The EU's auditors have put a price tag on the budget fight, and it is a worrying one.
In its annual report on the 2025 budget, published on Thursday in Luxembourg, the European Court of Auditors says errors in EU spending rose again, that the Union's debt is climbing fast, and that the next long-term budget could fall short unless governments agree on new sources of money.
The Court estimates the error rate in 2025 spending at 3.8%, up from 3.6% in 2024 and well above its 2% materiality threshold. It gave an adverse opinion on spending for the seventh year running. The worst area was cohesion, where the rate rose to 6.6% from 5.7%. Agriculture and environment climbed to 3.9% from 2.6%. The main causes were ineligible projects or costs and breaches of public procurement rules. The error rate measures money spent against the rules, not fraud. The auditors reported 17 suspected fraud cases to EU authorities. The accounts themselves were reliable.
The Court gave a qualified opinion on payments from the Recovery and Resilience Facility. Nine of 37 grant payments in 2025 did not meet the applicable conditions. Of €359.9 billion in committed grants, €237.5 billion had been paid by the end of last year, leaving more than €122 billion, about a third, to be paid in the final year. Only three of 27 member states had drawn at least 80% of their allocations. The auditors also found that some governments cut or narrowed their plan commitments without convincing justification, in some cases after asking for payment.
EU borrowing could reach €1 trillion by 2027, mainly because of NextGenerationEU. Interest on the programme's non-repayable support could cost up to €93 billion in 2028-34. Loans to Ukraine agreed or approved since 2014 total €170.1 billion, including a €90 billion loan decided early this year, of which €70.3 billion had been paid by the end of 2025. The Court says the EU's growing debt "could put increasing pressure on future budgets".
That warning arrives in the middle of the fight over the 2028-34 budget. The auditors note that around a fifth of the Commission's proposed budget of roughly €2 trillion relies on revenue streams that have not yet been agreed. "Without an agreement on new sources of revenue, the EU budget could face a significant shortfall," the Court says, which could mean higher national contributions or lower ambitions. Its president, Tony Murphy, said "ambitious budgets demand equally ambitious safeguards" and urged lessons from the recovery fund for a new model in which payments are tied to results rather than costs.
Capitals cannot agree even on how to count. A Commission paper put contributions at 0.76% of gross national income without the new levies, against 0.84% today, and at 1.19% with them. Figures circulating in Parliament show the budget at 1.11% of GNI, against 1.15% proposed last year and 1.13% now. Diplomats have called some of the Commission's sums "voodoo calculations", and net contributors led by Germany have threatened a no-deal. Parliament has warned the Irish presidency against "unacceptable" cuts, and external action and development policy look like the likely casualties.
The auditors have handed both camps ammunition. Net payers will say that a budget leaning on unagreed revenue and rising debt is a reason to cut. Those who want more will say the risk is a reason to agree on the new levies now. Neither can claim the numbers settle it, because the numbers depend on what you count.
The next test comes fast. Ireland circulates a new compromise on Saturday, and leaders take up the budget at their summit next week. If they do not agree on where the money comes from, the Court has just told them what happens next.
