectoral targets and historical values are used.

• For shared management, past and future figures are presented on the basis of the programmes

and CAP strategic plans agreed with the Member States, and updated in accordance with the

annual reports.

• For indirect management, the figures are based on the existing targets and agreements with

implementing partners, along with their annual reports.

• Past expenditure is revised annually following a quality review conducted by Commission

departments, incorporating additional information available on the selected project.

Focus on results (66)

49 gigawatt-hours of estimated energy efficiency

savings per year from private and public buildings.

1 380 additional gigawatt-hours

of renewable energy capacity installed.

124 million tonnes of carbon dioxide equivalent avoided per year, of which almost half was

through NextGenerationEU green bond investment. Additionally, 962 million tonnes of carbon

dioxide reduction are expected from the Innovation Fund, ongoing or completed projects, over their

first 10 years of operation.

(65) Data on budget programming for 2026 and 2027 presented in this report reflect information available as of 31 May

2026. (66) Aggregated data of core performance indicators reflecting estimated and expected impact from the EU budget

programmes during the 2014-2025 period (contributions from the regional policy, the LIFE programme, the InvestEU programme, the Innovation Fund, the Just Transition Mechanism and the Recovery and Resilience Facility).

Annex 1 – Performance of the EU budget in 2025

50

A clear focus on results is essential for effective green budgeting and EU budget implementation

in general. The results stemming from available indicators can be used to achieve more targeted spending

and to improve steering of the EU budget. It can also make the green transition more efficient by improving

accountability. The latter is also important in view of the need to contribute to multiple international

commitments.

The focus on emission reductions through energy efficiency and renewable energy expansion is

crucial for achieving the EU’s climate neutrality goals and achieving the 2030 targets. The above

results show that the EU budget is helping Member States to diversify their energy mix and gradually reduce

their reliance on fossil fuels. This results in lower energy costs and decreased emissions of greenhouse gases

and air pollutants, helping combat climate change.

Measuring the impact of NextGenerationEU investment

In December 2025 the Commission published the third annual impact report for NextGenerationEU green

bonds. The reports mark a major achievement in transparency, enabling the measurement of the concrete

climate impact of the investment financed by these bonds.

Building on the robust EU green bond framework, the report is based on detailed analyses of the milestones

and targets for green-bond-financed investment under the Recovery and Resilience Facility. This provides the

basis for calculating their climate impact, allowing the measuring of progress on the path to a sustainable

future and ensuring a direct link between funding and climate impact.

The analysis shows that after full implementation, NextGenerationEU green bond investment has the

potential to avoid greenhouse gas emissions by a total of 53.4 million tonnes of carbon dioxide

equivalent per year – equivalent to 1.5% of the EU’s total emissions in 2022. The report estimates a

current annual reduction of 14.0 million tonnes of carbon dioxide equivalent, a figure that represents 26.2%

of the total projected amount and continues to increase as the implementation of the Recovery and Resilience

Facility accelerates (compared with 2.7% in 2024).

EU-supported activities and the EU taxonomy for sustainable finance

For the third consecutive year, the ‘programme performance statements’ (Annex 4 to this report) of several

key EU budget programmes include an analysis of how their supported activities relate to the EU taxonomy

for sustainable activities. This addition provides an important starting point for future analyses of how EU

spending contributes to a greener future (67).

While the analysis of the relationship between the supported activities and the taxonomy in the Recovery and

Resilience Facility has been detailed previously in the context of NextGenerationEU green bond reporting,

the scope covers additional programmes that may invest in activities covered by the EU taxonomy.

This approach offers a more comprehensive view of the EU’s commitment to sustainable financing across its

various initiatives.

(67) Taxonomy alignment is not a prerequisite for funding.

Annex 1 – Performance of the EU budget in 2025

51

Support to climate and environmental objectives in the 2028-2034

long-term budget

The impact assessment (68) underpinning the Commission proposal for a Performance Regulation

highlighted the lessons learned from the current programming period. It identified a number of

positive developments and challenges, such as the lack of a harmonised methodology to track contributions

to green objectives across EU budget programmes, overlaps in tracking between climate and biodiversity and

a lack of programme-specific targets for biodiversity.

As a result, for the 2028-2034 multiannual financial framework, the Commission proposed a

spending target of 35% of the EU budget, covering all climate and environmental objectives ,

including circular economy, water and clean air, in addition to climate change mitigation and adaptation, and

biodiversity, while avoiding risks of double counting. The proposal further includes programme-specific

spending targets for national and regional partnership plans, the European Competitiveness Fund, Horizon

Europe, the Connecting Europe Facility and Global Europe. The contribution of all EU budget programmes to

climate and environmental policies will be tracked according to a harmonised methodology set out in the

Performance Regulation, allowing to track contributions relevant for the European Green Deal.

The proposed Performance Regulation further introduces, for the first time, a harmonised set of

output and result indicators applicable across all EU budget programmes. This would allow the

aggregation of performance data at the EU budget level and strengthen monitoring of climate action and

environmental protection. The framework includes indicators such as ‘annual GHG emissions avoided (tCO2e)’,

‘new or additional energy capacity installed in electricity production (MW)’ and ‘hectares of protected or

restored areas’.

The Commission also proposed a horizontal and systemic approach to integrate the do no significant harm

principle across all EU programmes. Guidance on do no significant harm will define environmental and climate

conditions, building on the lessons learned from the implementation of the do no significant harm principle in

existing programmes.

(68) Commission staff working document – Impact assessment report accompanying the document Proposal for a

Regulation of the European Parliament and of the Council establishing a budget expenditure tracking and performance framework and other horizontal rules for the Union programmes and activities, SWD(2025) 590 final of 16 July 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52025SC0590.

Annex 1 – Performance of the EU budget in 2025

52

Climate mainstreaming

Examples of achievements

LIFE projects have achieved a reduction of

14 162 593 tonnes of carbon dioxide equivalent

per year, annual primary energy savings of

8 332 gigawatt-hours and additional renewable

energy production of 3 153 gigawatt-hours per

year. Over 3.5 million citizens have benefited

from reduced vulnerability to climate change.

Under Global Europe (Neighbourhood,

Development and International Cooperation

Instrument), the EU is actively advancing the

green transition in the Eastern Partnership

through targeted programmes delivering

concrete results. The EU4Climate Resilience

programme (EUR 17 million) provides technical

support and pilot projects to strengthen climate

adaptation at the municipal level, helping partner

countries meet their Paris Agreement

commitments and align with EU legislation.

In the ‘Cities’ mission of Horizon Europe, 103

cities have formally committed to climate

neutrality, with an expected reduction of carbon

dioxide emissions equal to approximately 6.2%

of the EU total in 2023.

Under the CAP, actions to enhance carbon

sequestration and storage in soils and biomass

have been carried out on 38% of the EU’s

agricultural area.

Cohesion Policy plays a key role in

strengthening climate adaptation not only

through infrastructure investments, but also by

supporting the development and implementation

of climate adaptation strategies. By the end of

2025, the funds have supported the creation of

52 strategies across EU regions, ensuring a

structured and long-term approach to resilience.

Annex 1 – Performance of the EU budget in 2025

53

How much do we spend?

Climate contribution in the 2021-2027 period (million EUR)

Source: European Commission.

For the 2021-2027 period, the EU budget – including NextGenerationEU – is projected to

contribute EUR 662 billion to climate mainstreaming objectives, representing 34% of the budget

envelope, surpassing the initial target of 30%. Additionally, through the InvestEU programme, the EU

budget is expected to help mobilise over EUR 128 billion in investment to meet EU climate goals.

Differentiating between climate change mitigation and adaptation expenditure

Under the interinstitutional agreement of 16 December 2020, the Commission committed to report on climate

expenditure, differentiating between climate change mitigation and adaptation, where feasible. To allow for

such reporting, an external study was commissioned to assist in developing a methodology to disaggregate

climate expenditure across these two dimensions.

The methodology was designed to avoid creating additional administrative burdens by building on the existing

system of intervention fields used under the Common Provisions Regulation for cohesion funds and the

Recovery and Resilience Facility. For external action programmes, existing methodologies were used, while for

the CAP, the methodology was developed as a part of a specific study commissioned for this policy.

Horizon Europe EUR 32 741

Connecting Europe Facility, including military mobility

EUR 24 264

European Regional Development Fund and Cohesion Fund

EUR 94 833

Recovery and Resilience Facility

EUR 264 193

Common agricultural policy

EUR 145 582

Just Transition Mechanism

EUR 19 356

Neighbourhood, Development and

International Cooperation Instrument - Global Europe

EUR 19 958

Other EUR 60 380

Total

EUR 661 306 million

Annex 1 – Performance of the EU budget in 2025

54

Climate contribution in the 2021-2025 period disaggregated by climate mitigation

and climate adaptation

NB: Figures for the CAP refer only to the 2023-2025 period.

Source: European Commission.

Climate change mitigation

72%

Climate change adaptation

18%

Cross-cutting climate mitgation and adaptation

9%

Not attributable 1%

Annex 1 – Performance of the EU budget in 2025

55

Biodiversity mainstreaming

Examples of achievements

65 million hectares of land are covered by

selected projects to protect against wildfires

under cohesion policy funds. The Copernicus

monitoring services contribute to monitoring

changes in ecosystems and biodiversity loss,

in support of the EU biodiversity strategy,

the EU Nature Restoration Regulation, the

Convention on Biological Diversity and reporting

on the SDGs.

Under LIFE, biodiversity loss has been halted

or reversed across 2.0 million hectares of habitats,

and 557 species have benefited from conservation

effort.

2 691 measures contributing to ‘good

environmental status’ were selected between

2022 and 2024 under the European

Maritime, Fisheries and Aquaculture Fund.

41 million Hectares (25.3% of EU farmland)

are covered by biodiversity conservation

and restoration commitments in 2024

under the CAP.

How much do we spend?

Biodiversity contribution in the 2021-2027 period (million EUR)

Source: European Commission.

Horizon Europe 8 021

European space programme

930

European Regional and Development Fund and

Cohesion Fund 16 159

Recovery and Resilience Facility

10 198

Common agricultural policy

64 714

European Maritime, Fisheries and

Aquaculture Fund 1 816

LIFE programme 2 732

Just Transition Mechanism 752

Neighbourhood, Development and International Cooperation

Instrument - Global Europe 6 500

Instrument for Pre-accession

Assistance 472

Other 730

Total EUR 112 933

million

Horizon Europe EUR 8 021

European space programme EUR 930

European Regional and Development Fund and

Cohesion Fund 16 159

Recovery and Resilience Facility

EUR 10 198

Common agricultural policy

EUR 64 714

European Maritime, Fisheries and

Aquaculture Fund EUR 1 816

LIFE programme EUR 2 732

Just Transition Mechanism EUR 752

Neighbourhood, Development and International Cooperation Instrument - Global Europe

EUR 6 500

Instrument for Pr -accession

Assistance EUR 472

Other EUR 730

Total EUR 113 024

million

Annex 1 – Performance of the EU budget in 2025

56

For the 2021-2027 period, the EU budget – including NextGenerationEU – is contributing

EUR 113 billion, or 5.8% of the total budget, to biodiversity mainstreaming objectives. While the

ambition of allocating 7.5% of the EU budget to biodiversity in 2024 was achieved, the 10%

targets for 2026 and 2027 are projected to fall below the initial ambitions.

The CAP methodology for the 2023-2027 period gives more granular and accurate results compared with the previous period. As from the 2024 draft budget, the contribution of the CAP to biodiversity is estimated by the

Commission through the application of EU coefficients (100%, 40% and 0%) and weighting factors (100%, 70% and 50%) that aim to reflect the differentiated contribution of each type of intervention towards the

biodiversity objectives. Furthermore, given the design of the CAP and the cohesion policy – and the financial

programming of the two programmes – it is not possible to assign resources to specific years, as projects have a multiannual nature that cannot be attributed to a single year.

Annex 1 – Performance of the EU budget in 2025

57

Gender equality mainstreaming

In response to persistent gender gaps and intersecting inequalities, the EU has intensified efforts to make

its budget and policymaking more inclusive. Challenges such as the cost-of-living crisis, care burden

disparities and unequal access to digital and green jobs have highlighted the need for sustained investment

in gender equality.

As a result, gender mainstreaming is now embedded across major EU policies and funding programmes,

including the European Social Fund Plus, the European Regional Development Fund, the Just Transition Fund,

Horizon Europe, the CAP and the Neighbourhood, Development and International Cooperation Instrument –

Global Europe. These tools promote equal access to resources, economic participation and social protection,

along with the prevention of conflict-related violence and participation in peace processes – particularly for

women and under-represented groups.

Looking ahead, a new gender equality strategy for 2026–2030 was published in March 2026, following up on

the 2024 political guidelines for the 2024-2029 Commission. The strategy not only builds on past achievements

but also sets a new benchmark in advancing gender equality, marking a decisive step forward in both ambition

and accountability. It responds to emerging challenges with a more robust and forward-looking approach, while

significantly enhancing the way financial contributions to gender equality are tracked and measured.

Examples of achievements

The citizens, equality, rights and values programme contributed strongly to the three pillars

of the EU gender equality strategy, with 25% of the programme’s budget having gender equality

as a primary objective. In 2025, this was mainly driven by the Daphne call, which aims to prevent

and combat gender-based violence and violence against children, where EUR 15.4 million out of

EUR 23 million contributed to score 2. Overall, approximately 54% of the programme budget was

allocated to gender score 1, demonstrating strong gender mainstreaming across programme actions.

Under Horizon Europe,gender equality is a cross-cutting priority. Under the programme, research

and innovation contribute to gender equality primarily through the effective integration of the gender

dimension in research and innovation content, i.e. the consideration of sex and gender differences in

research objectives, methodologies, data collection, analysis and results. The Improve project supports

victims of domestic violence – particularly those from marginalised groups – by developing AI tools for

reporting, detection and assistance. Moreover, the grass ceiling project (Cluster 6) addresses gender

inequalities by co-designing solutions with rural women innovators. Through community hubs, it brings

together women farmers, enterprise officers, financial institutions and researchers to identify barriers,

co-create support systems and generate new businesses, partnerships and policy recommendations.

Annex 1 – Performance of the EU budget in 2025

58

With EUR 2.4 million in funding, the European Social Fund Plus supports the project ‘FairPlusService’

in Austria to enhance the professional development and further training of formally low-skilled and

unqualified women, fostering equal opportunities and empowerment. The initiative targets women with

limited formal qualifications, offering a range of measures to support employment, such as providing

compact training and short learning units to stimulate continuous skill development, along with tailored

consulting and coaching services for both Austrian companies and the women themselves. The project

focuses on key sectors such as trade, tourism, health and social care and education, where advisory

services are delivered to bridge skill gaps and promote career advancement. These services are

complemented by comprehensive outreach efforts and broad knowledge-sharing initiatives to ensure

long-term impact. Overall, the project seeks to promote long-term employment stability, gender equality

and labour market participation for some of Austria’s most vulnerable women.

The European Regional Development Fund continues to play a pivotal role in advancing gender

equality through a dual approach of gender mainstreaming and targeted interventions. For the

2021-2027 programming period, a total of EUR 19.9 billion has been earmarked for gender-targeted

and mainstreaming measures. For example, this support will facilitate the participation of women in

research and innovation, embed a gender lens in sustainable urban development and renewable energy

transitions and alleviate the disproportionate care burdens shouldered by women by improving access

to quality care services.

The Recovery and Resilience Facility supported a wide range of measures contributing to gender

equality. These include investments and reforms specifically designed to tackle inequalities based on

gender (score 2, contributing to this objective with around EUR 12.4 billion over the lifetime of the

Recovery and Resilience Facility) and other type of investments and reforms which are directly or

indirectly contributing to gender equality (score 1, corresponding to around EUR 5.7 billion). For example,

a measure specifically designed to tackle gender inequalities is the Portuguese reform to combat

inequalities between women and men, which awards a seal to companies with a narrow gender pay gap.

An example of measures directly or indirectly contributing to gender equality includes investments and

reforms improving the access to and the quality of long-term care, for which women traditionally take a

disproportionate burden in households in Czechia, Estonia, Spain, Cyprus, Lithuania, Austria, Poland,

Slovenia and Slovakia.

Under the Instrument for Pre-accession Assistance III, 35% of all actions adopted between

2021 and 2025 have gender as a significant or principal objective and an increasing number of country

and regional actions have gender equality as a principal objective. These targeted actions include,

amongst others, the fight against gender-based violence in North Macedonia through the ‘We care:

United we stand to fight against sexual and gender-based violence’ action, which empowers civil society

organisations to encourage positive behavioural change across society for the effective protection of

women. In Albania, the EU supports equal participation and leadership through the ‘EU for Gender

Equality II – Gender Equality Facility in Albania’, which seeks to promote the consistent application of

gender-responsive governance by national authorities, to strengthen equality, combat discrimination,

and enhance women's empowerment and human rights, in line with the EU acquis on gender equality.

Annex 1 – Performance of the EU budget in 2025

59

Under the Neighbourhood, Development and International Cooperation Instrument – Global

Europe, between 2021 and 2025, the share of external actions contributing to gender equality and

women’s empowerment reached 83% and, of these, 4.7% (about 90 programmes at the country,

regional and global levels) had gender equality as a principal objective. For instance, the Advocacy,

Coalition Building and Transformative Feminist Action Programme is a EUR 22 million initiative funded

by the EU and implemented by UN Women. The programme strengthens women’s rights movements to

advocate and work with public authorities on policy and legal reforms and accountability mechanisms to

end all forms of violence against women and girls, particularly in contexts of shrinking civic space.

In 2025, through the programme, women’s rights organisations and activists shaped more than 20

global and regional normative and policy processes, such as the adoption of the Mercosur Agreement

on the Mutual Recognition of Protection Measures for Women in Situations of Gender-Based Violence,

the ratification of the International Labour Organization’s Convention 190, and continental justice

and accountability frameworks, notably the African Union Convention on Ending Violence against

Women and Girls.

How much do we spend?

In line with the 2020-2025 gender equality strategy, the 2021-2027 multiannual financial framework and

NextGenerationEU support a range of initiatives promoting women’s labour market participation, work–life

balance, care infrastructure, female entrepreneurship and gender balance in education and professions.

Dedicated funding also supports civil-society and public institutions tackling gender-based violence.

The Commission developed a methodology to track gender-related spending at the programme level, in

collaboration with the European Institute for Gender Equality and informed by the European Court of Auditors’

2021 report on gender mainstreaming in the EU budget (69).

Since the 2023 financial year, the monitoring of gender expenditure has been enhanced with the inclusion

of the gender-disaggregated data available per programme in the programme performance statements

(Annex 4 to the present report).

The EU budget allocation to gender equality scores

The EU budget allocation to gender equality scores, based on the aggregation of the 2025

interventions qualifying for each score, is outlined below. In line with the methodology, a programme

may qualify for one or more gender scores based on the objectives pursued by its respective

interventions.

• Score 2: interventions whose principal objective is to improve gender equality corresponded to

1% of the EU budget implemented in 2025 and were included in 13 programmes.

• Score 1: interventions that have gender equality as an important and deliberate objective (but not

as the main reason for the intervention) corresponded to 19% of the EU budget implemented in

2025 and were included in 22 programmes.

• Score 0*: interventions that have the potential to contribute to gender equality corresponded to

5% of the EU budget implemented in 2025 and were included in 3 programmes.

• Score 0: interventions that do not have a significant bearing on gender equality corresponded to

76% of the EU budget implemented in 2025 and were included in 53 programmes.

(69) European Court of Auditors, Gender Mainstreaming in the EU budget: Time to turn words into action, Publications

Office of the European Union, Luxembourg, 2021, https://www.eca.europa.eu/lists/ecadocuments/sr21_10/sr_gender_mainstreaming_en.pdf.

Annex 1 – Performance of the EU budget in 2025

60

In 2025, almost 20% of the EU budget was allocated to measures supporting gender equality (scores 2 and

1), marking a solid continuation from the previous year and confirming that gender equality remains a strong

and consistent priority within the EU’s financial framework. This sustained level of ambition demonstrates

that promoting gender equality is not a one-off effort, but an objective that is systematically taken into

account year after year in budgetary decisions. It reflects a credible and enduring commitment, alongside a

deepening integration of gender mainstreaming across budgetary instruments. More broadly, it shows that

the EU is increasingly embedding gender considerations into the core of its spending, ensuring that financial

resources are consistently directed toward policies and programmes that advance gender equality across

Member States.

In concrete terms, this sustained prioritisation translates into significant financial support: in 2025, the EU

allocated a total of EUR 37.5 billion to projects promoting gender equality (gender scores 2 and 1), reinforcing

both the scale and the credibility of its commitment in this area.

Overall, the 2025 results reflect continued progress across EU programmes, both in implementation and in

strengthened reporting capacity, enabling a more precise and granular understanding of how the EU budget

contributes to gender equality. The further reduction in expenditure classified as 0* illustrates sustained

efforts to refine methodologies, improve clarity and better identify gender-relevant spending – supporting a

more accurate recognition of the EU budget’s gender dimension.

At the same time, 0* has now reached a normal and expected level of 5%, which is a striking contrast to the

initial amount reported in 2021, namely 95%. Today, 0* primarily reflects the inherent time lag of certain

types of projects where gender impacts can only be demonstrated over time. This confirms that 0* is no

longer driven by methodological or capacity gaps, but corresponds to the natural life cycle of interventions,

indicating that the system is now functioning as intended. In other words, it is no longer systemic, but rather

correspeonds to a natural rate. For example, certain actions where integrating the gender dimension in

research and innovation is mandatory, such as research under Horizon Europe, require an ex post assessment

to verify how this has been implemented. Until such evidence is available, these actions are assigned a 0*,

indicating a likely – but not yet demonstrated – positive impact on gender equality. Today, 0* only concerns

these types of projects.

Gender scores as a percentage of the total EU budget in 2025

Source: European Commission.

Score 2

1%

Score 1

19%

Score 0*

5% Contribution to

gender equality in

2025

Score 0 76%

Annex 1 – Performance of the EU budget in 2025

61

2021-2025 aggregate results

Past expenditure is revised annually through a quality review conducted by the Commission departments,

incorporating additional information available on the selected projects. This is particularly the case for measures

that were assigned a gender score of 0* in previous years. In this context, the reassessment concluded that, over the

2021-2025 period, 13% of the EU budget expenditure contributed to the promotion of gender (gender scores 1 and

2), amounting to a significant EUR 190 billion over these five years.

At the same time, the share of the EU budget under gender score 0* has steadily declined and now

stands at just 3% for the four-year period. This reflects the effectiveness of the Commission’s ongoing

reassessment efforts, which have contributed to a more precise and clearer understanding of the EU budget

support for gender equality. For the 2021-2025 period, 84% of allocations were assigned a score of 0, due to

the systematic reassessment of 0* expenditure from 2021 to 2025.

The financial commitments made over this five-year period had a tangible impact across various domains,

including employment, social protection and economic empowerment, reinforcing the EU’s role as a global

leader in gender equality financing.

Gender scores as a percentage of the total EU budget (2021-2025)

Source: European Commission.

Gender-disaggregated data

This year, for the third time, the programme performance statements (Annex 4 to this report), which provide

detailed performance information at the programme level, were enhanced to include the relevant gender-

disaggregated information available for each programme. This includes a wide array of gender-disaggregated

data aimed at improving the monitoring of the performance of the programme in relation to gender equality.

For some programmes, particularly those under shared and indirect management, the availability of gender-

disaggregated data is constrained by the programme regulations and the implementation agreements.

Looking ahead to the post-2027 multiannual financial framework, Article 44 of the Financial Regulation

requires that data relating to performance indicators of financial programmes be gender-disaggregated

where feasible, and appropriate in accordance with the relevant sector-specific rules. Building on this, the

Commission proposed a Performance Regulation in July 2025. It provides that such data be disaggregated by

Score 2

1%

Score 1

12%Score 0

84%

Score 0*

3%

2021-2025

Annex 1 – Performance of the EU budget in 2025

62

gender for a set of indicators, where relevant and feasible. This is an important step to improve gender

equality monitoring in EU programmes. It also complements the updated better regulation guidelines, which

ensure that future ex ante impact assessments of relevant spending programmes consider gender equality

from the outset.

Examples of gender-disaggregated data reported in the programme performance

statements (Annex 4 to this report)

• Under the Recovery and Resilience Facility, Member States report gender disaggregated data

for results and outputs achieved with Recovery and Resilience Facility support within common

indicators 8, 10, 11 and 14. For example, research facilities supported by the Recovery and

Resilience Facility employed 34 900 male and 23 400 female full-time equivalent researchers in

2025 (common indicator 8). So far, participants in education and training supported by the

Recovery and Resilience Facility amounted to a total of 12.9 million participants across all age

groups. Out of the total, 7.7 million females and 5.2 million males were reported (common

indicator 10). The total number of 7 million people in employment or job-searching activities

supported by the Recovery and Resilience Facility is subdivided into 3.7 million females and

3.3 million males across all age groups (common indicator 11). The number of young people aged

15-29 receiving support from the Recovery and Resilience Facility amounted to 863 200 males

and 893 400 females (common indicator 14).

• Under Horizon Europe, as of January 2026, women coordinated 32% of Horizon Europe projects

(6 281 women). There are large variations across the programme: the share of women is higher in

social-science-oriented actions (Cluster 2: 45%) and lower in industry-focused ones (Cluster 4:

23%). Women represent 53.1% of members of Horizon Europe boards and expert groups, with

55.6% in official expert groups (70 women) and 49.3% in special groups (40 women). Among

Horizon Europe researchers, women accounted for 38.3% (101 142), compared with 61.6% for

men (162 705), while 0.05% identified as non-binary (128).

• Under Erasmus+, in 2024, 60% of the provided mobility opportunities were taken up by women.

The gender distribution varies depending on the field of education; adult education has the highest

percentage of women (69.3%), followed by school education (65.3%), higher education (60.4%),

youth (57.6%), vocational education and training (54.3%) and sport (41.7%)

• Under the CAP, the total number of farmers receiving direct support (provisional data for 2024)

was 5 604 178, of which: women: 1 768 426 (31.6%); men: 3 553 350 (63.4%); non-binary: 250

(0.0%); no prevalence: 209 340 (3.7%) and prefer not to say: 72 812 (1.3%).

• Under the European Social Fund Plus, all common indicators on participants are broken down

by gender. By the end of 2025, 16.0 million participants had been supported, of whom 8.4 million

were women, 7.5 million were men and 0.1 million were non-binary.

• Under the Instrument for Pre-accession Assistance III, 393 418 people directly benefited

from EU-supported interventions that aim to reduce social and economic inequality. Available sex-

disaggregated data indicates that at least 202 532 were female and 191 068 were male.

• Under the humanitarian aid programme, the percentage of beneficiaries disaggregated by

gender in 2025 is as follows: 50% female, 42% male and 8% unknown (70).

(70) Number of beneficiaries by age and sex reached by humanitarian aid operations available in EVA actions operational

data (such data reflect information encoded in Fiche Opérationnelle and in the European Hospital and Healthcare Federation).

Annex 1 – Performance of the EU budget in 2025

63

Support gender equality in the 2028-2034 long-term budget

During the 2021–2027 multiannual financial framework, gender budgeting was strengthened through the

introduction of a dedicated expenditure-tracking methodology in 2021 and via mainstreaming across some of

the EU budget programmes. This progress resulted in around 13% of the EU budget over the 2021–2025

period supporting gender equality. At the same time, there is clear scope for further progress, as a large

majority of expenditure (around 84%) remains classified under score 0, indicating no identified contribution.

This reflects, in part, inconsistent provisions across programmes, including on monitoring, limited data

availability on gender equality, along with the limited integration of gender equality considerations in impact

assessments underpinning the 2021-2027 programmes’ basic acts. These limitations have constrained the

overall effectiveness of gender budgeting and highlight the need for a more robust and harmonised EU

budget framework to support and monitor gender equality objectives.

In response to these challenges, the Commission has proposed the Performance Regulation for the 2028-

2034 multiannual financial framework. Under the Commission’s proposal, gender equality will remain fully

integrated as a horizontal principle across EU budget programmes, in line with the requirements from the

Financial Regulation. It will allow to reinforce support for objectives such as equal access to the labour

market, fair working conditions, women’s entrepreneurship, participation in research and innovation and the

fight against gender-based violence.

For the first time, the Performance Regulation introduces binding, horizontal rules to operationalise gender

equality across all management modes, ensuring that gender equality considerations are integrated

throughout the policy cycle – from planning to implementation and evaluation. It also strengthens monitoring

and accountability by requiring gender-disaggregated data in performance indicators where relevant and

feasible. In addition, it introduces an enhanced expenditure tracking methodology, building on lessons from

the 2021-2027 period, which classifies expenditure according to its contribution to gender equality (scores 2,

1 and 0). Dedicated gender equality guidance will support the implementation of the tracking methodology.

Overall, the proposed framework for the 2028-2034 multiannual financial framework elevates gender

equality as a cross-cutting principle across all EU funding programmes, strengthening its integration into the

design, implementation and monitoring of EU expenditure. It aims to ensure that gender equality remains a

central driver in the implementation of the EU budget.

Annex 1 – Performance of the EU budget in 2025

64

Digital tracking

The digital transition is a core element of the Commission’s competitiveness agenda. Beyond

enhancing EU competitiveness, including leadership in AI innovation, it serves as a vital catalyst for prosperity,

economic recovery and resilience while enabling innovative solutions to tackle global challenges.

In 2021, the Commission presented its vision for the EU’s digital transformation by 2030, with a digital

compass for the EU’s Digital Decade that evolves around four digital dimensions:

• skills,

• secure and sustainable digital infrastructure,

• digital transformation of businesses, and

• digitalisation of public services.

On 14 December 2022, the co-legislators adopted the Digital Decade policy programme, taking up the digital

compass and its vision, setting quantitative EU targets for the four cardinal points to be reached by 2030, and

establishing a cooperation mechanism with the Member States to progress towards these targets.

Examples of achievements

20 million dwellings gained access to very-

high-capacity internet networks, including

5G networks and gigabit speed, through

measures under the Recovery and Resilience

Facility, InvestEU and cohesion funding

by the end of 2025.

13 video games,whose development was

supported by the media strand of the

creative Europe programme,received 34

nominations in the most important industry

competitions (71) in 2025.

Under the Connecting Europe Facility,

10 362 terabits per second of additional

capacity were created in 2025 by deployed

backbone networks, including submarine cables.

In 2025, 19 AI factories started to be deployed

in 16 Member States, offering AI start-ups, small

and medium-sized enterprises and researchers

access to AI-optimised high-performance

computers, AI training and technical

expertise to promote cutting-edge research

and AI applications. AI factories benefit from

the world-leading public supercomputing network

established by the European High-Performance

Computing Joint Undertaking.

(71) The Game Awards, The Indie Game Awards, Tribeca Games, Game Developers Choice Awards, IGF, DEVGAMM, A Maze,

Swedish Game Awards, Golden Joystick Awards, TIGA Awards, Venice Immersive, VR Awards.

Annex 1 – Performance of the EU budget in 2025

65

How much do we spend?

The 2026 stocktaking exercise to estimate EU spending on the digital transition was conducted for the

implementation of the 2021-2027 EU budget over the 2021-2025 period. The findings show that the EU

budget, including NextGenerationEU, is channelling significant contributions to all of the digital transition’s key

dimensions. The Commission’s ambition is to build on the findings to develop a comprehensive and robust

methodology for measuring the EU budget’s overall contribution to the digital transition across all

programmes.

Based on the results of the stocktaking exercise, almost EUR 229 billion of the EU budget (including

NextGenerationEU) was dedicated to the digital transition between 2021 and 2025, representing

14.5% of the total EU budget for that period (72). A significant share of this amount came from the

Recovery and Resilience Facility, which dedicated EUR 150.9 billion towards the digital transition during the

same period.

(72) Given that a fully-fledged tracking methodology for the digital contributions of the EU budget has not yet been

established, any aggregation of the contributions of individual programmes at this stage should be interpreted with caution. This is because the methodologies employed by individual spending programmes may not be strictly comparable. Despite this, such aggregation can still provide a general estimate of the total digital contribution from the EU budget. Almost 70% of the reported digital expenditure this year could be attributed to the four categories of the digital compass.

Annex 1 – Performance of the EU budget in 2025

66

Estimated contributions to the digital transition of the EU budget programmes in 2021-2025

(cumulatively) (*)

(*) Including NextGenerationEU, in million EUR. NB: For readability purposes, the scale is broken, as the Recovery and Resilience Facility provides more than 10 times more support to the

digital transition than the next most contributing programme. The abbreviations stand for: RRF – Recovery and Resilience Facility;

HORIZONEU – Horizon Europe; NDICI – Neighbourhood, Development and International Cooperation Instrument – Global Europe;

DIGITALEU – digital Europe programme; ESF PLUS – European Social Fund Plus; JTM – Just Transition Mechanism; SPACE – EU space

programme; CEF – Connecting Europe Facility; IPA III – Instrument for Pre-accession Assistance III; IBMF – Integrated Border

Management Fund; ISF – Internal Security Fund; CREATIVEEU – creative Europe programme; CAP – common agricultural policy;

EMFAF – European Maritime, Fisheries and Aquaculture Fund; SECURE CONNECTIVITY – EU secure connectivity programme;

TSI – Technical Support Instrument; ESC – European Solidarity Corps; OCT – Decision on the Overseas Association, including Greenland;

RIGHTS – citizens, equality, rights and values programme; TCC – Turkish Cypriot community; EDF – European Defence Fund;

WBF – Western Balkans Facility.

Source: European Commission.

1 2

8 3

2

1 0

6 6

7

8 1

1 7

6 0

3 7

2 8

6 4

2 6

0 5

2 2

9 5

2 2

4 9

1 5

3 1

1 0

5 5

9 9

4

9 0

7

8 0

4

6 6

2

5 5

5

5 1

8

4 4

6

3 7

9

3 5

8

1 8

0

1 5

0

1 4

5

6 3

4 5

3 6

3 0

2 7

2 7

5 4 0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

14 000

15 000

16 000

17 000

18 000

19 000

20 000

21 000

R R F

R E G

IO N

A L

P O

LI C Y

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O N

EU

N D

IC I

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S

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S M

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S P A

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JT M

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IN V

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U

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C R E A

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1 5

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(million EUR)

2 1

2 9

7

Annex 1 – Performance of the EU budget in 2025

67

Almost all EU budget programmes contribute to the digital transition. However, due to data

limitations, digital-related expenditure for the 2021-2025 period could only be tracked for 32 out of the 53

spending programmes implemented in 2025.

In terms of thematic concentration, significant efforts are being made to support the digitalisation of public

services (in particular government ICT solutions and the digitalisation of healthcare) and businesses, with

strong support directed towards small and medium-sized enterprises. More information is provided in the

following sections.

Estimated contributions to the digital transition by key digital dimensions (2021-2025) (*)

(*) Including NextGenerationEU, in billion EUR.

(**) Includes programmes that could not be disaggregated into specific categories due to methodological limitations (Erasmus+, European Solidarity Corps programme, Creative Europe, the CAP and the common fisheries policy, Technical Support Instrument, LIFE programme, European Defence Fund and the EU Secure Connectivity Programme).

Source: European Commission, based on the 2026 stocktaking exercise.

Digitalisation of businesses and public services

The EU budget (including NextGenerationEU) is making a significant contribution to the digitalisation of the

private and public sectors. For the 2021-2025 period, an estimated EUR 63.2 billion was dedicated to the

support of the EU budget to public services (including the digitalisation of health and justice systems) and

EUR 46.2 billion for the support of the digitalisation of businesses. The Recovery and Resilience Facility, the

European Regional Development Fund and the Cohesion Fund are important contributors to this investment.

From 2021 to 2025, 11.8% of the amounts from the European Regional Development Fund and the Cohesion

Fund were used to finance interventions that advance the digital transition, in particular supporting small and

medium-sized enterprises and public services.

Digitalisation of public services

EUR 63.2

Digitalisation of businesses EUR 46.2

Investment in digital capacities and the deployment of advanced technologies

EUR 29.6

Research EUR 4.7

Digital skills EUR 32.4

Broadband/connectivity EUR 19.0

Other digital (**) EUR 33.6

Total

EUR 228.8 billion

Annex 1 – Performance of the EU budget in 2025

68

Estimated contributions of the EU budget to the digitalisation of public services

(2021-2025) (*)

(*) Including NextGenerationEU.

(**) These amounts are the result of the stocktaking exercise conducted for 2021 to 2025 and exclude the external action programmes, expenditure under indirect management, Erasmus+, European Solidarity Corps programme, creative Europe, the CAP and the common fisheries policy, Technical Support Instrument, LIFE programme, European Defence Fund, and the EU Secure Connectivity Programme due to methodological limitations.

Source: European Commission, based on the 2026 stocktaking exercise.

Supporting the development and deployment of digital technologies and

research

From 2021 to 2025, estimates indicate that the EU contributed EUR 29.6 billion to investment in digital

capacities and the deployment of advanced technologies, and EUR 17.5 billion to research. These numbers

include contribution to the digital objective from Horizon Europe, whose primary objective is supporting

research. These figures are not yet final and will be updated as more information from funded projects

becomes available.

The main contributing programmes towards investment in digital capacities and the deployment of advanced

technologies and research are the Recovery and Resilience Facility, Horizon Europe, the EU space programme,

the European Regional Development Fund, the Cohesion Fund and the digital Europe programme.

Investing in digital skills

From 2021 to 2025, the EU budget, including NextGenerationEU, made a significant contribution to both basic

and advanced digital skills, with an estimated investment totalling EUR 32.4 billion. In addition to supporting

the development of digital skills at all levels, along with information technology services and applications for

digital skills and digital inclusion, particular emphasis was placed on supporting young people. The main

programmes contributing to improving digital skills are the Recovery and Resilience Facility (EUR 22.0 billion)

and the European Social Fund Plus (EUR 8.1 billion), providing support to youth employment and the

socioeconomic integration of young people.

48%

24%

3%

16%

9%

Total 2021-2025Digitalisation

of justice

Digitalisation of transport

Digitalisation of health systems

Digitalisation of energy networks

e-government

Annex 1 – Performance of the EU budget in 2025

69

Enhancing digital connectivity

The EU budget, including NextGenerationEU, is contributing to enhancing digital connectivity ,

which will give citizens and businesses new opportunities to benefit fully from the digital single market and

accelerate economic growth. Between 2021 and 2025, investment in digital connectivity, including investment

in very-high-capacity broadband networks and 5G network coverage, is estimated to have reached

EUR 19.0 billion. The main programmes contributing are the Recovery and Resilience Facility (EUR 12.7 billion),

the cohesion policy funds (EUR 1.0 billion) and the Connecting Europe Facility. Already reported figures on the

contribution from the Recovery and Resilience Facility needed to be adjusted because of amendments to the

national recovery and resilience plans that took place in 2025.

The CAP plays a key role in improving broadband access in rural areas by supporting broadband infrastructure

and improved access to e-government services. Nearly 13 million people living in rural areas are benefiting

from improved access to ICT services and infrastructure as a result of support from the EU budget.

Under the Connecting Europe Facility, 10 300 terabits per second of additional capacity were created by

deployed backbone networks, including submarine cables. More than EUR 800 million was awarded to

45 projects to support the digitalisation of the trans-European transport network, notably through support

for the European Railway Traffic Management System technology. The programme also aims to modernise

energy grids and deploy digital connectivity infrastructure to support the EU’s digital transition. Specifically,

the programme will support the deployment of 5G systems and high-capacity digital networks to transform

various sectors, including healthcare, education and manufacturing. This will enhance digital readiness,

competitiveness and inclusiveness, particularly in the outermost regions, and contribute to the EU’s economic

recovery and growth. Through InvestEU, more than two million households, enterprises or public facilities have

obtained access to high-speed internet. The European Investment Fund allocated EUR 3.6 billion to support

small and medium-sized enterprises in innovation and digitalisation through a dedicated guarantee supported

by InvestEU. This guarantee supports various digitalisation efforts, including innovative business models,

supply chain management and digital skills acquisition. With a focus on joint small and medium-sized

enterprises, the fund also supports investments fostering the development of digital, cultural and creative

industry solutions.

The twin transition: exploiting synergies

The twin green and digital transitions are deeply interconnected, offering the potential to create

significant synergies. The EU budget is instrumental in this process, acting as a key enabler in unlocking these

synergies. It provides the necessary financial support for initiatives that align with the objectives of both

transitions, thereby ensuring that the potential benefits can be fully realised. The table below provides

illustrative examples of some of the synergies that are being achieved with the support of the EU budget.

Annex 1 – Performance of the EU budget in 2025

70

• The IM4CA project, funded under Horizon Europe, strengthens climate action by

improving Europe’s capacity to monitor and understand methane emissions. By

combining satellite and ground-based observations, the project provides data and

methods to better quantify methane sources, sinks and trends, supporting evidence-based

mitigation and progress towards EU and global climate targets.

• Supporting smart grids, such as those under the Connecting Europe Facility energy

strand, contributes to sustainable development by the integration of energy from

renewable sources and the development of smart energy grids. An example is the

Danube inGrid project, whose first phase is expected to be completed by the end of 2027.

The project adopts smart grid technologies and fosters the roll-out of modern energy

infrastructure at the cross-border areas of Hungary and Slovakia, to efficiently support the

increased demand of consumers, prosumers and distributed renewable energy sources.

• In addition, as a result of the investments in smart energy systems financed through

the cohesion policy funds through the entire 2021-2027 programming period,around

2 million additional end users will be connectedto the smart energy systems.

• Supported by the cohesion policy funds, a public water company in Sardinia has

digitalised and centralised its water service, providing drinking water to over

1.6 million residents. It has improved its service quality by developing a centralised data

control and acquisition system that enables real-time monitoring, remote management

and tools for simulating and optimising water resource flows. This will enable better

planning of targeted interventions to ensure water availability in the context of

increasing water stress in the region.

• As part of the EU’s broader efforts to modernise agriculture and rural development under

the CAP, strategic plans under the policy support the twin transition by helping farmers

adopt digital technologies that can also deliver environmental and climate

benefits. This support is channelled mainly through investment projects EIP-AGRI

operational group projects, but also through eco-schemes and agri-environment-climate

commitments. For example, in Flanders, farmers can use satellite-guided machinery

to reduce overlaps and input use. Another example is the Soil Passport, which helps

farmers use parcel-level soil data to improve sustainable soil management. Other Member

States, including Estonia, Poland and Romania, have also planned investments in

precision agriculture.

• The EU’s Galileo satellite system supports technologies that are key enablers for

smart and sustainable transport, and in particular for connected and autonomous driving.

In road transport, using navigation and positioning services from Galileo leads to a range

of innovative applications that enable smart mobility and multi-mode transport

digitalisation with optimised travel routes, in turn allowing for a reduction of carbon

dioxide emissions. In air transport, using the European Geostationary Navigation Overlay

Service for the efficient definition of flight routes helps reduce fuel consumption and

carbon dioxide emissions.

Annex 1 – Performance of the EU budget in 2025

71

The EU budget and the sustainable development goals

What do we do?

The United Nations’ 2030 Agenda for Sustainable Development, with its 17 SDGs and

169 targets, has given new impetus to global efforts to achieve sustainable development.

The EU has played an important role in shaping the agenda, through public consultations, dialogue with

partners and in-depth research. The EU is committed to playing an active role to maximise progress towards

the SDGs, as outlined, for example, in the Commission communication ‘Next steps for a sustainable European

future’, in the Commission staff working document ‘Delivering on the UN’s Sustainable Development Goals – A

comprehensive approach’ and recently in the first-ever EU voluntary review on progress in the implementation

of the 2030 Agenda for Sustainable Development, adopted on 15 May 2023. Moreover, Eurostat publishes a

report annually on monitoring progress towards the UN SDGs in an EU context.

In line with the 2021 Commission communication on the better regulation agenda and the objectives of the

current multiannual financial framework, the Commission further strengthened the integration of the SDGs

into the EU’s policy and budgetary cycle. Overall, this approach ensures that all major legislative and financial

proposals are assessed for their contribution to the 2030 Agenda for Sustainable Development, thereby

reinforcing the EU’s commitment to sustainability, strategic foresight and evidence-based policymaking. To

this end, since 2021 the Commission has been systematically identifying the relevant SDGs for each proposal

and examining how the initiative supports their achievement. In addition, links to the SDGs will be included

throughout evaluations and impact assessments. At the EU level, sustainable development challenges

are addressed through policies and regulatory instruments. As far as the former are concerned, the

EU budget, through its spending programmes, provides a significant contribution to sustainable development

by complementing national budgets, in line with the principle of subsidiarity. In doing so, the design and

implementation of the EU spending programmes aim to deliver on the objectives in each policy field, while

promoting sustainability through the initiatives and interventions of the relevant programmes in a connected

and consistent way. In particular, 49 out of 53 of the 2021-2027 EU spending programmes contributed

towards at least one SDG in 2025.

Annex 1 – Performance of the EU budget in 2025

72

Number of 2021-2027 programmes contributing to individual sustainable development

goals in 2025

Source: European Commission.

In light of the cross-cutting nature of the SDGs, and to ensure a holistic approach in addressing

sustainable development, 99% of the EU budget contributes to SDGs. In addition, the vast majority

of the 2021-2027 programmes (43 out of 53) are designed to address multiple SDGs through their policy

measures. In the programme performance statements (Annex 4 to this report), the Commission presents the

SDGs to which each EU funding programme contributes, along with examples of their contribution. The

infographic below provides, in a non-exhaustive manner, examples illustrating how EU programmes contribute

to the SDGs.

The 2023 EU voluntary review on the implementation of the 2030 Agenda for Sustainable Development,

together with the 2026 Sustainable Development in the European Union – Monitoring report on progress

towards the SDGs in an EU context – 2026 edition, reaffirmed the EU budget as a key driver for

delivering substantial progress on the 2030 Agenda for Sustainable Development (73). Looking

ahead, the EU has reinforced its commitment to systematically integrate and report on the implementation of

the SDGs across all relevant EU programmes, ensuring policy coherence and sustained momentum towards

achieving all goals.

(73) European Commission: Eurostat, Sustainable development in the European Union – Overview of progress towards the

SDGs in an EU context – 2026 edition, Publications Office of the European Union, 2026, https://data.europa.eu/doi/10.2785/9931334; https://ec.europa.eu/eurostat/product?code=KS-01-25-064.

15

13

25

27

25

15

25

28

26

23

22

18

26

13

15

21

13

SDG1

SDG2

SDG3

SDG4

SDG5

SDG6

SDG7

SDG8

SDG9

SDG10

SDG11

SDG12

SDG13

SDG14

SDG15

SDG16

SDG17

No poverty

Zero hunger

Good health and well-being

Quality education

Gender equality

Clean water and sanitation

Affordable and clean energy

Decent work and economic growth

Industry, innovation and infrastructure

Reduced inequalities

Sustainable cities and communities

Responsible consumption and production

Climate action

Life below water

Life on land

Peace, justice and strong institutions

Partnerships for the goals

Annex 1 – Performance of the EU budget in 2025

73

In Bulgaria, the European Social Fund

Plus supports a project modernising social protection systems, with the goal of improving access for vulnerable groups, including children and people with disabilities. By enhancing the capacity of staff, the Agency of Social Assistance will ensure adequate care by offering those in need competent and multi-component support, in line with new technologies and ensuring an improvement in their quality of life. This initiative ensures faster, more efficient support, helping prevent social isolation and improve quality of life.

The single market programme supports initiatives such as emergency measures for animal and plant disease control, EU Reference Laboratories and the EU vaccine bank for animal diseases, directly reduce risks to food security by ensuring sustainable agricultural production and resilience against outbreaks of diseases like African swine fever, avian influenza, foot-and-mouth disease, lumpy skin disease, peste des petits ruminants and sheep pox and goat pox.

The programme supports the European Food Bank Federation’s activities to facilitate food donation and increase the share of surplus food made available for human consumption, thereby addressing both food security and preventing food waste. The annual grant helps increase the federation’s capacity to redistribute food.

The EU4Health programme and its annual work programmes deliver actions to implement the ‘Healthier together’ initiative, Europe’s beating cancer plan, the comprehensive approach to mental health, and addresses key risk factors to reduce premature mortality from non- communicable diseases. The programme also funds actions that are producing guidance to improve healthcare access contributing to SDG 3.8, while also funding actions to address SDG 3.3 to end the epidemics of HIV/AIDS, tuberculosis, neglected tropical diseases and combat hepatitis, water-borne diseases and other communicable diseases. The programme funds actions to strengthen the capacity of countries for early warning, risk reduction and management of national and global health risks, addressing SDG 3.D.

Financed by Erasmus+, the share the music for inclusive learning in education project was designed to support teachers in addressing this challenge by providing a practical framework and showcasing best practices for managing inclusion and diversity in education. Its primary goal is to offer pre-primary and primary schoolteachers new knowledge, key competencies and ready-to-use educational materials to effectively use music as a pedagogical tool for inclusive education.

Additionally, the project aims to help teachers develop their social and digital skills through its digital repository and online training resources. While the project has been designed for teachers, the ultimate beneficiaries are the students, whose well-being and academic performance are expected to improve as a result of these integrated inclusive practices.

Under the Technical Support Instrument in 2025, a number of new gender-related projects started recently. For instance, the Technical Support Instrument project on the assessment on the effectiveness of work–life balance and gender equality policies in the labour market is helping Portugal to address its demographic challenges and promote a more inclusive and equitable society, contributing to the country’s sustainable economic development and competitiveness.

The EU provides safe drinking water, sanitation and hygiene support through its humanitarian aid operations and the Union

Civil Protection Mechanism, whose main objective is to save and preserve life and alleviate the suffering of populations facing severe environmental health risks and water insecurity in the context of anticipated, ongoing and recent humanitarian crises, for example in Ukraine. The mechanism has also been active in responding to flooded areas with non-food items, health and water access and sanitation and hygiene material, such as in the response to Hurricane Melissa in the Caribbean (Cuba, Jamaica) and in earthquake-affected areas such as Myanmar. These donations were offered by Member States, and the Emergency Response Coordination Centre co-funded transport and deployment costs.

Annex 1 – Performance of the EU budget in 2025

74

Through Horizon Europe, the ascend project,

with an EU contribution of EUR 19.99 million, supports affordable and clean energy in cities by delivering two Positive Clean Energy Districts in Lyon and Munich and engaging eight partner cities to prepare replication. The project develops and disseminates scalable, cost-effective district-level energy solutions to accelerate urban energy transitions.

Under the Instrument for Pre-accession

Assistance, the regional project ‘Supporting the development of a modern payment system and a regional investment area in the Western Balkans’, implemented by the World Bank, supports the Western Balkan partners to join the Single Euro Payments Area (SEPA). In 2025 North Macedonia and Serbia joined SEPA’s geographical scope, after Albania and Montenegro who had already joined at the end of 2024. Moreover, as of October 2025, Albania, Montenegro and North Macedonia started enjoying SEPA’s concrete benefits by joining its payment schemes. This resulted in faster transactions and in a reduction of transaction costs by up to ten times. It is estimated that SEPA’s full implementation in the Western Balkan region could potentially save up to EUR 500 million per year for individuals and businesses.

Digital Europe is contributing to the broader digital transformation of areas of public interest and of industry. The acquisition and deployment of advanced supercomputing capabilities aim to enhance Europe’s industrial competitiveness. Moreover, the established network of European Digital Innovation Hubs contributes to the digitisation of industry and addresses issues of technological accessibility, ensuring that businesses, including small and medium-sized enterprises, have access to cutting-edge technologies and finance for adapting to digital change. The interoperable Europe action supports the development of reusable interoperability infrastructure/solutions, with the view to support the digital transformation of the public sector and create capacity for public authorities to collaborate effectively to set up seamless cross-border services.

Under the Asylum Migration and

Integration Fund, phase 7 of the regional

development and protection programme for North Africa is running from 2025 to 2028 with a budget (EU grant amount maximum) of EUR 37.5 million. The main objective of the proposed action is to support non-EU countries in North Africa and across the Atlantic and Mediterranean migration route to consolidate their migration and asylum systems and build their capacity to provide adequate reception, protection and durable solutions for vulnerable migrants, asylum seekers and refugees.

Under Neighbourhood, Development and

International Cooperation Instrument –

Global Europe, in 2025 the EU launched, the third phase of its flagship initiative Mayors for Economic Growth (2025-2028, EUR 8 million), implemented by the United Nations Development Programme, reinforcing its support for local economic development across the Eastern Partnership since 2017. This new phase empowers cities and towns in Armenia, Moldova, and Ukraine to tackle challenges such as rural depopulation, job creation, climate change, and the digital transition, with a strengthened focus on local economic development planning and access to finance. In 2025 alone, the initiative unlocked approximately EUR 1 million to support local governments in leading their own economic transformation.

By the end of 2025, the Recovery and

Resilience Facility supported the installation of photovoltaic capacity in business premises in Luxembourg.

Annex 1 – Performance of the EU budget in 2025

75

The Innovation Fund is designed to answer this goal and take urgent action to combat climate change and its impacts. The grip project aims to decarbonise industrial heat production up to 200 °C by scaling up the industrialisation of the innovative rotation heat pump technology. Project endor aims at producing electric sustainable aviation fuel to support the decarbonisation of the aviation sector.

Regional fisheries management

organisations promote the conservation and sustainable use of the oceans, seas and marine resources by improving management measures adopted following scientific advice and by promoting healthy tuna stocks in the Atlantic and Indian Oceans, and through the governance framework established by sustainable fisheries partnership agreements with a number of non-EU countries.

The European Regional Development Fund

planned EUR 9.5 billion to support this goal. For instance, the urban biodiversity parks project in Turku (Finland) reflects the New European Bauhaus principles by promoting urban ecological restoration and regeneration through the creation of biodiversity parks and pilot green spaces. It reflects Turku’s ambition to become one of the world’s leading ‘nature and climate cities’. The project aim is to establish a 20-hectare biodiversity park, providing a recreational area – while also serving as a platform for community engagement and experiential learning. The concept is being piloted in Turku’s Skanssi area, with more, smaller pilots planned in other suburban neighbourhoods.

The common foreign and security policy measures contribute to the preservation of peace, conflict prevention, strengthening of international security, consolidating and supporting democracy, the rule of law and human rights by advising and building capacity on security sector reforms, the rule of law and border management, by supporting mediation and conflict resolution initiatives or by supporting the universalisation and effective implementation of international treaties and conventions addressing the proliferation of weapons of mass destruction or conventional weapons.

The humanitarian aid programme supports local actors and partners to reinforce both their capacities, security of staff and ability to reach communities in hard-to-reach areas. This work is further empowered by our commitment to inclusiveness in coordination mechanisms wherever possible. In Myanmar, one third of the budget goes to local organisations, with many programmes operating through large networks of local partners that ensure principled, context-sensitive and timely humanitarian assistance, even in highly constrained and insecure environments. These partnerships strengthen local ownership, improve access and acceptance at community level, and contribute to more sustainable humanitarian outcomes.

EN EN

EUROPEAN COMMISSION

Strasbourg, 16.6.2026

COM(2026) 824 final

REPORT FROM THE COMMISSION

TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF

AUDITORS

Annual Management and Performance Report for the EU Budget – 2025 financial year

The Annual Management and Performance Report for the EU Budget – 2025 financial year, together with

its annexes, is the European Commission’s main contribution to the annual discharge procedure (1) by which

the European Parliament and the Council of the European Union monitor the implementation of the EU

budget. It fulfils the Commission’s obligations under the Treaty on the Functioning of the European

Union (2) and the Financial Regulation (3). Implementing the EU budget is a shared responsibility, where the

Commission works hand in hand with the Member States and with other partners and organisations.

The report is composed of three volumes.

• Volume I provides the key facts and achievements in relation to budgetary management in 2025.

• Volume II presents a more comprehensive overview of the implementation of the EU budget.

Annex 1 provides an overview of the performance of the EU budget in 2025 in delivering the EU’s

priorities and systematically integrating horizontal policy priorities into the EU budget. Annex 2

provides a high-level overview of the internal control and financial management procedures.

Annex 3 covers the performance and compliance aspects of the Recovery and Resilience Facility.

• Volume III contains technical annexes supporting the report. Annex 4 provides detailed

programme-by-programme performance information in the ‘programme performance

statements’.

This report is part of the broader integrated financial and accountability reporting package (4), which also

includes the consolidated annual accounts (5), a long-term forecast of future inflows and outflows covering

the next five years (6), the report on internal audits (7) and the report on the follow-up to the discharge of

the previous year (8).

(1) The annual discharge procedure is the procedure through which the Parliament and the Council give their final

approval on the budget implementation for a specific year and hold the Commission politically accountable for the implementation of the EU budget (https://commission.europa.eu/strategy-and-policy/eu-budget/how-it-works/annual- lifecycle/assessment/discharge-procedure_en).

(2) Article 318 of the Treaty on the Functioning of the European Union (OJ C 202, 7.6.2016, p. 186, http://data.europa.eu/eli/treaty/tfeu_2016/art_318/oj).

(3) Article 253(1)(b) and (e) of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj).

(4) Article 253 of the Financial Regulation. (5) Article 252 of the Financial Regulation. (6) Article 253(1)(c) of the Financial Regulation. (7) Article 118(8) of the Financial Regulation. (8) Article 267(3) of the Financial Regulation.

2025 financial year

3

Contents

THE EU BUDGET: NAVIGATING CRISES, DELIVERING RESULTS ............................................................................ 5

EU BUDGET CONTRIBUTION TO HORIZONTAL PRIORITIES .................................................................................. 15

NEXTGENERATIONEU DRIVING REFORMS AND INVESTMENT VIA RECOVERY AND

RESILIENCE PLANS ........................................................................................................................................................... 17

EFFECTIVE TOOLS ENSURE THAT THE EU BUDGET IS WELL MANAGED AND SAFEGUARDED ................. 20

THE CONDITIONALITY REGIME CONTINUES TO CONTRIBUTE TO THE PROTECTION OF THE

EU’S FINANCIAL INTERESTS .......................................................................................................................................... 29

MANAGEMENT CONCLUSION ......................................................................................................................................... 30

2025 financial year

5

The EU budget: navigating crises, delivering results

Introduction

2025 was marked by geopolitical uncertainty, intensified economic competition, and deepening

conflicts, including the illegal and continuing Russian war of aggression against Ukraine. It was

also a transformational year for the European Union (EU). The EU redoubled its efforts to boost the

competitiveness of the European economy, reduce strategic dependencies and step up cooperation on security

and defence. At the same time, it continued to deliver for citizens and businesses by creating more

opportunities and consolidating individual rights. Looking to the future, the European Commission adopted an

ambitious proposal for a more streamlined, flexible and impactfullong-term budget for the years 2028-

2034, drawing on the lessons learned from the current financial period (2021-2027).

In 2025, the EU budget helped to strengthen the EU’s competitiveness by delivering support to key

strategic sectors, investing in cross-border infrastructure, and boosting research and innovation. By doing so,

it continued to support the livelihoods and well-being of EU citizens, providing support for job creation, skills

building, education, housing, energy, infrastructure and other economic needs. The budget also contributed to

upgrading defence capabilities and collaboration, while strengthening preparedness, resilience and the EU’s

capacity to respond to crises.

Moreover, the budget continued to underpin the EU’s unwavering support for Ukraine, responding

to its humanitarian, economic, and recovery and reconstruction needs, while ensuring proper accountability. It

also played a major role in upholding the EU’s interests and values on the global stage, providing

humanitarian relief, supporting peace and security and reinforcing strategic partnerships.

The total commitment appropriations from the EU budget amounted to EUR 206.5 billion in

2025 (9).

Multiannual financial framework: 2025 EU budget commitment appropriations by budget

heading, from the final adopted budget (EUR million)

Source: European Commission.

(9) This amount includes EUR 190.9 billion from the final adopted budget; EUR 1.6 billion from appropriations carried

over or made available again from 2024; and EUR 14.1 billion from appropriations stemming from assigned revenues (of which EUR 0.4 billion from NextGenerationEU).

13% 38% 28%

2% 1%

10% 4%4%

Single market, innovation and digital EUR 27 095

Total EUR 206 542

Cohesion, resilience and values EUR 78 884

Natural resources and environment EUR 57 658

Migration and border management

EUR 4 738

Neighbourhood and the world EUR 19 645

Security and defence EUR 2 666

European public administration EUR 8 381

Outside MFF and special instruments

EUR 7 474

2025 financial year

6

Throughout the year, the limited flexibility in the EU budget was deployed to respond to crises

and support new priorities. For example, in the context of the mid-term review of Cohesion policy, the

Commission proposed and the co-legislators adopted a number of targeted regulatory amendments

introducing greater flexibility and incentives to align cohesion policy investments with the Union’s new

priorities, notably defence and security, competitiveness and decarbonisation, housing, water resilience,

energy transition and challenges facing Eastern border regions.

However, the number and size of unexpected challenges since the beginning of the 2021-2027

multiannual financial framework have overwhelmed the EU budget’s limited flexibility, which has

further diminished as budgetary implementation has progressed, leaving almost no unallocated funds with

two years left in the current cycle. This is why the Commission has proposed a more agile long-term budget

for the 2028-2034 period, capable of adapting as needs and priorities evolve, while continuing to provide the

predictability necessary for long-term investment.

Proposal for the 2028-2034 multiannual financial framework

The EU budget ensures that the EU has the means to deliver on its priorities. In 2025, the

Commission proposed a long-term budget for the years 2028-2034 that is ambitious in both size and

design. It amounts to almost EUR 2 trillion (1.26% of the EU’s gross national income), including about

EUR 25 billion annually (0.11% of the EU’s gross national income) for the repayment of the loans used

to finance NextGenerationEU. It is simpler and more agile, with fewer programmes to reduce the risk

of overlaps, along with harmonised rules and greater in-built flexibility. This modernised approach will

allow for increased capacity to react to evolving circumstances and a stronger focus on performance

and results.

The proposal is based on three main pillars:

• fostering the achievement of the EU’s priorities at the local, regional and national levels with the

new national and regional partnership plans, worth EUR 865 billion;

• delivering on a more competitive Europe though the European Competitiveness Fund and

Horizon Europe, worth EUR 409 billion;

• building long-term, mutually beneficial partnerships with non-EU countries though the Global

Europe instrument, worth EUR 200 billion.

The three main pillars are complemented by other programmes, including the EU’s flagship

programmes for infrastructure investment (the Connecting Europe Facility) and for investing in people

and values (Erasmus+ and AgoraEU).

The proposal also provides for innovative financing via new own resources, to reduce

pressure on national budgets. These new own resources include revenues from the EU emissions

trading system, proceeds from the Carbon Border Adjustment Mechanism, a new own resource based

on uncollected e-waste, a tobacco excise duty and a contribution from companies operating and

selling in the EU with a net turnover of at least EUR 100 million.

Supporting the EU’s competitiveness

Through the 2021-2027 long-term budget and NextGenerationEU, the EU has worked towards

fostering innovation, decarbonising the economy and reducing dependencies, thereby aiming to

boost its competitiveness and bolster economic security. The EU budget plays a key role in addressing

2025 financial year

7

the challenges identified in the Draghi report and implementing the competitiveness compass (10). It does this

by supporting investment and structural reforms to boost competitiveness, sustainability and skills, while also

helping to address challenges identified in the country-specific recommendations under the European

semester (11).

For example, Horizon Europe committed EUR 12.9 billion to public and private beneficiaries in 2025 for

research and innovation. By 2025, Horizon Europe’s projects had produced over 22 500 peer-reviewed

scientific publications, with more than 130 000 researchers involved in upskilling activities and producing over

10 000 innovative products, processes, methods and applications for intellectual property rights. By 2025, the

programme had supported over 10 000 small and medium enterprises, including start-ups, fostering

innovation in key areas, such as artificial intelligence and advanced materials. Under the European Innovation

Council (EIC), over 770 small and medium enterprises and start-ups were funded between 2021-2025 by the

EIC Accelerator, enabling the scale-up of deeptech and breakthrough innovations.

The InvestEU programme uses an EU budget guarantee to leverage investment by lowering risk for financial

institutions and attracting private capital for projects in areas such as sustainable infrastructure, social

investment and skills, small and medium-sized enterprises, and research, innovation and digitalisation. By the

end of 2025, the volume of InvestEU guarantees totalled EUR 26.8 billion, helping to support 91 294 small

and medium-sized enterprises and mobilising more than EUR 397 billion in investment between 2022 and

2025.

The Innovation Fund focuses on supporting and scaling up highly innovative technologies with significant

potential to reduce greenhouse gas emissions. It has helped to support a range of innovative low- and zero-

carbon processes and technologies in energy-intensive industries, energy storage, mobility and clean-tech

manufacturing. The Innovation Fund has mobilised EUR 58 billion worth of investment, with EUR 11.7 billion of

grants committed. In 2025, 83 projects focused on decarbonisation, 5 on vehicle battery manufacturing, and

6 on renewable hydrogen production signed their grant agreements.

The single market programme, with over EUR 610 million allocated for 2025, helps the single market reach

its full potential. In 2025, It helped to safeguard the single market by supporting market surveillance

authorities in the Member States, which detected 21 891 non-compliant products. It also supported the

European Consumer Centre Network, which in 2025 provided personalised assistance to over 168 000

consumers, helping them to recover over EUR 11.25 million from non-compliant traders. In 2025, the

programme also supported more than 808 000 small and medium enterprises directly or via advisory services

through its SME pillar. It also supported standardisation, facilitating the implementation of 25 044 European

standards across the EU.

The Digital Europe programme had committed more than EUR 6 billion by the end of 2025, financing 26

supercomputers which are among the fastest and greenest in the world, such as Jupiter, the fourth-fastest

and one of the most energy-efficient supercomputers in the world. Digital Europe also financed training for

over 60 000 people to help them acquire digital skills. Additionally, the programme funded the deployment of

14 common European data spaces, 166 European digital innovation hubs and five semiconductor pilot lines.

Cohesion policy also supported competitiveness. It is expected to contribute with an estimated

EUR 214 billion to the objectives of the competitiveness compass by the end of the 2021-2027 period. This

funding supports a range of European priorities, including broader topics such as innovation and

(10) Communication from the Commission to the European Parliament, the European Council, the Council, the European

Economic and Social Committee and the Committee of the Regions – A competitiveness compass for the EU, COM(2025) 30 final of 29 January 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0030

(11) Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, 2026 European semester – Spring package, COM(2026) 200 final of 3 June 2026, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=COM%3A2026%3A200%3AFIN&qid=1780494235578

2025 financial year

8

decarbonisation. By the end of 2025, over 130 000 small- and medium-sized companies received support (in

the form of grants, equity, guarantees, loans and advice) to grow and become more competitive, and nearly

32 000 companies received support for innovation.

On top of these investments, EUR 15.2 billion was reallocated to support EU competitiveness in the context

of the mid-term review of cohesion policy, with investments in critical technologies and industries to reduce

key vulnerabilities and technological dependencies on non-EU countries. Greater focus was also placed on the

challenges faced by the Eastern border regions, with enhanced support provided in recognition of the socio-

economic and security challenges they have encountered since the start of Russia’s war of aggression against

Ukraine.

Moreover, the Just Transition Mechanism targets decarbonisation and economic diversification in regions

facing the socioeconomic effects of the climate transition. By the end of 2025, funding worth

EUR 15.45 billion had reached over 2 000 businesses and financed the creation of nearly 270 megawatts of

additional renewable energy capacity. In 2025, the mechanism provided grants and loans for public

authorities to the amount of EUR 86 million from the EU budget, complemented by EUR 594 million in loans

by the European Investment Bank.

The Connecting Europe Facility continued to support Europe’s transport, energy and digital cross-border

networks, which are instrumental to the continent’s strategic autonomy. In 2025, it awarded EUR 3 billion to

projects advancing a sustainable, intelligent, eco-friendly and resilient transport network, along with more

than EUR 1 billion to 109 projects relating to charging and hydrogen-refuelling infrastructure, airport

electrification, onshore power supply in ports and alternative fuels infrastructure for the maritime sector.

Likewise, the facility awarded approximately EUR 650 million to 14 cross-border energy infrastructure

projects. It provided EUR 389 million for submarine cables, 5G large-scale pilot projects and quantum

communication projects.

The EU budget also supports mobility and cooperation in the fields of education, training, youth and sport via

the Erasmus+ programme, which had a budget of EUR 4.3 billion for 2025. Besides contributing to

achieving the European Education Area and initiatives under the Union of Skills, over 1.5 million learners and

staff benefitted from an Erasmus+ mobility in 2025.

The EU also supports competitiveness through the LIFE programme. In 2025, it selected various new

projects for funding, designating EUR 91.4 million for the energy transition, EUR 73 million for the circular

economy and quality of life and over EUR 60 million for climate-change mitigation. Examples of these

projects include an initiative to standardise heat-pump solutions for the food industry, new technologies for

recycling end-of-life solar panels and the demonstration of technologies for producing and distributing green

hydrogen locally for road transport.

The Strategic Technologies for Europe Platform

The Strategic Technologies for Europe Platform (STEP) was established in March 2024 as part of the

midterm revision of the multiannual financial framework, with the objective of steering EU funding

towards areas that are strategically important for the EU’s competitiveness. The platform channels

resources from selected EU funds and programmes to support the development of clean, digital and

biotechnologies that are critical for the single market and the strategic autonomy of the EU. In 2025,

the scope of STEP was extended to include defence technologies.

STEP is implemented across 11 EU funds and programmes: the digital Europe programme, the

European Defence Fund, EU4health, Horizon Europe, the Innovation Fund, InvestEU, the Recovery and

Resilience Facility, the Cohesion Fund, the European Regional Development Fund, the European Social

Fund Plus and the Just Transition Fund.

2025 financial year

9

Over almost two years of STEP implementation, these programmes have dedicated close to

EUR 24 billion to the priorities of the platform: EUR 10 billion through calls launched under five

programmes under direct management; and EUR 13.9 billion reprogrammed for STEP by Member

States and regions under cohesion policy.

More information on STEP implementation and results is available on the STEP Portal (12), in the annual

reports on STEP (13) and in the interim evaluation published in 2025 (14).

Supporting livelihoods

The EU budget supports the livelihoods of EU citizens through a variety of programmes and

policies. In 2025, Member States and regions allocated EUR 3.3 billion of cohesion policy funding under the

mid-term review of cohesion policy to affordable and sustainable housing projects. Overall, under cohesion

policy, around EUR 100 billion is set aside in the 2021-2027 period for projects in cities, such as:

EUR 10.5 billion to the construction and renovation of housing allocated under the European Regional

Development Fund, Cohesion Fund and Just Transition Fund. Cohesion policy also invested EUR 14.5 billion in

climate adaptation and disaster risk management, and EUR 3.1 billion to water resilience. Since 2021,

cohesion policy has funded an additional 1 434 megawatts of renewable energy production capacity, access

to very-high-capacity broadband for more than 335 000 dwellings and over 1 000 kilometres of new,

upgraded or modernised roads.

The common agricultural policy continued to support farmers’ livelihoods and productivity and to promote

vibrant rural economies, with payments amounting to EUR 53.2 billion in 2025. By 2025, 5.5 million farmers

had received direct support. Moreover, 311 000 young farmers were supported in 2025, and over 270 000

jobs were created in rural areas.

By the end of 2025, the European Social Fund Plus had committed EUR 66.3 billion towards sustainable

and quality employment, education and social inclusion, supporting 16.0 million participants. By 2025, the

fund had delivered aid in the form of food, materials or vouchers to 35.2 million individuals, 7.9 million of

whom were children. By the end of 2025, 13 schemes based on financing not linked to cost and amounting to

EUR 5.1 billion were adopted by the Commission for 10 Member States (Estonia, France, Croatia, Cyprus,

Latvia, Lithuania, Hungary, Poland, Portugal and Romania).

The European Maritime, Fisheries and Aquaculture Fund provided about EUR 555 million in 2025 to

support sustainable fisheries and the blue economy of fishing and aquaculture communities in Member

States. By 2025, the fund had benefited more than 26 700 people, including through skills improvement and

training. It also helped to implement 10 919 tonnes per year of new production capacity and supported

32 602 tonnes per year of aquaculture production (15).

EU4health provided more than EUR 570 million in 2025 for a healthier and safer union. It helped to finance

crisis preparedness and response through staff training, support for coordinated surveillance of pathogens

and support for the development of crisis-related products. Moreover, it supported health promotion and

(12) European Commission: Directorate-General for Budget, Strategic Technologies for Europe Platform website,

https://strategic-technologies.europa.eu/index_en. (13) European Commission: Directorate-General for Budget, ‘STEP documents’, Strategic Technologies for Europe Platform

website, https://strategic-technologies.europa.eu/about/step-documents_en. (14) Report from the Commission to the European Parliament and the Council – Investing in the competitiveness and

technological leadership of the EU, COM(2025) 421 final of 16 July 2025, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A52025DC0421&qid=1778335917845.

(15) European Commission: Directorate-General for Regional and Urban Policy, ‘European Maritime Fisheries and Aquaculture Fund (EMFAF)’, European Commission website, https://cohesiondata.ec.europa.eu/funds/emfaf/21- 27#achievements.

2025 financial year

10

disease prevention, stronger health systems and healthcare workers, digitalisation of healthcare and the fight

against cancer. For example, the programme financed the European reference networks, enabling access to

diagnosis and treatment for 2.7 million patients with rare conditions in 2025.

In 2025, the citizens, equality, rights and values programme supported Europeans’ direct democratic

participation, allocating over EUR 1.9 million for the European citizens’ initiative. It also launched calls to select

projects, for a combined funding amount of EUR 130 million, aimed at anti-discrimination, town twinning,

citizens’ engagement, remembrance of European history, and children’s rights and participation. Moreover, the

justice programme devoted around EUR 15.4 million during the year to new projects on judicial cooperation,

training and access to justice, and concluded procurement contracts amounting to EUR 9.2 million to develop

and maintain information technology tools and key EU policies in the justice field.

Stepping up the EU’s security and defence

In 2025, the imperative for the EU to provide for its own security and defence came into sharp

focus. The European Defence Fund is a core component of EU security and defence by creating innovative

and interoperable defence technologies and equipment. Following the 2024 calls for proposals, 63 projects

were launched with a total of over EUR 1 billion of EU funding. Overall, 38% of the fund’s beneficiaries are

small and medium-sized enterprises.

With the publication of the 2025 work programme, the European Defence Fund will award around

EUR 1 billion to collaborative research, development and innovation in the field of defence. The 2025 annual

work programme allocated around EUR 400 million to support defence innovation,of which over

EUR 140 million to support small- and medium-sized enterprises in developing and testing breakthrough

defence technologies. The EU Defence Innovation Scheme (EUDIS), the part of the European Defence Fund

dedicated to supporting non-traditional defence players, contributed to this effort.

The Act in Support of Ammunition Production supported 31 projects in 2025, providing over

EUR 500 million to enhance the production of ammunition, with projects relating to explosives, powder, shells,

missiles, testing and reconditioning.

Following the adoption of the White Paper for European Defence, the EU adopted the reArm

Europe plan in 2025, based on the use of financial instruments to strengthen Europe’s defence capabilities,

including the national escape clause of the Stability and Growth Pact, which could unlock up to

EUR 650 billion. The plan also includes up to EUR 150 billion in loans via the security action for Europe to

support urgent defence investment and address critical capability gaps. By the end of 2025, 19 Member

States had expressed interest in accessing loans under this action, covering the full loan envelope, and had

submitted their national defence industry investment plans.

The EU is also using cohesion policy to support defence. Through the mid-term review of cohesion

policy, EUR 11.9 billion was reallocated to support defence industrial capacities and capabilities, defence

infrastructure, military mobility and civil preparedness, prioritising dual use, along with skills development in

civil preparedness and the defence industry.

Other programmes supported key strategic projects during the year, such as the Connecting Europe

Facility, which financed secure equipment and smart capabilities for submarine cables and key terrestrial

connections with EUR 186 million under its digital strand. In addition, the Connecting Europe Facility

contributed to enhancing the EU’s strategic transport infrastructures to make them fit for military mobility.

The EU secure connectivity programme and the space programme provided a combined total of over

EUR 2.4 billion in 2025 to finance:

2025 financial year

11

• the ongoing development of the IRIS2 (infrastructure for resilience, interconnectivity and security

by satellite) secure connectivity satellite constellation;

• the Govsatcom governmental communications system;

• the Galileo and European Geostationary Navigation Overlay Service satellite navigation systems;

• the Copernicus Earth observation system, including its space situational awareness components

performing surveillance of space, space weather and near-Earth objects.

In 2025, the Union Civil Protection Mechanism committed EUR 226.7 million to Member States and non-

EU countries to foster resilience and strengthen the civil protection pool of capacity available for response

operations. Initiatives included consular or medical evacuations, emergency medical support and the fighting

of forest fires. During the wildfire season, the mechanism was activated 16 times in Europe, with 1 million

hectares of burnt area registered during the year (16).

To address migration challenges, the EU set up the Asylum, Migration and Integration Fund, with a

total financial programming of EUR 11 billion from the 2021-2027 multiannual financial framework, including

EUR 1.91 billion for 2025. Between 2021 and 2025, the fund financed the creation of 22 919 new places in

reception centres, in line with the EU acquis, and supported the resettlement of 39 829 people. In this way the

EU budget supports the implementation of the pact on migration and asylum.

Supporting Ukraine

By the end of 2025, the EU and its Member States had provided support to Ukraine totalling over

EUR 193.3 billion. About half of this support, EUR 88.2 billion, was enabled by the EU budget in the

form of humanitarian aid, crisis response, macrofinancial assistance and budget support, along with early

recovery and reconstruction. In addition, EUR 17 billion was made available to Member States by

reallocating existing cohesion policy budgets to support Member States in addressing the needs of those

fleeing Russia’s illegal and continuing military aggression against Ukraine. During 2025, support was provided

by the EU budget from the Ukraine Facility, the Union Civil Protection Mechanism, the Connecting Europe

Facility, the humanitarian aid programme and the European Defence Fund. Support in the form of loans was

also provided with an exceptional revenue accelerator macrofinancial assistance loan, as part of the G7

Exceptional Revenue Acceleration Loans initiative. Moreover, other instruments outside of the EU budget have

complemented this support.

The EU has also been using proceeds from immobilised Russian sovereign assets to assist

Ukraine. 95% of these funds are provided to Ukraine via the Ukraine Loan Cooperation Mechanism to help

Ukraine repay the G7 Exceptional Revenue Acceleration loans (including borrowing costs), including the EU’s

exceptional macrofinancial assistance loan of EUR 18.1 billion disbursed throughout 2025. The remaining 5%

contribute to the European Peace Facility (an instrument outside the EU budget).

In December 2025, the European Council agreed to provide a limited-recourse loan to Ukraine of

EUR 90 billion for the years 2026 and 2027, based on EU borrowing on the capital markets backed by the

EU budget’s headroom, to be repaid by Ukraine only once it has received reparations from Russia. This support

loan is to be implemented by means of enhanced cooperation pursuant to Article 20 of the Treaty on

European Union, with backing from 24 Member States (17).

(16) European Commission: Joint Research Centre, ‘2025 was EU’s most destructive wildfire season on record’, European

Commission website, 31 March 2026, https://joint-research-centre.ec.europa.eu/jrc-news-and-updates/2025-was-eus- most-destructive-wildfire-season-record-2026-03-31_en.

(17) Regulation (EU) 2026/467 of the European Parliament and of the Council of 24 February 2026 implementing enhanced cooperation on the establishment of the Ukraine Support Loan for 2026 and 2027 (OJ L, 2026/467, 26.2.2026, ELI: http://data.europa.eu/eli/reg/2026/467/oj).

2025 financial year

12

The EU is supporting Ukraine’s short-term recovery and medium-term reconstruction and

modernisation, in line with Ukraine’s path towards EU membership. Trade has been facilitated since

2022 by the solidarity lanes, a set of alternative logistics routes via rail, road and inland waterways. Overall,

the EU had provided EUR 600 million by the end of 2025 for investment in transport connections with Ukraine

via the Connecting Europe Facility.

Via the Ukraine Facility, the EU has been providing financial support conditional on Ukraine’s

implementing qualitative and quantitative reform steps. It is also stimulating private support under

the Ukraine Investment Framework. By the end of 2025, the facility had disbursed EUR 26.8 billion in loans

and non-repayable support, with EUR 10.7 billion provided in 2025 upon the fulfilment of 45 steps by Ukraine

under the Ukraine Plan. The Ukraine Investment Framework provided EUR 6.9 billion in the form of a

guarantee to mobilise funds from financing institutions to finance projects spanning from support for

municipal investment and micro- and small businesses to housing, recovery and financial inclusion. Under the

facility’s Ukraine Energy Support Fund, the EU disbursed EUR 96 million to repair and restore the capacity of

thermal power plants, install gas turbines and repair solar and wind power plants.

EU budget contributions to help Ukraine and Member States face the consequences of the

full-scale Russian invasion between 2022 and 2025

Allocations to Ukraine and Member States to face the consequences of the war from the EU budget.

(*) EUR 17 billion was made available to Member States for redeployment from cohesion policy in order to provide emergency support to address migration challenges stemming from Russia’s military aggression against Ukraine.

(**) European Instrument for International Nuclear Safety Cooperation, repurposing of the European Neighbourhood Instrument and common foreign and security policy.

Source: European Commission.

Emergency assistance to Ukraine continued to be predominantly funded by the humanitarian aid

programme, with EUR 220 million allocated in 2025. Overall, the EU provided EUR 1.2 billion to Ukraine in

humanitarian aid by 2025. This was complemented by peace and stability support in areas such as

demining, energy and accountability. The Union Civil Protection Mechanism also complemented these efforts

through continuous supply of in-kind assistance from Member States, rescEU stocks, the private sector

and non-EU countries, contributing to the overall emergency response in Ukraine.

Neighbourhood, Development and

International Cooperation Instrument –

Global Europe and European

Neighbourhood Instrument

EUR 2.1 billion Funding made available to

Member States to support

Ukrainian refugees (*)

EUR 17 billion

Support through EU

budgetary guarantees

(excluding Ukraine

Guarantee)

EUR 2.8 billion Humanitarian aid

EUR 1.2 billion

Macrofinancial

assistance loans

EUR 43.3 billion

Other grants (**)

EUR 0.4 billion

Connecting

Europe Facility

EUR 0.6 billion

Macro Financial Assistance Plus

Interest Rate Subsidy

EUR 1.1 billion

Ukraine Facility

EUR 36.7 billion

2025 financial year

13

Promoting international partnerships and supporting EU enlargement

The Instrument for Pre-Accession Assistance III continued to support the EU’s enlargement

process and the accession of candidate countries. It has, for example, provided expanded community-

based services to over 9 000 people in Albania and provided energy-efficiency subsidies to over 40 000

households in Kosovo (*).

Moreover, in 2025, the Reform and Growth Facility for Moldova disbursed EUR 288.9 million in loans.

Also, a total of EUR 396 million was released in pre-financing and disbursements under the Reform and

Growth Facility for the Western Balkans: EUR 164 million for Albania, EUR 45 million for Montenegro,

EUR 77 million for North Macedonia and EUR 111 million for Serbia.

From 2021 until the end of 2025,the Neighbourhood, Development and International Cooperation

Instrument – Global Europe had disbursed EUR 29.8 billion. In 2025, over EUR 9.8 billion was

disbursed to support a wide range of actions, for instance peace and stability initiatives (EUR 340 million

between crisis-response interventions and thematic interventions), as well as initiatives aimed at improving

resilience and peacebuilding in fragile contexts (EUR 120 million). The EU also adopted a substantial financial

package in support of Syria (including EUR 139 million for 2025 under the Neighbourhood, Development and

International Cooperation Instrument – Global Europe (18)).

In 2025, the volatile situation in the Middle East highlighted the need for a more structured and coordinated

approach to cooperation in the region. The EU presented a proposal for a multiannual comprehensive

programme for Palestine’s recovery and resilience for the period 2025–2027, for an amount of EUR 1.6

billion. Moreover, cooperation and engagement with the Gulf Cooperation Council (GCC) and individual Gulf

countries were strengthened, particularly in the areas of security, climate change, digital cooperation, and the

energy transition. Furthermore, the adoption of the Pact for the Mediterranean provided a new framework

for EU-Southern Mediterranean relations.

In 2025, the EU and its Member States continued scaling up the Global Gateway strategy. The

second Global Gateway Forum and Board were organised and President von der Leyen announced that the EU,

Member States and European financing institutions, following a Team Europe approach, had mobilised over

EUR 306 billion in investments, exceeding the original EUR 300 billion.

2025 marked the 25th anniversary of the EU–African Union Partnership. As announced at the 7th

European Union–African Union summit in November 2025, the EU, in a Team Europe approach, has so far

mobilised more than EUR 120 billion for Global Gateway projects across Africa. This includes, for

instance, water, sanitation and hygiene facilities for schools in Uganda (19) and delivering high-speed digital

connectivity networks, e-services and data infrastructure for the benefit of research and education

communities in sub-Saharan Africa (20).

The EU-Latin America and Caribbean Global Gateway Investment Agenda delivered tangible results.

More than 80 projects advanced in their implementation, covering areas such as climate action, critical raw

(*) This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion

on the Kosovo declaration of independence. (18) Commission Implementing Decision of 30.9.2025 on the financing of the special measure in favour of Syria for

2025, C(2025) 6539 final, https://north-africa-middle-east-gulf.ec.europa.eu/commission-implementing-decision- financing-special-measure-favour-syria-2025_en.

(19) European Commission: Directorate-General for International Partnerships, ‘Building WASH facilities in schools in Uganda’, European Commission website, https://international-partnerships.ec.europa.eu/policies/global- gateway/building-wash-facilities-schools-uganda_en.

(20) European Commission: Directorate-General for International Partnerships, ‘AfricaConnect4 in sub-Saharan Africa’, European Commission website, https://international-partnerships.ec.europa.eu/policies/global- gateway/africaconnect4-sub-saharan-africa_en.

2025 financial year

14

materials, digital transformation and innovation, along with sustainable transport. An example is the

development of cross-border electric infrastructure to forge cohesive regional energy markets via a

EUR 6.86 billion initiative on regional electricity integration, which will fund 24 projects to boost clean energy

generation, transmission and trade.

The Global Gateway has also been mobilising funds for investment in the Asia-Pacific region. For

instance, a Team Europe Global Gateway investment package mobilised EUR 12 billion for central Asia, with

the EU and the Pacific set to invest close to EUR 300 million in sustainable economic development and

resilience to climate change. In the Eastern Neighbourhood, 2025 saw the adoption of multiannual action

programmes for 2025-2027 for Armenia, Azerbaijan, Belarus, Georgia and Moldova, totalling

EUR 668.2 million.

2025 financial year

15

Providing humanitarian aid and ensuring food security

In 2025, the EU provided around EUR 2.6 billion in humanitarian assistance through the

humanitarian aid programme. The EU responded to the humanitarian needs of people facing, for example,

natural hazards and human-induced disasters, the consequences of conflict, human rights violations, sexual

and gender-based violence, forced displacement, acute food insecurity and extreme poverty.

A particular priority in 2025 was the EU’s response to the needs of the Palestinian people. Under

the humanitarian aid programme, EUR 220 million was committed to address the needs of Palestine (21). In

addition, the EU provided aid to:

• the Sudan crisis (EUR 273 million);

• the African Great Lakes region (EUR 129 million);

• the central Sahel countries, i.e. Burkina Faso, Niger and Mali (EUR 124 million);

• Myanmar/Burma (EUR 55 million);

• Venezuela (EUR 52 million);

• Rohingya refugees in the Cox’s Bazar refugee camp in Bangladesh (nearly EUR 39 million).

ReliefEU allocated EUR 110 million for operations in 2025, using a total of EUR 53.5 million of first-line

emergency humanitarian funding in 60 countries. ReliefEU funding was mobilised 118 times. ReliefEU

capacities responded to 20 crises in 18 countries with logistical services and multimodal transportation

services.

EU budget contribution to horizontal priorities

The EU budget delivers clear EU added value, beyond what would be achieved by Member States

acting alone. All EU funds and programmes continued to progress towards their objectives in 2025, and

together they provided strong support to a range of cross-cutting priorities such as the green and digital

transitions. During the year, it is estimated that almost EUR 64 billion was provided to support climate

objectives, over EUR 15 billion targeted biodiversity objectives, over EUR 19 billion was allocated to digital

priorities and almost EUR 38 billion supported gender equality (22).

EU budget and NextGenerationEU allocation to horizontal priorities in 2025 (percentage of

total budget and estimated amounts in million EUR)

Source: European Commission.

(21) This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the

individual positions of the Member States on this issue. (22) Figures based on budgetary from final adopted EU budget, NextGenerationEU and commitments made available

again following article 15.3 of the Financial Regulation. Support for different priorities should not be aggregated, as in some cases the same intervention may contribute to more than one priority.

BIODIVERSITY EUR 15 161

7.8% DIGITAL

EUR 19 488

10.1% CLIMATE EUR 63 961

33.0% =

GENDER EUR 37 518

19%

2025 financial year

16

Examples of contributions from the EU budget to horizontal priorities

Climate

• In the ‘Cities’ mission of Horizon Europe, 103 cities have formally committed to climate

neutrality, with an expected reduction in carbon dioxide emissions equal to approximately

6.2% of the EU total in 2023.

• A total of 940 866 new or upgraded refuelling and recharging points for clean vehicles had

been installed through measures under the Recovery and Resilience Facility by mid-2025.

• At least 81 million people in the EU are set to benefit from climate mitigation measures

funded by cohesion policy programmes for the protection from floods, wildfires and

natural disasters and an additional 26 million people from measures on air quality

improvement.

• Under the common agricultural policy, measures to enhance carbon sequestration and

storage in soils and biomass have been carried out on 38% of the EU’s agricultural area.

• LIFE projects have achieved a reduction of 14.1 million tonnes of carbon dioxide equivalent

per year, annual primary energy savings of 8 332 gigawatt-hours and additional

renewable energy production of 3 153 gigawatt-hours per year. Vulnerability to climate

change has been reduced for over 3.5 million citizens.

• Under the Neighbourhood, Development and International Cooperation Instrument – Global

Europe, the EU4climate resilience programme (EUR 17 million) supports climate adaptation

at the municipal level through technical support and pilot projects. It helps Eastern

Partnership countries meet their commitments under the Paris Agreement and align with

EU legislation.

Biodiversity

• Cohesion policy has supported projects covering some 65 million hectares of land to

protect against wildfires.

• The Copernicus monitoring services contribute to monitoring changes in ecosystems and

biodiversity loss, in support of the EU biodiversity strategy, the EU Nature Restoration

Regulation, the Convention on Biological Diversity and reporting on the United Nations’

sustainable development goals.

• Under the LIFE programme, biodiversity loss has been halted or reversed across 2 048 647

hectares of habitats, and 557 species have benefited from conservation efforts.

• A total of 2 691 initiatives contributing to good environmental status were selected

between 2022 and 2024 under the European Maritime, Fisheries and Aquaculture Fund.

Digital

• By the end of 2025, 20 million additional dwellings had broadband access via very-high-

capacity networks thanks to investment financed by the Recovery and Resilience Facility

InvestEU and Cohesion funding

• Over 51 000 businesses and almost 20 000 public institutions were selected to receive

support under the cohesion policy funds to develop digital products, services and

processes.

• Additional capacity of 10 362 terabits per second was created by backbone networks,

including submarine cables, that had been deployed by the Connecting Europe Facility by

the end of 2025.

2025 financial year

17

Gender equality

• In 2025, 19% of the EU budget contributed to the promotion of gender equality.

• During the year, the digital Europe programme funded activities to increase the number of

women in information and communications technology. For example, it supported outreach

activities, consultancy services and workshops to attract more women to the sector. In

addition, projects to set up four sectoral skills academies in the fields of quantum, artificial

intelligence, semiconductors and virtual worlds specifically promoted the participation of

women in these academies.

• The plans under the Recovery and Resilience Facility include 123 gender-relevant

measures, 72 investments and 51 reforms. These measures include 207 milestones and

targets in 25 plans, of which 117 have already been assessed as fulfilled and 35 have

been reported by Member States as completed.

• Horizon Europe requires that public bodies, research organisations and higher education

institutions from Member States and associated countries have a gender-equality plan in

place as a condition for eligibility.

NextGenerationEU driving reforms and investment via recovery and

resilience plans

In 2025, NextGenerationEU continued to support economic recovery through Member State

reforms and investments under the Recovery and Resilience Facility. The total envelope amounted to

EUR 637.1 billion at the end of 2025, comprising EUR 360 billion in non-repayable support and EUR 277 billion

in loans. In 2025, the Commission assessed 34 payment requests amounting to EUR 87.3 billion (EUR

47.2 billion in loans and EUR 40.1 billion in non-repayable support).

The reforms supported by the Recovery and Resilience Facility contribute to the long-term

economic resilience of Member States and maximise the positive impact of related investment under the

facility. As reflected in the recovery and resilience scoreboard, the facility has supported, for instance, the

modernisation of regulatory frameworks in key sectors (e.g. digital, energy, transport), improvements in

permitting and public procurement procedures, and the strengthening of rule-of-law and anti-corruption

safeguards (23).

(23) European Commission: Directorate-General for Economic and Financial Affairs and Secretariat-General, ‘Recovery and

resilience scoreboard’, European Commission website, 9 May 2026, https://ec.europa.eu/economy_finance/recovery- and-resilience-scoreboard/index.html.

2025 financial year

18

The Recovery and Resilience Facility has provided substantial support to Member States tied to the

delivery of reforms and investment and has reshaped EU economic governance and policy

coordination with its performance-based design (24). Across the EU, the facility has made a real

difference to the lives of individuals by supporting ambitious investment agendas in the following

areas (25):

• Green transition. By the end of 2025, annual energy consumption had been reduced by

37.6 million megawatt hours, and more than 940 866 refuelling and recharging stations for clean

vehicles had been installed or upgraded.

• Digital transition. Around 20 million additional dwellings had gained access to very-high-

capacity internet networks by the end of 2025, and more than 2.4 billion users (26) were using new

or improved public digital services.

• Healthcare. Healthcare capacity has been increased, including in hospitals, clinics, outpatient

care centres and specialised care centres. By the end of 2025, around 60.2 million people annually

could benefit from new or modernised healthcare facilities.

• Education and training. Some 30.7 million people have participated in education and training

and almost 3.5 million people are in employment or engaged in job-searching activities thanks to

the support received through the facility. In addition, 12.7 million young people aged 15-29 have

received support, whether monetary or in kind (i.e. education, training and employment support).

• Support for businesses. Around 4.9 million enterprises had received support – whether

monetary or in kind – under the facility by the end of 2025.

REPowerEU provides EUR 57.6 billion for investment and reforms to help Member States save

energy, diversify energy supplies and produce clean energy. All 27 REPowerEU chapters have been

adopted. The measures continue to contribute to saving energy, substituting fossil fuels and addressing

security-of-supply needs, while reducing dependency on Russian fossil fuels. Following the adoption of the

REPowerEU chapters, a total of EUR 339.7 billion (27) – over 50% of the Member States’ total allocation under

the Recovery and Resilience Facility – has been dedicated to measures contributing to the green transition

pillar.

(24) Communication from the Commission to the European Parliament, the Council, the European Central Bank, the

European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, 2026 European semester – Spring package, COM(2026) 200 final of 3 June 2026, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=COM%3A2026%3A200%3AFIN&qid=1780494235578

(25) This information is based on data reported by the Member States in the context of the biannual reporting on the common indicators. More information and data are available from the recovery and resilience scoreboard (see footnote 24).

(26) The indicator counts the total number of uses rather than the number of unique individuals. (27) This figure shows cost estimates based on the pillar tagging methodology for the recovery and resilience scoreboard

(see footnote 24) and corresponds to the measures allocated to the green transition pillar as a primary or secondary policy pillar.

2025 financial year

19

Key climate and energy commitments under the REPowerEU component of the Recovery and

Resilience Facility

Renewable energy for all

Saving energy

• A significant share of the Recovery and Resilience Facility is dedicated to renewable energy and energy infrastructure. EUR 67.6 billion (28) is allocated to

these measures under the facility. This represents 20% of the total estimated cost of the measures in the recovery and resilience plans.

• The Recovery and Resilience Facility is projected to increase the capacity of renewable energy sources by more than 61 gigawatts by 2026. This corresponds to

almost 32% of all additional renewable energy capacity deployed in Europe between 2021 and 2024 (29).

• Considering the average electricity consumption of households, the renewable capacity supported by the Recovery and Resilience Facility is expected to generate

enough electricity each year to cover the needs of

around 40 million households (30) across the EU.

• The recovery and resilience plans will replace more than

3 million heating and cooling systems with sustainable alternatives.

Boosting the competitiveness of EU industry

Secure energy networks for the EU

• Strategic clean-tech investments will be made in

electrolysers, batteries and solar panels.

• The electricity generated from Recovery and

Resilience Facility investment in renewable energy

could replace almost 15.8 billion cubic metres of

fossil gas, equivalent to more than 16% of the reduction in gas imports from Russia achieved since 2021.

• The recovery and resilience plans include investment in over 21 000 megawatts of additional transmission

and distribution capacity – enough to carry the full

output of around 5 125 new onshore wind turbines.

• More than 10 000 kilometres of transmission and

distribution lines are being reinforced or

constructed – roughly equivalent to circling a quarter of

the earth, or stretching from Lisbon to Helsinki and back.

• Key cross-border gas infrastructure projects will

meet immediate security-of-supply needs.

In 2025, Member States revised their plans under the Recovery and Resilience Facility to adjust to

new needs and simplify milestones and targets to ease implementation, in line with the

Communication ‘NextGenerationEU – The Road to 2026 published by the Commission’ (31).Overall, 50 Council

implementing decision revisions were positively assessed by the Commission, including 24 amendments

relating to the simplification effort.

Almost EUR 80.4 billion had been issued in the form of NextGenerationEU green bonds as of April

2026. The largest share of these funds was used to make disbursements to Member States under the

Recovery and Resilience Facility. This means the EU maintains its position as one of the world’s largest issuers

of green bonds. In December 2023, the Commission published the first NextGenerationEU green bond

allocation and impact report (32), which confirms the EU’s commitment to sustainable finance. Since then, this

(28) The figures for renewable energy and infrastructure presented in this thematic analysis, except when otherwise

specified, are based on the pillar tagging methodology for the Recovery and Resilience Scoreboard and correspond to the measures allocated to the policy area ‘Renewable Energy & Networks’ as primary or secondary policy area in September 2025.

(29) Based on the total renewable capacity of the EU-27 available from the IRENA Renewable Capacity Statistics 2025. Since 2021, 191.33 gigawatts of renewables have been deployed in the EU-27.

(30) According to Eurostat (2025) number of households by household composition. (31) Communication from the Commission to the European Parliament and the Council – NextGenerationEU – The road to

2026, COM(2025) 310 final/2 of 4 June 2025, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=celex:52025DC0310.

(32) European Commission: Directorate-General for Budget, Green bonds – Impact and allocation report – NGEU report 2023, Publications Office of the European Union, Luxembourg, 2023, https://data.europa.eu/doi/10.2761/302803.

2025 financial year

20

has been an annual exercise, with the latest report published in December 2025 (33). The report shows that

the full implementation of all measures funded by NextGenerationEU green bonds could reduce greenhouse

gas emissions by 53.4 million tonnes per year, equivalent to 1.5% of all such emissions in the EU in 2022.

Further information on the implementation and management of the Recovery and Resilience Facility is

provided in Annex 3 to this Annual Management and Performance Report for the EU Budget.

Effective tools ensure that the EU budget is well managed and

safeguarded

The Commission attaches the greatest importance to making the best possible use of taxpayers’

money. It is fully committed to ensuring that funding reaches the intended beneficiaries at the right cost and

in compliance with the applicable rules. To achieve this objective, the Commission relies on several tools that

have proved to be fit for purpose over the years and have remained effective in relation to the new

challenges encountered by the EU.

A robust chain of accountability

The Commission’s governance system and chain of accountability are tailored to its unique

structure and role. The College of Commissioners is politically responsible for managing the EU budget. It

delegates the day-to-day operational management to the 52 authorising officers by delegation (34), who

manage and steer their departments and are accountable for the share of the EU budget implemented in

their department.

The annual activity reports demonstrate how the authorising officers by delegation have

obtained the assurance that the resources assigned to them have been used for their intended purpose, in

accordance with the principle of sound financial management, and that the control procedures in place give

the necessary guarantees concerning the legality and regularity of the underlying transactions. If the

authorising officers by delegation identify weaknesses, they may qualify their declaration of assurance with

reservations.

The assurance is built on the following: (1) an assessment of the internal control system, including anti-

fraud measures; (2) the results of the controls carried out and their assessment of the risks to which their

department is exposed and the mitigating measures taken; (3) the preventive and corrective measures they

have applied as a result of the controls they have carried out, together with the Member States in the case of

shared management; (4) the observations and conclusions of the internal auditor and of the Court of Auditors;

and (5) the mitigating measures taken to address the weaknesses identified, especially in higher-risk areas.

(33) European Commission: Directorate-General for Budget, NGEU Green Bonds Allocation and Impact Report 2025,

Publications Office of the European Union, Luxembourg, 2025, https://data.europa.eu/doi/10.2761/8167958. (34) The term ‘authorising officers by delegation’ covers Directors-General of Commission departments and heads of

executive agencies, offices, services, task forces, etc. Article 74(1) of the Financial Regulation provides that ‘The authorising officer shall be responsible in the Union institution concerned for implementing revenue and expenditure in accordance with the principle of sound financial management, including through ensuring reporting on performance, and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients.’

2025 financial year

21

An internal control framework and measures to fight fraud that are

continuously updated and ensure cybersecurity

The Commission’s internal control framework is crucial to ensuring the effectiveness, efficiency

and economy of its operations, along with their legality and regularity. This is especially true in a

context of scarce resources and an increasing number of priorities. In parallel, since 2024, the Commission

has also enhanced the efficiency and effectiveness of the borrowing and lending operations underpinning the

financing of policy programmes. These include NextGenerationEU, support for Ukraine through macrofinancial

assistance (Macro Financial Assistance Plus and the Ukraine Loan Cooperation Mechanism) and ongoing

support for other neighbouring countries. The Commission considers that internal control systems are

functioning well and that suitable mitigating measures are being implemented in areas where weaknesses

have been identified.

On the fight against fraud, the Commission progressed in the implementation of its revised anti-

fraud strategy action plan,which aims to prevent and tackle fraud. The majority of the actions included in

the 2023 action plan were implemented by the end of 2025. The European Anti-Fraud Office (OLAF)

continued its strategic analytical work and investigative activities and included an updated qualitative

assessment of the national anti-fraud strategies in its 2024 annual report on the protection of the EU’s

financial interests (35).

Security, safety, cybersecurity and business continuity are high on the Commission’s agenda . In

2025, as required by the regulation on cybersecurity in the EU’s institutions, bodies, offices and agencies (36),

the Commission conducted an initial cybersecurity review, ran a maturity assessment and reported on its

cybersecurity plan, therefore building on the existing internal cybersecurity governance, monitoring and

reporting framework and the corporate cybersecurity strategy. The implementation of the first complete cycle

of reporting required by the regulation contributed to establishing a comprehensive and binding framework to

ensure a high common level of cybersecurity across EU entities, including obligations on governance, risk

management, incident reporting and cooperation.

In the current geopolitical context, digital sovereignty has also emerged as a critical area. In

November 2025, the Commission’s corporate information technology governance body endorsed a digital

sovereignty action plan, which aims to increase control over the Commission’s own digital assets.

Control results confirm the EU budget is well protected

As part of their control strategies, within the internal control framework, the Commission and

the Member States perform thousands of checks every year to prevent, detect and correct errors

and weaknesses in the management and control systems. For shared management, the Commission

relies on the checks carried out by the national authorities and supervises them with its own controls and

audits where necessary. This is done in line with the single audit principle, which rationalises audit and control

and minimises the audit burden on beneficiaries. Under indirect management the Commission relies on the

control systems of implementing partners, whereas for direct management it is the Commission itself that

(35) Report from the Commission to the Council and the European Parliament – 36th Annual Report on the protection of

the European Union’s financial interests and the fight against fraud –2024, COM(2025) 426 final of 25 July 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025DC0426.

(36) Regulation (EU, Euratom) 2023/2841 of the European Parliament and of the Council of 13 December 2023 laying down measures for a high common level of cybersecurity at the institutions, bodies, offices and agencies of the Union (OJ L, 2023/2841, 18.12.2023, ELI: http://data.europa.eu/eli/reg/2023/2841/oj), which entered into force in January 2024.

2025 financial year

22

performs the controls. For the Recovery and Resilience Facility, checks and controls are performed according

to the division of responsibilities between the Commission and the Member States.

In agriculture In cohesion

Member States continue to enhance their

highly automated and systematic ex ante checks

(e.g. through the compulsory use of the area

monitoring system). The Commission reviewed

the annual reports and opinions for all 72 paying

agencies and carried out 45 conformityaudits

in 21 Member States.

For the 2014-2020 programming period,

Member States audited 9 425 (parts of)

operations, and the Commission reviewed the

annual reports and opinions for 441 programmes

and carried out 88 risk-based audits.

As a result of these controls and audits, preventive and corrective measures to the amount

of EUR 9 040 million were implemented in 2025. EUR 1 137 million is the amount of errors prevented

as a result of controls and audits carried out before payments took place, and EUR 7 903 million is the

amount of corrections implemented by the Commission and the Member States as a result of controls and

audits carried out after payment took place. The increase in the latter compared to 2024, when the amount

was EUR 1 475 million, is due to the closure of the 2014-2020 operational programmes in the cohesion

policy, reflecting mainly the high volume of submitted accounts in 2025 (last accounting year) and the

additional corrective capacity applied at closure.

Control results are presented at the level of the individual multiannual financial framework

(MFF) headings, reflecting the different approaches followed for different types of expenditure.

For all headings under which expenditure is cost based – also called compliance based – the

Commission estimates the risk at payment and the risk at closure. The risk at payment measures

the risk that the payments made are affected by irregularities before any correction has been applied. The

risk at closure represents the remaining level of error at the end of the programming cycle after all controls

and all corrections have been implemented. Given the multiannual character of the funding programmes, the

Commission, together with Member States in the case of shared management, makes a substantial effort to

perform controls after payment and to make corrections until the closure of the programmes. These efforts

are reflected in the estimated risk at closure.

In 2025, for compliance-based expenditure, the risk at closure was below 2% for all headings.

The risk at payment was slightly above 2% for the MFF headings covering Single market, innovation and

digital and Cohesion, resilience and values and below 2% for other MFF headings (see the chart below).

2025 financial year

23

Overview of risk at payment and risk at closure for compliance-based expenditure

Source: European Commission annual activity reports for 2025 (as of 22 April 2026).

For performance-based expenditure, there is a qualitative assessment of the risk to the legality

and regularity of the payments made whereby expenditure is grouped into three categories of

risk: low, medium and high. Since 2024, this has concerned payments made under the new delivery model

for the common agricultural policy for 2023-2027, under the heading of natural resources and environment,

where the focus is on the functioning of the systems in place in the Member States and systems audits, both

by the national audit authorities (37) and by the Commission. From 2025 onwards, this also applies to

expenditure related to the Moldova, Ukraine and Western Balkans facilities, under the heading neighbourhood

and the world, where payments are based on the achievement of milestones and targets (steps in the case of

the facilities), like the Recovery and Resilience Facility (38). The assessment is mostly based on the level of risk

associated with the milestones and targets paid. Further elements relating to the situation of the

management and control systems used in the beneficiary countries may be taken into account. Even if the

approach does not produce error rates, the same level of protection of the EU budget from errors is ensured

through interruptions, suspensions and financial corrections that result from the controls in place.

For natural resources and environment, the share of low-risk expenditure was 64%. This is slightly

below the average for the period 2020-2024 (66.7%), and reflects overall the improved assessment of the

(37) Certification bodies for agriculture. (38) The Reform and Growth Facility for Moldova, the Ukraine Facility and the Reform and Growth Facility for the Western

Balkans.

2.1%

1.7%

2.3%

0.8%

Heading 1 Single market,

innovation and digital

1.1%

1.0%

1.7%

1.7%

2.8%

2.6%

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

Materiality

Heading 2 Cohesion, resilience

and values

Heading 4 Migration

and border management

Heading 5 Security

and defence

0.5%

0.5%

Heading 7 European public administration

Risk at payment Risk at closure

2025 financial year

24

systems in place by the certification bodies, which gained experience in the second year of implementing the

new delivery model.

For the neighbourhood and the world, the share of low-risk expenditure was close to 90%,which

is in line with previous years’ results. For the Ukraine Facility (39), given the early stage in the instrument’s life

cycle, the progress already made in implementation, the types of milestones and the targets submitted for

payments, and taking into account the situation on the ground, all payments were assessed as low risk.

To ensure comparability with previous years at the Commission level, control results are

presented in an overview of the share of expenditure in each of the three categories of risk: low,

medium and high. The evidence gathered by the Commission through its controls and audits, and those of

the Member States, allows expenditure to be grouped together in three risk categories based either on the risk

at payment (low, if below 2.0%; medium, if between 2.0% and 2.5%; or high, if above 2.5%) or on the share

of expenditure assessed as low, medium or high risk, based on the tailored methodology established for

performance-based payments.

Expenditure per risk category

Source: European Commission annual activity reports for 2025.

Based on all the controls and audits carried out, the Commission has detailed and robust

evidence of the differentiated risk level for EU budget expenditure. This evidence is detailed down to

the level of programmes for cohesion policy; to the level of interventions within paying agencies for

performance-based expenditure under natural resources; and to the level of individual payments for facilities.

This in turn makes it possible to address and correct weaknesses precisely in the segments of expenditure

where they occur and to focus action where it is deemed necessary.

This approach allows the Commission to present a nuanced picture of the managed expenditure.

Although Horizon Europe programmes and the digital Europe programme have a risk at payment above 2.5%,

64.1% of expenditure under the single market, innovation and digital heading is in the low- or medium-risk

categories. Similarly, while the overall risk at payment for cohesion is 2.7% (40), the majority of cohesion

policy programmes were in the medium-risk category in 2025. Moreover, cohesion policy’s multilevel control

and corrective framework ensures that the risk at closure remains below the materiality threshold of 2%. The

Commission is able to report precisely which programmes in which Member States are medium risk (risk at

(39) In 2025, payments consisted of loans, to all facilities, from the borrowing operations of the Commission, and of non-

repayable funding, to Ukraine only, from the EU budget. (40) For the heading cohesion, resilience and values, which is wider than cohesion only, the risk at payment is 2.3%. For

cohesion only, see also Volume III, Annex 5, Table B, it is 2.71%.

66.5%

54.7%

58.6%

9.2%

24.5%

25.2%

24.2%

20.8%

0 20 40 60 80 100 120 140 160 180

2023

2024

2025

(billion EUR)

1 – low 2 – medium 3 – high

16.2%

2025 financial year

25

payment above between 2% and 2.5%) and high risk, with a risk at payment above 2.5% or significant

weaknesses identified (41). Similarly, for natural resources where expenditure is low risk in general, the

Commission can identify those interventions at paying-agency level that are assessed as medium or high

risk (42). All the remaining expenditure under the other multiannual financial framework headings – migration

and border management, security and defence, neighbourhood and the world, and administrative

expenditure – is low or medium risk.

European Commission categorisation of expenditure into higher-, medium- and lower-risk

segments, as a percentage of the total of relevant expenditure for 2025

Source: European Commission annual activity reports for 2025.

The Commission’s approach to the control of the funds it is implementing reflects its specific

role. The Commission’s duty as manager of the EU budget is, on a multiannual basis, to prevent errors and, if

necessary, to correct them, recover funds unduly spent and address identified weaknesses. The Commission’s

approach stems from a multiannual management perspective and requires that more detailed information be

provided. It differs from that of the Court of Auditors, which is annual by definition and takes an auditor’s

perspective.

For 2023-2027 expenditure under the common agricultural policy, the Court of Auditors

continues to apply the approach of previous years. The Court of Auditors determines an error rate

based on audits of payments to final beneficiaries, checking whether they comply with the rules set by the

Member States in their plans. Errors identified in payments are also analysed by the Court of Auditors for

(41) In 2025, reservations for Cohesion policy were made in relation to 68 programmes in 17 Member States and the

United Kingdom for both the 2014-2020 and the 2021-2027 programming periods. (42) In 2025, for expenditure under the new performance-based model, 82 interventions in 34 paying agencies in 25

Member States were put under reservation.

2025 financial year

26

indications of potential serious deficiencies in the governance systems in Member States, which are the focus

of the Commission’s assessment. The Court of Auditors’ approach is therefore complementary to the

Commission’s.

The Commission reports transparently on expenditure with a high level of risk that is deemed to

be material, with significant weaknesses in the management of funds or with reputational risks.

This is done in the annual activity reports of each authorising officer by delegation through reservations

qualifying their declaration of assurance. For 2025, there are 32 reservations, 30 relating to expenditure

under the EU budget, with a total financial impact of EUR 867 million, or 0.5% of the total expenditure, and

two relating to the Recovery and Resilience Facility, with a financial impact of EUR 343 million, or 0.8% of the

total expenditure under the Facility in 2025. Reservations are a keystone of the accountability chain. They

outline the challenges and weaknesses encountered and are systematically accompanied by a description of

the measures envisaged to address them. Appropriate financial corrections are also applied.

Root causes of errors

• Ineligible costs in cost claims. • Non-compliance with EU or national rules (procurement,

State aid, etc.). • Ineligible participants. • Missing supporting documents.

Mitigating measures

• Continuous update of control strategies. • Simplified cost options. • Awareness actions. • Guidance. • Training. • Digital solutions.

The Commission uses appropriate measures to address the main weaknesses identified through

its controls, taking into account the recommendations made by the Parliament, the internal auditor and the

Court of Auditors.

In addition, the Commission has taken into account the lessons learned, in particular on

simplification measures, when designing the legal framework for new programmes. This was done,

for instance, for the basic acts for the 2021-2027 programming period and in the proposals for the 2028-

2034 multiannual financial framework. As explained above, the impact of simplification measures such as the

use of simplified cost options will increase in the years to come, when more expenditure from the 2021-2027

programming period takes place and has been checked under the rules for this programming period.

Based on the above, the Commission considers that, in 2025, the EU budget was well

protected overall. This is confirmed by the internal auditor’s overall conclusion (43), in which

she considered that, during the year, the Commission put in place governance, risk management and

internal control procedures which, taken as a whole, are adequate to give reasonable assurance over

the achievement of its financial objectives, with the exception of those areas of financial management

over which authorising officers by delegation have expressed reservations in their declarations of

assurance.

(43) See Annex 2, Section 3.2 ‘Work of the Internal Audit Service and overall conclusion’.

EU BUDGET

Mitigating measures

Root causes of errors

2025 financial year

27

Transparent reporting

The Commission reports transparently on the operational and budgetary implementation of the

funds it manages, and provides information on the beneficiaries and recipients of EU funds.

This is done through a wide range of reports and publicly accessible databases, examples of which are

given below.

• The Commission’s integrated financial and accountability reporting brings together

comprehensive information on the implementation, performance, results, sound financial

management and protection of the EU budget. It includes the final consolidated accounts, this

Annual Management and Performance Report for the EU Budget, the long-term forecast of future

inflows and outflows, the annual internal audit report and the report on the follow-up to the

discharge.

• In their annual activity reports, the authorising officers by delegation of all 52 Commission

departments report on the progress achieved towards their objectives in implementing the funds.

They report on the control results, the weaknesses identified in the internal control systems and

the measures taken to address them. They transparently mention in their declaration of assurance

the reservations for high-risk expenditure or revenues.

• The Financial Transparency System web portal is open to members of the public who are

interested in finding out who received funding from the EU budget and the European Development

Fund and how much they received under direct management, along with the commitments for

entities entrusted with managing the EU budget under indirect management.

• The NextGenerationEU green bonds dashboard provides a real-time overview of the

measures financed by the NextGenerationEU green bonds and related expenditure. These data

demonstrate that the Commission is issuing green bonds in line with the highest standards and

the best market practices. Every year, the Commission publishes a NextGenerationEU green bond

allocation and impact report, which shows how the proceeds from green bonds have been used

and presents the assessment of the climate impact of the measures financed by them, along with

the level of compliance with the EU taxonomy.

• Kohesio (44), the public platform for the visibility and transparency of cohesion policy

funds, includes the lists of operations benefiting from EU funding published by all the Member

States for the 2014-2020 and 2021-2027 programming periods in line with applicable regulatory

provisions.

• In relation to natural resources, transparency of information is achieved at the Member State

level through the development and management of national systems and, as applicable,

databases accessible through the internet, for example for the identification of land parcels for

the agricultural funds, and the regular publication of the beneficiaries of agriculture and maritime,

fisheries and aquaculture funds.

• For the Moldova, Ukraine and Western Balkans facilities, scoreboards for the respective

plans were established in 2025, providing easy public access to the assessment of reforms as

captured in the decisions underpinning payments.

(44) https://kohesio.eu/.

2025 financial year

28

• For the Recovery and Resilience Facility,the scoreboard displays the data reported by

Member States on the 100 final recipients that receive the highest amount of funding for the

implementation of measures under the facility. The date is updated twice a year. The website for

the Facility also includes a map of projects that provides examples of reforms and investment

supported by the Recovery and Resilience Facility in the various Member States. In 2025, to

further enhance transparency, data on all measures and all milestones and targets was made

available on the Scoreboard.

For the Recovery and Resilience Facility under NextGenerationEU, control

results confirm the satisfactory fulfilment of all milestones and targets for

the payments made in 2025

For the Recovery and Resilience Facility, the Commission has put in place a dedicated control

environment. This control set-up ensures both that the Member States put in place an effective control

system for the protection of the EU’s financial interests, as per the requirements of the Recovery and

Resilience Facility Regulation (45), and that the payments to the Member States are legal and regular.

All of the audit and control milestones have been assessed as fulfilled for all Member States

that had received a payment by the end of 2025 and for which such milestones had been added to

their national plan. Particular attention was paid to the achievement of these milestones in relation to the

Member States’ arrangements to ensure an adequate audit and control system to protect the financial

interests of the EU. Following a thorough assessment during the revision of the recovery and resilience plans,

the Commission proposed new audit and control milestones where this was deemed necessary (46). Control

systems in the Member States have significantly improved since the launch of the Recovery and Resilience

Facility, with 56 audit and control milestones (out of 83) assessed as being satisfactorily fulfilled. The

remaining 27, corresponding to one Member State, will be assessed once the corresponding payment requests

are submitted. Member States cannot receive payments, except for pre-financing, until the audit and control

milestones are fulfilled.

In 2025, the Commission carried out four system audits on the protection of the financial

interests of the EU (47). By the end of May 2026, the Commission had performed 36 system

audits, covering all the Member States. During these audits, the Commission also verified whether

Member States had complied with their obligation to check compliance with applicable rules regularly, notably

public procurement and State-aid rules, including the effectiveness of such checks, and whether they had

procedures to avoid double funding between the Recovery and Resilience Facility and other EU programmes.

An overall improvement in the implementation of internal control systems was noted across the audited

implementing and coordinating bodies. Member States are implementing the necessary improvements

stemming from audit findings. In some instances, the audit and control milestones provided an additional

incentive for Member States to implement actions responding to audit recommendations in a timely manner.

In relation to legality and regularity, the Commission’s control results confirm the satisfactory

fulfilment of all milestones and targets for the payments made in 2025. These results are based on

the Commission’s careful assessment (48) of the evidence provided by the Member States to substantiate the

(45) Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the

Recovery and Resilience Facility (OJ L 57, 18.2.2021, pp. 17–75, ELI: http://data.europa.eu/eli/reg/2021/241/oj). (46) Ten audit and control milestones and targets were added in seven revised recovery and resilience plans in 2023 and

one in 2025. (47) In relation to Ireland, Spain, France, Poland, Finland and Sweden. (48) In its assessment, the Commission retains a margin of discretion as regards a limited number of circumstances in

which minimal deviations linked to the amounts, formal requirements, timing or substance can be accepted.

2025 financial year

29

fulfilment of milestones and targets, along with the management declarations and audit summaries

accompanying each payment request, before the payment takes place. This allowed a very small number of

milestones and targets (11 out of 1 174 assessed) to be identified as not having been achieved at the time

the payment requests were submitted, and for which suspensions of payments were applied amounting to

EUR 1 737.5 million (49). This assessment was complemented by on-the-spot audits (50) after the payments

had taken place. The satisfactory achievement of another two targets (51) was put in question, a posteriori,

after considering the Court of Auditors’ audit results in the context of its 2025 statement of assurance. The

corresponding payment was considered high risk.

The responsible authorising officer by delegation reported that they had reasonable assurance

of the legality and regularity of the payments made in 2025 for the Recovery and Resilience Facility,

based on the results of the controls carried out except for the one payment considered high risk for which a

reservation was issued. The Commission concluded that all other payments made in 2025 were considered to

be at a low or medium level of risk of error. In addition, regarding the compliance with all applicable rules

when using the funds, and the obligation to correct cases of fraud, corruption, conflict of interest or serious

breach of an obligation resulting from the financing and loan agreements, one Member State (52) was found

to be at a high level of risk, for which a reservation was maintained. All other Member States were assessed

at either a medium level of risk or a low level of risk.

The conditionality regime continues to contribute to the protection

of the EU’s financial interests

Since 2021, with the entry into force of the Conditionality Regulation (53), the EU budget has had

an additional layer of protection when breaches of the principles of the rule of law in a Member

State affect, or seriously risk affecting, EU financial interests in a sufficiently direct way. The

rule of law is one of the founding values of the EU, and respect for it is also key for the sound financial

management of the EU budget and the effective use of EU funding. The Conditionality Regulation

complements other tools and procedures to protect the EU budget, for example checks and audits or financial

corrections under sectoral rules, including those put in place by the Recovery and Resilience Facility

Regulation (54) and by the Common Provisions Regulation (55) governing several EU funds and programmes, or

investigations by the European Anti-Fraud Office.

(49) Romania (six milestones and targets, EUR 869.8 million), Spain (two milestones and targets, EUR 500.3 million),

Bulgaria (three milestones and targets, EUR 367.4 million). In accordance with the methodology adopted in February 2023 in Communication from the Commission to the European Parliament and the Council – Recovery and Resilience Facility: Two years on – A unique instrument at the heart of the EU’s green and digital transformation, COM(2023) 99 final, 21 February 2023, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023DC0099.

(50) In 2025, the Commission carried out 23 audits on milestones and targets (some of them were also combined with systems audits). These audits are carried out on a risk basis, usually covering 100% of high-risk milestones and targets, along with some medium-risk milestones and targets.

(51) For the 3rd payment to Poland a financial reservation was introduced with a financial impact amounting to EUR 326.1 million, representing 0.72% of the total amount of non-repayable support paid in 2025.

(52) Cases of conflicts of interest detected during audits in 2024 with a financial impact amounting to EUR 16.85 million, representing 0.04% of the total amount of non-repayable support paid in 2025.

(53) Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433, 22.12.2020, ELI: http://data.europa.eu/eli/reg/2020/2092/oj).

(54) Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, ELI: http://data.europa.eu/eli/reg/2021/241/oj).

(55) Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, ELI: http://data.europa.eu/eli/reg/2021/1060/oj).

2025 financial year

30

The Conditionality Regulation allows the EU to take measures to protect the EU budget, for

example through the suspension of payments or financial corrections. Where the conditions set by

the regulation are met, the Commission must propose that the Council adopt appropriate and proportionate

measures in relation to the Member State concerned. The Council decides on the adoption of measures by

qualified majority. If measures are adopted, only the Member State concerned should be affected: the

relevant EU programmes should continue to be implemented, and the Member State remains bound to fulfil

its obligations, including that of paying final recipients.

In 2025, the Commission continued to monitor the situation in all Member States, and protective

measures remained in place as regards Hungary. Following the procedure launched in December 2022

to impose protective measures, the Commission reassessed the situation for Hungary at the end of 2023 and

at the end of 2024 and concluded that the EU budget remained at the same level of risk. Therefore, the

Commission did not propose any lifting or adaptation of the protective measures. In 2025, Hungary did not

notify new remedial measures to address the issues identified by the Council (56).

Management conclusion

The Commission ensures that the EU budget serves EU citizens. Thanks to the effective tools in place

and the proactive management of the EU budget, the budget has delivered on its objectives and has helped to

respond to multiple unforeseen challenges. The Commission has provided its beneficiaries, implementing

partners and the Member States with the appropriate flexibility to respond to unforeseen circumstances, while

ensuring sound financial management and maintaining an appropriate level of assurance on the management

of the EU budget.

Flexibility and sound financial management are integral to the proposal for the post-2027

multiannual financial framework. The EU budget must continue to balance predictability for long-term

investment and flexibility to respond to crises, but the current complexity and structural rigidity in the EU

budget are ill-suited to a highly volatile geopolitical environment in which it is impossible to predict

tomorrow’s priorities today. A much more streamlined and flexible budget will be needed for the future, which

will also continue to provide the predictability and stability, along with the robust financial controls, that are

the foundation stones of the EU budget.

For 2025, all authorising officers by delegation have provided reasonable assurance, qualified

with reservations where appropriate. The annual activity reports demonstrate that all Commission

departments have put in place solid internal control systems and provide evidence of the action taken to

address issues and weaknesses identified, improve cost-effectiveness, further simplify the rules and

adequately protect the budget from fraud, errors and irregularities.

The internal auditor, in her overall conclusion, considered that, in 2025, the Commission had put in

place governance, risk management and internal control procedures which, taken as a whole, are adequate

to give reasonable assurance over the achievement of its financial objectives, with the exception of those

areas of financial management over which authorising officers by delegation have expressed reservations in

their declarations of assurance.

(56) Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union

budget against breaches of the principles of the rule of law in Hungary (OJ L 325, 20.12.2022, ELI: http://data.europa.eu/eli/dec_impl/2022/2506/oj).

2025 financial year

31

Based on the assurances and reservations in the annual activity reports and taking into

account the opinion of the internal auditor, the College of Commissioners adopts this

Annual Management and Performance Report for the EU Budget – 2025 financial yearand

takes overall political responsibility for the management of the EU budget.

EN EN

EUROPEAN COMMISSION

Strasbourg, 16.6.2026

COM(2026) 824 final

ANNEXES 2 to 3

ANNEXES

to the

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE

COUNCIL AND THE COURT OF AUDITORS

Annual Management and Performance Report for the EU Budget – 2025 financial year

3

Contents

ANNEX 2 – INTERNAL CONTROL AND FINANCIAL MANAGEMENT ........................................................................ 5

1 Strong tools to manage the EU budget in a complex environment ................................................................................ 7

2. Cost-effective controls protecting the EU budget .................................................................................................................. 21

3. Management assurance ........................................................................................................................................................................... 53

4. Outlook for 2026 and beyond .............................................................................................................................................................. 59

ANNEX 3 – THE RECOVERY AND RESILIENCE FACILITY UNDER NEXTGENERATIONEU .............................. 61

1. The Recovery and Resilience Facility– an innovative and successful crisis response tool ........................... 63

2. Control results confirm the satisfactory fulfilment of all milestones and targets for payments

made in 2025 ................................................................................................................................................................................................. 68

4

Annex 2 – Internal control

and financial

management

Annex 2 – Internal control and financial management

7

1 Strong tools to manage the EU budget in

a complex environment

The European Commission must fulfil its crucial role in shaping and implementing the European Union’s

policies while making the best possible use of taxpayers’ money. It is therefore essential to ensure that EU

spending is effective, efficient and economical, while also complying with the applicable rules. The

Commission strives to achieve the highest standards of financial management while striking the right balance

between a low level of error, prompt payments and reasonable control costs.

1.1. The EU budget: a wide variety of areas, recipients and

spending in a complex environment

In 2025, the expenditure managed by the Commission amounted to EUR 166.7 billion (see figures below) (1).

This encompasses the share of the EU budget managed by the Commission, along with the European

Development Fund (2) and the EU trust funds. This expenditure was made through almost 328 000 payments,

ranging from a few hundred euro per beneficiary (for Erasmus+ mobility grants) to hundreds of millions of

euro (for large projects such as the ITER thermonuclear reactor or Galileo and Copernicus, along with

budgetary support for partner countries) and even billions of euro (for Member States under cohesion funds,

agricultural funds and the Recovery and Resilience Facility, or for Ukraine). This shows that the recipients of

EU funds are very diverse and numerous. This expenditure concerns both the 2014-2020 and the 2021-2027

programming periods. In 2025, the amount of the payments relating to the latter became higher than that of

the payments relating to the former.

Relevant expenditure of the EU budget implemented by the Commission in 2025, by policy area

Single market,

innovation and

digital

Cohesion,

resilience and

values

Natural

resources and

environment

Migration and

border

management

Security and

defence

Neighbourhood

and the world

E u ro

p e a n p

u b li c

a d m

in is

tr a ti

o n

E U

R 8

.9 b

ill io

n (

5 .3

% )

EUR 25.1 billion

(15.0%)

EUR 54.0 billion

(32.4%)

EUR 58.0 billion

(34.8%)

EUR 2.8 billion

(2.3%)

EUR 0.6 billion

(0.4%)

EUR 16.4 billion

(9.8%)

More than 4 300

Horizon Europe

grants were signed

in 2025, 19 500

cumulatively and

almost

EUR 53 billion of

EU contribution

since 2021.

Around 5 million

enterprises have

been supported

and almost

145 million people

have been covered

by improved

health services

since 2014.

Some 5.6 million

beneficiaries were

supported by

agricultural funds

under a variety of

different

interventions and

schemes in 2025.

Member States

received an

additional

allocation of

EUR 169.9 million

for the purchase

of equipment to be

used for border

surveillance.

Since 2021, the

European Defence

Fund has

supported 225

collaborative

projects focusing

on research and

development in

defence.

Sustainable

development,

stability, and

partnerships were

supported across

around 130 non-

EU countries

throughout the

world.

Source: European Commission annual activity reports for 2025.

(1) The amount of the Commission’s relevant expenditure corresponds to the payments made in 2025 minus the pre-

financing paid out in 2025, plus the pre-financing paid out in previous years and cleared in 2025 (for definitions and more details, see Annex 5). This amount only includes the payments made from the EU budget.

(2) The European Development Fund has been incorporated into the EU’s general budget for the 2021-2027 multiannual financial framework.

Annex 2 – Internal control and financial management

8

Under the EU budget, expenditure for which the management is shared between the Commission and Member

States (3) (especially expenditure on cohesion policy and agriculture) represents the biggest share of the total

expenditure. The rest of the budget was implemented either directly by the Commission or indirectly through

entrusted entities such as international organisations, the European Investment Bank and national

promotional banks. The table that follows describes the three management modes.

2025 expenditure from the EU budget by management mode

Examples

of programmes/spending

Other actors involved, in

cooperation with the Commission

Direct management

Funds are implemented by the Commission.

Horizon programmes; Connecting Europe Facility; administrative expenditure.

n/a (funding goes directly to the beneficiaries).

Indirect management

Funds are implemented in cooperation with entrusted entities.

Erasmus+; part of development and humanitarian aid; pre-accession assistance; external action.

Agencies; joint undertakings; United Nations; World Bank; European Investment Bank; European Bank for Reconstruction and Development; non-EU countries; etc.

Shared management

Funds are implemented in cooperation with Member States’ national and/or regional authorities, which have the first level of responsibility for budget implementation.

Agricultural funds; European Maritime, Fisheries and Aquaculture Fund; European Regional Development Fund; Cohesion Fund; European Social Fund and youth employment initiative; migration, border management and internal security funds.

Paying agencies for the common agricultural policy: 72; Managing authorities for the operational programmes for cohesion policy funds: 441, in all Member States for the 2014- 2020 programming period (380 for 2021-2027) Managing authorities for programmes for the European Maritime, Fisheries and Aquaculture Fund (26) and the three Home Affairs Funds (39).

Source: European Commission draft annual accounts 2025 – Statement of financial performance.

(3) Under shared management, Member States’ bodies select projects, distribute funds and manage expenditure in

accordance with EU and national law and report back to the Commission about the results achieved.

35%

10%

55%

Annex 2 – Internal control and financial management

9

In addition, the Commission spent almost EUR 115.9 billion using the amounts borrowed on capital markets.

These funds are all implemented directly by the Commission. In 2025, the majority of these funds was used

for the Recovery and Resilience Facility, for both loans (EUR 47.2 billion) and non-repayable support

(EUR 33.2 billion). The remaining amounts were used for macro-financial assistance (MFA) loans to Ukraine

(EUR 18.1 billion) and Jordan (EUR 250 million), loans under the Reform and Growth Facilities for the Western

Balkans (EUR 184.4 million), the Republic of Moldova (EUR 288.9 million); and the Ukraine Facility

(EUR 10.1 billion). In addition, EUR 6.6 billion were used for non-repayable support under NextGenerationEU

other than the Recovery and Resilience Facility.

Use of the amounts borrowed in 2025 on capital markets

(*) Reform and Growth Facility for the Western Balkans, Reform and Growth Facility for Moldova and Macro Financial Assistance to Jordan.

Source: European Commission draft annual accounts 2025 – Statement of financial performance.

NextGenerationEU non-repayable support (other than Recovery and Resilience Facility)

29%

41%

15%

9%

0.62%

6%

Recovery and Resilience

Facility loans (NextGenerationEU)

Exceptional Revenue Acceleration MFA loan

Ukraine Facility (loans)

Recovery and Resilience Facility non-repayable support (NextGenerationEU)

Other (*)

Annex 2 – Internal control and financial management

10

1.2. A robust governance system underpinning the College’s

responsibility

As the authorising officer of the Commission, the College of Commissioners is politically responsible for the

management of the EU budget and thus accountable for the work of the Commission’s departments. The EU

budget’s governance is built on a clear division of responsibilities between the political and management

levels; an independent internal audit supported by the Audit Progress Committee, which includes external

experts; an independent accountant; a strong commitment to performance management and compliance with

the legal framework; transparency and high ethical standards; and transparent reporting.

The Commission’s governance system and chain of accountability are tailored to its unique model of

decentralised decision-making in budget implementation. The College of Commissioners delegates the day-to-

day operational management to 52 authorising officers by delegation (4), who manage and steer their

departments to deliver on the objectives in their strategic outlooks, taking into account available resources.

Each authorising officer by delegation is accountable for the share of the EU budget implemented in their

department.

In their annual activity reports, the authorising officers by delegation report in a transparent way on the

performance and results achieved, on the functioning of their internal control systems and on the financial

management of their share of the EU budget – taking account of the assurance provided by Member States

under shared management and the implementing partners under indirect management. Each annual activity

report contains a declaration of assurance. It may be qualified with a reservation if an authorising officer by

delegation identifies weaknesses with a significant impact.

The annual management and performance report synthesises the annual results for the EU budget at the

Commission level, on the basis of the assurance and reservations contained in all the annual activity reports.

This report is part of the Commission’s integrated financial and accountability reporting package, which is

adopted by the College of Commissioners (5).

The ensuing annual budgetary discharge procedure allows the European Parliament and the Council of the

European Union to hold the Commission politically responsible for the implementation of the EU budget. The

Parliament’s decision takes into consideration the Commission’s integrated financial and accountability

reporting; the annual and special reports of the Court of Auditors, along with the latter’s statement of

assurance on the reliability of the accounts and the legality and regularity of underlying transactions; the

hearings of Commissioners and Directors-General; and a recommendation from the Council.

These robust governance arrangements help the College of Commissioners to deliver on the Commission’s

objectives, to use resources efficiently and effectively and to ensure that the EU budget is implemented in

accordance with the principles of sound financial management. An overview is presented in the chart below.

(4) The term ‘authorising officers by delegation’ covers Directors-General of the Commission and heads of executive

agencies, offices, services, task forces, etc. Article 74(1) of the Financial Regulation (Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj)) states that ‘The authorising officer shall be responsible in the Union institution concerned for implementing revenue and expenditure in accordance with the principle of sound financial management, including through ensuring reporting on performance, and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients.’

(5) As required by Article 253 of the Financial Regulation, the integrated financial and accountability reporting package also includes the final consolidated annual accounts of the EU, the report on the follow-up to the budgetary discharge for the previous financial year, the annual report to the discharge authority on internal audits carried out and the long-term forecast of future inflows and outflows of the EU budget covering the next five years.

Annex 2 – Internal control and financial management

11

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Annex 2 – Internal control and financial management

12

1.3. A mature internal control framework contributing

to the achievement of the Commission’s objectives in an

evolving environment

1.3.1. A mature internal control framework continually adjusted to

address minor weaknesses

The Commission relies on a strong corporate internal control framework based on the highest

international standards. It also employs a robust risk management policy to identify, assess and manage

risks at every level of the organisation, in order to provide assurance about the achievement of its objectives.

In 2025, the Commission continued to ensure that the amounts allocated from the EU budget were invested

for their intended purpose in strict compliance with the financial rules, in order to minimise, detect and

prevent errors, avoid double funding, prevent fraud, enhance transparency and pave the way to the discharge.

Overall, in 2025, the Commission departments concluded that the internal control principles

underlying their internal control systems were present and working as intended, and stable over

the years (see graph below), even if minor improvements are needed in some areas. This overall

assessment confirmed that the Commission departments had continued their efforts to address the

deficiencies in their internal control systems identified in 2024. Progress made in 2025 resulted from, among

other things, the improvement of local strategies in various areas (e.g. human resources, anti-fraud),

increased participation in learning activities, the adoption of business continuity plans and relocation plans,

and the improvement of the quality of information provided on local intranets.

Assessment of the functioning of the components and internal control principles (*)

(*) The number of Commission departments reporting that internal control components and principles were upheld and functioned

properly in 2023, 2024 and 2025.

Source: European Commission annual activity reports.

15

35

1 0

18

32

1 0

27 25

0 0 0

5

10

15

20

25

30

35

40

Effective and functioning as intended

Effective and functioning, some improvements needed

Partially effective Not effective

Annual activity report 2023 Annual activity report 2024 Annual activity report 2025Annual activity report 2025Annual activity report 2023 Annual activity report 20 4

Annex 2 – Internal control and financial management

13

Commission departments, with the support of the Central Financial Service, continued to

enhance, update and fine-tune their internal control systems where necessary. For some internal

control principles, improvements are still needed, corresponding mostly to minor deficiencies. Similarly to

previous years, partial effectiveness is often related to external factors. This assessment is inherent to the

unstable political situation in certain non-EU countries and regions where operations are taking place. This

heightened volatility prevents the full implementation of standard monitoring, evaluation and control

activities without discontinuing the urgent and essential delivery of financial assistance. Most of the time,

partial effectiveness was detected by audits (internal or external) and led to audit recommendations for which

action plans have been developed and implementation has already started but is not yet completed. The

departments concerned and the areas for improvement vary from one year to another. This is why variations

over the years at the Commission level remain marginal. An overview can be found in the assurance provided

by the Internal Audit Service in Volume III, Annex 6.

1.3.2. Progress in the Commission’s digital transformation

Against a backdrop of unprecedented challenges, the Commission’s digital transformation is moving forward

by continuing to develop more efficient corporate information technology tools to increase the efficiency of

its business processes and offering increasing data management and reporting capabilities.

In 2025, in line with the EU’s digital strategy, the Commission continued to implement and deploy its new

corporate financial platform, SUMMA. This was an important milestone in the business-driven digital

transformation of the Commission. It was a change and an update of an unprecedented order of magnitude

(see box below).

SUMMA – the Commission’s new corporate financial platform

The platform went live in the Commission departments and executive agencies in January 2025, fully

replacing the former central accounting, budgetary and treasury system. In January 2026, the

European External Action Service and 22 decentralised EU agencies also started to use SUMMA. By

2027, SUMMA will be further deployed to each of the 27 entities still using the previous financial

system, and to the Joint Sickness Insurance Scheme and the European Development Fund.

SUMMA is a modern financial system that is designed in close cooperation with the business owners,

based on the best industry standards and fully integrated into the Commission’s corporate information

technology landscape. Its integration with the main corporate and local systems increased the overall

level of automation of the Commission’s operations.

SUMMA is an important source for the central data and reporting hub, which designs and delivers

modern reporting solutions, from interactive dashboards to corporate reports, for a wide range of

stakeholders: the Commission, the executive agencies and other bodies, institutions and decentralised

agencies. The reporting hub makes the financial data clear, reliable and easy to use. The data and

reporting hub also provides planning and forecasting solutions, allowing the EU entities to better

programme their expenditure.

The SUMMA program has a strong governance framework and uses a thorough quality assurance

system, based on regular tests on SUMMA processes and integrations.

Overall, SUMMA offers a significant increase in business efficiency, along with flexibility through

integrated real-time analytics and decreased costs relating to ownership and future maintenance.

Annex 2 – Internal control and financial management

14

1.3.3. An enhanced framework for the risk management of financial

operations

Since the NextGenerationEU borrowing programme was launched at the end of 2021, the EU’s

financial operations have expanded significantly in volume and in scope to address emerging

challenges. Budgetary guarantees and loans to achieve the EU’s policy objectives, funded through the

issuance of debt securities, have been used on a large scale to tackle emerging challenges and successive

crises. The Commission completed its funding programme for 2025, raising a total of EUR 155 billion over the

course of the year. The 2025 issuance brought the total outstanding amount of EU bonds to EUR 560 billion

by year end, with EUR 78.5 billion issued in the form of NextGenerationEU green bonds.

In this context, the Commission has appointed a Chief Risk Officer to devise, develop and

implement an appropriate risk management and compliance framework to protect the EU’s

financial interests and to ensure that the various risks stemming from the borrowing operations are

adequately identified, managed and mitigated in a timely manner. This framework has been continually

enhanced by putting in place processes, control points and risk oversight across all the core borrowing and

lending activities, including funding planning, the execution of borrowing transactions, liquidity management,

cost calculation and allocation.

Taking into account the increased complexities and scale of all EU financial operations, the

Commission needed to evolve quickly towards a more comprehensive and sophisticated risk

management framework, aligned with best practices in the industry. This was achieved at the

beginning of 2025 by extending the Chief Risk Officer’s role beyond the EU’s borrowing and related lending

and debt management operations to asset management operations, budgetary guarantees and financial

assistance for non-EU countries (6). In line with best practices, the Commission has implemented the ‘three

lines of defence’ risk management model:

• the first line of defence is composed of the directorates-general responsible for the EU’s financial

operations in accordance with the Financial Regulation, which should implement sound financial risk

management processes, ensure compliance with the risk management framework and report any

deviations;

• the Chief Risk Officer acts as the second line of defence at the corporate level, and is responsible for

establishing a common financial risk management framework for all of the EU’s financial operations and

for independent risk assessment and reporting;

• the third line of defence is the Internal Audit Service, which exercises its role in accordance with

Article 118 of the Financial Regulation.

The Commission is now developing the framework governing financial risk management and compliance for

the various categories of the EU’s financial operations. This framework will ensure consistent and harmonised

risk approaches across Commission services. The policies will ensure alignment with international standards

by adopting best practices for risk measurement and monitoring.

The Commission is now developing the framework governing financial risk management and compliance for

the various categories of the EU’s financial operations. This framework will ensure consistent and harmonised

risk approaches across Commission services. The policies will ensure alignment with international standards

by adopting best practices for risk measurement and monitoring.

(6) Commission Decision (EU, Euratom) 2025/369 of 21 February 2025 establishing the role of the Chief Risk Officer

overseeing the financial risks arising from the Union’s financial operations (OJ L, 2025/369, 25.2.2025, ELI: http://data.europa.eu/eli/dec/2025/369/oj).

Annex 2 – Internal control and financial management

15

1.4. Multiannual control strategies to ensure that expenditure

is legal and regular

Authorising officers, as managers of the EU budget, put in place multiannual control strategies

to prevent, detect and correct errors. In line with their responsibility to carry out individual payments,

they need to build their assurance from the bottom up and in detail (i.e. by programme or other relevant

segment of expenditure). This allows the Commission to detect weaknesses and errors in a detailed and

differentiated manner for each programme or segment of expenditure; to identify the root causes of systemic

errors (e.g. the complexity of rules in certain policy areas, such as research or cohesion); to take targeted and

proportionate corrective measures; and to ensure that lessons learned are used to improve the management

and control systems and the design of future financial programmes.

EU spending programmes are multiannual by design, and so are the related control strategies.

This implies that the detection and correction of errors may take place continuously, until programme closure.

Moreover, the control strategies are risk differentiated (i.e. they are adjusted to the characteristics and risks

associated with different management modes, actors involved, policy areas and/or funding arrangements).

Control strategies usually entail preventive controls (ex ante controls) carried out before the Commission

payment takes place and corrective controls (ex post controls) carried out after the payment has been made.

The current approach for cost-based expenditure, and for expenditure where an error rate is determined, is

presented in the visual below. The Commission’s key preventive and corrective mechanisms are detailed in

Volume III, Annex 5.

The European Commission’s multiannual control cycle

Source: European Commission.

All management modes European Commission

• Commission departments and executive agencies

Direct management

European Commission

Shared management Member States

Indirect management

Entrusted entities

• Paying agencies / managing authorities

• Certification bodies / audit authorities

• Commission departments and executive agencies

• International organisations

• Non-EU countries

• Decentralised agencies

• Joint undertakings

PREVENTION

Ex ante

adjustments Ex post controls

Recoveries

and corrections Payments

End of

programme life

cycle

Ex ante controls

DETECTION AND CORRECTION

Annex 2 – Internal control and financial management

16

For cost-based instruments, risk at payment and risk at closure are determined at different

points in time, as explained in the visual below.

Risk at payment and risk at closure

Source: European Commission.

For additional information regarding the 2025 risk at payment and at closure, see Section 2.1 below and

Volume III, Annex 5, Sections 5.1 and 5.2.

For performance-based payments, the sequence of controls remains similar to the one described

above but there is no calculation of a risk at payment and risk at closure. For expenditure under the

new delivery model for the 2023-2027 common agricultural policy, there is a focus on the functioning of the

systems in place in the Member States and systems audits, both from the national audit authorities (7) and

from the Commission. For the expenditure under the Ukraine Facility, given the early stage in the life cycle of

the instrument and the progress already made in its implementation, and taking into account the situation on

the ground, the assessment is mainly based on ex ante desk reviews. Similar to cost-based instruments, the

controls continue to result in adjustments and corrections, be they before the payment is made with

suspensions and reductions or after the payment is made with financial corrections and recoveries.

Regarding the other funding programmes for the 2021-2027 multiannual financial framework,

given the acceleration in payments in 2025, the Commission is now able to implement fully its

control strategies. More payments mean more transactions to sample for auditing and thus less need to

resort to flat rates, but also the possibility to rely on audit results for the error rates, which become more

accurate, keeping a conservative approach.

(7) Certification bodies in the case of agriculture.

Risk at payment Risk at closure Estimated future

corrections =-

Closest to the Court of Auditors’

estimated level of error

Ex post controls Recoveries and corrections End of programme life cycle

Annex 2 – Internal control and financial management

17

1.5. Fight against fraud: the Commission’s anti-fraud strategy

and further proposals

1.5.1. Implementation of the Commission’s anti-fraud strategy

action plan

The Commission has zero tolerance for fraud. Pursuant to Article 325 of the Treaty on the Functioning

of the European Union, the Commission and the Member States protect the EU budget from fraud and other

illegal activities.

Throughout 2025, Commission services and the European Anti-Fraud Office made progress in the

implementation of the action plan accompanying the Commission anti-fraud strategy (8) from

2019. The strategy plays a significant role in preventing the possible misuse of EU money. It is accompanied

by an action plan, revised in 2023 (9), including 44 measures under seven themes that cover the

Commission’s priorities in fighting fraud. The target date for the different measures varies from 2023 to

2026, but for the majority the implementation is ‘done’, or ‘done and continuous’. The European Anti-Fraud

Office further supported Commission services in the design of their anti-fraud strategies and continued

sharing the latest developments on anti-fraud policy within the Fraud Prevention and Detection Network.

During the year, the European Anti-Fraud Office advanced its strategic analytical work, which is used to

feed into Commission departments’ and Member States’ fraud risk assessments, notably through analyses of

the detection and reporting of irregularities and fraud in different sectors and of the impact of and

vulnerability to fraud in the various areas of the cohesion policy.

The European Anti-Fraud Office has engaged with national authorities to improve the reporting

of irregularities and fraud, and provided strategic analysis to feed into Commission

departments’ and Member States’ fraud risk assessments. The European Anti-Fraud Office continued

engaging with Member States, both in the context of the Advisory Committee for the Coordination of Fraud

Prevention and by providing on-demand support to their anti-fraud activities, including to candidate countries,

such as Ukraine. The 2024 annual report on the protection of EU’s financial interests (10) included an updated

qualitative assessment of the national anti-fraud strategies.

As a result of its investigative work, in 2025 the European Anti-Fraud Office recommended

EUR 597 million for recovery, and that EUR 18.1 million be prevented from being unduly spent. The European

Anti-Fraud Office reports on its investigative activities in its annual report (11).

(8) Communication from the Commission to the European Parliament, the Council, the European Economic and Social

Committee, the Committee of the Regions and the Court of Auditors – Commission anti-fraud strategy action plan – 2023 revision, COM(2023) 405 final of 11 July 2023, https://eur-lex.europa.eu/legal- content/EN/ALL/?uri=CELEX:52023DC0405.

(9) Commission staff working document – Action plan – 2023 revision, SWD(2023) 245 final of 11 July 2023, https://eur- lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023SC0245&qid=1747126601079.

(10) Report from the Commission to the Council and the European Parliament – 36th annual report on the protection of the European Union’s financial interests and the fight against fraud – 2024, COM(2025) 426 final of 25 July 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52025DC0426&qid=1778508410193.

(11) European Commission: European Anti-Fraud Office, ‘Annual OLAF reports’, European Commission website, https://anti- fraud.ec.europa.eu/about-us/reports/annual-olaf-reports_en.

Annex 2 – Internal control and financial management

18

Review of EU anti-fraud architecture

In July 2025, the Commission launched a review of the EU anti-fraud architecture (12). This anti-

fraud review aims to promote efficiency at every stage of the anti-fraud cycle, supporting complementarity

between anti-fraud actors in the prevention, detection, investigation, correction and prosecution of fraud and

the more efficient and effective recovery of amounts for the EU budget. The White Paper also invited

stakeholders and anti-fraud architecture actors to contribute to the review. The outcome of the review will

be presented in 2026 and may be accompanied by legislative proposals.

Early detection and exclusion system

In 2025, building on the novelties introduced by the 2024 Financial Regulation, the Commission intensified

its efforts to promote the early detection and exclusion system – a key tool in safeguarding the EU's

financial interests against fraud, corruption and other forms of misconduct, such as breaches of conflict-of-

interest rules or incitement to hatred and discrimination. This included awareness-raising activities addressed

to all EU institutions, bodies, offices and agencies. This also led to a more harmonised application of the early

detection and exclusion system framework and scrutiny of exclusion situations across services. In addition, in

2025, the rules of procedure of the early detection and exclusion system panel were revised to accelerate

authorising officers’ decisions and improve the overall efficiency of the system.

1.5.2. Ensuring cybersecurity

Security, safety, cybersecurity and business continuity are very high on the Commission’s

agenda. In 2024-2025, the Commission launched and ran the ‘Be prepared’ campaign, the internal

flagship initiative to raise staff awareness of these issues. Leveraging the ‘Be prepared’ tips sent to all staff

of the Commission, the ‘Be prepared’ snap visuals shown on screens across Commission buildings, the ‘Be

prepared’ roadshows and the ‘Be prepared’ dedicated initiatives, the horizontal services in charge of security,

safety, cybersecurity and business continuity raise the contextual awareness of Commission staff on specific

relevant matters in these four areas. Building on the successful results, the campaign has been extended to

the 2026-2027 period, further promoting active and dynamic engagement with staff.

As regards cybersecurity, attacks against the Commission have been contained successfully and

the impact of incidents has been limited successfully. The Commission continues to be an attractive

target for cyber-threat actors in the current geopolitical context and threat landscape, which is characterised

by the exploitation of technical and human vulnerabilities in increasingly sophisticated ways. In this context,

the Commission continuously invests in improving its cybersecurity posture and evolving its threat

intelligence, detection and response capabilities.

As required by the regulation on cybersecurity at the institutions, bodies, offices and agencies of the EU (13),

the Commission established an initial cybersecurity review, ran the maturity assessment and reported on its

cybersecurity plan, building on the internal existing cybersecurity governance, monitoring and reporting

framework, and the corporate cybersecurity strategy. The implementation of the first complete cycle of

reporting required by the regulation contributed to the establishment of a comprehensive and binding

framework to ensure a high common level of cybersecurity across the EU entities, including obligations on

governance, risk management, incident reporting and cooperation.

(12) White Paper for the anti-fraud architecture review, COM(2025) 546 final of 16 July 2025, https://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025DC0546. (13) Regulation (EU, Euratom) 2023/2841 of the European Parliament and of the Council of 13 December 2023 laying

down measures for a high common level of cybersecurity at the institutions, bodies, offices and agencies of the Union (OJ L, 2023/2841, 18.12.2023, ELI: http://data.europa.eu/eli/reg/2023/2841/oj), which entered into force in January 2024.

Annex 2 – Internal control and financial management

19

In the current geopolitical context, digital sovereignty also emerges as a critical area. In

November 2025, the Commission’s corporate information technology governance body endorsed a digital

sovereignty action plan, which aims to increase control over the Commission’s own digital assets. The action

plan was proactively shared through the Interinstitutional Committee for Digital Transformation, to serve as a

reference for other EU institutions that retain administrative autonomy for their own digital choices.

The Commission is actively promoting European leadership, innovation and strategic autonomy,

and has already taken steps to reduce reliance on non-EU providers for critical infrastructure, to

increase resilience and to safeguard competitiveness. In October 2025, the Commission launched a

EUR 180 million sovereign cloud tender to be awarded under a new cloud sovereignty framework. By

embedding sovereignty considerations into its information technology procurement procedures and

establishing a benchmark for sovereign use of cloud services, the Commission contributes to shaping market

practices that support sovereign solutions and leads by example with regard to the Member States.

1.6. Other tools to ensure the protection of the EU’s

financial interests

1.6.1. Conditionality regime

Since 2021, the regulation on a general regime of conditionality for the protection of the EU

budget (14) (Conditionality Regulation) has protected the budget from breaches of the principles

of the rule of law that affect or seriously risk affecting the financial interests of the EU in a sufficiently

direct way. The Conditionality Regulation complements other procedures established by EU legislation for the

protection of the EU budget. The validity of the Conditionality Regulation was fully upheld by the Court of

Justice of the European Union in two judgments from 2022 (15). Following those judgments, the Commission

adopted its guidelines on the application of the Conditionality Regulation (16). Since then, the Commission has

been monitoring the situation across all Member States under the Conditionality Regulation and will trigger

the procedure under the regulation if all its conditions are fulfilled.

At the end of 2022, one procedure was launched, concerning Hungary. The Council decided to

suspend 55% of the budgetary commitments for three programmes (17) under cohesion policy, corresponding

to an amount of approximately EUR 6.4 billion for the 2021-2027 period, and prohibited the Commission

from entering into new legal commitments with public-interest trusts or entities maintained by them (many of

which are universities) under any EU programme directly or indirectly managed by the Commission.

The prohibition regarding the second measure has been challenged before the General Court (the case is still

pending).

(14) Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a

general regime of conditionality for the protection of the Union budget (OJ L 433, 22.12.2020, p. 1, ELI: http://data.europa.eu/eli/reg/2020/2092/oj), which entered into force on 1 January 2021.

(15) See judgments of the Court of Justice of 16 February 2022, Hungary v Parliament and Council, C-156/21, ECLI:EU:C:2022:97, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A62021CJ0156&qid=1778574960258 and Poland v Parliament and Council, C- 157/21, ECLI:EU:C:2022:98, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A62021CJ0157&qid=1778575036967.

(16) Communication from the Commission – Guidelines on the application of the Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget (OJ C 123, 18.3.2022, p. 1, https://eur- lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52022XC0318(02)).

(17) The environmental and energy efficiency operational programme plus, the integrated transport operational programme plus and the territorial and settlement development operational programme plus.

Annex 2 – Internal control and financial management

20

In 2025, the Commission continued to monitor the situation in all Member States and protective

measures remained in place as regards Hungary. The Commission reassessed the situation for Hungary

at the end of 2023 at its own initiative, and at the end of 2024 following a written notification from Hungary

on remedial measures to address the outstanding concerns. Each time, it concluded that the EU budget

remained at the same level of risk and did not propose any lifting or adaptation of the protective measures. In

2025, Hungary did not notify new remedial measures to address the issues identified by the Council. Further

details can be found in the annual rule-of-law report (18).

1.6.2. Use of the single data-mining and risk-scoring tool – Arachne

The Financial Regulation (recast), adopted in September 2024, requires a modernised data-mining and risk-

scoring tool, to be used in all management modes. The existing data-mining and risk-scoring tool, Arachne, on

which the future tool will be based, is already used by Commission services and by a number of Member

States on a voluntary basis in shared management and for the Recovery and Resilience Facility. An expert

group was established with Member States in 2025 with a view to assessing the readiness of that tool, for

which compulsory data feeding will be required from all Member States as from the next programming

period, starting in 2028. Based on that assessment, the possibility to make the use of the tool by Member

States compulsory may be discussed again by the co-legislators.

(18) European Commission: Directorate-General for Communication, ‘2025 rule of law report – Communication and

country chapters’, European Commission website, https://commission.europa.eu/publications/2025-rule-law-report- communication-and-country-chapters_en.

Annex 2 – Internal control and financial management

21

2. Cost-effective controls protecting the

EU budget

In line with Article 33 of the Financial Regulation, to ensure that controls remain cost-effective, the

Commission aims to strike the right balance between the following.

• Effectiveness. The level of error found, based on the

controls carried out, which allows the expenditure to be

grouped into different risk categories.

• Efficiency. The average time taken to make a payment.

Beyond this, the Commission is also constantly looking for

and developing new ways to increase efficiency, notably by

creating synergies wherever possible.

• Economy. The proportionality between the costs of controls

and the funds managed.

Cost-effectiveness is obtained through differentiation of the controls: riskier areas trigger a higher level of

scrutiny and/or frequency and intensity of controls, whereas low-risk areas should result in less-intensive,

less-costly and less-burdensome controls. Other ways to ensure the cost-effectiveness of controls include

reducing the risk of errors through simplified rules and processes, such as simplified cost options (i.e. lump

sums, flat rates and unit costs), cross-reliance on existing assessments, and audits and controls performed by

other entities and achieving economies of scale by pooling the control functions.

In line with the principle of sound financial management, more instruments are using the progress in the

achievement of objectives, monitored with performance indicators, as a triggering factor for the payment of

EU funds. This requires the adjustment of controls and a different approach to building the assurance.

ECONOMY EFFICIENCY

EFFECTIVENESS

Annex 2 – Internal control and financial management

22

2.1. The Commission’s control results confirm that the EU budget

is well protected

2.1.1. Overall results for 2025

With the increasing share of performance-based expenditure – most of the common

agricultural policy expenditure since 2024 and the expenditure under the Ukraine,

Western Balkans and Moldova facilities since 2025 – the Commission presents the

control results at the level of individual multiannual financial framework headings. For

the entire EU budget, expenditure is presented for each category of risk: low, medium

and high.

For cost-based and compliance-based payments, the Commission considers that the budget is

effectively protected when, at the latest by the closure of the programmes (i.e. when all

controls, corrections and recoveries have been implemented), the risk at closure is below 2%.

This is the same materiality threshold as used by the Court of Auditors. For more details on these concepts

and the methodology used to determine these estimates, along with the control results for each policy area,

see Volume III, Annex 5. Based on the audits and controls carried out, each year the Commission departments

estimate the level of risk for the legality and regularity of EU spending at two stages of the multiannual

control cycle: at payment and at closure of the programmes.

Source: European Commission.

Until 2023, this was the only indicator used to measure the level of protection of the EU budget, and it was

also used for the entire Commission. This indicator continues to be applied for those headings under which

payments are cost based and compliance based, thus for 2025 headings 1, 2, 4, 5 and 7.

Risk at payment

At the moment of payment (before

corrections are made)

Risk at closure

Remaining level of error at the end of the

programme (once all corrections have taken place)

Estimated future financial corrections and

recoveries

Corrections from payment until the end

of the programme

Annex 2 – Internal control and financial management

23

Overview of risk at payment and risk at closure for cost- and compliance-based expenditure

Source: European Commission annual activity reports for 2025.

For instruments where expenditure is performance based, a qualitative assessment is made

allowing the share of expenditure in each category of (risk, low, medium and high) to be

determined. This concerned the following headings.

• Natural resources and environment. Since 2024, with the new delivery model under the 2023-2027

common agricultural policy, the focus has been on performance, based on the achievement of results,

and on the proper functioning of the governance systems in the Member States. As Member States no

longer report to the Commission on control statistics at the beneficiary level, a risk at payment and risk

at closure cannot be determined. Instead, the corresponding expenditure is grouped into three categories

of risk (low, medium and high), based on the assessment of the functioning of the systems in place in

the Member States to ensure the legality and regularity of the underlying transactions, along with the

quality of performance results and progress made on the performance part. For instance, if a system is

assessed as functioning well, all expenditure made through that system will be considered low risk.

Controls carried out continue to result in suspensions, reductions, financial corrections and recoveries.

2.1%

1.7%

2.3%

0.8%

Heading 1 Single market,

innovation and digital

1.1%

1.0%

1.7%

1.7%

2.8%

2.6%

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

Materiality

Heading 2 Cohesion, resilience

and values

Heading 4 Migration

and border management

Heading 5 Security

and defence

0.5%

0.5%

Heading 7 European public administration

Risk at payment Risk at closure

Annex 2 – Internal control and financial management

24

• Neighbourhood and the world. Since 2025, regarding the Ukraine (19), Western Balkans and Moldova

facilities, expenditure has been considered performance based, given that payments are made once

predefined steps (equivalent to milestones and targets) are satisfactorily fulfilled. For the assurance, the

Commission makes a qualitative assessment of the satisfactory fulfilment of the steps submitted for

payment. This qualitative assessment is difficult to translate into quantitative terms with an error rate. In

addition, the investments and reforms included in the beneficiary countries’ plans are very diverse, which

hinders statistical extrapolation. In this context, a meaningful error rate cannot be determined. Here as

well, expenditure is grouped into three categories of risk (low, medium and high), based on the

assessment of the level of risk of the steps associated with the payment made, complemented by the

result of ex ante and ex post controls (20). For instance, if a step relates to the adoption of a reform, it is

usually considered low risk, and the amount paid corresponding to that step is also considered low risk.

See more details in Section 2.1.2, under ‘Heading 6 – neighbourhood and the world’. As foreseen in the

regulation, controls will result in suspensions, reductions, financial corrections and recoveries when errors

are identified or in cases of serious breaches of the beneficiaries’ obligations.

Consequently, control results are reported per heading, some with risk at payment and risk at closure, some

with share of low, medium and high-risk expenditure. This latter presentation is also used to the EU

expenditure as a whole.

For 2025, all headings managed under the cost-based and compliance-based payment

delivery model have a risk at at closure below 2%. For the heading on natural resources

and environment, the share of low-risk payments is 64%, in line with the range for the

period 2020 - 2024 (50.6% to 77.6%). For the heading on neighbourhood and the world,

the share of low-risk payments is 89.6%, in line with the range for the period

2020 - 2024 (from 76.6% to 100%). The corresponding expenditure is thus well

protected.

For the single market, innovation and digital and the cohesion, resilience and values

headings, the risk at payment is above 2% and the risk at closure below 2%. For these

headings, the Commission is continuing its efforts to further reduce the level of risk at

the time of payment. Since the risk at closure is below 2%, this means that the

corresponding expenditure is ultimately well protected thanks to the efforts of the

Commission (and Member States) after payment, through controls and ensuing

corrections.

(19) The Ukraine Facility started in 2024 but, for that year, the same error rate as that for budget support has been

applied to the payments made under the EU budget which amounted to EUR 3 billion. The approach was changed in 2025 to align it with the one applied to the Recovery and Resilience Facility.

(20) Given the relatively early stage of implementation of the facilities, and the nature of the steps submitted for payment to this point, ex post controls have not yet taken place.

Annex 2 – Internal control and financial management

25

To allow for comparability and to have an overview, the information is presented below per risk category (low,

medium or high) for each heading (see Section 2.1.2) and for the entire Commission.

Overview of expenditure per risk category for the entire Commission

Source: European Commission annual activity reports for 2025.

Preventive and corrective measures

This new approach to assurance on performance-based payments has no impact on preventive and corrective

measures that continue to be applied.

Total preventive and corrective measures (Commission and Member States): EUR 9.0 billion

(2024: EUR 2.7 billion).

This increase relates to cohesion policy funds and is mostly due to the corrections made to the 2014-

2020 programmes, for which final accounts were submitted and taken into account in the financial

year 2025.

See Section 2.1.3 below, heading ‘cohesion, resilience and values’, and Volume III, Annex 5, Section 5.4

for more details.

Reservations: 32 (18 in 2024), of which 30 related to expenditure from the EU budget with a total

financial impact of EUR 867 million (17 and EUR 330.9 million in 2024) and two related to expenditure

from the Resilience and Recovery Facility with a financial impact of EUR 343 million (EUR 17.5 million

in 2024).

See Section 3.1 below and Volume III, Annex 5, Section 5.3 for more details.

66.5%

54.7%

58.6%

9.2%

24.5%

25.2%

24.2%

20.8%

0 20 40 60 80 100 120 140 160 180

2023

2024

2025

(billion EUR)

1 – low 2 – medium 3 – high

16.2%

Annex 2 – Internal control and financial management

26

2.1.2. Control results by lower-, medium- and higher-risk programme

segments

The Commission has reliable, evidence-based information showing the diversified situation of

the funds it manages. It identifies which programmes or segments of expenditure are higher risk, allowing

it to efficiently provide its support and address specific weaknesses even for policies that are generally lower

risk, such as the common agricultural policy.

For cost-based expenditure, the split between the categories of risk is based on the risk at

payment (i.e. before any future correction is implemented): lower risk – risk at payment below 2.0%; medium

risk – risk at payment between 2.0% and 2.5%; and higher risk – risk at payment above 2.5%. For cohesion,

this analysis is also applied at the level of the individual programmes in the Member States.

Performance-based expenditure is directly split between the low-, medium- and high-risk

categories according to the assessment made based on methodologies tailored to the means of

payment. For expenditure under the new delivery model of the 2023-2027 common agricultural policy, this

is based on the assessment of the functioning of the systems in the paying agencies, at the intervention level.

For expenditure under the facilities, this is based on the risk assessment of the milestones and targets (steps)

submitted for payment. As a result, the new approach maintains or even increases the granularity: in the case

of the common agricultural policy, because information on the weaknesses and deficiencies is at a level lower

than paying-agency level; in the case of the facilities, because the information is at the level of each

individual payment.

Annex 2 – Internal control and financial management

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The European Commission’s categorisation of expenditure into lower-, medium- and higher-risk

segments, as a percentage of the total relevant expenditure for 2025

Source: European Commission annual activity reports for 2025.

Annex 2 – Internal control and financial management

28

In 2025, the relevant expenditure decreased from EUR 179 billion in 2024 to EUR 166.7 billion in 2025. The

share of the respective lower-, medium-, or higher-risk segments remained stable overall, with some changes

in the components.

• Lower risk. Expenditure in this category amounted to EUR 97.6 billion in 2025, representing 58.6% of

the total expenditure (54.7% in 2024). This increase is due to the fact that, under the 2021–2027

programming period, many cohesion programmes present low error rates, since the initial amounts of

expenditure declared are generally less error-prone compared to expenditure declared at later stages of

implementation.

As in previous years, this lower-risk category also includes the majority of expenditure managed under

the new common agricultural policy delivery model (amounting to more than EUR 31.5 billion,

corresponding to 2 188 interventions with a governance system assessed as functioning well out of a

total of 2 865).

It also includes expenditure managed by 49 out of 68 paying agencies and by the United Kingdom for

rural development; most of the expenditure implemented under shared management in the maritime

affairs and fisheries areas; and expenditure relating to the Connecting Europe Facility – transport

programme for the 2014-2020 period, Erasmus+, the Marie Skłodowska-Curie actions, Horizon Europe

financial instruments, the vast majority of contributions to other EU bodies and international

organisations (e.g. the European Union Agency for the Space Programme, the European Joint Undertaking

for ITER and the Development of Fusion Energy and the European Space Agency), 87.6% of the Asylum,

Migration and Integration Fund, 83.7% of the Internal Security Fund, humanitarian aid, expenditure in the

neighbourhood and the world policy area (89.6% of the total expenditure of that heading), and

administrative expenditure in general.

• Medium risk. Expenditure in this category amounted to EUR 42.0 billion in 2025, or 25.2% of the total

expenditure, compared to EUR 43.9 billion in 2024, or 24.5%. This apparent overall stability is explained

by an increase in expenditure under the new common agricultural policy delivery model allocated to this

category of risk (from EUR 4.7 billion in 2024 to EUR 11.2 billion in 2025), along with a higher share of

governance systems being assessed as partially functioning (448 out of 2 865 in 2025 compared to 152

out of 1 526 in 2024), which is largely offset by a decrease in expenditure under cohesion considered in

this category due to error rates below 2%.

This category also included expenditure in research and innovation, in particular grants under Connecting

Europe Facility – transport programme for the 2021-2027 period, along with other expenditure related to

the common agricultural policy, such as market measures and rural development measures.

• Higher risk. Expenditure in this category decreased from EUR 37.2 billion in 2024, or 20.8% of the total

expenditure, to EUR 27.1 billion in 2025, or 16.2% of the total expenditure. In 2025, 98.5% of

expenditure in this category of risk was equally split between three headings: (1) single market,

innovation and digital (33.1% in 2025 versus 13.8% in 2024); (2) cohesion, resilience and values (32.5%

in 2025 versus 64.6% in 2024); and (3) natural resources and environment (32.9% in 2025 versus

19.7% in 2024). This corresponds mainly to the grants under the Horizon Europe and digital Europe

programmes; to the lower number of cohesion programmes with a high error rate in 2025 compared to

2024; and to the higher number of interventions assessed as not functioning in 2025 (229 out of 2 865)

compared to 2024 (268 out of 1 526). For detailed explanations, see Section 2.1.2 under the relevant

headings.

Annex 2 – Internal control and financial management

29

The Commission’s detailed analysis confirms that the level of error and share of high-risk

expenditure are closely related to the nature of the funding. Most programmes or segments of

expenditure, corresponding to more than 50% of the year’s relevant expenditure, are estimated to be in the

lower-risk category because they encompass more entitlement-based payments. On the other hand, some

programmes or segments of expenditure with complex reimbursement-based rules appear to have a

relatively higher risk at payment (as is typically the case under cohesion policy, with many applicable national,

regional or programme rules in addition to EU rules). Nevertheless, the control systems in place allow the risks

relating to some of the more complex programmes to be mitigated and, as a result, the level of risk at

payment to be reduced.

The Commission is closely monitoring the risks at payment and at closure for the various

programmes and segments of expenditure, and is taking further action to reduce them. For the

medium- and higher-risk categories in particular, the Commission is continually looking for ways to further

decrease them by raising beneficiaries’ and implementing partners’ awareness of issues, adjusting the control

strategies where necessary, applying the lessons learned to future programmes and simplifying rules

wherever possible.

2.1.3. Control results by policy area

The Annual Management and Performance Report for the EU Budget is a summary of the annual activity

reports of the 52 Commission departments. The spending covered in each of these reports is allocated in full

to one of the seven headings of the multiannual financial framework. Since 2022, considering its size, the

spending for security and defence by DG Defence Industry and Space has been divided between heading 1

and heading 5. Since 2025, spending by DG Economic and Financial Affairs has been split between heading 2

and heading 6 (expenditure related to Ukraine) and spending by DG Budget has been split between heading 2

(interest paid on NextGenerationEU borrowing), heading 6 (expenditure related to Ukraine) and heading 7. The

situation for each policy area is described below.

Annex 2 – Internal control and financial management

30

Heading 1 – single market, innovation and digital

Total relevant expenditure: EUR 25.0 billion (2024: EUR 24.2 billion).

Risk at payment: 2.1% (2024: 1.6%).

Risk at closure: 1.7% (2024: 1.2%).

Total preventive and corrective measures: EUR 232.9 million (2024: EUR 348.5 million):

• preventive measures: EUR 153.3 million (2024: EUR 244.7 million);

• corrective measures: EUR 79.6 million (2024: EUR 103.8 million).

Reservations: 13 (2024: one reputational reservation without financial impact (21)).

In 2025, the risks at payment (2.1%) and at closure

(1.7%) increased by 0.5 percentage points compared

to 2024. This is due to the increase in the risk at payment

for grants under both Horizon programmes and for grants

under the digital Europe programme.

For Horizon 2020, the risk at payment increased from

3.55% to 3.83%, whereas the total expenditure of that

heading decreased from 20.3% to 16.9%. As in previous

years, and despite ongoing efforts and improvements, the

risk at payment remained above 2% because of the

inherent complexity of the rules and the nature of the

payments. Payments made in 2025 corresponded mostly to

final payments for larger and more complex projects, which

are more error prone than interim payments. Similarly to

previous years, the research departments did not qualify

their declarations of assurance with a reservation in

relation to the Horizon 2020 programme (22). At the same

time, the risk at closure, at 1.78%, is in line with 2024, at

1.79%, and remained below the materiality threshold.

For Horizon Europe, the risk at payment increased from

2% to 4.38% (23) and the share in the total expenditure of that heading increased from 17.9% to 25.8%. The

risk at closure is estimated overall at 4.05% in 2025. This higher level of error is the combined result of (1) a

population of beneficiaries composed of newcomers to the programme and small and medium-sized

enterprise beneficiaries, for which cost claims are generally more error prone; (2) significant errors identified

in three participations/projects that had a big impact on the error rate in a still rather limited audited

population, being at the beginning of the audit campaign of the programme; and (3) the limited impact of

lump sum grants in the Horizon Europe control results, since few have yet been paid and reviewed. Similar to

(21) The programme concerned (the promotion of agricultural products) is funded by the European Agricultural Guarantee

Fund, which is currently under budget heading 3 – natural resources and environment. However, it is reported under heading 1 – single market, innovation and digital for consistency with previous reports.

(22) Proposal for a Council decision establishing the specific programme implementing Horizon 2020 – The framework programme for research and innovation (2014-2020), COM(2011) 811 final of 30 November 2011, https://eur- lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52011PC0811&qid=1747145040788.

(23) In 2024, for Horizon Europe, as the number of payments was not meaningful, no representative error rate could be determined. Instead, using a conservative approach already used in 2023, a flat rate of 2% had been used for the risk at payment, taking into account the information available at that time.

Annex 2 – Internal control and financial management

31

Horizon 2020, the most frequent errors are related to personnel costs (e.g. missing or unreliable time

reporting system, wrong calculation of daily rates).

To reduce these error rates, the Commission is focusing its efforts on communication, both external

and internal. Dedicated webinars and training sessions targeting beneficiaries were organised throughout

the year for Horizon Europe. In the context of the client centricity project, the error-rate-reduction campaign

that was launched in 2024 continued in 2025, with three additional rounds of personalised notifications sent

to the most error-prone beneficiaries that were approaching their reporting deadlines. These notifications

were revised to maximise their impact and included practical tips on how to avoid the most common errors.

The Commission is also pursuing the roll-out of lump sums under Horizon Europe with the goal of lump-sum

grants reaching at least 50% of the call budget in the main 2026-2027 work programme. According to the

Horizon Europe midterm evaluation (24), lump sums help avoid financial errors while safeguarding

the EU’s financial interest, and controls thereof have led to grant reductions at the evaluation and

payment stages. In addition, this model helps shift the focus during the implementation stage from financial

controls to the project’s content. However, the impact on the error rate will not be felt before 2029, when a

larger number of such grants are paid and ex post control results start to become available.

Regarding the digital Europe programme, similarly to last year it is the error rate for the Horizon

Europe programme that has been used, given the limited number of available audit results at the end of

2025 and considering the similarities with that programme (eligibility criteria, number of beneficiaries in

common and type of beneficiaries).

In 2025, a total of 13 reservations were issued, an increase of 12 reservations compared to

2024. Reservations were issued for those programmes for which the error rate after corrections remains

above the materiality threshold of 2%: for the grants under the Horizon Europe programme, in the declaration

of assurance of the eight departments implementing them and where the de minimis rule does not apply; for

the grants under the digital Europe programme, in the two departments implementing them; and for the

promotion of agricultural products programmes (one department). In addition, a reservation was issued in the

two departments implementing the European Innovation Council concerning weaknesses affecting the award

decision process. Action plans to address the weaknesses and reduce the level of the error rate have been put

in place. Further details are provided in Volume III, Annex 5, Section 5.3.3.

The decrease in the amount of preventive measures, from EUR 244.7 million in 2024 to

EUR 103.3 million in 2025, resulted mainly from the transition to the Commission’s new accounting

system, SUMMA, where only preventive measures exceeding EUR 500 000 are reported. Under this heading, a

significant part of those preventive measures fall below this threshold, hence they are outside the reporting

scope.

(24) Communication from the Commission to the European Parliament and the Council – Horizon Europe: Research and

innovation at the heart of competitiveness, COM(2025) 189 final of 30 April 2025, https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A52025DC0189&qid=1778583080645.

Annex 2 – Internal control and financial management

32

Multiannual financial framework heading 1 – single market, innovation and digital –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025.

67.3%

56.2%

52.7%

4.1%

22.7%

11.4%

28.6%

21.1%

35.9%

0 5 000 10 000 15 000 20 000 25 000 30 000

2023

2024

2025

1 – low 2 – medium 3 – high

(billion EUR)

Annex 2 – Internal control and financial management

33

Heading 2 – cohesion, resilience and values

Total relevant expenditure: EUR 54.0 billion (2024: EUR 64.1 billion) (25).

Risk at payment: 2.3% (2024: 2.9%).

Risk at closure: 0.8% (2024: 1.7%).

Total preventive and corrective measures (Commission and Member States): EUR 7 191 million

(2024: EUR 1 028.6 million):

• preventive measures: EUR 590.2 million (2024: EUR 579.9 million);

• corrective measures: EUR 6 600.8 million (2024: EUR 448.7 million).

Reservations: five reservations with a financial impact of EUR 304 million (2024: five reservations

with a financial impact of EUR 73 million).

The reduction in total relevant expenditure under this

heading from EUR 62 billion in 2024 to EUR 54 billion in

2025 is largely attributable to the timing of the Member

States’ accounts submissions for 2014-2020. The

expenditure for 2025 includes only 20% of the final

account submissions, with the remaining 80% being

deferred to 2026 due to the Strategic Technologies for

Europe Platform Regulation (26), which postponed the

deadline for submitting the accounts by one year.

The risk at payment for this heading decreased from

2.9% to 2.3%, while the risk at closure

(25) The total amount of relevant expenditure reported in the AMPR 2024 for this heading was EUR 62.0 billion for the

financial year 2024. The difference with the amounts of EUR 64.1 billion at the end of 2024 mentioned in the text corresponds to the payments made in the context of the European Union Recovery Instrument (EUR 2 116.2 million in 2024) that had been counted with the expenditure under the heading European public administration in 2024.

(26) Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024 establishing the Strategic Technologies for Europe Platform (STEP), and amending Directive 2003/87/EC and Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241 (OJ L, 2024/795, 29.2.2024, ELI: http://data.europa.eu/eli/reg/2024/795/oj).

Materiality

3.4%

3.2%

3.0%

2.8%

2.6%

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

2.9%

1.7%

20252023 2024

2.6%

1.2%

Risk at payment Risk at closure

2.3%

0.8%

Annex 2 – Internal control and financial management

34

decreased from 1.7% to 0.8% (27). The risk at payment and risk at closure were mostly driven by the

amounts paid for the cohesion policy funds (28) managed under shared management, which represented

around 84% of the total relevant expenditure for this heading.

For all the cohesion policy funds, the risk at payment remained material in the range of 2.0% to

2.7%, a decrease from the range observed in 2024 of 2.3% to 3.2%. The decrease is mainly due to the

prudent approach taken by the Commission for expenditure corresponding to the 2021-2027 programming

period of using a flat rate of 2%, increased where necessary on a programme-by-programme basis based on

information available, due to the limited audit results received for the 2024-2025 accounting year (29) and

the increased share of this expenditure in the total cohesion expenditure, from 15.3% in 2024 (EUR 8.4 billion)

to 80.5% (EUR 36 billion) in 2025. In 2024, most of the cohesion expenditure corresponded to the 2014-2020

programming period, for which the risk at payment was higher.

Overall, the Commission has reasonable assurance that the management and control systems

function sufficiently well for 85% of the cohesion programmes (30). Nevertheless, the risk at

payment remained above the 2% materiality threshold. This is mainly due to the inherent complexity

of the projects financed by these funds, the variety of actors concerned and the difficulty of tackling certain

complex rules at both the national and the EU level, in particular those relating to public procurement and

State aid. Weaknesses remain mainly at the level of managing authorities or their intermediate bodies. The

main categories of irregularities identified by the Member States’ audit authorities and the Commission are

similar to those identified by the Court of Auditors: ineligible expenditure; ineligible projects or beneficiaries;

errors in public procurement procedures; and missing supporting information or documentation.

For the cohesion funds, the Commission applied additional financial corrections for those programmes where

it confirmed individual error rates above 2%, so that the risk at closure will ultimately be below 2% for all the

programmes. Estimated future corrections corresponded to a range of 1.24% to 2.05%, leading to an

estimated risk at closure of 0.76%.

The sharp increase in preventive and corrective measures in 2025 compared to 2024 was mainly

driven by corrective measures related to operational programmes under the 2014-2020

programming period, which reached the closure stage. Member States reported EUR 6 518 million in

corrective measures (31) for cohesion funds under the 2014-2020 programming period. This marks a sharp

increase from EUR 211 million in the previous year, which was exceptionally low due to the limited number of

final accounts submitted (i.e. only 20%, due to the additional year provided under the Strategic Technologies

(27) For the third consecutive year, the Commission’s risk at payment is outside the error-level range of between 3.3%

and 8.1%, estimated by the Court of Auditors. See European Court of Auditors, Annual reports on the implementation of the EU budget for the 2024 financial year and on activities funded by the 9th, 10th and 11th European Development Funds (EDFs) for the 2024 financial year, Publications Office of the European Union, Luxembourg, 2025, https://data.europa.eu/doi/10.2865/7727690, p. 215. The higher level of error estimated by the Court of Auditors can be explained by divergences in the interpretation of breaches of applicable rules that, in some cases, do not constitute irregularities in the sense of Regulation (EU) 2021/1060 (the Common Provisions Regulation), for which the Commission has assessed that it would not have legal grounds to impose financial corrections, and by differences in the methods used to quantify some errors.

(28) These include the European Regional Development Fund, the Cohesion Fund, the European Social Fund, the youth employment initiative and the Fund for European Aid to the Most Deprived. See detail in Volume III, Annex 5, Section 5.2.2.

(29) A total of 245 out of 380 programmes submitted accounts and the Commission was able to confirm only 105 programmes.

(30) This concerns 374 out of 441 programmes for the 2014-2020 programming period. (31) For the last accounting year, all financial corrections (withdrawals, recoveries and deductions at closure) reported by

the Member States were considered as corrective measures, whereas in previous years deductions at closure were considered as preventive measures. This is because no further action is possible after the submission of the final accounts in next payment applications, or subsequent accounts, to take preventive measure into account and they become de facto corrective in nature.

Annex 2 – Internal control and financial management

35

for Europe Platform Regulation (32) to submit them). The convergence of the last accounting period for the

2014-2020 programming period, concentrating the highest volumes of accounts (33), and the additional time

frame led to a significantly amplified scale of adjustments, as programme authorities in Member States

undertook a final, comprehensive review of both the current and the previous accounting years. In this

context, the closure acted as a critical safeguard, ensuring that remaining irregular or inaccurate expenditure

was identified and excluded.

For the 2021-2027 programming period, the preventive measures increased slightly from EUR 565 million in

2024 to EUR 586 million in 2025. As it is still early in the programme life-cycle implementation, the corrective

measures were rather low at EUR 9 million (2024: EUR 8 million).

One specific feature of the 2021-2027 multiannual financial framework for the European Regional

Development Fund, Cohesion Fund and European Social Fund Plus is the need for Member States to comply

with a set of thematic and horizontal enabling conditions to allow for the effective implementation of the

funds. At the end of 2025, around 97% of the applicable thematic enabling conditions were

assessed as fulfilled for the European Regional Development Fund, Cohesion Fund and European

Social Fund Plus programmes that had been adopted. By the end of April 2026, all Member States

except Hungary fulfilled the horizontal enabling conditions (34).

At the end of 2025, four reservations were issued in relation to cohesion policy funds (two per

programming period): one for the European Regional Development Fund and Cohesion Fund and

one for the European Social Fund, the youth employment initiative and the Fund for European Aid

to the Most Deprived. These reservations concern operational programmes that presented significant

weaknesses in their management and control systems or for which the error rate was above the materiality

threshold, or, less frequently, for which the audit work at the Member State level was deemed insufficient or

unsatisfactory.

• Two reservations for the 2014-2020 period: the number of programmes under reservation (40) was

higher than in 2024 (26), while the financial impact increased from EUR 68 million to EUR 143 million.

The increase in both number of programmes under reservation and the corresponding financial impact is

explained by the larger number of programmes closed during 2025 (i.e. 80% of accounts). In 2024, the

Strategic Technologies for Europe Platform Regulation postponed the deadline for submitting the

accounts by one year, which resulted in an unusually low level of submission of accounts (only 20%) (35).

• Two reservations for the 2021-2027 period: the number of programmes under reservation (28) was

higher than in 2024 (7), and the total financial impact increased from EUR 3 million to EUR 156 million.

The increase is explained by the higher number of programmes gaining speed in implementation in 2025

compared to 2024 and the corresponding accounts that are submitted.

Reservations are only lifted once the system weaknesses have been addressed and the error rate is below

2%. Usually, the reasons for the reservations are not structural, and it takes one to two years for most

reservations to be lifted. For more details on reservations, see Volume III, Annex 5.

The Commission continues to take action to support programme authorities in improving their

management and control systems and to bring the risk at closure for cohesion below 2%. In

(32) Article 14(4) ‘Amendments to Regulation (EU) No 1303/2013’: ‘in Article 138, the following subparagraph is added:

“By way of derogation from the deadline set out in the first subparagraph, Member States may submit the documents referred to under points (a), (b) and (c) for the final accounting year by 15 February 2026.”.’

(33) Also incorporating the one-off REACT EU submission for an amount of EUR 40.8 billion. (34) There are four horizontal enabling conditions linked to overarching, horizontal aspects of programme implementation,

ensuring compliance with general EU principles and effective programme management (Annex 3 to the Common Provisions Regulation).

(35) Regarding the closure accounts of the programmes for the 2014-2020 period: 20% were submitted in February 2025 and reported in financial year 2024; 80% were reported in February 2026 and reported in financial year 2025.

Annex 2 – Internal control and financial management

36

December 2024, following a participative debate with both audit and managing authorities, the Commission

established a jointly agreed action plan to improve the programme authorities’ error detection capacity

comprising 22 measurescovering the following categories: the dissemination of information to beneficiaries

to improve their understanding of their obligations and rules; the analysis of errors detected, and in particular

additional errors reported by EU audits; the enhanced use of information technology tools; staff training; the

enhanced preventive role of auditing; the use of complete and updated audit checklists; and effective audit

practices in line with audit standards (e.g. documentation of verifications/checks done). Throughout 2025, the

Commission monitored the implementation of the measures. The progress was discussed in the annual

coordination meetings between the audit authorities of all of the Member States. In addition, the Commission

updated its single audit strategy to target high-risk areas, taking account of resource constraints, by

significantly increasing the coverage of its on-the-spot audits and by reflecting its new approach for

compliance audits (faster, preventive and targeted).

Multiannual financial framework heading 2 – cohesion, resilience and values –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025 (36).

(36) The total amount of relevant expenditure reported in the AMPR 2024 for this heading was EUR 62.0 billion for the

financial year 2024 and EUR 67.3 billion for financial year 2023. The difference with the amounts of EUR 64.1 billion in 2024 and EUR 66.6 billion in 2023, shown in this visual corresponds to the payments made in the context of the European Union Recovery Instrument (for an amount of EUR 2 116.2 million in 2024 and EUR 694 million in 2023) that had been both counted with the expenditure under the heading European public administration.

1 – low 2 – medium 3 – high

52.7%

14.5%

37.2%

14.2%

48.2%

46.4%

33.1%

37.3%

16.3%

0 10 20 30 40 50 60 70

2023

2024

2025

(billion EUR)

Annex 2 – Internal control and financial management

37

Heading 3 – natural resources and environment

Total amount of relevant expenditure: EUR 58.0 billion (2024: EUR 57.4 billion):

• compliance-based assurance model: EUR 11.7 billion (2024: EUR 14.5 billion);

• performance-based assurance model: EUR 46.3 billion (2024: EUR 42.9 billion).

Share of low-risk expenditure: 64.4% (2025), 77.6% (2024).

Total preventive and corrective measures (Commission and Member States): EUR 1 417.1 million

(2024: EUR 1 069.8 million):

• preventive measures: EUR 201.6 million (37) (2024: EUR 178.4 million);

• corrective measures: EUR 1 215.6 million (2024: EUR 891.4 million).

Reservations: seven reservations with a financial impact of EUR 301 million (2024: seven

reservations with a financial impact of EUR 254 million).

Multiannual financial framework heading 3 – natural resources and environment –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025.

In 2025, for natural resources and environment, 64% of the expenditure was considered low risk.

This corresponds to expenditure with a risk at payment below 2%, for compliance-based payments; and

expenditure for which the systems in place in the Member States have been assessed as low risk, functioning

well or functioning, for performance-based payments. This is the same as the share of low-risk expenditure

for agriculture (64%), which represents the bulk of the expenditure in this policy area (98%), the rest

corresponding to maritime affairs and fisheries (38), environment and climate expenditure. This is a decrease

compared to the share of low-risk expenditure in 2024 (77%) and in 2023 (69%), and is slightly below the

average for 2020-2024 of 66.7%. This mainly reflects a shift from low to medium risk, which is partly due to

improved assessment and the resulting gradings of the systems by the certification bodies, which gained

experience in the second year of implementing the new delivery model (notably in France, aligning with DG

Agriculture and Rural Development audit findings), combined with end-of-programme effects in the 2014-

2022 rural development programmes, where accelerated spending at closure can increase amounts under

(37) Preventive measures for performance-based expenditure are not included in the 2025 amounts. (38) European Maritime and Fisheries Fund expenditure, although included under the natural resources and environment

heading, follows the same delivery mechanism as cohesion expenditure.

69.0%

77.6%

64.4%

9.0%

9.6%

20.2%

22.0%

12.8%

15.4%

0 10 20 30 40 50 60

2023

2024

2025

(billion EUR)

1 – low 2 – medium 3 – high

Annex 2 – Internal control and financial management

38

reservation / at risk. Greece’s continued precautionary reservation also remained a significant driver in

absolute terms.

The 2023-2027 common agricultural policy represents a shift from compliance-based payments

to a greater focus on performance and results achieved, with these changes applying for the

first time for the payments made in 2024. With this new delivery model, Member States have more

flexibility and responsibility in setting beneficiary rules in their national plans within the general EU

framework. The Commission focuses on progress towards results and the effectiveness of national

governance systems rather than on checking individual transactions. As Member States no longer report

beneficiary-level control statistics, the Commission cannot calculate error rates at the paying agency or the

common agricultural policy level.

For this new delivery model, the Commission’s assurance model therefore assesses the

performance, the progress towards achieving the results and how well Member States’ systems

ensure the legality and regularity of the underlining transactions and the quality of the

performance results. The Commission draws on certification bodies’ annual assessments of the systems in

place (with gradings assigned by paying agency and intervention), on Commission audits and on findings by

the Court of Auditors, and may adjust gradings on a case-by-case basis.

Based on the final system grading (39), the Commission classifies common agricultural policy

expenditure as low, medium or high risk. Low risk corresponds to grades 3-4, medium to grade 2 and

high to grade 1. The Commission issues reservations where serious system deficiencies in the Member States’

governance systems are identified (grade 1) or where a Member State is behind on its milestones.

Reliance on the certification bodies plays a crucial role under the single audit principle that is

applied by the Commission. As a result, it only audits paying agencies if the work of the certification

bodies cannot be relied upon. In 2025, the Commission performed 45 conformity audits, targeting the

governance systems in place in the Member States. The same audits, where relevant, also covered the legality

and regularity of expenditure under the 2014-2022 programming period.

The corrective measures implemented in 2025, amounting to EUR 1 216 million, still relate to the

previous common agricultural policy system. No net financial corrections have yet been decided

for expenditure under the 2023-2027 common agricultural policy. The 2025 audits showed that, in

general, Member States’ governance systems for the new common agricultural policy are operational. Some

potentially serious deficiencies were found for which conformity procedures have been opened to confirm the

deficiencies and to assess more precisely the risk to the EU budget. Conformity procedures need time to offer

the Member States the opportunity to contradict the Commission’s findings. As of the end of 2025, no

conformity procedures had been finalised for the expenditure under the common agricultural policy strategic

plans.

For the expenditure implemented outside the strategic plans for rural development, market

measures and direct payments (19% of this heading’s expenditure), the estimated overall risk at

payment was higher in 2025 (3.46%) than in 2024 (2.79%), with 3.75% for rural development, 2.41%

for market measures and 1.60% for direct payments. For rural development and, to a lesser extent, market

measures, error rates are generally higher than for direct payments, largely due to the complexity of the

(39) There are four grades describing the functioning of the governance systems of the interventions:

4 – functioning well, for governance systems for which no or very few exceptions in the tests of controls were found; 3 – functioning, for governance systems for which few exceptions in the tests of controls were found; 2 – partially functioning, for governance systems for which some exceptions in the tests of controls were found; 1 – not functioning, for governance systems for which several systemic exceptions in the tests of controls were found, substantially affecting the effectiveness of controls.

Annex 2 – Internal control and financial management

39

rules. The higher rates in 2025 are mainly due to the end-of-programme effects, for which more expenditure

is found to be at risk.

Expenditure relating to fisheries, the environment and climate initiatives – 2% of this heading’s

expenditure – continued to be low risk. The estimated risk at payment for the European Maritime and

Fisheries Fund, for the 2014-2020 programming period, is 1.02% (compared to 0.59% in 2024). The

estimated risk at payment for the 2021-2027 European Maritime, Fisheries and Aquaculture Fund was

0.59%. Overall, the risk level has remained stable since 2021, at around 1%. Similarly, for climate and

environment-related initiatives, the risk at payment is low (0.21% for DG Environment and 0.41% for DG

Climate Action), reflecting the predominance of inherently low-risk payment types (e.g. procurements,

subsidies to decentralised agencies, contribution agreements with international organisations).

At the end of 2025, there were seven reservations for this heading, as described below.

Five recurrent reservations for segments of expenditure or programmes where control

weaknesses and/or error rates are above 2%:

• European Agricultural Guarantee Fund market measures in relation to five aid schemes in three Member

States, quantified;

• direct payments (programme of options specifically relating to remoteness and insularity) in relation to

one Member State, quantified;

• European Agricultural Fund for Rural Development measures in relation to 10 paying agencies in 10

Member States, quantified;

• European Maritime and Fisheries Fund, for management and control system weaknesses in two Member

States, non-quantified;

• EU emissions trading system registry, one reservation related to information technology risks, non-

quantified.

Two new reservations for expenditure under the common agricultural policy strategic plans

for interventions in Member States where potential serious deficiencies were identified in

the functioning of the governance systems. Given the qualitative assessment, no financial impact

can be determined, and the reservations are not quantified:

• for expenditure that falls under the integrated administration and control system (19 reservations in 19

paying agencies for 14 Member States affecting 56 interventions);

• for expenditure that does not fall under the integrated administration and control system (15

reservations in 15 paying agencies for 11 Member States affecting 26 interventions).

In all cases where the deficiencies identified have led to reservations, close follow-up measures are in place,

including conformity clearance procedures to ultimately protect the EU budget, monitoring of the

implementation of remedial measures taken by Member States and, where necessary, interruption or

reduction/suspension of payments to the Member States (for more details, see Volume III, Annex 5).

Annex 2 – Internal control and financial management

40

Heading 4 – migration and border management

Total amount of relevant expenditure: EUR 3.8 billion (2024: EUR 3.5 billion).

Risk at payment: 1.1% (2024: 1.3%).

Risk at closure: 1.0% (2024: 1.2%).

Total preventive and corrective measures (Commission and Member States): EUR 115.6 million

(2024: EUR 45.5 million):

• preventive measures: EUR 115.6 million (2024: EUR 44.4 million);

• corrective measures: EUR 0.02 million (2024: EUR 1.1 million).

Reservations: two reservations without a financial impact (2024: two reservations with a financial

impact of EUR 3.4 million).

For migration and border management (40),

both risk at payment and risk at closure

decreased slightly compared to 2024 and the

share of low-risk expenditure (risk at payment below

2%) increased from 73.2% in 2024 to 87.6% in

2025 (see graph to the left). The preventive

measures more than doubled compared to 2024.

This increase reflects the further advancement in

the implementation of programmes under the 2021-

2027 multiannual financial framework, as such

preventive measures were implemented by 25

Member States in 2025, compared to 13 in 2024.

This policy area consisted mostly of low-risk

segments of expenditure relating to the

implementation of the Internal Security Fund, the

Asylum, Migration and Integration Fund and the

Border Management and Visa Policy Instrument

under the shared management mode (46% of the

expenditure), which are considered overall not to be

error-prone programmes, and to subsidies to

decentralised agencies voted by the budgetary

authority (40% of the expenditure), which are

considered an error-free type of expenditure.

The high-risk expenditure corresponds to expenditure under shared management for 25 programmes (out of a

total of 139) for which management and control systems are not functioning effectively, even if the risk at

payment is below 2%, and to EU action and emergency assistance grants to support Member States in the

fields of migration and border management, where the risk at payment is above 2%.

(40) Heading 4 also includes the Internal Security Fund of heading 5, since all the funds managed by DG Migration and

Home Affairs are audited and controlled on the basis of the management mode and the type of payment, and the risks thus determined cannot be split between the budget headings.

Materiality

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

1.2%

1.3%

20252023 2024

1.0%

1.1%

Risk at payment Risk at closure

1.0%

1.1%

Annex 2 – Internal control and financial management

41

At the end of 2025, two reservations were identified:

• one reservation concerning the Border Management and Visa Policy Instrument, the Asylum, Migration

and Integration Fund and the Internal Security Fund for the 2021-2027 programming period, for two

Member States;

• one reservation concerning the Asylum, Migration and Integration Fund and the Internal Security Fund for

the 2014-2020 programming period, for seven Member States and two Schengen-associated countries.

Multiannual financial framework heading 4 – migration and border management –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025.

75.9%

73.2%

87.6%

1.4%

5.6%

2.1%

22.7%

21.1%

10.2%

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

2023

2024

2025

(billion EUR)

1 – low 2 – medium 3 – high

Annex 2 – Internal control and financial management

42

Heading 5 – security and defence

Total amount of relevant expenditure: EUR 615.6 million (2024: EUR 318.7 million).

Risk at payment: 1.7% (2024: 0.5%).

Risk at closure: 1.7% (2024: 0.5%).

Total preventive and corrective measures: EUR 9 million (2024: EUR 7.5 million):

• preventive measures: EUR 9.0 million (2024: EUR 7.2 million);

• corrective measures: none (2024: EUR 0.3 million).

Reservations: none (2024: none).

In 2025, the risk at payment, 1.7%, increased

significantly compared to 2024. This is due to a

combination of the following.

• The use of a conservative flat error rate of 2%

for the payment of grants under direct management.

This prudent approach has been retained pending the

results of a new audit campaign that will start once a

sufficient number of payments have been made.

• The significant increase in payments of grants

under direct management, which almost doubled

in 2025 compared to 2024, to EUR 466 million, and

represents the bulk of the expenditure under this

heading. This increase is due to the progress in the life

cycle of projects, with an increasing number for which

interim and final payments are made.

Together, these two factors explain that, in 2025, most

of the expenditure was medium risk (with an error rate

between 2% and 2.5%). The remaining expenditure,

mainly for experts and procurements, is by definition

low risk, at 0.5%.

Materiality

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

0.5%

0.5% 0.5%

0.5%

1.7%

1.7%

2023 2024 2025

Risk at payment Risk at closure

Annex 2 – Internal control and financial management

43

Multiannual financial framework heading 5 – security and defence –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025.

100.0%

100.0%

20.3% 79.7%

0 100 200 300 400 500 600 700

2023

2024

2025

(million EUR)

1 – low 2 – medium 3 – high

Annex 2 – Internal control and financial management

44

Heading 6 – neighbourhood and the world

Total amount of relevant expenditure: EUR 16.4 billion (2024: EUR 20.4 billion) (41).

Share of low-risk expenditure: 89.6% (2024: 92.4%).

Total preventive and corrective measures: EUR 74.1 million (2024: EUR 153.1 million):

• preventive measures: EUR 67.3 million (2024: EUR 125.5 million);

• corrective measures: EUR 6.8 million (2024: EUR 27.6 million).

Reservations: two reservations without financial impact (2024: one reservation).

Multiannual financial framework heading 6 – neighbourhood and the world –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025.

From 2025 onwards, there is no risk at payment determined for the heading ‘neighbourhood and

the world’. This is because part of the expenditure is performance-based and no quantified error rate can be

determined. As a result, it is no longer possible to determine a risk at payment for the entire heading, and the

new indicator about control results and the legality and regularity of the expenditure is the share of low-risk

expenditure.

In 2025, for neighbourhood and the world, almost 90% of the expenditure was considered low

risk. This is in line with the share of low-risk expenditure for the heading in 2024, at 92.4%, and slightly

lower compared to 2023, at 100%. In 2025, most of the compliance-based expenditure, still the bulk of all

the payments under this heading at EUR 15.8 billion, has a risk at payment below 2%. In addition,

performance-based payments, amounting to EUR 601.3 million in 2025 under the Ukraine Facility, have been

assessed as low risk, based on a qualitative assessment of the milestones and targets that triggered the

payments (see box below for a more detailed description of the approach). Regarding the expenditure

considered medium or high risk, it mostly corresponds to grants under direct management with a risk at

payment respectively above 2% and 2.5%.

(41) The total amount of relevant expenditure reported in the AMPR 2024 for this heading was EUR 20.0 billion for the

financial year 2024. The difference with the amounts of EUR 20.4 billion at the end of 2024 mentioned in the text and shown in the visual corresponds to the interest rate subsidy for the macro financial assistance (loan) to Ukraine (EUR 421 million), that was counted with the expenditure under the heading European public administration.

1 – low 2 – medium 3 – high

(billion EUR)

100.0%

92.5%

89.6%

7.5%

10.4%

0 5 10 15 20 25

2023

2024

2025

Annex 2 – Internal control and financial management

45

After a significant increase in 2024 due to high-value payments, the total amount of relevant expenditure

under this heading in 2025 was broadly in line with the amounts in 2023. The difference compared to 2023 is

mainly explained by the support provided to Ukraine (non-repayable support under the Ukraine Facility, the

Ukraine Loan Cooperation Mechanism and the interest rate subsidy for macrofinancial assistance).

The main errors identified (missing supporting documents, procurement issues and excess

clearing) are in line with the Court of Auditors’ findings. They are mainly due to the misunderstanding

or misinterpretation of the relatively complex contractual conditions, a lack of capacity in some countries, a

lack of safeguarding of the financial documentary evidence after project completion or a lack of response to

the auditors. This is further exacerbated by a complex operational environment, characterised by

unpredictability, volatility and insecurity. The difference between the Court of Auditors’ estimated level of

error (4.9% in 2024) – and its conclusion that all expenditure under this heading is high risk – and the

Commission’s residual error rates and assessment that most of the expenditure is low risk is mostly due to

the different approaches: the Court of Auditors audits payments on ongoing contracts whereas the

Commission audits closed contracts to identify only the remaining (residual) errors after all controls and

ensuing corrections have taken place.

The Commission continued to look into possibilities to improve its financial management of

programmes, in particular for those areas for which expenditure is categorised as medium or

high risk. For instance, Commission services have taken mitigating measures, such as strengthening the

dialogue and verification processes to increase transparency in cooperation with international organisations.

In 2025, DG International Partnerships finalised the review of its control strategy in view of improving the

efficiency and effectiveness of its internal control framework. A first outcome already achieved at the

beginning of 2026 is the reduction of the sample size used to determine the yearly error rate, leading to a

considerable improvement of the cost efficiency of controls. Other important measures are in the course of

finalisation, such as the risk profiling dashboard, which will lead to more informed decision-making on

mitigating measures for high-risk contracts and high-risk implementing partners.

Annex 2 – Internal control and financial management

46

The Ukraine Facility and the Westen Balkans and Moldova facilities are new types of

instrument (42). Similarly to the Resilience and Recovery Facility (see Annex 3), funds are disbursed following

a qualitative assessment of the satisfactory fulfilment of predefined/agreed milestones and targets (named

‘steps’ in the case of the facilities) measuring the implementation of reforms and investment designed to

respond to the challenges faced by these countries and to boost their progress with a view to their accession

to the EU. These funds are paid by the Commission to the beneficiary country, and in the case of the Western

Balkans Facility also partially to the Western Balkans Investment Framework and the Neighbourhood

Investment Platform for the Moldova Facility. Hence the Commission does not check transactions between the

country and the individual final recipients. This is why these payments are considered to be performance

based, as opposed to the compliance-based payments, for which the amounts disbursed correspond to

invoices and expenditure incurred by the beneficiaries / final recipients. The situation regarding payments and

disbursements is presented in the graph below.

For the assurance, similarly to the Resilience and Recovery Facility, the Commission makes a

qualitative assessment of the level of risk associated with the payments made. The Commission

focuses on evaluating the progress towards achieving the steps and on the functioning of the systems put in

place by the beneficiary countries to manage the funds thus received and their compliance with the applicable

rules and regulations. This qualitative assessment is difficult to translate into quantitative terms with an error

rate, as the latter is a quantitative assessment, which is pertinent when the expenditure can be directly

attributed to a quantitative criterion. In addition, the investments and reforms included in the countries’ plans

are very diverse, which hinders any statistical extrapolation. In this context, a meaningful error rate cannot be

determined.

(42) The Ukraine, Western Balkans and Moldova facilities were established respectively in February 2024, May 2024 and

March 2025.

2024 2025

Ukraine Facility (loans) – from borrowings

Ukraine Facility - Non-repayable support (grants) – from EU budget

Other (loans) – from borrowings

Total EUR 16.1 billion

Total EUR 11.1 billion

3 0.6 0.47

13.1 10

Annex 2 – Internal control and financial management

47

Assurance for the facilities is obtained through a risk-based model combining three

complementary layers of control and, where relevant, taking into account the work of the

European Court of Auditors. Where a high level of risk is identified for a payment, the authorising

officer by delegation may issue a reservation limited to a beneficiary country, a specific payment

request and/or an implementing entity. More specifically, for the Ukraine Facility, the payments made

in 2025 are considered low risk, following the three-layer assurance model below.

• Primary layer of control – Commission ex ante audit.

— The beneficiary country’s authorities operate a management and control system in line

with the framework agreement between the EU and the country. No blocking issues were

identified through the full-scale system audit carried out in the first years of the facilities.

• Secondary layer – Commission ex ante checks.

— The Commission carries out a risk assessment of the steps submitted for payment in the

payment request. Some of these steps are considered low risk given their nature, for

instance corresponding to legislative reforms.

— The Commission makes an assessment of each payment request, along with the

accompanying supporting evidence, management declarations and audit summaries, and

confirms the satisfactory fulfilment of the steps and that no issues are identified.

• Tertiary layer – Commission ex post audits. The Commission plans targeted audits on

higher-risk steps (notably information-technology-related measures, recruitment and

investment/procurement-related steps) once a sufficient number of such steps are reported for

payment.

— For these riskier steps, ad hoc ex post audits on their continuous fulfilment will take place

as from the second half of 2026, i.e. when a sufficient number of medium- and high-risk

steps are declared for payment.

For Ukraine, all the payments made in 2025 were considered low risk. Regarding the ex ante audit,

the auditors issued a qualified opinion with recommendations to strengthen the system, but no blocking

issues were identified. The Ukrainian authorities fully accepted three of the 23 findings, and partially accepted

two. All the steps in the payment requests submitted were assessed as low risk and no other issues were

identified by ex ante controls in the payment requests submitted. Since no high-risk steps were declared to be

fulfilled in 2025, no ex post audits were carried out.

The total amount of preventive and corrective measures decreased from EUR 153.1 million in

2024 to EUR 74.1 million in 2025. This evolution is due to the transition to the Commission’s new

accounting system, SUMMA, where only preventive measures exceeding EUR 500 000 are reported. Since all

of the preventive measures taken under this heading fall below this threshold, they are outside the reporting

scope. As far as corrective measures are concerned, the difference is attributed to major recoveries that

increased the ex post total amount in 2024.

The reservation concerning projects in Libya, Syria and Ukraine in 2025 has been maintained in

2025, but is now issued by two departments following the creation of a new department in the Commission

dealing with the Mediterranean and North African regions. One reservation corresponds to programmes in

Libya, Palestine and Syria, and the other corresponds to programmes in Ukraine. In these countries, the EU

delegations cannot implement standard monitoring and control activities due to security and political

constraints on the ground. Mitigating measures have been put in place, including remote monitoring and

cross-checking information from various sources. Still, they do not allow the impact on the assurance of the

corresponding expenditure to be fully addressed.

Annex 2 – Internal control and financial management

48

Heading 7 – European public administration

Total amount of relevant expenditure: EUR 8.9 billion (2024: EUR 9.1 billion (43)).

Risk at payment: 0.5% (2024: 0.5%).

Risk at closure: 0.5% (2024: 0.5%).

Total preventive and corrective measures: EUR 0.1 million (2024: EUR 5.9 million):

• preventive measures: none (2024: EUR 4.3 million);

• corrective measures: EUR 0.1 million (2024: 1.6 EUR million).

Reservations: one reputational reservation (2024: one reputational reservation).

The risk at payment for this heading remains at

0.5%, which is consistent with the types of activity and

expenditure under this heading. This heading groups

together all of the Commission services and departments

that mostly provide services to other Commission services

and departments and have no operational policy objectives.

These entities thus mostly manage administrative

expenditure under the direct management mode, such as the

Office for the Administration and Payment of Individual

Entitlements, which represents approximately 78% of the

expenditure for this heading.

The risk at payment was prudently set at 0.5% for

this low-risk type of expenditure. As most of the

corresponding control systems involve predominantly

ex ante controls, the estimated future corrections were often

set at a prudent 0.0%. Thus, the risk at closure is equal to

the risk at payment and remained very low at 0.5%.

In 2025, the total of amount preventive and

corrective measures decreased from EUR 5.9 million to

EUR 0.16 million because of the decrease in preventive measures. The absence of preventive measures in

2025 is due to the transition to the Commission’s new accounting system, SUMMA, where only preventive

measures exceeding EUR 500 000 are reported. Since all preventive measures taken under this heading fall

below this threshold, they are outside the reporting scope.

In this policy area, the reputational reservation raised in 2023 and 2024 on the issues encountered in

implementing new selection procedures and competitions was maintained. It was considered prudent to

maintain the reservation until competitions with the new contractor, planned in 2026, have taken place

according to plan.

(43) The total amount of relevant expenditure reported in the AMPR 2024 for this heading was EUR 11.6 billion for the

financial year 2024. The difference with the amounts of EUR 9.1 billion mentioned here corresponds to (i) the costs associated with the funds borrowed on the capital markets on behalf of the Union in the framework of the European Union Recovery Instrument (for an amount of EUR 2 116.2 million in 2024) and (ii) interest rate subsidy for the macro financial assistance (loan) to Ukraine (EUR 421 million in 2024), that were both counted with the expenditure under the heading European public administration and are now added respectively to the heading “cohesion, resilience and values” and the heading “neighbourhood and the world”.

Materiality

2.4%

2.2%

2.0%

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

0.5%

0.5% 0.5%

0.5%

0.5%

0.5%

2023 2024 2025

Risk at payment Risk at closure

Annex 2 – Internal control and financial management

49

Multiannual financial framework heading 7 – European public administration –

overview of risk segmentation for 2023-2025

Source: European Commission annual activity reports for 2025 (44)

2.1.4. Efficiency measures have been

taken

In 2025, 97% of payments (in value) were made

within the legal payment deadline versus 99% in 2024.

The slight decrease in performance for this indicator is

explained by the transition in 2025 to the Commission’s new

accounting system, SUMMA. The adjustments to this new

system had an impact on budget implementation tasks,

processes and financial management activities, particularly

during the first part of the year. In a limited number of

cases, this resulted in lower performance for some standard

financial indicators, such as timely payment.

Time to pay is the main indicator used to measure

the efficiency of procedures and controls in place for

making payments and is of paramount importance, as many beneficiaries rely on these payments to carry

out their activities and projects, which, in turn, contribute to the Commission’s objectives.

The Commission is continually striving to improve the efficiency of its operations so as to deliver

on its objectives under tight budgetary constraints and to achieve the objectives set in its digital agenda.

(44) The total amount of relevant expenditure reported in the AMPR 2024 for this heading was EUR 11.6 billion for the

financial year 2024 and EUR 8.9 billion for financial year 2023. The difference with the amounts shown in the visual: EUR 9.1 billion in 2024 and EUR 8.2 million in 2023, corresponds to (i) the costs associated with the funds borrowed on the capital markets on behalf of the Union in the framework of the European Union Recovery Instrument (for an amount of EUR 2 116,2 million in 2024 and EUR 694 million in 2023) and (ii) interest rate subsidy for the macro financial assistance (loan) to Ukraine (EUR 421 million in 2024), that were both counted under the heading European public administration and are now added respectively to the heading “cohesion, resilience and values” and the heading “neighbourhood and the world”.

100.0%

100.0%

100.0%

0 1 2 3 4 5 6 7 8 9 10

2023

2024

2025

(billion EUR)

1 – low 2 – medium 3 – high

97%

Percentage of Commission payments made within deadline

Annex 2 – Internal control and financial management

50

Processes are being streamlined to ensure the most efficient use of limited resources. Some examples of

initiatives leading to improved economy and efficiency are presented in the box below.

Examples of improved economy and efficiency

• One of the measures that continues to have the widest and longest-term effect is the increased

use of simplified cost options, in particular lump sums and unit costs . In the area of

research, the use of lump sums has grown significantly. In 2025, lump sums accounted for more than

35% of the overall call budget for the main Horizon Europe work programme, and successfully

reached the goal of at least 50% for the 2026-2027 work programme adopted in December 2025.

The Horizon Europe midterm evaluation (adopted in April 2025) confirmed that lump-sum grants

effectively reduce administrative burdens, help avoid financial errors and shift the focus from

financial controls to project content.

• In the same area, the European Research Executive Agency continued its drive for efficiency by

piloting artificial-intelligence-assisted expert allocation tools to compare the quality and

efficiency of pre-allocations produced by different systems. Additionally, a simplification

hackathon in 2025 brought together over 70 colleagues to generate ideas for streamlining proposal

evaluations and grant management, which directly informed the development of the 2026-2027 work

programme and the next research and innovation framework programme.

• In external action policies, in the Directorate-General for Enlargement and Eastern

Neighbourhood, data openness and interoperability have been strengthened through the

development of a statistical platform designed to gather quantitative and qualitative

data on corruption and organised crime in enlargement countries. This platform supports

structured assessments of rule-of-law performance, contributing to evidence-based policymaking.

• The Reusable Solutions Platform, a set of software building blocks, saves Commission

departments from requiring lengthy procurement procedures or development periods, including

through the reuse of corporate multilingual and artificial intelligence-based language services where

appropriate. The success of these reuse–buy–build principles was highly visible in 2025, with new

digital solutions developed by other departments, such as eAidRegister and eNotifications, achieving

reuse rates of over 70% and 90% by relying on these corporate building blocks. This improves

economy, efficiency and information technology security at the corporate level.

• In relation to cohesion policy, the push for simplification accelerated in 2025, reflecting a growing

awareness among Member States of the importance of streamlining fund delivery. Building on tools

like Kohesio, DG Regional and Urban Policy developed nine new financing not linked to costs

models to simplify the delivery of midterm review priorities . Over the course of the year, 18

Member States and six Interreg programmes developed 197 simplified cost options methodologies

accounting for EUR 8.1 billion, while 13 Member States developed 28 financing not linked to costs

schemes totalling almost EUR 5 billion.

Annex 2 – Internal control and financial management

51

The impact of artificial intelligence

In 2025, the Commission’s Information Management Steering Board continued to closely monitor the

implementation of the communication on artificial intelligence in the Commission (45) to

maximise artificial intelligence opportunities while mitigating risks and ensuring compliance with the

EU Artificial Intelligence Act (46). The existing Corporate AI@EC network continued to facilitate

collaboration on artificial intelligence use cases and extrapolations among over 6 000 members from

more than 60 Commission departments, agencies and other EU institutions and bodies. To foster a

digital culture across the institution, an AI Champions network was successfully launched, featuring

105 champions across more than 50 Commission departments and executive agencies. Furthermore,

the training of the first EU institutional large language model using European supercomputers

(Leonardo and MareNostrum 5) was advanced, with the aim of enhancing artificial intelligence

services across all of the official EU languages.

In relation to research and innovation, a substantial increase in the number of proposals received

has been noted for many calls, which is likely due, at least in part, to the rapid adoption of generative

artificial intelligence by applicants. In 2025, this trend escalated significantly across the executive

agencies, with an increase of between 25% and 49%. This in turn increased the workload and the

pressure on resources during the evaluation and selection of proposals, stretching operational capacity

and impacting indicators such as time-to-grant.

There are also risks associated with the use of artificial intelligence tools by experts and Commission

staff, along with the ethical implications of using such tools within projects. Examples are as follows: a

possible positive bias in evaluations towards artificial-intelligence-assisted proposals due to better

drafting quality, at the cost of overlooking scientific excellence in other proposals; possible

manipulation of researchers’ curricula vitae, requiring an increase in checks and verifications by

evaluation experts; lower quality and success rates of projects drafted by artificial intelligence; and

project reports and deliverables with unreliable content.

To address both these risks and the increase in applications, an AI Task Force is exploring emerging

issues and designing measures to address them. As a practical adjustment in 2025, for the Marie

Skłodowska-Curie actions, the requirement for applicants to demonstrate robustness in relation to

artificial intelligence in their main proposals was removed, with any necessary assessments instead

addressed through the ethics screening process. Agencies are also beginning to leverage artificial

intelligence themselves to manage the workload, such as the European Research Executive Agency

piloting artificial-intelligence-assisted expert allocation tools, and corporate systems such as Arachne+

integrating artificial intelligence and machine-learning algorithms to forecast risks such as double

funding and bankruptcy.

(45) Communication to the Commission – Artificial intelligence in the European Commission (AI@EC) – A strategic vision to

foster the development and use of lawful, safe and trustworthy artificial intelligence systems in the European Commission, C(2024) 380 final of 21 January 2024, https://commission.europa.eu/system/files/2024- 01/EN%20Artificial%20Intelligence%20in%20the%20European%20Commission.PDF.

(46) Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence and amending Regulations (EC) No 300/2008, (EU) No 167/2013, (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1139 and (EU) 2019/2144 and Directives 2014/90/EU, (EU) 2016/797 and (EU) 2020/1828 (Artificial Intelligence Act) (OJ L, 2024/1689, 12.7.2024, ELI: http://data.europa.eu/eli/reg/2024/1689/oj).

Annex 2 – Internal control and financial management

52

2.1.5. The costs of controls are proportionate to the associated risks

In 2025, after having assessed their effectiveness, efficiency and economy, all Commission departments

reached a positive conclusion on the cost-effectiveness of their controls. The resources allocated to controls

are aligned with the risks relating to the nature of the programmes and/or the context in which they are

implemented. The cost of controls, which for some departments also includes the cost of supervision of

executive agencies and joint undertakings, has remained generally stable over time. The variety of spending

programmes and their different features do not allow for a meaningful comparison of their control costs.

However, some common cost drivers can be identified, as shown in the following text box.

Examples of common cost drivers

The intrinsic complexity of the programmes managed. Grants based on the reimbursement of

real costs imply labour-intensive controls as opposed to financing based on lump sums, simplified cost

options or financing not linked to costs, such as performance-based instruments. It is on this cost

driver that the Commission is focusing, mostly by introducing options for simplifications in its

programmes (e.g. by developing lump-sum grants in Horizon Europe).

The complexity of the environment in which programmes are implemented. The cost of

controls is likely to be higher in the case of a multisite organisational structure or when partners

and/or beneficiaries are located outside the EU’s jurisdiction.

The volumes and amounts to be processed. A high number of low-value payments will generate

higher control costs than recurrent mass payments, while the regulatory framework requires certain

incompressible controls. This results in diseconomies of scale.

The type of budget implementation mode. Under the indirect and shared management modes,

the cost of controls is shared between the Commission and its implementing partners, while for the

direct management mode the burden is entirely borne by the Commission.

The life cycle of the programme. Towards the final stage of programmes (e.g. in the direct

management mode), despite the low level of expenditure, a minimum level of controls still has to be

carried out, which results in an increase in the ratio of cost of controls to expenditure controlled.

The increase in the average standard staff costs, driven by salary adjustments and

fluctuations in currency exchange rates. In the last several years, inflation has led to significant

increases in staff costs, whereas the overall budget managed and controlled every year has remained

stable. In external action, an additional factor relates to currency exchange rates.

For the sake of transparency and completeness, departments dealing with shared and/or indirect

management have also reported on the cost of controls in Member States and entrusted entities separately

from the Commission’s own cost of controls in their annual activity reports.

Annex 2 – Internal control and financial management

53

3. Management assurance

As part of the governance system explained above, overall management assurance is ensured through the

assurance given by the Directors-General, the Internal Audit Service and the Audit Progress Committee. It is

supplemented by the opinion of the Court of Auditors and points on the 2024 discharge given by the

budgetary authority and by the follow-up of the discharge and external audit recommendations.

3.1. Assessments, assurance and reservations declared by

authorising officers

For the 2025 reporting year, all 52 authorising officers by delegation (47) declared in their respective annual

activity reports (48) that they had reasonable assurance that (1) the information contained in their reports

presents a ‘true and fair view’ (i.e. reliable, complete and correct) of the state of affairs in their departments;

(2) the resources assigned to their activities were used for their intended purpose and in accordance with the

principle of sound financial management; and (3) the control procedures put in place give the necessary

guarantees concerning the legality and regularity of the underlying transactions, taking into account the

multiannual character of some programmes and the nature of the payments concerned.

Within their overall assurance-building process, and from their management perspective, the authorising

officers by delegation use all information available during the year, especially the results of their controls, to

spot any potential significant weakness in quantitative or qualitative terms for each programme or segment

of their portfolio. At the end of each financial year, they determine whether the financial impact of such a

weakness is likely be above the materiality threshold of 2% and/or whether the reputational impact is

significant. If so, they qualify their declaration of assurance with a reservation for the specific segment

affected.

Reservations EU budget: number and financial impact by policy area in 2025 (49) (million EUR)

(*) Non-quantified reservation.

Source: European Commission annual activity reports.

(47) See footnote 4. (48) European Commission: Directorate-General for Communication, ‘Annual activity reports’, European Commission

website, https://commission.europa.eu/strategy-and-policy/strategy-documents/annual-activity-reports_en. (49) Excluding the reservation issued for the Recovery and Resilience Facility.

Single market, innovation and digital

[12]

EUR 261.5 million

Cohesion, resilience and values

[5]

EUR 304.3 million

Natural resources and environment

[8]

EUR 300.7 million

Migration and border management (*)

[2]

Neighbourhood and the world (*)

[2]

European public administration (*)

[1]

Total EUR 866.5

million