The EU budget

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Following key information on the EU, the European construction, the European institutions and the European competences and policies…

Step 5 to better understand the EU: The EU budget

EU budget management

The EU Commission manages and implements the EU budget. In the framework of the institutional triangle, the EU Commission proposes a draft budget to the EU Parliament and the Council of the EU which must vote it in co-decision according to a specific process.

To facilitate the functioning of the EU institutions, a Multiannual Financial Framework (MFF) is set up every seven years. It defines caps for planned expenditures into different categories. An annual budget is then voted to specify the amount allocated to each budget line.

Resources and budget lines

The EU budget is funded by different resources:

• Own resources (99%)
• Traditional own resources (customs and agricultural duties and sugar levies);
• VAT resource: Paid by each Member State according to VAT they receive;
• GNI resource: Each Member State pays a specified proportion of its Gross National Income (GNI) to the EU;
• Other resources (1%): tax and deductions from EU staff remunerations, bank interest, contributions from non-EU countries to certain programmes, interest on late payments and fines.

Multiannual Financial Framework 2014-2020 budget lines (or headings) are:

• 1/ Smart and Inclusive Growth (47% of the budget)
• a/Competitiveness for growth and jobs (33.9% of the budget)
• b/ Economic, social and territorial cohesion (13.1% of the budget)
• 2/ Sustainable Growth: Natural Resources (38.9% of the budget)
• 3/ Security and citizenship (1.6% of the budget)
• 4/ Global Europe (6.1% of the budget)
• 5/ Administration (6.4% of the budget)
• 6/ Compensations (Croatia) (0.0% of the budget)

Figures

Multiannual Financial Framework 2014-2020 is about 960 billion euros (738.9 billion pounds).

In 2016, the EU budget is about 144 billion euros (110.9 billion pounds).

In 2015, the UK was the second largest contributor to the EU budget between Germany and France.