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The European Union (EU) budget is mainly dedicated to investment. Therefore, the EU adopts annual budgets within long-term spending plans, known as multiannual financial frameworks (MFFs), running for a period of 5–7 years.

The current MFF runs from 2021 to 2027. It sets a ceiling for each category of spending, which must be respected when establishing annual budgets to cover spending on, for instance, developing rural regions, infrastructure, research and development, the environment, agriculture and fisheries, and its administration costs. 

Together with NextGenerationEU, the budget will help EU economies recover from the COVID-19 crisis.

The budget represents around 1% of the wealth generated annually by EU Member States.

Around 75% of the budget spending is managed by the Member States and the European Commission. The rest is managed directly by the European Commission and its agencies and delegations (around 18%) or other international organisations, national agencies or non-EU countries (around 8%). 

The European Court of Auditors and the European Parliament scrutinise the previous year’s spending through the discharge procedure.

The EU budget is funded from several sources of revenue, known as the EU’s ‘own resources’ (customs duties, a proportion of each Member State’s gross national income, a share of Member States’ VAT receipts and, as of 1 January 2021, a new own resource based on the amount of non-recycled plastic packaging waste).