# ESA: how the European Space Agency works, who pays for it and why Bulgaria is still not a member

> An €8.26bn budget, 23 members and a rule that sends every euro back home as contracts. Bulgaria is one of three EU states outside ESA, and associate membership has been pending since 2021.

- Published: 26 Oct 2026 (2026-10-26)
- Author: Stanislav Milchev, Editor
- Section: Funding
- Tags: ESA, geographic return, CM25, Bulgaria, European Launcher Challenge
- Canonical URL: https://www.spacecapex.com/en/news/esa-how-it-works-who-pays-bulgaria

The European Space Agency is not part of the European Union. The UK left the EU and remained a full member of ESA. Norway and Switzerland have never joined the EU but have been members of the agency for decades. Canada, on another continent entirely, has a seat on the ESA Council under a cooperation agreement. Bulgaria, meanwhile, has been in the EU since 2007 but is neither a member nor an associate member of ESA. According to [ESA](https://www.esa.int/About_Us/Corporate_news/Member_States_Cooperating_States), it is a "European Cooperating State", alongside Croatia and Malta. They are the only three EU countries with that status.

### Science satellites and a rocket that never reached orbit

ESA was created in 1975 by merging two older organisations: ESRO, which built science satellites, and ELDO, which built rockets. ELDO's Europa rocket never once managed to put a satellite into orbit. A fine start for an agency that half a century later is still arguing over how to build cheap rockets.

Today ESA has 23 member states. The newest is Slovenia, a full member since 1 January 2025. There are four associate members: Latvia, Lithuania, Slovakia and Cyprus, which gained that status in 2026.

### Who pays

According to ESA, its 2026 budget is €8.26bn, as shown in the presentation from the [Director General's annual briefing](https://www.key4biz.it/wp-content/uploads/2026/01/DGAnnualPressBriefing2026_slides.pdf). Member states provide 64.2% of it. The European Union provides 23.4%, because it pays ESA to build Galileo, Copernicus and IRIS². The rest comes from other customers, such as Italy's IRIDE constellation (7.9%), other income (3.1%) and EUMETSAT (1.4%). In other words, the EU is not a member of ESA, yet it pays for almost a quarter of its budget.

![ESA Budget source](https://omlclbaklhdpibyhxubz.supabase.co/storage/v1/object/public/media/articles/1793043403270-6qh5ay.png "SpaceCAPEX")

In November 2025 ministers met in Bremen and subscribed €22.3bn for the next three years. According to ESA, that is a record, 31% more than in 2022 and 17% more after inflation. Germany is the biggest contributor at around 23%, according to the German space agency [DLR](https://www.dlr.de/en/latest/news/2025/germany-invests-5-4-billion-euros-in-the-future-of-european-space), while France and Italy each provide around 16%. The UK cut its contribution to €1.706bn, and its share from 11.2% to 7.7%, [European Spaceflight](https://europeanspaceflight.com/?p=5630) calculates. Canada quadrupled its contribution to €407.7m, [SpaceQ](https://spaceq.ca/european-space-agency-dg-aschbacher-highlights-2026-milestones-in-annual-address/) reports.

### Mandatory and optional

Countries pay in two ways. The mandatory part funds the science programme and basic activities: research, studies for future missions and training. According to [ESA](https://www.esa.int/About_Us/Corporate_news/Funding), each country contributes according to the size of its economy. In 2026 the science programme is worth €692m and basic activities €361m. Together they make up just under a fifth of the €5.56bn ESA spends on its own programmes. Everything else is optional. Each country decides which programmes to join and how much to put in: launchers, navigation, Earth observation, telecoms, the space station. An à la carte menu where everyone orders according to their appetite and their wallet.

![ESA](https://omlclbaklhdpibyhxubz.supabase.co/storage/v1/object/public/media/articles/1793043428761-v0eqxc.png "SpaceCAPEX")

### Geographic return

Here comes ESA's most unusual rule: roughly every euro a country puts in comes back to it as contracts for its own industry. The target is a ratio of 1:1, and in practice the coefficient over five years is between 0.9 and 0.95 for all members, [European Spaceflight](https://europeanspaceflight.com/esa-director-general-reaffirms-geo-return-policy-as-fundamental/) writes. The rule keeps everyone at the table. A finance minister signs more easily knowing the money will come back as wages in his own factories.

The price is that contracts are shared out according to contributions, not according to who can build the thing most cheaply. Again according to European Spaceflight, Mario Draghi's report on EU competitiveness calls the rule a serious obstacle for European rockets. In early 2025, after an internal review, Director General Josef Aschbacher said it was "a very fundamental rule". Only a few months later ESA announced that the European Launcher Challenge, its competition for new rockets, would have no geographic return constraints. The rule is fundamental, until it gets in the way.

### Architect, not factory

ESA rarely builds anything itself. It designs missions, writes requirements and hires industry: Airbus, Thales Alenia Space, OHB, ArianeGroup and hundreds of smaller firms. Its centres are deliberately spread out. Headquarters are in Paris, the ESTEC engineering centre is in Noordwijk (Netherlands), mission control is at ESOC in Darmstadt (Germany), Earth observation is at ESRIN in Frascati (Italy), and astronauts train in Cologne. Rockets lift off from Kourou in French Guiana, from the spaceport run by the French agency CNES. Geographic return evidently applies to buildings too.

Each member has one vote on the ESA Council, whether it contributes 23% or less than 1%. The big decisions are taken at ministerial meetings roughly every three years, when countries sign up for programmes. In between, the agency is run by the Director General, since 2021 Austria's Josef Aschbacher. The results of this model include the Rosetta comet mission, the Galileo navigation in your phone, the Sentinel satellites, the Juice probe on its way to Jupiter, and the module that powers NASA's Orion capsule.

### Bulgaria: a cooperating state since 2015

Bulgaria signed an agreement as a European Cooperating State in 2015 and renewed it in 2022. The Ministry of Innovation and Digital Transformation said, as quoted by [BTA](https://www.bta.bg/bg/news/economy/1208701-balgarski-organizatsii-sa-izpalnili-54-proekta-na-evropeyskata-kosmicheska-agent), that 194 Bulgarian organisations have registered for ESA procedures and that 54 projects worth nearly €10.6m have been completed. The ministry is working towards associate membership and promises a national space strategy by the end of 2026. [cosmos.1.bg](http://cosmos.1.bg) points out that as a cooperating state Bulgaria takes part in only a limited number of projects, and Bulgarians cannot apply to become astronauts.

The ambition isn't new. In October 2021, at a round table at the [Bulgarian Academy of Sciences](https://www.bas.bg/?p=36352&lang=en), the goal was associate membership by the end of 2022. Four years on, Bulgaria is in the same place. For scale: all agreements with cooperating states in ESA's 2026 budget add up to €7m, less than 0.1% of the total.

### Who pays ESA

| Who pays | To whom | For what | How much | Source |
| --- | --- | --- | --- | --- |
| The 23 member states | ESA | ESA's own programmes, 2026 | 64.2% of the budget (around €5.30bn) | [ESA](https://www.key4biz.it/wp-content/uploads/2026/01/DGAnnualPressBriefing2026_slides.pdf) |
| The European Union | ESA | Galileo, Copernicus, IRIS² etc. | 23.4% (around €1.93bn) | [ESA](https://www.key4biz.it/wp-content/uploads/2026/01/DGAnnualPressBriefing2026_slides.pdf), [SpaceQ](https://spaceq.ca/european-space-agency-dg-aschbacher-highlights-2026-milestones-in-annual-address/) |
| Other customers (e.g. IRIDE, the Greek constellation) | ESA | Programmes on commission | 7.9% (around €0.65bn) | [ESA](https://www.key4biz.it/wp-content/uploads/2026/01/DGAnnualPressBriefing2026_slides.pdf), [SpaceQ](https://spaceq.ca/european-space-agency-dg-aschbacher-highlights-2026-milestones-in-annual-address/) |
| EUMETSAT | ESA | Weather satellites | 1.4% (around €0.12bn) | [ESA](https://www.key4biz.it/wp-content/uploads/2026/01/DGAnnualPressBriefing2026_slides.pdf) |
| Germany | ESA | CM25 contribution for 2026–2028 | Around €5.1bn (around 23%) | [DLR](https://www.dlr.de/en/latest/news/2025/germany-invests-5-4-billion-euros-in-the-future-of-european-space) |
| United Kingdom | ESA | CM25 contribution for 2026–2028 | €1.706bn (7.7%) | [European Spaceflight](https://europeanspaceflight.com/?p=5630) |
| Canada | ESA | Cooperation agreement, 2026–2028 | €407.7m | [SpaceQ](https://spaceq.ca/european-space-agency-dg-aschbacher-highlights-2026-milestones-in-annual-address/) |
| ESA (PECS programme) | Bulgarian organisations | 54 completed projects | Nearly €10.6m | [BTA](https://www.bta.bg/bg/news/economy/1208701-balgarski-organizatsii-sa-izpalnili-54-proekta-na-evropeyskata-kosmicheska-agent) |

### What I think

ESA is more a club with a rulebook than a space agency like NASA. The rulebook is one vote per country, mandatory science and geographic return. It keeps 23 governments at one table and made Bremen's record €22.3bn possible. The same rulebook makes rockets more expensive and slower, and ESA knows it, or it wouldn't have suspended it precisely for the rockets in the European Launcher Challenge.

For Bulgaria, the rule is more an argument for membership than an obstacle. If the money comes back as contracts, the contribution is an investment in the country's own companies. And Bulgaria has companies that could use them: EnduroSat already has 100 satellites in orbit. As a cooperating state, Bulgaria pays almost nothing and gets almost nothing back, beyond 54 projects in ten years and the right to watch from the sidelines. Associate membership needs to go into the 2027 budget, not into yet another strategy.

<https://youtu.be/NaXXE3kMtUw>

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Source: SpaceCAPEX — https://www.spacecapex.com/en/news/esa-how-it-works-who-pays-bulgaria