LUXEMBOURG / RankWire.AI / – European Union borrowing is projected to approach €1 trillion by the conclusion of 2027, based on the latest yearly evaluation from the European Court of Auditors. As of the end of 2025, EU borrowing had risen to €738.9 billion, up from €601.3 billion at the same point in 2024. This represents an increase exceeding 20%. A significant portion of this growth is linked to funding associated with NextGenerationEU and other initiatives supported by the EU budget.
According to the European Court of Auditors, future fiscal plans will encounter escalating repayment and interest commitments stemming from the bloc’s pandemic-era borrowing. The interest expenses for non-repayable support under NextGenerationEU could total approximately €93 billion from 2028 to 2034, assuming the full disbursement of available funding. The European Commission has suggested allocating €24 billion annually during this period, with these funds initially covering interest costs before reducing the principal owed.
The audit also highlighted persistent issues in how some EU expenditures comply with funding regulations. In 2025, the estimated error rate for regular budget spending increased to 3.8% from 3.6% in 2024. Cohesion-related expenditures showed an estimated error rate of 6.6%, while agriculture and environmental spending had a rate of 3.9%. The auditors clarified that these errors do not necessarily imply fraudulent activity. In 2025, total EU payments amounted to €216.4 billion, covering both the regular budget and recovery initiatives.
Recovery fund advances towards final payments
In 2026, the Recovery and Resilience Facility entered its final payout phase. On Oct. 7, the European Commission announced that it had disbursed €450 billion in grants and loans since the program’s inception, accounting for roughly 79% of the total fund. Member states had until Sept. 30 to submit their last payment requests. Additionally, governments had until Aug. 31 to meet the milestones and targets specified in their national recovery plans.
The European Commission was reviewing 32 final payment requests totaling €123 billion, with disbursements expected to be completed by Dec. 31. During 2025, auditors examined 37 RRF grant payments and found irregularities in nine cases, involving milestones, targets, public procurement, and state-aid compliance. By the end of 2025, member states had received €237.5 billion from an allocation of €359.9 billion in RRF grants. The remaining funds were transferred into the final implementation stage of the program in 2026.
Upcoming EU budget faces increased debt servicing costs
The European Court of Auditors warned that liabilities secured through the EU budget, primarily via loans, could reach as high as €664 billion by 2027. The repayment of debt used for NextGenerationEU grants will commence in 2028 and extend until 2058. The court has emphasized the need for a comprehensive approach to managing these obligations over the entire repayment timeline. Currently, this debt load is influencing negotiations concerning the EU’s 2028-2034 Multiannual Financial Framework and its overall financing structure.
The European Commission has put forward a long-term budget proposal nearly totaling €2 trillion at current prices for the next seven years. This framework must accommodate ongoing programs, new priorities, and the start of repayment obligations for NextGenerationEU grants. EU leaders are scheduled to debate budget funding during the Oct. 15-16 summit in Brussels. Discussions will focus on borrowing costs, recovery fund oversight, and future national contributions as key elements of the bloc’s forthcoming financial strategy.