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67-657: The budget of the European Union ( a.k.a. The Union’s annual budget) is used to finance EU funding programmes (such as the European Regional Development Fund , the Cohesion Fund , Horizon Europe , or Erasmus+ ) and other expenditure at the European level. The EU budget is primarily an investment budget. Representing around 2% of all EU public spending, it aims to complement national budgets. Its purpose

134-534: A "statement of assurance", essentially a certificate that an entire annual budget can be accounted for. This has proved to be a problem, as even relatively minor omissions require the ECA to refuse a statement of assurance for the entire budget, even if almost all of the budget is considered reliable. This has led to media reports of the EU accounts being "riddled with fraud ", where issues are based on errors in paperwork even though

201-478: A formula is used to create the so-called "harmonised VAT base", upon which the EU charge is levied. The starting point for calculations is the total VAT raised in a country. This is then adjusted using a weighted average rate of VAT rates applying in that country, producing the intermediate tax base. Further adjustments are made where there is a derogation from the VAT directive allowing certain goods to be exempt. The tax base

268-431: A large extent. The second share of EU spending goes to regional development (34% for the period 2014–2020). EU funding for regional and social development is an important source for key investment projects. In some EU countries that have otherwise limited means, European funding finances up to 80% of public investment. However, EU regional spending does not just help poorer regions. It invests in every EU country, supporting

335-479: A more favourable light. Note: in this budget period, "EU 27" meant the 27 member states prior to the accession of Croatia. In the 2014–2020 period, the EU budget had revenues amounting to total of €1,069,945.7 million: €825,759.1 million from national contributions (VAT-based own resources and GNI-based own resources), €139,351.6 million from traditional own resources (TOR) and €104,835 million from other revenues. European Regional Development Fund During

402-679: A recommendation by the Council, on whether or not to provide its final approval, known as 'granting discharge', to the way the Commission implemented the EU budget in a given year. When granted, it leads to the formal closure of the accounts of the institution for a given year. When deciding whether to grant, postpone or refuse the discharge, the Parliament takes into consideration the Integrated Financial Reporting Package prepared by

469-488: A total of €1,050,851 million: €900,638.1 million for the EU-28 member states, €62,021.8 million for non-EU expenditures, €56,022.9 million earmarked, and €32,168 million for other expenditures. The expenditures were divided into six categories or "headings": Besides those six categories, there were also expenditures allocated to "special instruments" (Emergency Aid Reserve, European Union Solidarity Fund, etc.). The EU budget for

536-568: A uniform call rate is applied to the GNI of each of the Member States. Due to this covering mechanism the rate to be applied to the Member States' gross national income varies from one financial year to another. Nowadays this resource represents the largest source of revenue of the EU Budget (generally around 70% of the total financing). In 2017, due to the higher than usual other revenues and surplus from

603-418: Is capped, such that it may not be greater than 50% of a Member State's gross national income (GNI). In 2017, eight Member States saw their VAT contribution reduced thanks to this 50% cap ( Estonia , Croatia , Cyprus , Luxembourg , Malta , Poland , Portugal and Slovenia ). Member countries generally pay 0.3% of their harmonised VAT base into the budget, but there are some exceptions. The rate for Germany,

670-479: Is composed of one member from each EU Member State, each of whom is appointed unanimously by the Council of the European Union for a renewable term of six years. They are not all replaced every six years, however, as their terms do not coincide (four of the original members began with reduced terms of four years for this reason). Members are chosen from people who have served in national audit bodies, who are qualified for

737-493: Is now in its 2014–2020 period. As part of its task to promote regional development, the ERDF contributes towards financing the following measures: All awards of ERDF must comply with European Union competition law (including State Aid Law and Government procurement in the European Union ). Failure to comply with these legal requirements may result in irregularity rulings which carry financial implications. One project supported by

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804-405: Is one of the seven EU institutions . The Court comprises one member from each EU member state (currently 27) supported by approximately 800 civil servants. The ECA was created by the 1975 Budgetary Treaty and was formally established on 18 October 1977, holding its first session a week later. At that time the ECA was not a formal institution; it was an external body designed to audit

871-526: Is prepared to fine those who do not return to acceptable standards. In this role, the ECA has to remain independent yet remain in touch with the other institutions; for example, a key role is the presentation of the ECA's annual report to the European Parliament . It is based on this report that the Parliament makes its decision on whether or not to sign off the European Commission's handling of

938-492: Is rather a professional external investigatory audit agency. The primary role of the ECA is to externally check if the budget of the European Union has been implemented correctly and that EU funds have been spent legally and with sound management. In doing so, the ECA checks the paperwork of all persons handling any income or expenditure of the Union and carries out spot checks. The ECA is bound to report any problems in its reports for

1005-506: Is supported by a staff of approximately 800 auditors, translators and administrators recruited as part of the European Civil Service . Auditors are divided into auditor groups which inspect and prepare draft reports for the ECA to take decisions upon. Inspections take place not only of EU institutions but of any state which receives EU funds, given that 90% of income and expenditure is managed by national authorities rather than

1072-442: Is to implement the priorities that all EU members have agreed upon. It provides European added-value by supporting actions which, in line with the principle of subsidiarity and proportionality, can be more effective than actions taken at national, regional or local level. The EU had a long-term budget of €1,082.5 billion for the period 2014–2020, representing 1.02% of the EU-28's Gross National Income (GNI) and of €1,074.3 billion for

1139-722: The Directorate-General for Budget and Eurostat , who report back to the country concerned. The country has a legal obligation to respond to any issues raised in the report, and discussions continue until both sides are satisfied, or the matter may be referred to the European Court of Justice for a final ruling. The Advisory Committee on Own Resources ( ACOR ), which has representatives from each Member State, gives its opinion where Member States have asked for authorisations to leave certain calculations out of account or to use approximate estimates. The ACOR also receives and discusses

1206-670: The 1960s, the European Commission occasionally tried to establish a regional fund, but only Italy ever supported it. Britain made it an issue for its accession in 1973 , and pushed for its creation at the 1972 summit in Paris. Britain was going to be a large contributor to the CAP and the EEC budget, and sought to offset this deficit by having the ERDF established. They would then be able to show their public some tangible benefits of EEC membership. The ERDF

1273-754: The 2021–2027 period has expenditures of €1,074.3 billion. It goes together with the Next Generation EU recovery package of €750 billion in grants and loans over the period 2021–2024 to meet the unparalleled economic challenge of the COVID-19 pandemic . An important part (95.5 billion euros) of the budget goes to the framework programme for research and development Horizon Europe. Around 25 billion euros are dedicated to Excellent Science (Pillar I), 53,5 billion euros to Global Challenges and European Industrial Competitiveness (Pillar II), and 13,5 billion euros to Innovative Europe (Pillar III). The transversal part about Widening

1340-535: The 2021–2027 period. The long-term budget, also called the Multiannual Financial Framework , is a seven-year spending plan, allowing the EU to plan and invest in long-term projects. Initially, the EU budget used to fund mainly agriculture. In the 1980s and 1990s, Member States and the European Parliament broadened the scope of EU competences through changes in the Union's founding Treaties . Recognising

1407-519: The Commission along with the European Court of Auditors ' Annual Report on how the budget has been spent and any relevant Special Reports from the Court. More particularly, every year the European Court of Auditors, which is the EU's independent external auditor, examines the reliability of accounts, whether all revenue has been received and all expenditure incurred in a lawful and regular manner, and whether

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1474-644: The Community. By becoming an institution it gained some new powers, such as the ability to bring actions before the European Court of Justice (ECJ). At first its audit power related only to the European Community pillar of the European Union (EU), but under the Treaty of Amsterdam it gained the full power to audit the finances of the whole of the EU. Despite its name, the ECA has no jurisdictional functions. It

1541-499: The Council of the European Union. The EU budget must remain within the limits set out in the Multiannual Financial Framework (MFF) and the Own Resource Celling. The MFF is the EU's long-term budget. It is established at least for five years (usually seven years). The European Commission submits the draft budget no later than 1 September each year. The Council of the European Union adopts its position no later than 1 October. If

1608-640: The Directorate-General for Budget of the Commission may notify to the Permanent Representative of the Member State concerned required corrections and improvements in the form of reservations on the Member State's GNI data. Payments are made monthly by Member States to the commission. Own resources payments are made monthly. Custom duties are made available by Member States after their collection. Payments of VAT- and GNI-based resources are based upon

1675-439: The EU Budget from Member States in any given year is limited with reference to Member States' GNI. Currently, the total amount of own resources allocated to the Union to cover annual appropriations for payments cannot exceed 1.20% of the sum of all the Member States' GNI. The GNI for own resource purposes is calculated by National Statistical Institutes according to European law governing the sources and methods to compile GNI and

1742-416: The EU budget (around 70% for the period 2014–2020) goes to agriculture and regional development. During the period 2014–2020, the share of EU spending on farming is set at 39%. In 1985, 70% was spent on farming. Farming's relatively large share of the EU budget is due to the fact that it is the only policy funded almost entirely from the common budget. This means that EU spending replaces national expenditure to

1809-582: The EU. These are collected by the Member States and passed on to the EU. Member States are allowed to keep a proportion of the duty to cover administration (20%), 25% as per 2021. The European Commission operates a system of inspections to control the collection of these duties in Member States and thus ensure compliance with the EU rules. In 2017, the EU's revenue from customs duties was €20,325 million (14.6% of its total revenue). A production charge paid by sugar producers brought in revenue of €134 million. The total revenue from TORs (customs duties and sugar levies)

1876-722: The EU. Upon finding a fault, the ECA—possessing no legal powers of its own—informs the European Anti-Fraud Office (OLAF), which is the EU's anti-fraud agency. The ECA is also assisted by the Secretary-General of the European Court of Auditors , elected by the College of ECA Members, who—along with general management and assistance to the President—draws up draft minutes and keeps archives of decisions, as well as ensuring

1943-413: The European Commission claims that every budget since 2007 has been signed off. Terry Wynn , an MEP who served on the Parliament's Committee on Budgetary Control and reached the position of chairman, has also backed these calls, stating that it is impossible for the Commission to achieve these standards. In a report entitled EU Budget – Public Perception & Fact – how much does it cost, where does

2010-591: The European Communities (Article 274 of the Treaty)". The size of the ECA has also come under criticism. Owing to the one-member-per-state system, its College of Members grew from nine to twenty-eight as of 2013 (twenty-seven after completing of the United Kingdom withdrawal from the European Union / Brexit on 31 January 2020 ). Attempting to get consensus in the body has thus become more difficult; this led to

2077-504: The European Court of Auditors as of 20 October 2024: ( N. Party) The Secretary-General is the ECA's most senior member of staff. Appointed for a renewable term of six years, he is responsible for the management of the ECA's staff and for the administration of the ECA. In addition, the Secretary-General is responsible for the budget, translation, training and information technology. ECA staff are mainly officials recruited via

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2144-527: The European Parliament may accept the Council's position or fails to take a decision within 42 days, then the budget is adopted. If the Parliament adopts its position then the Conciliation Committee is convened. The Conciliation Committee has 21 days to adopt a joint text if the committee fails to adopt a joint text or the joint text is not adopted within 14 days by the Council and the Parliament

2211-625: The Fund is the Golf Club Campo de Golf in the African Spanish exclave Melilla , located right next to the border with Morocco where African migrants regularly attempt to enter the territory of the EU by climbing a triple fence with razor wire. In 2009, Ecologists in Action called the location insulting and asked the EU to investigate why more than €1.1m was given to the project by the ERDF. The petition

2278-413: The Member States according to their GNI. 2014 EU expenditure in millions of euros (total: 142,496 million) Approximately 94% of the EU budget funds programmes and projects both within member states and outside the EU. Less than 7% of the budget is used for administrative costs, and less than 3% is spent on EU civil servants' salaries. For the period 2014–2020, the EU budget had expenditures amounting to

2345-418: The Member States are the largest source of the EU budget and are calculated based on gross national income. The GNI-based resource ensures that the general budget of the Union is always initially balanced. The GNI call rate is determined by the additional revenue needed to finance the budgeted expenditure not covered by the other resources (VAT-based payments, traditional own resources and other revenue). Thus

2412-502: The Netherlands and Sweden is 0.15% for the 2014-2020 period, while Austria also had a reduced rate in the 2007-2013 period. The EU's total revenue from the VAT own resource was 16,947 million euros (12.2% of total revenue) in 2017. Member States are required to send a statement of VAT revenues to the EU before July after the end of the budget year. The EU examines the submission for accuracy, including inspection visits by officials from

2479-632: The Participation and Strengthening the European Research Area receives around 3,3 billion euros. Net receipts or contributions vary over time, and there are various ways of calculating net contributions to the EU budget, depending, for instance, on whether countries' administrative expenditure is included. Also, one can use either absolute figures, the proportion of gross national income (GNI), or per capita amounts. Different countries may tend to favour different methods, to present their country in

2546-662: The United Kingdom stated that there were 500 separate accounts for the UK, and "in the last year, I qualified 13 of the 500. If I had to operate the EU system, then, because I qualify 13 accounts, I might have to qualify the whole British central government expenditure". Despite the problems, the Barroso Commission stated that it aimed to bring the budget within the Court's limits by the end of its mandate in 2009. The ECA made clear in its year report for 2010 that "Responsibility for

2613-407: The actual amount at risk is below the 2% threshold, once corrections and recoveries have been taken into account.2% of any public budget is very high however hence the qualification. Pie chart showing EU revenue sources (2017) The EU obtains its revenue from four main sources: Traditional own resources are taxes raised on behalf of the EU as a whole, principally import duties on goods brought into

2680-533: The arrival of 13 new Member States with diverse socioeconomic situations and by successive EU strategies to support jobs and growth and enhanced actions for the younger generation through the Youth Employment Initiative and Erasmus+. In 2015, it has set up the European Fund for Strategic Investments (EFSI), "so called Juncker plan " allowing to reinforce investments in the EU. The largest share of

2747-402: The attention of the EU's Member States and institutions, these reports include its general and specific annual reports, as well as special reports on its performance audits. The ECA 's decision is the basis for the European Commission decisions; for example, when the ECA found problems in the management of EU funds in the regions of England , the Commission suspended funds to those regions and

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2814-431: The budget estimates made for that year, subject to later correction. Other revenue accounted for 12.4% of EU revenue in 2017. This includes tax and other deductions from EU staff remunerations, contributions from non-EU countries to certain programmes (e.g. relating to research), interest on late payments and fines, and other diverse items. As the balance from the previous year's budget is usually positive in comparison to

2881-424: The budget estimates, there is usually a surplus at the end of the year. This positive difference is returned to the Member States in the form of reduced contributions the following year. The EU budget has had a number of correction mechanisms designed to re-balance contributions by certain member states: The United Kingdom withdrawal from the European Union has led the EU to reconsider its funding mechanisms, with

2948-483: The budget for that year. The Parliament notably refused to do this in 1984 and 1999, the latter case forced the resignation of the Santer Commission . The ECA, if satisfied, also sends assurances to the Council and Parliament that the taxpayers' money is being properly used, and the ECA must be consulted before the adoption of any legislation with financial implications, but its opinion is never binding. The ECA

3015-488: The budget in various ways, most importantly by publishing the Integrated Financial Reporting Package, which consists of the annual accounts, the Annual Management and Performance Report, and other accountability reports. The annual discharge procedure allows the European Parliament and the Council to hold the Commission politically accountable for the implementation of the EU budget. The European Parliament decides, after

3082-597: The budgetary procedure needs to start again. The European Commission, in cooperation with Member States, is responsible for the implementation of the EU budget in accordance with the Financial Regulation . The EU budget is implemented in accordance with the principles of unity and of budgetary accuracy, annuality, equilibrium, unit of account, universality, specification, sound financial management and performance and transparency. The EU programmes are managed in three ways: The Commission reports on how it has implemented

3149-403: The commission is on the right path. While a clean opinion means that the figures are true and fair, a qualified opinion means that there are minor issues still to be fixed. If Member States or final beneficiaries are found to spend EU money incorrectly, the Commission takes corrective measures. In 2017, the Commission recovered €2.8 billion, equal to 2.1% of the payments to the EU budget. Therefore,

3216-802: The departments (and other activities) are soundly managed. The President also represents the institution and appoints a representative for it in contentious proceedings. The current President is Tony Murphy (from Ireland) who took office on October 1, 2022. He succeeded Klaus-Heiner Lehne (Germany), elected in 2016. The previous presidents were Sir Norman Price (elected in 1977, United Kingdom ), Michael Murphy (1977, Ireland ), Pierre Lelong (1981, France ), Marcel Mart (1984, Luxembourg ), Aldo Angioi (1990, Italy ), André Middelhoek (1992, Netherlands ), Bernhard Friedmann (1996, Germany ), Jan O. Karlsson (1999, Sweden ), Juan Manuel Fabra Vallés † (2002, Spain ), Hubert Weber (2006, Austria ), and Vítor Manuel da Silva Caldeira (2007, Portugal ). List of members of

3283-542: The economy of the EU as a whole. 6% of the EU budget goes for the administration of all the European Institutions, including staff salaries, pensions, buildings, information technology, training programmes, translation, and the running of the European School system for the provision of education for the children of EU staff. The EU budget is adopted through the budgetary procedure by the European Parliament and

3350-588: The finances of the European Communities . It replaced two separate audit bodies, one which dealt with the finances of the European Economic Community and Euratom , and one which dealt with the European Coal and Steel Community . The ECA did not have a defined legal status until the Treaty of Maastricht when it was made the fifth institution, the first new institution since the founding of

3417-481: The financial management has been sound.   The European Court of Auditors has signed off the EU accounts every year since 2007. In October 2018, the European Court of Auditors gave the EU annual accounts a clean bill of health for the 11th year in a row, finding them true and fair. The Court has given, for a second year in a row, a qualified opinion on the 2017 payments. The report thus shows further improvements in terms of compliance and performance, and confirms that

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3484-481: The inspection results. In 2018, 15 inspections were reported by inspectors to the ACOR. It is anticipated that 12 countries will be visited in 2019. The Gross National Income (GNI)-based resource is an 'additional' resource that provides the revenue required to cover expenditure in excess of the amount financed by traditional own resources, VAT-based contributions and other revenue in any year. These national contributions from

3551-401: The integrity of the institutions. It is frequently claimed that annual accounts have not been certified by the external auditor since 1994. In its annual report on the implementation of the 2009 EU Budget, the Court of Auditors found that the two biggest areas of the EU budget, agriculture and regional spending, have not been signed off on and remain "materially affected by error". Nonetheless,

3618-414: The legality and regularity of spending on Cohesion Policies starts in the Member States, but the Commission bears the ultimate responsibility for the correct implementation of the budget". In previous reports, the ECA has noted that "Regardless of the method of implementation applied, the Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of

3685-581: The money go and why is it criticised so much? , Wynn cites consensus that practice in the EU differs from that in the US. In the US, the focus is on the financial information, not on the legality and regularity of the underlying transactions, 'So, other than in Europe, the political reaction in the US to the failure to obtain a clean audit opinion is only "a big yawn"'. By comparison, the Comptroller and Auditor General for

3752-463: The need to support the new single market , they increased the resources available under the Structural Funds to support economic, social and territorial cohesion. In parallel, the EU enhanced its role in areas such as transport, space, health, education and culture, consumer protection , environment, research, justice cooperation and foreign policy. Since 2000, the EU budget has been adjusted to

3819-512: The office and whose independence is beyond doubt. While serving in the Court, members cannot engage in any other professional activities. As the body is independent, its members are free to decide their own organisation and rules of procedure, although these must be ratified by the Council of the European Union. Since the Treaty of Nice, the ECA can set up "chambers" (with only a few Members each) to adopt certain types of reports or opinions. The ECA

3886-451: The previous year the rate of call of GNI was 0.5162548% and the total amount of the GNI resource levied was €78,620 million (representing 56.6% of total revenue). In 2017, Denmark , the Netherlands and Sweden benefited from an annual gross reduction in their GNI-based contribution (of respectively €130 million, €695 million and €185 million – all amounts are expressed in 2011 prices). The total amount of own resources that may be collected for

3953-534: The publication of reports in the Official Journal of the European Union . The members then elect one of their members as the President of the ECA for a renewable three-year term. The election takes place by a secret ballot of those members who applied for the presidency. The duties of the President (which may be delegated) are to convene and chair the meetings of the ECA, ensuring that decisions are implemented and

4020-420: The rebates likely to change. European Commissioner for Budget and Human Resources Günther Oettinger has stated that "I want to propose a budget framework that does not only do without the mother of all rebates [the U.K.'s] but without all of its children as well". The Multiannual Financial Framework for the 2021-2027 period will shift €53.2 billion as national rebates to Germany and the frugal Four funded by

4087-729: The reserve lists from general competitions organised by the European Personnel Selection Office external link (EPSO). In certain circumstances, however, the ECA may also engage temporary or contract staff. To be eligible for a post at the ECA, one must be a citizen of one of the European Union Member States. Just like the other EU institutions, the ECA organises three traineeship sessions per year in areas of interest to its work. Traineeships are granted for three, four or five months maximum, and may be remunerated (€1500 /month) or non-remunerated. The ECA publishes

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4154-419: The results of its audit work in a variety of reports – annual reports, specific annual reports and special reports – depending on the type of audit. Other published products include opinions and review-based publications. In total, the ECA published 93 reports in 2017. All reports, opinions and reviews are published on the ECA's website in the official EU languages. Since 1994 the ECA has been required to provide

4221-556: The transmission of GNI data and related methodological information to the commission (Eurostat). Basic information must be provided by the countries concerned to Eurostat before 22 September in the year following the budget year concerned. Eurostat carries out information visits to the National Statistical Institutes forming part of the European Statistical System . Based on assessment reports by Eurostat,

4288-469: The underlying spending was legal. The auditing system itself has drawn criticism from this perception. The Commission in particular has stated that the bar is too high, and that only 0.09% of the budget is subject to fraud. The Commission has elsewhere stated that it is important to distinguish between fraud and other irregularities. The controversial dismissal in 2003 of Marta Andreasen for her criticism of procedures in 2002 has, for some, called into doubt

4355-459: Was dismissed, because the objectives of the golf course to “increase tourism, create jobs and promote sport and sporting values” was compatible with the goals of the ERDF. European Court of Auditors The European Court of Auditors ( ECA ; French: Cour des comptes européenne ) is the supreme audit institution of the European Union (EU). It was established in 1975 in Luxembourg and

4422-496: Was set to be running by 1973, but the 1973 oil crisis delayed it, and it was only established in 1975 under considerable British and Italian pressure. It started with a budget of 1.4 billion units of account , much less than the original British proposal of 2.4 billion units of account, but has increased rapidly both proportionally and absolutely in the course of time. Since its creation, it has operated under changing set of rules that were standardised with Single European Act and

4489-454: Was €20,459 million (14.7% of the EU's total revenue). Countries are liable to make good any loss of revenue due to their own administrative failure. As per the 2021-2027 period an additional system of own resources will be introduced relying on levies collected by the EU. The VAT-based own resource is a source of EU revenue based on the proportion of VAT levied in each member country. VAT rates and exemptions vary in different countries, so

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