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Section 1 — Performance and results. A result-oriented EU budget. Horizontal priorities in the EU budget. Competitiveness for growth and jobs. Economic, social and territorial cohesion. Sustainable growth: natural resources. Security and citizenship. Global Europe. Special instruments. Section 2 — Internal control and financial management The Commission manages the EU budget in a complex environment Further developments: outlook for and the period The EU budget contributes to strengthening the European economy and making it more resilient.

Around half of the budget is allocated to smart and inclusive growth. It is also used for investing in the future, in particular in the transition to a greener and more digital Europe. The EU budget also supported the common European response in the fields of migration and security. At the same time, it remains on the frontline when tackling new challenges: in the current crisis, we have used all the flexibility in the budget to channel funding swiftly to where the crisis repair needs are greatest.

The current coronavirus crisis has also shown once more how important it is for the EU to be able to rely on a well-dimensioned and flexible multiannual financial framework. Withi n the established limits of its capacity and its regulatory flexibility, it offers the means to act and to react quickly to unforeseen and unprecedented crises.

The Commission attaches great importance to ensuring that the EU budget is spent responsibly and correctly, and to working with all parties involved to make sure that it delivers tangible results on the ground. This report sets out the steps that are being taken to ensure that the EU budget is managed in accordance with the highest standards of sound financial management. The Commission carefully monitors the implementation of the EU budget on the ground.

If Member States, intermediaries or final beneficiaries are found to have spent EU money incorrectly, the Commission takes immediate steps to correct these errors, and recover the funds as necessary. Through this report, the Commission takes overall political responsibility for the management of the EU budget in For the Commission, reporting consistently and improving the various control instruments are instrumental to protecting the EU budget.

I can assure you that we will continue working to make sure that every euro contributed by EU taxpayers is well spent in the interests of the citizens. Johannes Hahn, Commissioner for Budget and Administration. This report is part of the broader integrated financial and accountability reporting package 4 , which also includes the annual accounts 5 , a long-term forecast of future inflows and outflows covering the next 5 years 6 , the report on internal audits 7 and the report on the follow-up to the discharge 8.

Section 1 provides a high-level overview of the performance of the EU budget in , focusing on the key programmes. This section presents the latest information, from a variety of sources including programme monitoring, evaluations and audits, on the results achieved with the EU budget up until the end of This section is structured according to the headings of the current multiannual financial framework.

The overview summarises the key performance messages from the programme statements accompanying the draft budget proposal. Section 2, on internal control and financial management, reports on the steps the Commission took in to ensure the sound financial management of the EU budget.

Based on the control results reported by the Commission departments accountable for managing the budget, it confirms that the EU budget is well protected.

Through this report the Commission takes overall political responsibility for the management of the EU budget. The budget focuses on areas in which pooling resources to tackle common challenges can deliver results that could not be achieved as effectively or efficiently by Member States acting alone. This is the case in areas as diverse as cross-border infrastructure, external border management, large-scale space projects and pan-European research. The EU budget is well managed with a strong focus on results.

The EU budget is primarily an investment budget. Unlike national budgets, the EU budget is mainly focused on supporting strategic investments over the medium to longer term, and on using its leverage to catalyse investment from other public and private sources. Some two thirds of the EU budget is managed together with Member States through shared management. The EU budget is adopted annually based on a 7-year financial framework. Structured into five headings, it brings together 60 financial programmes of varying size and scope.

In some policy areas the EU budget is the main delivery tool, such as in the common agricultural policy. In other areas the EU budget is complemented by regulatory instruments that contribute to the achievement of EU policy goals. The EU budget has a robust and integrated performance framework , leading to well-managed and result-oriented EU programmes. This framework includes clear and measurable objectives for each programme, together with indicators providing the basis for monitoring, reporting and evaluation.

This indicator information, combined with other sources of qualitative and quantitative performance information such as evaluations, allows programme performance and the progress towards the agreed objectives to be assessed. This allows programme managers to anticipate and address weaknesses in programme implementation and is an important input into budgetary decision-making.

It provides an overview of the objectives of each programme together with the state of its budgetary implementation and the latest available performance data. Some financial programmes have embedded performance assessment even more deeply into their design. For example, a performance reserve was created for the current European Structural and Investment Funds.

This reserve was released in to programmes that had achieved their predefined milestones by the end of In the case of programmes and priorities that had not achieved their milestones, resources were reallocated.

The performance framework for the EU budget and related reporting is being strengthened over time. Audits conducted by internal and external auditors have helped in this respect. Recent recommendations from the European Court of Auditors have led to more balanced reporting on performance, with more attention given to challenges encountered, a stronger focus on the reliability and quality of data, and clearer explanations of how data on performance have been used to improve performance.

Based on the findings of a comprehensive spending review, the Commission has included a smaller number of higher-quality indicators linked closely to programme objectives in the proposals for the financial programmes. The Commission is now working with the European Parliament and the Council to ensure that these improvements, together with the other changes to programme design that will contribute to improved performance, are reflected in the final versions of the future programmes.

The EU budget in With the European elections in May, was a year of transition for the European Union. The focus was on completing work on the political priorities of the Juncker Commission and preparing for the arrival of a new European Parliament and a new Commission led by President Ursula von der Leyen. The strategic agenda of the European Council 9 and the political guidelines 10 of the von der Leyen Commission set out the political framework for the coming period.

During the EU budget contributed to strengthening the economy of the European Union and making it more resilient. The total amount of commitments implemented from the EU budget in amounted to EUR billion The EU budget, commitment appropriations, per budget heading. All amounts in million EUR. Source: European Commission. Despite the delays in starting up the cohesion programmes, progress is now accelerating.

Definitive conclusions on programme performance, however, will only be possible on the basis of detailed evaluations after the closure of the current programmes.

The impact of the COVID pandemic and the steps that are being taken to redirect the EU budget to support crisis repair and recovery will need to be given due consideration in any such assessment. The performance of the EU budget is a responsibility shared among the many actors involved in its implementation.

The administrative budget under Heading 5, which supports both budgetary management and the full spectrum of activities of the European Union institutions, accounts for a small share of the EU budget.

The European Court of Auditors has confirmed these savings, while noting the negative consequences they have had for staff These savings have been made at a time when there are ever-increasing expectations on the Commission to deliver in areas such as the green and digital transitions, industrial policy, economic and social recovery, migration, the rule of law and defence cooperation.

These pressures have been heightened by the w orkload involved in developing and deploying a comprehensive EU response to the COVID pandemic and its aftermath. Stability in the administrative budget under the future financial framework will therefore be essential for the EU institutions to continue to deliver for the EU in all the priority areas.

The EU budget addresses specific policy needs through one or several programmes. The horizontal nature of some policy objectives, however, requires deeper integration throughout the budget. This is particularly true for climate-related expenditure, protecting biodiversity and pursuing the sustainable development goals.

The EU budget provides strong support for its climate and biodiversity goals. The climate mainstreaming approach entails the deep integration of climate-related expenditure throughout the long-term budget. Left: contribution of climate-related expenditure by budget heading. Right: Climate-relevant share of the main contributing programmes i n Thanks to the mainstreaming approach, all headings contribute to the achievement of this overarching priority. The degree to which an individual programme is climate related varies in accordance with its field of operation and the nature of the investment.

This will make an important contribution to delivering the European Green Deal proposed by the Commission. The EU is also making a concerted effort to support biodiversity. Throughout the period the contribution of the budget has been stable, with the exception of the first 2 years of implementation. Left: contribution of biodiversity-related expenditure by budget heading.

Right: Biodiversity-relevant share of the main contributing programmes in In the contribution from the EU budget to the fight against biodiversity loss amounted to almost As an integral element of the European Green Deal, the new biodiversity strategy for will include a transformative plan to further protect and restore nature, with resulting benefits for both halting biodiversity loss and mitigating the effects of climate change.

The EU budget will play an important role in delivering this strategy. Further information on how the EU budget is used to support climate and biodiversity is provided in Annex 2 to this report. The EU budget and the agenda for sustainable development. The EU, together with its Member States, is fully committed to being at the forefront of implementing the agenda for sustainable development. The agenda is the shared roadmap adopted under the auspices of the United Nations for a peaceful and prosperous world, of paramount importance to the values of the EU and the future of Europe.

The EU has committed to implementing the sustainable development goals in both its internal and its external policies.



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