TEC recommends EU budgetary “prudence” to risk

Nthe annual report on the EU budget for 2025, the ECA highlights “the risks and challenges for future EU budgets” at budgetary and financial management level, stating that “the borrowing by the Union could reach a billion euros by 2027, the European Union’s Recovery Instrument [IRUE, which finances the RRPs] being one of the main players”.

In the proposal for the next long-term EU budget for 2028-2034, the European Commission proposes a fixed annual amount of EUR 24 billion at current prices to cover both interest payments and capital repayments, with interest costs related to the non-refundable support of the EUI expected to be around EUR 93 billion during this period.

“ As the impact of borrowing on future budgets becomes clearer, it is important to note that the proposals on the Multiannual Financial Framework also allow for substantial loans to support Ukraine, the Member States' national plans and the possible use of the serious crisis response mechanism. These planned loans may require Member States to increase national contributions to service debt in the context of budgets already under pressure,” the ECA warns.

Speaking to Portuguese journalists in the presentation of the annual report, the Portuguese member of the ECA, João Leão, asked Brussels for “prudence” at a time of negotiations on the next EU budget for 2028 to 2034.

“ If we want to avoid having to increase many contributions from Member States, some of them with internal budgetary challenges, and if we want to avoid reducing the ambition of the European budget, given the need to address these new priorities, then it is important to find new sources of funding for the European budget,” said the former Portuguese Minister for Finance.

He stressed, however, that the ECA is “independent and neutral” on political choices and does not state what the EU’s priorities should be or on the concrete financing mechanisms to be adopted, for example through new revenue or a new joint debt.

“What we draw attention to is that if new priorities have been identified and if we do not want to sacrifice the current priorities too much, new resources have to be found,” he said.

The EU debt reached EUR 738.9 billion at the end of 2025, compared to EUR 601.3 billion in 2024.

The current maturity structure of EU borrowings is distributed across the current and subsequent multiannual budgets.

In the report, the ECA warns of the need for the European Commission to present a clearer strategy on how the debt will subsequently be amortised and financed over the next financial framework.

This is because the repayment of loans contracted under the IREU should start in 2028 and be completed by 2058 at the latest, without the Community executive having released an overall strategy, according to the Community auditor.

“ It is necessary to have a clear picture, a clear strategy of how it will be amortized this debt ", defended João Leão.

At the end of 2025, the total exposure of the EU budget amounted to EUR 406.8 billion, plus 19% more than the EUR 342 billion recorded a year earlier.

It is expected to continue to increase to EUR 664 billion in 2027.