WHERE DOES EUROPE S MONEY GO? A GUIDE TO EU BUDGET DATA SOURCES ELISABETH DRUEL, PIERRE CHRZANOWSKI, RUFUS POLLOCK & JONATHAN GRAY JULY 2015

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1 JULY 2015 WHERE DOES EUROPE S MONEY GO? A GUIDE TO EU BUDGET DATA SOURCES ELISABETH DRUEL, PIERRE CHRZANOWSKI, RUFUS POLLOCK & JONATHAN GRAY WITH SUPPORT FROM

2 ThisreportwasresearchedandwrittenbyElisabeth*DruelandPierre*Chrzanowskionbehalf ofopen*knowledge,withinputandguidancefromrufus*pollockandjonathan*gray. SupportwasprovidedbytheAdessium*Foundation. Open*Knowledgeisaglobalcivilsocietyorganisationdedicatedtoopeninguppublic information,researchandculturetobenefitthelivesofcitizensaroundtheworld. Findoutmoreat:okfn.org. Adessium*Foundationaspirestoasocietythatencouragespeopletoliveinharmony witheachotherandwiththeirenvironments.thefoundationworkstoachievea balancedsocietycharacterizedbyintegrity,abalancebetweenpeopleandnature,and socialharmony.findoutmoreat:adessium.org. Thankstothefollowingpeoplewhoprovidedinput,feedbackandsupportatvariousstages: Nick*Aiossa,EUPolicyOfficer,TransparencyInternationalEUOffice Brigitte*Alfter,EuropeEditor,JournalismFund.euandLecturer,RoskildeUniversity Caelainn*Barr,DataJournalist,TheGuardian Cynthia*O Murchu,Reporter,FinancialTimes

3 CONTENTS' ExecutiveSummary...2 SummaryofRecommendations...3 ListofAcronyms...4 Glossary...5 TheEUBudgetataGlance...8 HowistheEUBudgetSetUp?...9 TheMultiannualFinancialFramework...9 WhatareCommitmentandPaymentAppropriations?...10 TheEUAnnualBudget...10 WhereDoestheMoneyComeFrom?...13 WhoManagesandSpendstheMoney,andHow?...16 WhereDoestheMoneyGo?...18 TheCohesionFund(CF)...20 TheEuropeanAgriculturalFundforRuralDevelopment(EAFRD)...21 TheEuropeanMaritimeandFisheriesFund(EMFF)...22 TheEuropeanRegionalDevelopmentFund(ERDF)...23 TheEuropeanSocialFund(ESF)...23 HowTransparentistheEUBudget?...27 OverallFiscalTransparency...27 TransparencyRegulations...28 BeneficiariesofEUFunds...29 JournalisticInvestigationsandTransparencyProjectstoFollowtheMoney...31 InvestigationsintoEUFunds...31 ToolsforEUFundsDataInvestigation...34 RecommendationsandNextSteps...36 Annexes...38 Annex1bEUFundsDataset...38 Annex2bTheOpenDataAuditofEUFunds...38 Annex3bLegalBasisfortheEstablishmentoftheEUBudget...39 References...40 * EUBudgetGuidebyOpenKnowledge P 1

4 EXECUTIVE'SUMMARY' The*EU*Budget*in*Numbers TheEUhascommittedtospendingover 959,988*billionovertheperiod2014b2020. TheEUbudgetisdividedintomorethan80*funds*and*programmes. Fiveofthesefunds,theEuropeanStructuralandInvestmentsFunds(ESIF),represent33%of thetotalbudget. Around6%ofthebudgetgoestotheadministrationoftheEuropeaninstitutions,whereas around94%isallocatedtovariouseuropeanprogrammes. Therearemorethan100*authoritiesmanagingEUfunds.20%ofthesearemanageddirectlyby theeuropeancommission.theremaining80%aremanagedbyotherauthorities. RecentpollsshowthatEuropeancitizensholdtheEUtobeinaccessibleduetoitscomplexity andlackoftransparency. 1 Thelackoftransparencyanddemocraticaccountabilityin Europeaninstitutionsiswidelycharacterisedasa democraticdeficit,aphrasewhichhas becomepartoftheeu sofficialglossary. 2 This democraticdeficit isparticularlyapparent whenitcomestoeupublicfinances. Thisguideaimstohelpcivilsocietyorganisations(CSOs),journalistsandotherstonavigate thevastlandscapeofdocumentsanddatasetsabouttheeu sfiscalaffairs.indoingso,our objectiveistosupportmoreevidencebbasedjournalismandadvocacy,andbinthelonger termbtocontributetowardsthetransparency,publicunderstandinganddemocratic accountabilityofeupublicfinances. TheleveloftransparencyaboutEUpublicmoneyishighlyvariable,andislargelydependent onwhichauthorityisresponsibleformanaginganddisbursingagivenfund.fundswhichare exemplaryfortheirtransparencyexistalongsidefundswhichareeffectivelydark.for example,ononehand,thefinancialtransparencysystem(fts)setupbytheeuropean Commissionprovidesaccesstogranularopendataaboutspending,butonlyconcernsabout 20%oftotalspending.Ontheotherhand,informationaboutpublicmoneyspentbyEU MembersStatesisoftenunavailabletothepublic. TheEuropeanUnionhasnowenteredintoanewbudgetframeworkfor2014b2020.Thisis accompaniedbyanewfinancialregulation,definingnewfundsandnewtransparencyrules. However,asweshallseeinthisreport,manybarriersstillremain.Inadditiontoprovidingan overviewofkeyfundsandprogrammes,wealsoconcludewithsomeanalysisand recommendationsforfurtherworkinthisarea,whicharesummarisedbelow. 1 For example, see this analysis from the Robert Schuman Foundation on recent opinion polls: thebeuropeanbunion 2 See,http://europa.eu/legislation_summaries/glossary/democratic_deficit_en.htm EUBudgetGuidebyOpenKnowledge P 2

5 SUMMARY'OF'RECOMMENDATIONS' 1. Establish*a*single*central*point*of*referencefordataanddocumentsaboutEUrevenue, budgetingandexpenditureandensurealltheinformationisuptodateatthisdomain (e.g.atawebsitesuchasec.europa.eu/budget).atthesametime,ensurealleubudget dataareavailablefromtheeuopendataportalasopendata. 2. Create*an*open*dataset*with*key*details*about*each*EU*fund,includingnameofthe fund,heading,policy,typeofmanagement,implementingauthorities,linkto informationonbeneficiaries,linktolegalbasisineurblexandlinktoregulationineurb Lex. 3. Extend*the*Financial*Transparency*System*to*all*EU*fundsbyintegratingorfederating detaileddataexpendituresfrommembersstates,nonbeumembersandinternational organisations.dataonbeneficiariesshouldinclude,whenrelevant,auniqueeuropean identifierofcompany,andwhentheprojectiscobfinanced,theexactamountofeu fundingreceivedandthetotalamountoftheproject. 4. Clarify*and*harmonise*the*legal*framework*regarding*transparency*rulesforthe beneficiariesofeufunds. 5. Support*and*strengthen*funding*for*civil*society*groups*and*journalistsworkingonEU publicfinances. 6. Conduct*a*more*detailed*assessment*of*beneficiary*data*availabilityforallEUfunds andforallimplementingauthoritiesbe.g.,throughadedicated opendataaudit. 7. Build*a*stronger*central*base*of*evidence*about*the*uses*and*users*of*EU*fiscal*datab includingdataprojects,investigativejournalismprojectsanddatausersinthemedia andcivilsociety. EUBudgetGuidebyOpenKnowledge P 3

6 LIST'OF'ACRONYMS' ACP* * African,CaribbeanandPacific(countries) CAP CommonAgriculturalPolicy CF CohesionFund CFP CommonFisheriesPolicy CSO* * CivilSocietyOrganisation DG DirectoratebGeneral EAFRD* EuropeanAgriculturalFundforRuralDevelopment EAGF EuropeanAgriculturalGuaranteeFund EDF* * EuropeanDevelopmentFund ECA EuropeanCourtofAuditors EFF EuropeanFisheriesFund EMFF EuropeanMaritimeandFisheriesFund ERCAS EuropeanResearchCentreforAntibCorruptionandStatebBuilding ERDF EuropeanRegionalDevelopmentFund ESIF EuropeanStructuralandInvestmentFunds EU* * EuropeanUnion FIFG FinancialInstrumentforFisheriesGuidance FTS FinancialTransparencySystem GNI GrossNationalIncome ICIJ InternationalConsortiumofInvestigativeJournalists IMF InternationalMonetaryFund IMP* * IntegratedMaritimePolicy MFF* * MultiannualFinancialFramework OCTs OverseasCountriesandTerritories OLAF EuropeanAntibFraudOffice TBIJ TheBureauofInvestigativeJournalism TED* * TendersElectronicDaily TFUE* * TreatyontheFunctioningoftheEuropeanUnion TIZEU TransparencyInternationalEUOffice UN UnitedNations VAT ValuebaddedTax ' ' EUBudgetGuidebyOpenKnowledge P 4

7 EUBudgetGuidebyOpenKnowledge P 5 GLOSSARY' MostofthesedefinitionsaretakenfromtheEUGlossaryandfromthepublicationHow$the$ European$Union$Works(EuropeanCommission,2013). 3 Budget Annualfinancialplan,drawnupaccordingtobudgetary principles,thatprovidesforecastsandauthorises,for eachfinancialyear,anestimateoffuturecostsand revenueandexpendituresandtheirdetaileddescription andjustification.intheeu,ittakestheformofa regulation. Budget*Data* Informationusedinthebudgetarycyclebincluding planning,revenuesandexpenditures. Ceiling* Limitsofexpenditureorrevenuefixedbylaworby regulationsuchasintheownresourcesdecisionorin the*multiannual*financial*framework. Commitment* Legalpledgestoprovidefinance,providedthatcertain conditionsarefulfilled. Consent*Procedure* Throughthisprocedure,the*Councilhastoobtainthe European*Parliament sassentbeforecertaindecisions aretaken.theparliamentmayacceptorrejectthe Councilproposalbutcannotamendit. Council* TheinstitutionwhereministersofEUMemberStates meettodiscusseumatters,takedecisionsandpass laws.whichministersattendwhichcouncilmeeting dependsonthesubjectontheagenda.thecouncil adoptsthebudgetjointlywiththeeuropean*parliament. ItshouldnotbeconfusedwiththeEuropeanCouncil, whichbringstogetherheadsofstatesorgovernments. Discharge*(Granting*Discharge)* ThedecisionbywhichtheEuropean*Parliament,onthe basisoftherecommendationfromthecouncilandthe declarationofassuranceprovidedbytheeuropean* Court*of*Auditors,closesthelifeofanannualbudget exercise. * * 3 See:http://ec.europa.eu/budget/explained/glossary/glossary_en.cfm

8 EUBudgetGuidebyOpenKnowledge P 6 European*Commission* PoliticallyindependentexecutivearmoftheEuropean Unionthatproposeslegislation,policiesand programmesofactionsandisresponsiblefor implementingthedecisionsoftheeuropeanparliament andofthecouncil. European*Court*of*Auditors* IndependentexternalauditinstitutionoftheEuropean Union.ItchecksthattheEUbudgetiscorrectly implemented. European*Parliament* DirectlyelectedlegislativearmoftheEuropeanUnion.It sharesauthoritywiththecounciloverthebudget.at theendofthebudgetprocedure,itadoptsorrejectsthe budgetinitsentirety( discharge ). Financial*Transparency*System* Databaseofbeneficiariesofgrantsandotheraidspaid outeachyearbytheeuropeancommission. Fiscal*Transparency* TheInternationalMonetaryFund(IMF)definesfiscal transparencyasthecomprehensiveness,clarity, reliability,timeliness,andrelevanceofpublicreporting onthepast,present,andfuturestateofpublicfinances. Grants* Directfinancialcontributions,bywayofdonations,from thebudgetinordertofinanceeitheranactionintended tohelpachieveanobjectivepartofaeupolicyorthe functioningofabodywhichpursuesanaimofgeneral Europeaninterestorhasanobjectiveformingpartofa EUpolicy. Headings* IntheMultiannualFinancialFramework,theyaregroups ofeuactivitiesinbroadcategoriesofexpenditure. Multiannual*Financial*Framework* Multiannualspendingplanthattranslatesintofinancial termstheeupolicypriorities.itsets(a)limitsoneu expenditureoverafixedperiodandthusimposes budgetarydiscipline;(b)annualmaximumamounts (ceilings)ofcommitmentsforthemaincategoriesof expenditures(headings)andanoverallpayments ceilings. * *

9 EUBudgetGuidebyOpenKnowledge P 7 Open*Data* Dataisconsideredtobeopenifanyonecanfreelyuse, reuseandredistributethem,foranypurpose,without restrictions(asperopendefinition.org).thisincludes beingbothtechnicallyopenbthedatacanbe downloadedonlineinopenformatsandreadby softwarebandlegallyopenbusershavealegalrightto reusethedata. Open*Budget*Data* Publicfinancialinformationusedinthebudgetcyclethat isfreelyavailableinamachinebbreadableformattouse, modifyandshare(asperopendefinition.org). Open*Spending*Data* Informationaboutpublicexpenditurethatisfreely availableinamachinebbreadableformattouse,modify andshare(asperopendefinition.org) Open*Fiscal*Data Informationaboutpublicfinancethatisfreelyavailable inamachinebbreadableformattouse,modifyandshare (asperopendefinition.org). Ordinary*Legislative*Procedure* Mainlegislativeprocedurebywhichdirectivesand regulationsareadopted.itgivesanequalweighttothe European*ParliamentandtotheCouncil*inthedecision procedure. Own*Resources* RevenueflowingautomaticallytotheEuropeanUnion budget,pursuanttothetreatiesandimplementing legislation,withouttheneedforanysubsequent decisionbynationalauthorities. Payment* Cashorbanktransfertothebeneficiaries. Regulation Normativeact,ofgeneralapplication,bindinginits entiretyanddirectlyapplicableinalleumemberstates. Spending*Data* Spendingdataisinformationaboutpublicexpendituresb andcruciallyincludestransactionleveldata,e.g.data aboutindividualfinancialtransactions.ideallyspending datashouldcontaininformationonamount,payer, beneficiary,dateandpurposeofthetransaction(e.g.a projectorservice). Sugar*Levies* Mainlycustomsdutiesonimportsofcertainagricultural productsfromnonbeucountriesaswellasleviespaidby producersonsugar,isoglucoseandinsulinsyrup.

10 THE'EU'BUDGET'AT'A'GLANCE' * ' Source:*European*Commission.* EUBudgetGuidebyOpenKnowledge P 8

11 HOW'IS'THE'EU'BUDGET' SET'UP?' Unlikemostnationalbudgetswhichareonlysetuponanannualbasis,theEUbudgetisset upthroughtwomaininstruments:themultiannualfinancialframework(mff)forthelong term,andamorestandardannualbudgetregulation. THE'MULTIANNUAL'FINANCIAL'FRAMEWORK' TheMFFisaninstrumentwhichsetsthemaximumannualamountsbor ceilings bwhichthe EUmayspendindifferentpoliticalfieldsbor headings bforaperiodofatleast5years.in practice,themffisadoptedforaperiodof7yearsandthecurrentoneisapplicableforthe years2014b TheMFFtakestheformofaCouncilregulation,adoptedfollowingaspeciallegislative procedurecalledtheconsentprocedure: 1. TheEuropeanCommissionsubmitsaproposalforanMFFregulation; 2. TheEuropeanParliamentacceptsorrejectstheproposalbyanabsolutemajorityvote bbutitcannotamendtheproposal; 3. AftertheapprovaloftheEuropeanParliament,theCounciladoptstheMFF Regulationbyaunanimousvote. ThroughtheMFFregulation,ceilingsforeachyearconcerningcommitmentappropriations andpaymentappropriationsaredeterminedforeachofthemffheadings.headingschange fromonemfftotheother,makingcomparisonsdifficultovertheyears. Fortheperiod2014/2020,theheadingsare: Smartandinclusivegrowthincluding: Competitivenessforgrowthandjobs; Economic,socialandterritorialcohesion; Sustainablegrowth:naturalresources; Securityandcitizenship; GlobalEurope; Administration; Compensation. 4 See Council regulation n 1311/2013 of 2 December 2013 laying down the multiannual financial frameworkfortheyears2014b2020. EUBudgetGuidebyOpenKnowledge P 9

12 Theframeworkalsosetsupceilingsforanumberofinstrumentsestablishedoutsidethe generalheadingsandknownastheflexibilityandspecialinstruments,suchas(1)the EmergencyAidReserve;(2)theEuropeanUnionSolidarityFund;(3)theFlexibility Instrument; 5 (4)theEuropeanGlobalisationAdjustmentFund;(5)theContingencyMargin;(6) theglobalmarginforcommitmentsforgrowthandemployment,inparticularyouth employment.theseinstrumentsenabletheeutomobilisethenecessaryfundstoreactto unforeseenevents(financialcrisis,emergencysituations). Onespecificinstrument,theEuropeanDevelopmentFund(EDF)ismanagedoutsidethe frameworkofthemffandgovernedbyitsownsetofrules.theedfprovidesdevelopment aidtoafrican,caribbeanandpacific(acp)countries,aswellastooverseascountriesand Territories(OCTs).ItisbasedonanACPbEUPartnershipAgreementknownasthe Cotonou Agreement,whichisrevisedeveryfiveyears,anditisfinancedbydirectcontributionsfrom EUMemberStates.TheresourcesforthecurrentEDFamountto30.5billioneurosforthe period2014b2020. WHAT'ARE'COMMITMENT'AND'PAYMENT' APPROPRIATIONS?' IntheEUannualbudgetandintheMFFregulations,authorisedexpenditureamountsare expressedinbothcommitmentandpayment*appropriations. Commitmentsarelegalpledgestoprovidefinance,providedthatcertainconditions arefulfilled.theeucommitsitselftoreimburseitsshareofthecostsofaneub fundedprojectwhentheprojectiscompleted. Paymentsarecashorbanktransferstobeneficiaries.Today scommitmentsare tomorrow spayments. 6 Thismeansforinstancethat2015paymentsareactually2014commitments.Inpractice,this impliesthattheeudoesnotfinanceaprojectinadvance.someone,amemberstateinmost ofthecases,wouldhavetoprovidethefundsbeforehandbeforebeingreimbursedbythe EU. Theceilingsofthe2014b2020MFFare959,988*billion*eurosincommitmentappropriations and908,4*billion*eurosinpaymentappropriations.thisrepresentsadecreasecomparedto the2007b2013mff,whoseceilingincommitmentappropriationswasupto994,176billion euros.themainareasaffectedbythisdecreasearethecohesionpolicy,undertheheading SmartandInclusiveGrowth(b8%)andtheAgricultureandRuralDevelopmentPolicy,under theheadingsustainablegrowth:naturalresources(b11%). 7 THE'EU'ANNUAL'BUDGET' 5 TheFlexibilityInstrumentwasusedtofinancetheJunckerPlan:http://ec.europa.eu/priorities/jobsb growthbinvestment/plan/docs/anbinvestmentbplanbforbeurope_com_2014_903_en.pdf. 6 SeetheEUFundingGlossary. 7 SeetheAssemblyofEuropeanRegionsbriefingnote. EUBudgetGuidebyOpenKnowledge P 10

13 Everyyear,aregulationisadoptedtosetuptheannualbudgetoftheEU.Thisbudgetis basedonthemffandtheprocedurefollowedistheordinarylegislativeprocedure. 8 Oneof theguidingprinciplesforestablishingtheannualbudgetisthat the$revenue$and$expenditure$ shown$in$the$budget$must$be$in$balance. 9 * * Figure*1:*EU*annual*budget*regulation*adoption*procedure.Source:EuropeanCommission. Theannualbudgetregulationisdividedintoseveralsectionsdetailing,foreachoftheEU institutions,therelevantrevenue,expenditureandstaffallocated.thelargestsectionofthe regulationconcernstheeuropeancommission,whichisresponsibleformanagingtheeu policies. 8 Theordinarylegislativeprocedurestepbystep. 9 Article310oftheTreatyontheFunctioningoftheEuropeanUnion(TFEU). EUBudgetGuidebyOpenKnowledge P 11

14 Fortheyear2015,thebudgetamountsto: billionincommitmentappropriations; billioninpaymentappropriations(thisrepresentsanincreaseof1,57% comparedtothe2014euannualbudget); billioninbudgetaryrevenue. 10 Itispossibletoamendthebudgetafteritsadoption. AnnualactivityreportsarepreparedeveryyearbyeachDirectoratebGeneral(DG)and containthedg sannualaccountsandfinancialreports.thesereportsaresummarisedina synthesisreport,senttotheeuropeanparliament,thecouncilandtheeuropeancourtof Auditors(ECA). Inaddition,anannualreportonbudgetaryandfinancialmanagementispublishedeveryyear bythecommission. 11 InNovembereveryyear,theCourtofAuditorspublishespublicreportsonthe implementationoftheeubudgetandtheedfbythecommission.basedonthesereports, theeuropeanparliamentexpressesanopinionontheimplementationofthebudgetbythe EuropeanCommission.Ifthisopinionispositive,itmeansthattheParliamenthasgranted dischargetothecommissionforthisfinancialyear. 12 ' 10 Definitive adoption (EU, EURATOM) 2015/339 of the European Union's general budget for the financialyear The2014reportisavailableonline: 12 ReportsoftheECA. EUBudgetGuidebyOpenKnowledge P 12

15 WHERE'DOES'THE'MONEY' COME'FROM?' ThesourcesoftheEUrevenuearecalledtheEU s ownresources.acouncildecisionon OwnResources,settinguptherulesapplyingtotheircalculation,isusuallynegotiatedatthe sametimeasthemffregulation.resourcesarethenprovidedonanannualbasis. ThedifferencewiththeMFFregulationisthattheCouncilDecisionhastobeapprovedbyall thememberstatesbeforeitcomesintoforcebusuallythroughavoteinnational parliaments.thisexplainswhy,asofapril2015,thecouncildecisionontheeu sown resourcesdatesbackfrom andcontinuestoapplyuntilthenewcouncildecision, adoptedinmay2014bythecouncil,comesintoforce. 14 Whenthe2014Decisionwillbe approvedbyallthememberstates,itwillapplyretroactivelyasof1january2014. TheEU sownresourcesaredividedintoseveralcategories: Customs*duties*on*EU*imports:theyarisefromtheapplicationofthecommon customstariffsandarecollectedonimportsfromthirdcountriesattheexternal bordersoftheeu. Agricultural*duties*and*sugar*levies:theyconsistmainlyofcustomsdutiesonimports fromnonbeucountriesofagriculturalproductssubjecttothecommonorganisationof themarketsandleviesonsugar,isoglucoseandinsulinsyrup. Customsduties,agriculturaldutiesandsugarleviesarealsoreferredastheEU* traditional * own*resources. The*VATZbased*own*resources:thesearenationalcontributionsbasedonharmonised VATbasesforMemberStates. The*GNIZbased*own*resources:thisrevenueisbasedonanuniformcallrateapplied tothegrossnationalincome(gni)ofeachmemberstate. Other*revenues:*itincludestaxesonEUstaff;contributionsfromnonbMemberStates andfinesimposedoncompanies. ThecollectionofrevenuesdoesnotapplyuniformlytoallEUMemberStates,asratherad= hoccorrection*mechanismsalsoexist.thethreemaincorrectionmechanismsare: The*UK*rebate:theUKisreimbursedapercentageofthedifferencebetweenits contributionandwhatitreceivesbackfromtheeubudget(asoftoday,66%ofthe difference).tocompensatethisloss,allothermemberstateshavetomakean additionalcontributiontothebudgetinproportiontothesharetheycontributetothe EU sgni.althoughcontroversial,theukrebatehasbeenmaintainedbythe2014 CouncilDecisionontheEUownresources; 13 CouncilDecisionof7June2007onthesystemoftheEuropeanCommunities'ownresources CouncilDecisiononthesystemofownresourcesoftheEuropeanUnion. EUBudgetGuidebyOpenKnowledge P 13

16 LumpZsum*payments:somecountries(Denmark,theNetherlandsandSweden) benefitfromgrossreductionsintheirannualgnicontributions; Reduced*VAT*call*rates*forGermany,theNetherlandsandSweden. 15 Aspreviouslynoted,theEuropeanDevelopmentFundisnotconcernedbytheserules,asitis financeddirectlybythememberstatesandhasitsownfinancialregulations. 16 ' 15 AstheUKrebate,lumpsumpaymentsandreducedVATcallratesarecorrectionmechanisms,that is to say measures taken to compensate Member States whose contribution to the EU budget is perceivedasbeingtoohighcomparedtotheirrelativewealthandthebenefitstheygetoutoftheeu budget. 16 Council regulation (EU) 2015/323 of 2 March 2015 on the financial regulation applicable to the 11thEuropeanDevelopmentFund EUBudgetGuidebyOpenKnowledge P 14

17 Figure*2:*EU*own*resources*contribution*per*Member*States*(Budget*2013) Sourceofthedata:EuropeanCommissionbMadewithraw.densitydesign.org EUBudgetGuidebyOpenKnowledge P 15

18 WHO'MANAGES'AND'SPENDS'THE'MONEY,'AND' HOW?' TheEuropeanCommissionhastheoverallresponsibilityoftheimplementationoftheEU budget,butdoesnotdirectlymanagealleufunds.indeed,thesefundscanbespentin severaldifferentways: Throughcentralised*management:themoneyismanageddirectlybytheEuropean Commission(e.g.throughtheselectionofcontractorsortheawardofgrants)bthisis centralised*direct*managementborindirectlybyeuexecutiveagencies,decentralised agenciesornationalagenciesbthisiscentralised*indirect*management; Throughshared*management(thismethodaccountsforaround80%oftheEU budget):thereisadelegationofbudgetimplementationtoeumemberstates; Throughdecentralised*management:thereisadelegationofbudgetimplementation tononbeucountries; Throughjoint*management:thereisadelegationofbudgetimplementationto intergovernmentalandinternationalorganisations. Onefundcanbespentindifferentways(forexample,throughcentralisedandshared management).for*each*fund,*a*specific*regulation*is*adopted*which*defines*the*rules*related* to*its*implementation.* * Figure*3.*Budget*Management*Overview Source:EuropeanCommission Ultimately,alargenumberofentitiesareinvolvedinthespendingoftheEUbudget. The*Commission*itself*and*its*agencies.*Inthatcase,moneywillbedirectlyspent throughgrants,contracts,oradministrativeexpenditures. National*and*regional*authorities*in*EU*Member*States; Authorities*in*nonZEU*countrieswhichreceivefinancialsupportfromtheEU; International*organisationssuchastheUnitedNationsortheWorldBank. Asageneralrule,thecobfinancingprincipleusuallyappliestoEUspending,especiallywhenit EUBudgetGuidebyOpenKnowledge P 16

19 comestosharedmanagement.throughthisrule,partofthecostofanactionortherunning costsofanentityisbornebythebeneficiaryofthegrantorbycontributorsotherthanthe EuropeanCommission,withtheaimtomakebeneficiariesresponsiblefortheoperationaland financialviabilityoftheirprojects.someflexibilityneverthelessexiststoallowforthefull financingofsomeprojectswitheufunds. OtherrulesusuallyapplicabletofundingprojectswithEUmoneyare:thenonbprofitrule;the nonbretroactivityruleandthenonbcumulativerule. 17 ' 17 Seeforexamplethispresentation. EUBudgetGuidebyOpenKnowledge P 17

20 WHERE'DOES'THE'MONEY' GO?' TheEuropeanUnionhasabudgettopayforpoliciescarriedoutattheEuropeanlevelandfor theinstitutionsdeciding,managingandimplementingthesepolicies(thecommissionandits DirectoratesbGeneral,theParliament,theagencies,theCouncil,etc.). ThespendingprioritiesaresetintheMFFwhendefiningtheamountofthefundsunderits headings.forthe2014b2020mff,theprioritiesarecreatinggrowthandjobsandreducing economicgapsbetweentheeu'svariousregions. 18 Agriculture,ruraldevelopment,fisheries andenvironmentalprotectionaccountforamajorshareofthebudget. Eachheadingisthensplitintoprogrammesandfundswhichfinancetheimplementationof EUpolicies.Thefinalbeneficiariescanbeanypersonororganisation(company,research organisation,localcouncil,etc.)fromtheeumemberstatesandbeyond. AstheprogrammesandfundsaremanagedbyvariousentitiesbelongingornottotheEU institutions,there*is*currently*no*central*database*of*all*the*eu*spending*beneficiaries. The*European*Structural*and*Investment*Funds*(ESIF) AverylargeamountoftheEUbudgetisspentthrough5fundsknownastheEuropean* Structural*and*Investment*Funds*(ESIF).*Indeed,withatotalof366.9billioneurosforthe 2014b2020period,theESIFmakeupmorethanonethirdoftheEU sbudget.tothesefunds, inadditiontothespecificregulationsregardingtheirimplementation,appliesasinglesetof commonrulesdefinedinthecommonprovisionsregulation,withtheobjectivesof: EstablishingaclearlinkwiththeEurope2020Strategy; 19 Improvingcoordination; Ensuringconsistentimplementation; Makingaccesstothefundsasstraightforwardaspossibleforthosewhomaybenefit fromthem. 20 TheESIFaremanagedunderthesharedmanagementmechanism,whichprovidesthat MembersStatesarecobresponsibleforthefundsand,assuch,mustcomplywithspecific controlandauditprocedures. In2014,MemberStateshadtoprepareandnegotiatewiththeCommissionsobcalled PartnershipAgreements(strategicplanswiththeirinvestmentprioritiescoveringthefive ESIF).Then,theyadoptedOperationalProgrammes,whichbreakdowntheinvestment prioritiesandobjectivesofthepartnershipagreementsintoconcreteactions.the OperationalProgrammesaremanagedbythemanaging/nationalauthoritiesappointedby eachmemberstate.applicationsforfundingarethensubmittedtothenationalorregional 18 The12highlightsforthe2014/2020MFF. 19 Europe2020isthe10byeargrowthstrategyoftheEuropeanUnionfortheperiod2010b2020.See 20 EuropeanCommissionESIFwebpage. EUBudgetGuidebyOpenKnowledge P 18

21 authoritymanagingtherelevantprogramme. The5ESIFforthe2014b2020periodare: TheCohesionFund(CF); TheEuropeanAgriculturalFundforRuralDevelopment(EARDF); TheEuropeanMaritimeandFisheriesFund(EMFF) TheEuropeanRegionalDevelopmentFund(ERDF); TheEuropeanSocialFund(ESF). Belowaredetailsforeachofthe5ESIFs. ' EUBudgetGuidebyOpenKnowledge P 19

22 THE'COHESION'FUND'(CF)' MFF*heading Funds Policy*supported SmartandInclusiveGrowthbEconomic,SocialandTerritorialCohesion CohesionFund RegionalandUrbanPolicy 2014Z2020*MFF*ceiling 63399million 21 Managing*Member*States Managing*DirectorateZ General Website Bulgaria,Croatia,Cyprus,CzechRepublic,Estonia,Greece,Hungary,Latvia, Lithuania,Malta,Poland,Portugal,Romania,Slovakia,Slovenia DirectoratebGeneralforRegionalandUrbanPolicy(DGREGIO) TheaimoftheCFistoreduceeconomicandsocialdisparitiesandtopromotesustainable developmentinmemberstateswhosegniperinhabitantislessthan90%oftheeuaverage. ThefundinggoestoactivitiessupportingtheestablishmentoftransbEuropeantransport networksortoprojectsrelatedtoenergyortransportaslongastheyclearlybenefitthe environment. Beneficiaries: For*funds*under*shared*management,DGREGIOmanagesawebsitewithamap providingdirectlinkstolistsofbeneficiariesprovidedbyeumemberstates,butthe pagedoesnotmakeacleardistinctionbetweenthebeneficiariesofspendingunder thecforundertheeuropeanregionaldevelopmentfund(erdf): For*funds*under*centralised*direct*management,alistofbeneficiariesuntil2013is availableinthefts,undertheheading CohesionFunds : ' 21 Initial amount was million but in accordance with regulation 1303/2013 (art. 92(6) and 92(7)),partsofthisamounthavebeentransferredtotheConnectingEuropeFacilityandtotheFund foreuropeanaidtothemostdeprived. EUBudgetGuidebyOpenKnowledge P 20

23 THE'EUROPEAN'AGRICULTURAL'FUND'FOR'RURAL' DEVELOPMENT'(EAFRD)' MFF*heading Funds Policy*supported 2014Z2020*MFF*ceiling Managing*Member*States Managing*DirectorateZ General Website SustainableGrowth:NaturalResources EuropeanAgriculturalFundforRuralDevelopment(EAFRD) AgricultureandRuralDevelopment million EU28 DirectoratebGeneralforAgricultureandRuralDevelopment(DGAGRI) TheEAFRDisoneofthetwoEUfundswhichfinancetheCommonAgriculturalPolicy(CAP), theotheronebeingtheeuropeanagriculturalguaranteefund(eagf),whichisnotan ESIF. 22 TheCAP,theagriculturalpolicyoftheEU,wasestablishedin1962andlastreformed in2013tofocuson3priorities:(i)viablefoodproduction;(ii)sustainablemanagementof naturalresources;(iii)balanceddevelopmentofruralareasthroughouttheeu.inthis context,theeafrdfocusesontheeu scontributiontoruraldevelopmentprogrammesand isimplementedthroughsharedmanagementwitheumemberstates. TheoverallCAPbudgethasdecreasedovertheyears,butstillrepresentsasignificantshare oftheeubudget:from71%in1984to39%in2013. Beneficiaries: For*funds*under*shared*management,*DGAGRImanagesawebsitewithlinksto MemberStateswebsitesprovidinginformationonbeneficiariesofCAPpayments (althoughthereisnocleardistinctionbetweenbeneficiariesoftheeafrdandthe EAGF):http://ec.europa.eu/agriculture/capb funding/beneficiaries/shared/index_en.htm For*funds*under*centralised*direct*management,*alistofbeneficiariesuntil2013is availableinthefts:http://ec.europa.eu/budget/fts/index_en.htm ' 22 TheEAGFisthefundfinancingdirectpaymentstofarmersandmeasuresregulatingorsupporting theagriculturalmarket.astheeafrd,itismanagedbydgagri,butrepresentsamoresignificant shareoftheeubudget(around80%ofthecapbudget). EUBudgetGuidebyOpenKnowledge P 21

24 EUBudgetGuidebyOpenKnowledge P 22 THE'EUROPEAN'MARITIME'AND'FISHERIES'FUND' (EMFF)' MFF*heading SustainableGrowth:NaturalResources Funds EuropeanMaritimeandFisheriesFund(EMFF).Previouslycalledthe FinancialInstrumentforFisheriesGuidance(FIFGbfortheperiod1996b 2006)andtheEuropeanFisheriesFund(EFFbfortheperiod2007b2013) Policy*supported MaritimeAffairsandFisheries 2014Z2020*MFF*ceiling million Managing*Member*States EU28,Luxembourgexcepted Managing*DirectorateZ General DirectoratebGeneralforMaritimeAffairsandFisheries(DGMARE) Website TheEMFFsupportstheimplementationoftheEuropeanCommonFisheriesPolicy(CFP)and oftheeuintegratedmaritimepolicy(imp)fortheperiod2014b2020.theobjectivesofthe EMFFare:i)tohelpfishermeninthetransitiontosustainablefishing;ii)tosupportcoastal communitiesindiversifyingtheireconomies;iii)tofinanceprojectsthatcreatenewjobsand improvequalityoflifealongeuropeancoasts.inordertoreachthisobjective,11%ofthe fundismanageddirectlybytheeuropeancommissiontosupporteubwideobjectivesin maritimeandcoastalaffairs,whereastheremaining89%aremanagedbyeumemberstates onthebasisofcobfinancing.inthelastcase,eachcountryisallocatedashareofthetotal fundbudget,basedonthesizeofitsfishingindustrybthismakesspainthebiggest beneficiaryoftheemff. ApartoftheMFFceilingdedicatedtotheEMFF( 900million)hasbeenattributedtothe establishmentandmanagementofsustainablefisheriespartnershipagreementswiththird countries.veryoftencriticised,thesepartnershipagreementsobeytodifferentfinancialrules thanthegeneralrulesapplicabletotheemff(see: Beneficiaries: For*funds*under*shared*management,*DGMAREmaintainsawebsitewithlinkstothe websitesofmemberstatesprovidinginformationonbeneficiariesofemffpayments (although,forsomecountries,theinformationpresentedseemstobeoutdated): iative/index_en.htm For*funds*under*centralised*direct*management,alistofbeneficiariesuntil2013is availableinthefts:http://ec.europa.eu/budget/fts/index_en.htm '

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