The European Commission has welcomed a political agreement between the European Parliament and the Council on the European Union’s annual budget for 2026, the penultimate year of the current seven-year financial framework and the last with substantial payments under the post-pandemic recovery instrument, NextGenerationEU.
Under the deal, commitment appropriations for 2026 will amount to around €192.8 billion, with payment appropriations set at approximately €190.1 billion, according to figures released by the European Parliament. The Commission describes the package as aligned with the EU’s main political priorities, notably support for Ukraine, competitiveness, migration management, security and defence, and the continuation of green and digital policies.
Ukraine, neighbourhood and security priorities
The 2026 budget maintains the Ukraine Facility as the central channel for “stable and predictable” financial support to Kyiv, in line with the multi-year framework adopted earlier in the legislature. Additional resources are earmarked for humanitarian aid and for the EU’s neighbourhood policy, reflecting ongoing needs arising from Russia’s full-scale invasion of Ukraine and wider regional instability.
Security and defence spending is consolidated under Heading 5, “Security and Defence”, which will receive €2.81 billion in commitments. These funds are intended to back EU-level initiatives on defence readiness, support for capability development and measures linked to hybrid and cyber threats, complementing national defence budgets and existing EU instruments.
Migration and border management will be allocated €5.02 billion, reflecting a continued focus on external border control, asylum systems and returns policy, as well as support for Member States under pressure along key migration routes.
Cohesion funds and reprogramming flexibility
The largest share of the 2026 budget falls under Heading 2, “Cohesion, Resilience and Values”, with €71.65 billion in commitments. Of this, €56.59 billion is earmarked for economic, social and territorial cohesion, and €15.06 billion for “Resilience and Values”.
According to the Commission, the mid-term review of cohesion policy has introduced additional flexibility, allowing Member States to reprogramme remaining cohesion allocations towards emerging priorities such as competitiveness, defence-related investments, affordable housing, water resilience and the energy transition. This is intended to make it easier for regional authorities to redirect funds to areas of greatest need and to speed up payments to beneficiaries on the ground.
Green, digital and single market funding
Heading 1, “Single Market, Innovation and Digital”, will receive €22.16 billion in 2026 commitments. This envelope covers research and innovation programmes, including Horizon Europe, support for small and medium-sized enterprises, the digital transition and measures to strengthen the functioning of the single market.
Spending on “Natural Resources and Environment” under Heading 3 totals €56.53 billion, of which €40.01 billion is earmarked for market-related expenditure and direct payments, largely under the Common Agricultural Policy. The remainder covers rural development, environmental and climate-related programmes and aspects of the green transition linked to biodiversity and resource management.
External action and administration
External action is grouped under Heading 6, “Neighbourhood and the World”, with commitments of €15.60 billion. These funds support neighbourhood policy, development cooperation, humanitarian aid and thematic external instruments, including those related to global health, climate action and crisis response.
European Public Administration, covering the EU institutions’ administrative expenditure, is allocated €13.28 billion under Heading 7. The budget also includes €5.72 billion for “thematic special instruments”, which provide additional flexibility to respond to unforeseen events and crises beyond the standard ceilings of the long-term financial framework.
Relationship with the long-term framework and NextGenerationEU
The 2026 annual budget sits within the ceilings set by the 2021-2027 Multiannual Financial Framework (MFF), which has been shaped by a succession of shocks, including the COVID-19 pandemic, the return of large-scale war in Europe, the energy crisis and heightened global geopolitical tensions. Expenditure financed under the MFF is covered by the EU’s system of own resources, while additional spending linked to recovery and resilience continues to be financed through borrowing on capital markets under NextGenerationEU.
The Commission notes that 2026 will be the final year with substantial payments under NextGenerationEU, as implementation of national recovery and resilience plans approaches its concluding phase. This timing places the 2026 budget at the intersection of the winding-down of extraordinary crisis-response instruments and the return to a more standardised pattern of multiannual programming.
Procedure and next steps
The agreement on the 2026 budget follows the usual conciliation procedure between the Council, representing Member States, and the European Parliament. The two institutions now have 14 days to formally approve the deal. The Council is expected to endorse the package on 24 November, while a plenary vote in Parliament – currently scheduled for 26 November 2025 during the Strasbourg session – will mark the end of the process.
Once adopted, the 2026 budget will guide EU spending over the course of the year, in parallel with the final phase of disbursements under NextGenerationEU and the early stages of discussions on the next long-term financial framework after 2027.
