In the EU budget, maximum annual amounts (“ceilings”) exist both for:
- Expenditures – the long-term budget ceilings establish the maximum amounts that the EU can either commit or spend during the 7-year Multiannual Financial Framework (currently from 2021 to 2027);
- Revenues – the own resources ceilings establish the maximum amount of own resources the EU can request from Member States to finance its expenditures in the same period.
The long-term budget lays down the ceilings for EU expenditure as a whole and for the main categories of expenditure (headings) over the 7-year period. There are two types of expenditure ceilings:
- An annual ceiling for each heading, expressed in commitment appropriations, which are legally binding promises to spend money. Commitment appropriations will not necessarily be spent in the same year, but may be disbursed over several financial years.
- An overall annual ceiling:
- for commitment appropriations, corresponding to the sum of each heading’s ceilings;
- for payment appropriations, which indicates the maximum actual amounts authorised for disbursement in a given year.
The expenditure ceilings are lower than the revenue (“own resources”) ceilings. For each year of the long-term budget, the total payment appropriations have to be such as to avoid that Member States are requested to contribute more than the own resources ceiling.
Special instruments and margins
The only exception that allows surpassing the long-term budget ceilings occurs when it is necessary to use special instruments, mobilised to respond to unforeseen circumstances. However, even in this case, the commitment appropriations for special instruments cannot exceed the own resources ceiling.
Additional room for manoeuvre in case of unforeseen needs and emergencies is provided by the difference (“margin”):
- between the actual budgeted payment appropriations and the overall annual ceiling for payment appropriations;
- and between the actual budgeted commitment appropriations and the annual ceiling for each heading.