1. Foreword  1

2. EU budget: Structure and principles  3

2.1. Role and size of the EU budget  3

2.2. EU budget structure  7

2.2.1. Revenues  7

2.2.2. Expenditure – Multiannual planning and annual budget  8

2.3. Main institutional actors in three key phases of the budgetary cycle – Budgetary powers explained  10

2.3.1. Adoption  10

2.3.2. Implementation  11

2.3.3. Scrutiny of EU spending  11

3. EU multiannual financial framework  13

3.1. EU budget resources  13

3.2. 2021-2027 multiannual financial framework  15

3.2.1. Ceilings for commitments and payments  15

3.2.2. Revision of the 2021-2027 MFF Regulation  17

3.3. EU budget flexibility and special instruments  19

3.3.1. Margins under the MFF ceilings  19

3.3.2. Special instruments  20

3.3.3. Next Generation EU contribution to the EU budget and repayment cost  23

3.3.4. Support to Ukraine  26

3.4. Budgetary challenges ahead  28

3.5. Shaping the 2028-2034 multiannual financial framework  31

3.5.1. European Commission proposal  31

3.5.2. Structure of the proposed 2028-2034 MFF  31

3.5.3. Economic, social and territorial cohesion, agriculture, rural and maritime prosperity and security (Heading 1)  32

3.5.4. Competitiveness, prosperity and security (Heading 2)  33

3.5.5. Global Europe (Heading 3)  33

3.5.6. Administration (Heading 4)  34

3.5.7. Special instruments  34

3.5.8. Measuring the performance of the EU budget  35

3.6. Negotiations on the 2028-2034 MFF  39

3.6.1. Procedure  39

3.6.2. European Parliament deliberations  40

4. EU budget revenues: Reform of the own resources system  43

4.1. Decision-making and implementation of own resources  43

4.2. Existing types of own resource  44

4.2.1. Traditional own resources  45

4.2.2. VAT-based own resources  46

4.2.3. GNI-based own resources  46

4.2.4. Statistical own resource on non-recycled plastic packaging waste  47

4.2.5. Other revenue  47

4.3. New own resources – Preparatory developments  48

4.4. New own resources – State of play of the reform  50

4.5. Debt as a source of revenue  52

4.5.1. Debt and NGEU  52

4.5.2. Debt options in the 2028-2034 MFF proposal  53

4.5.3. Debt-financing EU defence  55

4.6. Other potential sources of revenue for EU policy objectives  55

5. EU budget for 2026  59

5.1. Overview of the adopted 2026 budget  59

5.2. Parliament's position and 2026 budget negotiations  63

5.3. Outlook on the 2027 budget  68

5.4. Annual budgetary procedure in the new MFF proposal  68

6. Implementation of the budget and scrutiny of EU spending: Procedures in the European Parliament  71

6.1. Democratic scrutiny of the EU budget  71

6.2. Main steps in the budgetary discharge procedure  73

6.3. Discharge for RRF spending  74

6.4. Rule of law and the Budgetary Conditionality Regulation – A new tool to protect the EU's financial interests  76

6.5. Reforms in the area of democratic and budgetary scrutiny  79

6.6. Democratic oversight and budgetary scrutiny in the context of the future MFF  80

7. Annexes  82