In 2024, Germany paid more to the European level than it received by around 0.4 % of its gross national income (€18 billion), as explained in the current Monthly Report. It was thus one of ten Member States that made net contributions to the EU budget and the NextGenerationEU (NGEU) off-budget entity. However, Germany was not among the frontrunners this year, as it received significantly more grants from the NGEU off-budget entity than it did in previous years. 

In 2024, 17 countries were net recipients. Latvia received the most funds in relation to its economic performance. These corresponded to 3.5 % of its gross national income (GNI). 

EU budget expenditure lower in 2024 than in previous years

The EU budget for 2024 comprised expenditure of around €146 billion (or 0.8 % of EU GNI), which was €19 billion lower than in the previous year. The main reason for this decrease was that Member States called up less cohesion funding. Cohesion spending is targeted investment by the EU. It is intended to reduce economic and social disparities between different European regions. 

The Bundesbank’s economists attribute this decline to the fact that the Member States primarily made use of funds from the Recovery and Resilience Facility (RRF). The RRF is not part of the regular EU budget and is the centrepiece of the NGEU off-budget entity. Member States must apply for funds from the RRF by the end of September 2026. Otherwise, as explained in the Monthly Report, they will expire. Cohesion funding is likely to rise significantly from 2027 at the latest as a result of catch-up effects.

European Commission proposes more funds for the EU budget and new leeway for debt

For the multiannual financial framework for 2028 to 2034, the European Commission is proposing to expand the maximum scope of the EU budget from 1.13 % of EU GNI per year to 1.26 %. Member States’ payments would be correspondingly higher, write the authors of the Monthly Report. The additional funds would be used primarily to service interest and repayments for NGEU debt. 

In addition, the European Commission wants to create considerable leeway for new joint debt. This is intended to finance loans to Member States and Ukraine as well as a new precautionary crisis mechanism.

Future EU spending: focus on European tasks?

Based on the European Commission’s proposal, slightly more funds from the EU budget would be allocated to research, infrastructure and defence in future. The Bundesbank’s economists support this, arguing that undertaking major research and infrastructure projects in a centralised way offers advantages, such as through economies of scale or if they would be unfeasible at the national level. In the areas of external action and migration, too, a joint European approach is likely to be more effective than solo efforts by individual national governments. The authors of the Monthly Report therefore recommend that the upcoming negotiations could make increased efforts towards focusing on European tasks. 

By contrast, they take a critical view of the European Commission’s proposal to agree bilateral reform plans with the Member States and to use selected EU budgetary resources for this purpose. They fear that this could harbour significant bureaucratic burdens. This is indicated, not least, by experiences with the RRF, for which the Member States likewise negotiated plans with the Commission.