Where Does the Money Go?

The European Union has a budget to pay for policies carried out at the European level and for the institutions deciding, managing and implementing these policies (the Commission and its Directorates-General, the Parliament, the agencies, the Council, etc.).

The spending priorities are set in the MFF when defining the amount of the funds under its headings. For the 2014-2020 MFF, the priorities are creating growth and jobs and reducing economic gaps between the EU’s various regions.1 Agriculture, rural development, fisheries and environmental protection account for a major share of the budget.

Each heading is then split into programmes and funds which finance the implementation of EU policies. The final beneficiaries can be any person or organisation (company, research organisation, local council, etc.) from the EU Member States and beyond.

As the programmes and funds are managed by various entities belonging or not to the EU institutions, there is currently no central database of all the EU spending beneficiaries. 

The European Structural and Investment Funds (ESIF)

A very large amount of the EU budget is spent through 5 funds known as the European Structural and Investment Funds (ESIF).Indeed, with a total of 366.9 billion euros for the 2014-2020 period, the ESIF make up more than one third of the EU’s budget. To these funds, in addition to the specific regulations regarding their implementation, applies a single set of common rules defined in the Common Provisions regulation, with the objectives of:

  • Establishing a clear link with the Europe 2020 Strategy;2
  • Improving coordination;
  • Ensuring consistent implementation;
  • Making access to the funds as straightforward as possible for those who may benefit from them.3

The ESIF are managed under the shared management mechanism, which provides that Members States are co-responsible for the funds and, as such, must comply with specific control and audit procedures.

In 2014, Member States had to prepare and negotiate with the Commission so-called Partnership Agreements (strategic plans with their investment priorities covering the five ESIF). Then, they adopted Operational Programmes, which break down the investment priorities and objectives of the Partnership Agreements into concrete actions. The Operational Programmes are managed by the managing/national authorities appointed by each Member State. Applications for funding are then submitted to the national or regional authority managing the relevant programme.

The  5 ESIF  for the 2014-2020 period are:

  • The Cohesion Fund (CF);
  • The European Agricultural Fund for Rural Development (EARDF);
  • The European Maritime and Fisheries Fund (EMFF)
  • The European Regional Development Fund (ERDF);
  • The European Social Fund (ESF).

Below are details for each of the 5 ESIF.

The Cohesion Fund (CF)


MFF heading

Smart and Inclusive Growth - Economic, Social and Territorial Cohesion

Funds

Cohesion Fund

Policy supported

Regional and Urban Policy

2014-2020 MFF ceiling

€63 399 million[19]

Managing Member States

Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia

Managing Directorate-General

Directorate-General for Regional and Urban Policy (DG REGIO)

Website

http://ec.europa.eu/regional_policy/en/funding/cohesion-fund/

The aim of the CF is to reduce economic and social disparities and to promote sustainable development in Member States whose GNI per inhabitant is less than 90% of the EU average. The funding goes to activities supporting the establishment of trans-European transport networks or to projects related to energy or transport as long as they clearly benefit the environment.

Beneficiaries: 

  • For funds under shared management, DG REGIO manages a website with a map providing direct links to lists of beneficiaries provided by EU Member States, but the page does not make a clear distinction between the beneficiaries of spending under the CF or under the European Regional Development Fund (ERDF): http://ec.europa.eu/regional_policy/en/atlas/beneficiaries/
  • For funds under centralised direct management, a list of beneficiaries until 2013 is available in the FTS, under the heading “Cohesion Funds”: http://ec.europa.eu/budget/fts/index_en.htm

The European Agricultural Fund for Rural Development (EAFRD)


MFF heading

Sustainable Growth: Natural Resources

Funds

European Agricultural Fund for Rural Development (EAFRD)

Policy supported

Agriculture and Rural Development

2014-2020 MFF ceiling

€95 577.052 million

Managing Member States

EU28

Managing Directorate-General

Directorate-General for Agriculture and Rural Development (DG AGRI)

Website

http://ec.europa.eu/agriculture/cap-funding/index_en.htm

The EAFRD is one of the two EU funds which finance the Common Agricultural Policy (CAP), the other one being the European Agricultural Guarantee Fund (EAGF), which is not an ESIF.4 The CAP, the agricultural policy of the EU, was established in 1962 and last reformed in 2013 to focus on 3 priorities: (i) viable food production; (ii) sustainable management of natural resources; (iii) balanced development of rural areas throughout the EU. In this context, the EAFRD focuses on the EU’s contribution to rural development programmes and is implemented through shared management with EU Member States.

The overall CAP budget has decreased over the years, but still represents a significant share of the EU budget: from 71% in 1984 to 39% in 2013.

Beneficiaries:

The European Maritime and Fisheries Fund (EMFF)


MFF heading

Sustainable Growth: Natural Resources

Funds

European Maritime and Fisheries Fund (EMFF). Previously called the Financial Instrument for Fisheries Guidance (FIFG - for the period 1996-2006) and the European Fisheries Fund (EFF - for the period 2007-2013)

Policy supported

Maritime Affairs and Fisheries

2014-2020 MFF ceiling

€7 404.84 million

Managing Member States

EU28, Luxembourg excepted

Managing Directorate-General

Directorate-General for Maritime Affairs and Fisheries (DG MARE)

Website

http://ec.europa.eu/fisheries/cfp/emff/index_en.htm

The EMFF supports the implementation of the European Common Fisheries Policy (CFP) and of the EU Integrated Maritime Policy (IMP) for the period 2014-2020. The objectives of the EMFF are: i) to help fishermen in the transition to sustainable fishing; ii) to support coastal communities in diversifying their economies; iii) to finance projects that create new jobs and improve quality of life along European coasts. In order to reach this objective, 11% of the fund is managed directly by the European Commission to support EU-wide objectives in maritime and coastal affairs, whereas the remaining 89% are managed by EU Member States on the basis of co-financing. In the last case, each country is allocated a share of the total fund budget, based on the size of its fishing industry - this makes Spain the biggest beneficiary of the EMFF.

A part of the MFF ceiling dedicated to the EMFF (€900 million) has been attributed to the establishment and management of sustainable fisheries partnership agreements with third countries. Very often criticised, these partnership agreements obey to different financial rules than the general rules applicable to the EMFF (see: http://ec.europa.eu/fisheries/cfp/international/agreements/index_en.htm).

Beneficiaries:

The European Regional Development Fund (ERDF)

MFF heading

Smart and Inclusive Growth - Economic, Social and Territorial Cohesion

Funds

Less-developed regions; More developed regions; Outermost and sparsely populated regions; Transition regions; Territorial cooperation.

Policy supported

Regional and Urban Policy

2014-2020 MFF ceiling

€187.4 million

Managing Member States

EU28

Managing Directorate-General

Directorate-General for Regional and Urban Policy (DG REGIO)

Website

http://ec.europa.eu/regional_policy/en/funding/erdf/ 

The ERDF was established in 1975. For the 2014-2020 period, its objectives are to strengthen economic and social cohesion in the EU by correcting imbalances between its regions. To do so, it focuses on several key priority areas: (i) innovation and research; (ii) the digital agenda; (iii) support for small and medium-sized enterprises; (iv) the low-carbon economy.

EU regions are classified into several categories (see the map presenting this classification). Depending on this classification, different rules apply:

  • In more developed regions, at least 80% of the funds must focus on at least two of the key priorities;
  • This is 60% of the funds in transition regions;
  • And 50% in less-developed regions.

Implementation of the ERDF is made at the regional and national levels through the principles of shared management and of co-financing. The Commission retains a supervisory role.

The ERDF is not established as such in the MFF and in the annual budget regulations. The money channeled through this fund comes from different budget lines, such as “Less-developed regions”, “More developed regions” or “Transition regions”. These budget lines are also used to finance other funds such as the European Social Fund (ESF), making it difficult for the public to determine the exact amount of money invested in the ERDF.

Beneficiaries:

The European Social Fund (ESF)

MFF heading

Smart and Inclusive Growth - Economic, Social and Territorial Cohesion

Funds

Less-developed regions; More-developed regions; Transition regions; Youth Employment Initiative

Policy supported

Employment, Social Affairs and Inclusion

2014-2020 MFF ceiling

€86.4 million

Managing Member States

EU28

Managing Directorate-General

Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL)

Website

http://ec.europa.eu/esf/home.jsp?langId=en

The ESF is the EU’s main instrument for supporting jobs, helping people to get better jobs and ensuring fairer job opportunities. For the 2014-2020 period, priorities are to boost the adaptability of workers; improving access to employment and helping people from disadvantaged groups to get jobs.

The ESF is implemented through the system of shared management, together with EU Member States, and according to the co-financing principle. Co-financing rates vary between 50% and 85% of the total project costs depending on the relative wealth of the region (see the map presenting the classification of the EU regions into different categories).

The ESF is not established as such in the MFF and in the annual budget regulations. The money channeled through this fund comes from different budget lines, such as “Less-developed regions”, “More developed regions” or “Transition regions”. These budget lines are also used to finance other funds such as the European Regional Development Fund (ERDF), making it difficult for the public to determine the exact amount of money invested in the ESF. In addition, and even if it is included under a different budget heading, the Youth Employment Initiative appears to be managed under the framework of the ESF.

Beneficiaries:




Figure 5: Share of the EU budget per headings and funds (2015 Appropriation Commitments)


Source of the data: European Commission -  Made with Many Eyes (IBM)




Figure 4: Members States contributors vs. beneficiaries (budget 2013)

Source of the data: European Commission - Made with raw.densitydesign.org


All Funds

Actions financed under the prerogatives of the Commission and specific competences conferred to the Commission **

Asylum, Migration and Integration Fund (AMIF) To promote the efficient management of migration flows and the implementation, strenghtening and development of a common Union approach to asylum and immigration.

Cohesion Fund (CF) To reduce economic and social disparities and to promote sustainable development in EU Member States whose GNI per inhabitant is less than 90% of the EU average.

Commission Administrative expenditure of the European Commission.

Committee of the Regions Administrative expenditure of the Committee of the Regions.

Common Foreign and Security Policy (CFSP) To preserve peace and strenghten international security, to promote international cooperation, to develop and consolidate democracy, the rule of law and respect for human rights and fundamental freedoms.

Compensations Temporary heading which includes temporary payments relating to the latest expansion of the EU.

Competitiveness of Enterprises and SMEs (COSME) To support the competitiveness,growth and sustainability of EU’s enterprises,in particular SMEs,and to promote entrepreneurship.

Connecting Europe Facility (CEF) - CF Contribution To contribute to the Connecting Europe Facility programme for transport infrastructure projects in Member States eligible to the Cohesion Fund.

Consumer Programme To support the EU consumer policy in the years to come, to help the citizens to fully enjoy their consumer rights and actively participate in the Single Market.

Contingency Margin Last resort instrument to react to unforeseen circumstances (established outside the ceilings of the MFF).

COPERNICUS European programme for the establishment of a European capacity for Earth observation.

Court of Auditors Administrative expenditure of the European Court of Auditors.

Court of Justice of the European Union Administrative expenditure of the Court of Justice of the European Union.

Creative Europe To support European cinema and the cultural and creative sectors,enabling them to increase their contribution to jobs and growth.

Customs,Taxation and Fight Against Fraud There are 4 programmes implemented under this fund: For customs and taxation: the Customs 2020 programme supports the functionning and modernisation of the Customs Union. The Fiscalis 2020 programme supports the functionning of the taxation systems in the Union. For the fight against fraud: the Pericles 2020 programme aims at combating euro-counterfeiting in Europe and worldwide. The Hercule III programme is dedicated to fighting fraud, corruption and any other illegal activities affecting the financial interests of the EU.

Decentralised agencies **

Development Cooperation Instrument (DCI) To combat poverty in developing countries.

Emergency Aid Reserve Response to unforeseen aid requirements from third countries

Employment and Social Innovation (EaSI) To support employment and social policies across the EU.

Energy Projects to aid economic recovery This fund is from the previous MFF and will no longer be active this year.

Environment and Climate Action (LIFE programme) EU’s financial instrument supporting environmental, nature conservation and climate action projects throughout the EU.

Erasmus + To boost skills and employability, as well as modernising Education,Training and Youth work.

EU Aid Volunteers To strenghten the UE capacity to deliver needs based humanitarian aid by providing professionnal support through the deployment of trained volunteers to people in need whilst also local organisations with capacity building measures.

EU Civil Protection and European Emergency Response Coordination Centre To coordinate the EU’s response to natural and manmade disasters within and outside the EU.

EU Civil Protection Mechanism To coordinate the EU’s response to natural and manmade disasters within and outside the EU.

Euratom Research and Training Programme To pursue nuclear research and training activities with an emphasis on continually improving nuclear safety, security and radiation protection.

Europe for Citizens This programme offers funding support in two different thematic areas: European Remembrance and Democratic Engagement and civic participation.

European Agricultural Fund for Rural Development (EAFRD) One of the two EU funds to finance the Common Agricultural Policy (CAP). It finances the EU’s contribution to rural development programmes.

European Agricultural Guarantee Fund (EAGF) One of the two EU funds to finance the Common Agricultural Policy (CAP). It finances direct payments to farmers and measures regulating or supporting agricultural markets.

European Aid to the Most Deprived (FEAD) To support EU countries’ actions to provide material assistance to the most deprived.

European Council and Council Administrative expenditure of the European Council and Council.

European data-protection Supervisor Administrative expenditure of the European data-protection Supervisor.

European Development Fund (EDF) Main instrument for EU aid for development cooperation in ACP countries and in OCTs.It is managed outside the general budget and funded by voluntary direct contributions from EU countries.

European Economic and Social Committee Administrative expenditure of the European Economic and Social Committee.

European External Action Service Administrative expenditure of the European External Action Service.

European Fund for Strategic Investments (EFSI) To support strategic investments such as in broadband and energy networks, as well as smaller companies with fewer than 3000 companies. This fund was only recently established and is therefore not included in the current MFF regulation (this explains the 0 in column F). The money necessary for its functioning will be provisioned on the basis of existing budget reserves and of the reallocation of certain, limited amounts for the Connecting Europe Facility and Horizon 2020.

European Globalisation Adjustment Fund To provide support to people losing their jobs as a result of major structural changes in world trade patterns due to globalisation or as a result of the global economic and financial crisis.

European Instrument for Democracy and Human Rights (EIDHR) To contribute to establish democracy and the rule of law and to protecting human rights and the basic freedoms in non-EU countries.

European Maritime and Fisheries Fund (EMFF) EU financial instrument for the Common Fisheries Policy (CFP) for the period 2014/2020. Previous funds were: the Financial Instrument for Fisheries Guidance (FIFG) for the period 1996/2006 and the European Fisheries Fund (EFF) for the period 2007/2013. The budget indicated in this fund also comprises the part dedicated to sustainable fisheries partnership agreements with third countries.

European Neighbourhood Instrument To strenghten relations with neighbourhood countries and bring tangible benefits to both the EU and its partners.

European Ombudsman Administrative expenditure of the European Ombudsman.

European Parliament Administrative expenditure of the European Parliament.

European satellite navigation systems (EGNOS and Galileo) To build EU’s own state of the art Global Navigation SatelliteSystem (GNSS) to provide accurate and guaranteed positioning for all types of civilian applications.

European Schools **

European Union Solidarity Fund Response to major disasters in Member States or candidate countries

Flexibility instrument To allow the financing,for a given financial year, of clearly identified expenditure which could not be financed within the limits of the ceilings available for one or more other headings.

Food and Feed To strenghten the enforcement of health and safety standards for the whole agrifood chain.

Guarantee fund for External Actions To cover default on loans and loan guarantees granted to non-EU States or for projects in non-EU States.

Health To encourage cooperation between Member States to improve the health policies that benefit their citizens.

Horizon 2020 Horizon 2020 is the EU Framework Programme for research and innovation.

Humanitarian Aid To provide assistance, relief and protection to people outside the EU victims of natural or manmade disasters.

Instrument Contributing to Stability and Peace To strengthen security in partner countries facing crisis situations and to guarantee security in stable countries.

Instrument for Nuclear Safety Cooperation (INSC) To promote a high level of nuclear safety,radiation protection and the application of efficient and effective safeguards of nuclear material in non-EU countries worldwide.

Instrument for Pre-accession Assistance (IPA II) To provide assistance to countries directly in line to become members of the EU.

Internal Security Fund (ISF) To promote the implementation of the Internal Security Strategy, law enforcement cooperation and the management of the Union’s external borders.It is implemented through two instruments: ISF Borders and visas and ISF Police.

IT Systems In order to cooperate on border management,a Visa Information System (VIS) and a Schengen Information System (SIS) are established at the EU level.

ITER An international collaborative project to demonstrate the potential of nuclear fusion as an energy source.

Justice Programme To ensure that EU legislation in civil and criminal justice is effectively applied.

Less-developed regions This programme is directed towards European regions whose GDP is less than 75% of the EU average. Funding is made available through the European Regional Development Fund (ERDF) and the European Social Fund (ESF).

Macro-financial assistance (MFA) For non-EU countries only: to restore a sustainable external financial situation while encouraging economic adjustments and structural reforms. It complements financing from the International Monetary Fund (IMF).

More developed regions This programme is directed towards European regions whose GDP is above 90% of the EU average. Funding is made available through the European Regional Developement Fund (ERDF) and the European Social Fund (ESF).

Nuclear safety and decommissioning To help Bulgaria, Lithuania and Slovakia to shut down 3 nuclear reactors.

Other actions and programmes **

Outermost and sparsely populated regions To provide a specific assistance to areas that are naturally disadvantaged from a geographical viewpoint,as well as outermost areas. This assistance is channelled through the European Regional Development Fund (ERDF) to address possible disadvantages.

Partnership Instrument (PI) To cooperate with partners around the world to advance the Union’s strategic interests and tackle global challenges.

Pensions **

Pilot projects and preparatory actions **

Rights,equality and citizenship To contribute to the further development of an area where equality and the rights of persons and promoted and protected.

Technical assistance and innovative actions **

Territorial Cooperation To help regions across the EU to work together to address shared problems. Funding is made available through the European Regional Development Fund (ERDF).

Transition Regions This programme concerns regions whose GDP is between 75% and 90% of the EU average. Funding is made available through the European Regional Development Fund (ERDF) and the European Social Fund (ESF).

Youth Employment Initiative To support young people not in education, employment or training in EU’s regions with a youth unemployment rate in 2012 at above 25% by integrating them into the labour market.

  1.  The 12 highlights for the 2014/2020 MFF.

  2.  Europe 2020 is the 10-year growth strategy of the European Union for the period 2010-2020. See http://ec.europa.eu/europe2020/index_en.htm.

  3.  European Commission ESIF webpage.

  4.  The EAGF is the fund financing direct payments to farmers and measures regulating or supporting the agricultural market. As the EAFRD, it is managed by DG AGRI, but represents a more significant share of the EU budget (around 80% of the CAP budget).