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EU Budget

EU Budget

Where does the money come from?

The EU spends around €150 billion per year across all Member States. The EU budget represents around 1% of EU Member States Gross Domestic Product – the total value of all goods and services produced in the EU. 

The EU budget is funded from three main sources:

  • Customs duties on imports from outside the EU and sugar levies, also known as the Union’s traditional “own resources”.
  • A standard percentage on the harmonised VAT base of each EU country
  • Member State contributions, based on a percentage of their Gross National Income.


Where does the money go?

Although the EU budget is agreed annually, this approval takes place within the framework of a more strategic long-term approach to budget planning known as the “Multiannual Financial Framework” (MFF). The MFF lays down maximum amounts (“ceilings”) for each broad category of expenditure for a clearly determined period of time (several years). 

Within the framework of the, Multiannual Financial Framework  2007-2013, the main priorities were:


  1. Sustainable growth: competitiveness and cohesion for growth and development
  2. Preservation and management of natural resources: common agricultural and fisheries policies, rural development and environmental measures
  3. Citizenship, freedom, security and justice: justice and home affairs, border protection, immigration and asylum policy, public health, consumer protection, culture, youth, information and dialogue with citizens.
  4. EU as global player: all external action ("foreign policy") by the EU
  5. Administration: the administrative expenditure of all the European institutions, pensions and EU-run schools for staff members' children
  6. Compensations: compensatory payments relating to the latest expansion of the EU

Source: European Commission

On 27 June 2013, the Irish Presidency of the Council of the European Union, the European Parliament's negotiators and the European Commission concluded the negotiations on the 2014-2020 financial period. In his 2013 State of the Union address, President Barroso insisted on the important role of the EU budget and the next steps towards the adoption of the MFF 2014-2020, which will focus on two major priorities: employment and growth.

How is the budget decided?

Based on the Multiannual Financial Framework, the European Commission prepares the draft budget and submits it to the Council and Parliament for approval. The budgetary authority, comprised of the Council and the Parliament, amends and adopts the draft budget.

In case there is disagreement between the Council and the Parliament, they can set up a Conciliation Committee with the task of reaching agreement on a joint text within a period of 21 days, subject to the approval of both arms of the budgetary authority. If the joint text is rejected by the Council, the European Parliament has the right to ultimately approve the budget.

Who manages the budget?

The European Commission is ultimately responsible for implementing the budget. But in practice, some 76% of the budget is spent under what is known as “shared management”, with individual EU countries actually distributing funds and managing expenditure. National governments are thus equally responsible for protecting the EU’s financial interests. This involves cooperation with the Commission and its Fraud Office (OLAF).

Who audits the expenditure?

Expenditure by Member States is audited by the Commission, which can reclaim funding if irregularities are found. Every Directorate-General of the Commission has an internal audit unit that ensures the DG's procedures comply with the rules.

The Commission as a whole is accountable annually to the European Court of Auditors for how EU money has been spent. The Court carries out an independent external audit of the EU’s annual accounts and resource management, resulting in a report for the Parliament and Council.

What about Greece?

All Member States contribute to the EU budget. Most of them (15 out of 27 in 2012) receive more in EU funding than they pay (net recipients) whilst the rest contribute more money to the EU than they receive back in funding each year (net contributors).

Between 1981 and 2010, Greece has been a net recipient of the EU budget, enjoying EU benefits through inflows of over €90 billion, not including the recent loans taken out in order to overcome the crisis. These funds, which represented an average of 2.3% of Greece’s GDP, were an important instrument of increased prosperity for urban areas, rural regions, investments, employment opportunities and development activities. Major national infrastructure projects as well as other minor works had been implemented by making use of EU resources.