LUXEMBOURG / RankWire.AI / – European Union borrowing could reach about €1 trillion by the end of 2027, the European Court of Auditors said in its latest annual report. Outstanding EU borrowing rose more than 20% to €738.9 billion at the end of 2025. It stood at €601.3 billion a year earlier. The increase reflects financing for NextGenerationEU and other EU programmes. The figures place debt management among the main financial issues facing the bloc as the current budget cycle nears its final year.
The auditors said debt servicing will place larger demands on future EU budgets when recovery-plan repayments begin in 2028. Interest on borrowing for non-repayable NextGenerationEU support could total about €93 billion between 2028 and 2034 if available support is fully disbursed. The European Commission has proposed setting aside €24 billion each year during that period. The money would cover interest first and then principal repayments. Recovery-related borrowing must ultimately be repaid by 2058.
The audit also found persistent problems in EU spending controls. The estimated error rate for regular EU budget expenditure rose to 3.8% in 2025 from 3.6% in 2024. That remained above the auditors’ 2% materiality threshold. Cohesion spending recorded an estimated error rate of 6.6%. Agriculture and environmental spending reached 3.9%. The European Court of Auditors stressed that spending errors do not automatically indicate fraud. EU payments in 2025 totaled €216.4 billion across the regular budget and recovery facility.
EU recovery fund enters final payment stage
The Recovery and Resilience Facility, the main component of NextGenerationEU, moved into its final payment phase in 2026. The European Commission said on Oct. 7 that it had disbursed €450 billion in grants and loans since the facility began. That equals about 79% of the RRF envelope. All member states submitted their final payment requests by Sept. 30. They had faced an Aug. 31 deadline to complete the milestones and targets included in their recovery plans.
The Commission said it was assessing 32 final payment requests worth €123 billion, with payments due by Dec. 31. Auditors separately reviewed 37 RRF grant payments made in 2025 and identified irregularities in nine. Those cases involved milestones, targets, public procurement or state-aid requirements. The audit also questioned whether some changes to national recovery plans had sufficient supporting evidence. By the end of 2025, member states had received €237.5 billion of €359.9 billion in allocated RRF grants.
Debt repayment concerns influence upcoming EU budget negotiations
The European Court of Auditors noted that liabilities backed by the EU budget, primarily loans, could reach as high as €664 billion by 2027. Borrowing associated with NextGenerationEU grants must be repaid between 2028 and 2058. The court has called for a comprehensive strategy to manage these liabilities throughout the repayment period. This issue now plays a key role in negotiations over the EU’s 2028-2034 Multiannual Financial Framework, which will set priorities, revenue sources, and debt servicing allocations for the next seven-year cycle.
The European Commission has proposed a long-term budget close to €2 trillion at current prices as governments discuss spending and financing options. The audit’s findings highlight debt costs, recovery-fund oversight, and national contributions as central to those discussions. EU leaders are scheduled to debate budget financing during the Oct. 15-16 summit in Brussels. The upcoming framework must also accommodate the scheduled start of NextGenerationEU grant repayments in 2028, which will run concurrently with other EU programmes and budget-backed liabilities.
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