# C_2015377EN.01000101.xml

| 13.11.2015 | EN | Official Journal of the European Union | C 377/1 |
| --- | --- | --- | --- |

13.11.2015

EN

Official Journal of the European Union

C 377/1

---

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS

Consolidated annual accounts of the European Union 2014

(2015/C 377/01)

CONTENTS

CONTENTS

| FINANCIAL STATEMENT DISCUSSION AND ANALYSIS | 2 |
| --- | --- |

| NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS | 22 |
| --- | --- |

| CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES | 23 |
| --- | --- |

| BALANCE SHEET | 24 |
| --- | --- |

| STATEMENT OF FINANCIAL PERFORMANCE | 25 |
| --- | --- |

| CASH FLOW STATEMENT | 26 |
| --- | --- |

| STATEMENT OF CHANGES IN NET ASSETS | 27 |
| --- | --- |

| NOTES TO THE FINANCIAL STATEMENTS | 28 |
| --- | --- |

| AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET AND EXPLANATORY NOTES | 99 |
| --- | --- |

FINANCIAL STATEMENT DISCUSSION AND ANALYSIS

1.   EU: INSTITUTIONAL GOVERNANCE AND OPERATIONS

EU: INSTITUTIONAL GOVERNANCE AND OPERATIONS

The European Union (EU) is an economic and political partnership of 28 European Member States. It was established in 1993 by the Maastricht Treaty and succeeded the European Community, the European Coal and Steel Community (ECSC) and Euratom. The latest major amendment to the constitutional basis of the EU, the Treaty of Lisbon, entered into force on 1 December 2009.

The EU is based on the rule of law. This means that every action taken by the EU is founded on treaties that have been approved voluntarily and democratically by all EU Member States. It has a unique institutional set-up:

| — | European citizens elect directly the Members of the European Parliament (EP), |
| --- | --- |

—

European citizens elect directly the Members of the European Parliament (EP),

| — | the EU’s broad priorities are set by the European Council, which brings together national and EU-level leaders, |
| --- | --- |

—

the EU’s broad priorities are set by the European Council, which brings together national and EU-level leaders,

| — | Governments defend their country’s national interests in the Council of the European Union (the ‘Council’), |
| --- | --- |

—

Governments defend their country’s national interests in the Council of the European Union (the ‘Council’),

| — | the interests of the EU as a whole are promoted by the European Commission (the ‘Commission’), whose President is elected by the EP and whose members are suggested for appointment by national governments by common accord with the President-elect and are subject, as a body, to a vote of consent by the EP. |
| --- | --- |

—

the interests of the EU as a whole are promoted by the European Commission (the ‘Commission’), whose President is elected by the EP and whose members are suggested for appointment by national governments by common accord with the President-elect and are subject, as a body, to a vote of consent by the EP.

The EU has its own legal order which is separate from international law and forms an integral part of the legal systems of the Member States. The legal order of the EU is based on its own sources of law. Given the varied nature of these sources, a hierarchy had to be established among them. Primary legislation is at the top of the hierarchy and is represented by the Treaties. This is followed by international agreements concluded by the EU, general legal principles and secondary legislation, which is based on the Treaties.

Sources and hierarchy of EU law:

| — | Treaty on European Union (TEU); Treaty on the Functioning of the European Union (TFEU); Charter of Fundamental Rights of the European Union; other Treaties and Protocols, |
| --- | --- |

—

Treaty on European Union (TEU); Treaty on the Functioning of the European Union (TFEU); Charter of Fundamental Rights of the European Union; other Treaties and Protocols,

| — | international agreements, |
| --- | --- |

—

international agreements,

| — | general principles of Union law, |
| --- | --- |

—

general principles of Union law,

| — | secondary legislation. |
| --- | --- |

—

secondary legislation.

The institutional governance of the EU consists of institutions, agencies and other EU bodies which are listed in note 10 of the notes to the financial statements. The main institutions in the sense of being responsible for drafting policies and taking decisions are the EP, the European Council, the Council and the Commission.

10

European Parliament

European Parliament

The EP is an important forum for political debate and decision-making at the EU level. The Members of the EP are directly elected by voters in all Member States to represent citizen’s interests with regard to EU lawmaking and to make sure other EU institutions are working democratically.

Over the years and with subsequent changes in European treaties, the EP has acquired substantial legislative and budgetary powers that allow it to set, together with the representatives of the governments of the Member States in the Council, the direction in which the European project is heading. In doing so, the EP has sought to promote democracy and human rights — not only in Europe, but also throughout the world.

The EP is on an equal footing with the Council in the annual budgetary procedure. It is involved in the budgetary process from the preparation stage, notably in laying down the general guidelines and the type of spending, right up to the adoption. It establishes the budget with the Council and monitors its implementation. The EP gives a discharge on the implementation of the EU budget on a recommendation from the Council. Finally, the EP has to provide its consent to the Multiannual Financial Framework (MFF) which ensures that EU expenditure develops in an orderly manner and within the limit of its own resources. The current President of the EP is Martin Schulz.

The European Council and the Council of the European Union

The European Council and the Council of the European Union

The European Council, formed by the Heads of State or Government of the Member States together with its President and the President of the Commission, provides the necessary impetus for the development of the EU and defines the general political directions and priorities. The current President of the European Council is Donald Tusk.

Jointly with the EP, the Council adopts EU legislation through regulations and directives and also makes decisions and non-binding recommendations. The Council consists of a representative of each Member State, at ministerial level, authorised to commit the government of that Member State by casting its vote. With the exception of the Foreign Affairs configuration, the Council is chaired by the representative of the Member State that holds the Union’s presidency on the basis of equal rotation every six months. A committee consisting of the permanent representatives of the Governments of the Member States (Coreper) prepares the Council’s work.

In its areas of competence, the Council takes its decisions by a qualified majority, except where the Treaties provide otherwise (e.g. unanimity or simple majority). The Council is one of the two branches (the other being the EP) of the budgetary authority which adopts the EU’s budget. The Council also adopts the decisions, pursuant to a special legislative procedure and acting unanimously, laying down the provisions applying to the own resources system and the MFF. In the latter case, the EP must give its consent by a majority of its Members. The latest MFF (2014-2020) was adopted by the Council in November 2013.

European Commission

European Commission

The Commission is the EU’s executive body. It represents the interests of the EU as a whole (not the interests of individual countries).

The Commission’s main roles are to:

| — | propose legislation which is then adopted by the co-legislators, the EP and the Council, |
| --- | --- |

—

propose legislation which is then adopted by the co-legislators, the EP and the Council,

| — | enforce European law (where necessary with the help of the Court of Justice of the EU), |
| --- | --- |

—

enforce European law (where necessary with the help of the Court of Justice of the EU),

| — | set objectives and priorities for action, outlined yearly in the Commission Work Programme and work towards delivering them, |
| --- | --- |

—

set objectives and priorities for action, outlined yearly in the Commission Work Programme and work towards delivering them,

| — | manage and implement EU policies and the budget, |
| --- | --- |

—

manage and implement EU policies and the budget,

| — | represent the Union outside Europe (negotiating trade agreements between the EU and other countries, for example). |
| --- | --- |

—

represent the Union outside Europe (negotiating trade agreements between the EU and other countries, for example).

A new team of 28 Commissioners (one from each EU Member State) is appointed every five years. The candidate for President of the Commission is proposed to the EP by the European Council that decides by qualified majority and taking into account the elections to the EP. The Commission President is then elected by the EP by a majority of its component members (which corresponds to at least 376 out of 751 votes). Following this election, the President-elect selects the 27 other members of the Commission, on the basis of the suggestions made by Member States. The final list of Commissioners-designate has then to be agreed between the President-elect and the Council. The Commission as a whole needs the Parliament’s consent. Prior to this, Commissioners-designate are assessed by the various EP committees. The current Commission’s term of office runs until 31 October 2019. Its President is Jean-Claude Juncker.

The current Commission priorities are: (1) jobs, growth and investment; (2) Digital Single Market; (3) Energy Union and climate; (4) internal market; (5) economic and monetary union; (6) EU-US free trade; (7) justice and fundamental rights; (8) migration; (9) EU as a global actor; and (10) democratic change.

The staff of the Commission works in departments, known as Directorates-General (DGs) or services, each responsible for a particular policy area and headed by a Director-General. The DGs draft laws, but their proposals become official only once the College of Commissioners (28 Commissioners’ meeting) adopts them. The DGs also manage funding initiatives at EU level, and carry out public consultations and communication activities.

The Commission also administers a number of executive agencies, which help with the management of EU programmes.

2.   INITIATIVES AND STRATEGIES OF THE COMMISSION

INITIATIVES AND STRATEGIES OF THE COMMISSION

The new Commission that came into office in November 2014 has defined its work programme for 2015 and the new initiatives for the Commission until 2019. The work programme sets out the Commission’s plans and identifies actions which will make a positive difference for jobs, growth and investment in 2015. This programme focuses on a limited set of concrete new initiatives such as:

A new boost for jobs, growth and investment:

A new boost for jobs, growth and investment:

| — | EUR 315 billion investment offensive: The legislative follow-up to the plan announced at the end of 2014, unlocking public and private investments in the real economy over the next three years, |
| --- | --- |

—

EUR 315 billion investment offensive: The legislative follow-up to the plan announced at the end of 2014, unlocking public and private investments in the real economy over the next three years,

| — | promoting labour integration and employability, and |
| --- | --- |

—

promoting labour integration and employability, and

| — | reviewing the Europe 2020 strategy. |
| --- | --- |

—

reviewing the Europe 2020 strategy.

Digital Single Market package:

Digital Single Market package:

| — | creating the conditions for a vibrant digital economy and society by complementing the telecommunications regulatory environment, |
| --- | --- |

—

creating the conditions for a vibrant digital economy and society by complementing the telecommunications regulatory environment,

| — | modernising copyright rules, |
| --- | --- |

—

modernising copyright rules,

| — | simplifying rules for consumers making online and digital purchases, |
| --- | --- |

—

simplifying rules for consumers making online and digital purchases,

| — | enhancing cyber-security, and |
| --- | --- |

—

enhancing cyber-security, and

| — | mainstreaming digitalisation. |
| --- | --- |

—

mainstreaming digitalisation.

A resilient energy union with a forward-looking climate change policy:

A resilient energy union with a forward-looking climate change policy:

| — | creation of the European Energy Union: To ensure energy supply security, further integrate national energy markets, reduce European energy demand and decarbonise the energy mix, and |
| --- | --- |

—

creation of the European Energy Union: To ensure energy supply security, further integrate national energy markets, reduce European energy demand and decarbonise the energy mix, and

| — | multilateral response to climate change. |
| --- | --- |

—

multilateral response to climate change.

A deeper and fairer internal market:

A deeper and fairer internal market:

| — | an internal market strategy, |
| --- | --- |

—

an internal market strategy,

| — | a labour mobility package, |
| --- | --- |

—

a labour mobility package,

| — | capital markets union action plan, |
| --- | --- |

—

capital markets union action plan,

| — | a framework for financial institution resolution, and |
| --- | --- |

—

a framework for financial institution resolution, and

| — | an aviation package. |
| --- | --- |

—

an aviation package.

A trade and investment strategy to boost jobs and growth

A trade and investment strategy to boost jobs and growth

An area of justice and fundamental rights:

An area of justice and fundamental rights:

| — | EU accession to the European Convention on Human Rights, and |
| --- | --- |

—

EU accession to the European Convention on Human Rights, and

| — | European agenda on security. |
| --- | --- |

—

European agenda on security.

A new policy on migration:

A new policy on migration:

| — | developing a new approach on legal migration to make the EU an attractive destination for talent and skills, and |
| --- | --- |

—

developing a new approach on legal migration to make the EU an attractive destination for talent and skills, and

| — | improving the management of migration into the EU through greater cooperation with third countries, solidarity among our Member States and fighting human trafficking. |
| --- | --- |

—

improving the management of migration into the EU through greater cooperation with third countries, solidarity among our Member States and fighting human trafficking.

A stronger global actor:

A stronger global actor:

| — | European Neighbourhood policy, and |
| --- | --- |

—

European Neighbourhood policy, and

| — | post-2015 sustainable development goals. |
| --- | --- |

—

post-2015 sustainable development goals.

A fair taxation environment:

A fair taxation environment:

| — | an action plan on efforts to combat tax evasion and tax fraud, including measures at EU level in order to move to a system on the basis of which the country where profits are generated is also the country of taxation; including automatic exchange of information on tax rulings and stabilising corporate tax bases, and |
| --- | --- |

—

an action plan on efforts to combat tax evasion and tax fraud, including measures at EU level in order to move to a system on the basis of which the country where profits are generated is also the country of taxation; including automatic exchange of information on tax rulings and stabilising corporate tax bases, and

| — | compulsory exchange of information on tax rulings. |
| --- | --- |

—

compulsory exchange of information on tax rulings.

A Union of democratic change:

A Union of democratic change:

| — | an EU agreement on better lawmaking; |
| --- | --- |

—

an EU agreement on better lawmaking;

| — | a mandatory transparency register; and |
| --- | --- |

—

a mandatory transparency register; and

| — | review of the genetically modified organism decision-making process. |
| --- | --- |

—

review of the genetically modified organism decision-making process.

Deeper Economic and Monetary Union: Continued efforts to promote economic stability and attract investors to Europe.

Deeper Economic and Monetary Union:

In preparing the work programme, the Commission examined around 450 proposals that were put forward to the EP and the Council, and is proposing to withdraw or amend 80 of them. Some are proposed for withdrawal because they do not match the new Commission’s priorities. In many cases, the Commission remains strongly committed to the objectives sought — but proposals are of no use if they are simply sitting dormant on a negotiating table or if they will be so watered down in negotiations that they can no longer achieve their original purpose. When that is the case, the Commission will propose new, better ways of achieving these objectives.

3.   EU BUDGET: FROM PREPARATION TO DISCHARGE

EU BUDGET: FROM PREPARATION TO DISCHARGE

3.1.   Budget and funding

Budget and funding

The MFF consists of headings with annual limits for commitment appropriations set for each. The sum of the ceilings of all headings gives the total ceiling of commitment appropriations. The EU Budget finances a wide range of policies and programmes throughout the EU. In accordance with the priorities set by the EP and the Council in the MFF, the Commission carries out specific programmes, activities and projects in the field. The direct link between the annual budget and the EU policies is ensured through activity-based budgeting (ABB). The activity-based budget nomenclature allows for clear identification of the policy areas of the EU and the total amount of resources allocated to each of these areas. The budget is prepared by the Commission and usually agreed in mid-December by the EP and the Council in accordance with the procedure of Article 314 TFEU. According to the principle of budget equilibrium, the total revenue must equal total expenditure for a given financial year.

The EU has two main categories of funding: Own resources revenues and sundry revenues. Own resources revenues make up the vast majority of EU funding and accrue automatically to the EU to enable it to finance its budget without the need for a subsequent decision by national authorities. The overall amount of own resources needed to finance the budget is determined by total expenditure less sundry revenue. The total amount of own resources cannot exceed 1,23 % of the gross national income (GNI) of the EU. Own resources can be divided into traditional own resources (such as custom levies), the own resource based on value added tax (VAT) and the resource based on gross national income (GNI). Sundry revenues arising from the activities of the EU (e.g. competition fines) normally represent less than 10 % of total revenue.

As a general principle the EU is not allowed to borrow money on capital markets or from financial institutions to finance its budget.

3.2.   How the EU budget is managed and spent

How the EU budget is managed and spent

Primary operational expenditure

Primary operational expenditure

The EU’s operational expenditure covers the various headings of the MFF and takes different forms, depending on how the money is paid out and managed. From 2014 onwards, the Commission classifies its expenditure as follows:

| | Direct management: this is where the budget is implemented directly by the Commission services. |
| --- | --- |

Direct management: this is where the budget is implemented directly by the Commission services.

Direct management:

| | Indirect management: this refers to cases where the Commission confers tasks of implementation of the budget to bodies of EU law or national law, such as the EU agencies. |
| --- | --- |

Indirect management: this refers to cases where the Commission confers tasks of implementation of the budget to bodies of EU law or national law, such as the EU agencies.

Indirect management:

| | Shared management: under this method, budget implementation tasks are delegated to Member States. About 80 % of the expenditure falls under this mode covering such areas as agricultural spending and structural actions. |
| --- | --- |

Shared management: under this method, budget implementation tasks are delegated to Member States. About 80 % of the expenditure falls under this mode covering such areas as agricultural spending and structural actions.

Shared management

The different financial actors within the Commission

The different financial actors within the Commission

The College of Commissioners assumes collective political responsibility but in practice does not exercise itself the budget implementation powers vested in it. It delegates these tasks each year to individual civil servants accountable to the College, subject to the Financial Regulation (FR) and the Staff Regulations (SR). The staff concerned — generally Directors-General and Heads of Service — are known as ‘Authorising Officers by delegation’ or ‘AODs’. They in turn may further delegate budget implementation tasks to ‘Authorising Officers by sub-delegation’.

College of Commissioners

The responsibility of the Authorising Officers covers the entire management process, from determining what needs to be done to achieve the policy objectives set by the institution to managing the activities launched from both an operational and budgetary standpoint. Each Authorising Officer is required to prepare an Annual Activity Report (AAR) on the activities under her/his responsibility where she/he reports on policy results and on the reasonable assurance she/he may have that the resources assigned to the activities described in her/his report have been used for their intended purpose and in accordance with the principles of sound financial management, and that the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions. On the basis of Article 66 FR, the Commission transmits a summary report (synthesis report) on the individual AARs to the EP and the Council, by which the Commission takes overall political responsibility for the management of the EU budget in line with Article 317 TFEU. This report and the AAR are available at: http://ec.europa.eu/atwork/planning-and-preparing/synthesis-report/index_en.htm

Authorising Officers

The Accounting Officer executes payment and recovery orders drawn up by Authorising Officers and is responsible for managing the treasury, laying down accounting rules and methods, validating accounting systems, keeping the accounts and drawing up the institution’s annual accounts. Furthermore, the Accounting Officer is required to sign the annual accounts declaring that they present fairly, in all material aspects, the financial position, the results of the operations and the cash flows.

Accounting Officer

Committing to spend the EU budget

Committing to spend the EU budget

Before a legal commitment (for example a contract or grant agreement) can be entered into with a third party, there must be a budget line authorising the activity in question in the annual budget. There must also be sufficient funds on the budget line to cover the expenditure. If these conditions are met, the funds required must be reserved in the budget by means of a budgetary commitment made in the accounting system and only then a legal commitment can be made. No money can be spent from the EU budget unless and until the Authorising Officer has adopted a budgetary commitment.

Once approved, the budgetary commitment is recorded in the budgetary accounting system and the appropriations are consumed accordingly. This, however, has no effect on the financial statements (or general ledger) since no expense has yet been incurred.

Making a payment

Making a payment

The Commission is a participant in SWIFT (Society for Worldwide Interbank Financial Telecommunication) and makes more than 2 million payments a year. No payment can be made unless a budgetary commitment has already been approved by the Authorising Officer dealing with the operation in question.

Prefinancing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be split into a number of payments over a period defined in the particular legal commitment. If the beneficiary does not incur eligible expenditure he has the obligation to return the prefinancing advance to the EU. Thus prefinancing paid is not a definitive expense until the relevant conditions are met and so is recorded as an asset on the EU balance sheet when the initial payment is made.

Cost claims will be received by the relevant EU body so as to justify how the prefinancing amount was spent by the beneficiary in accordance with the legal commitment. The rhythm of receipt of these cost claims is variable depending on the type of action being funded and the conditions.

Eligibility criteria are defined in the basic act, in the calls for proposal, in other documents for grant beneficiaries and/or in the contractual clauses of the grant agreements or in the grant decision. After analysis, the eligible amounts are taken into expenses and the beneficiary is informed about any non-eligible amounts.

The FR and other applicable legislation, particularly concerning agriculture and cohesion policies, give the right to make checks on expenditure up to many years after it was incurred. Where errors, irregularities or fraud are detected, financial corrections or recoveries are applied (see note 6 of the notes to the financial statements).

6

3.3.   Financial reporting and accountability

Financial reporting and accountability

The consolidated annual accounts of the EU provide financial information on the activities of the institutions, agencies and other bodies of the EU from a budgetary and accrual accounting perspective. These accounts do not comprise the annual accounts of Member States.

The annual accounts of the EU consist of two separate but linked parts:

| (a) | the financial statements; and |
| --- | --- |

(a)

the financial statements; and

| (b) | the reports on implementation of the budget, which provide a detailed record of budget implementation. |
| --- | --- |

(b)

the reports on implementation of the budget, which provide a detailed record of budget implementation.

It is the responsibility of the Commission’s Accounting Officer to prepare the EU’s financial statements and ensure that they present fairly, in all material aspects, the financial position, the result of the operations and the cash flows of the EU.

In addition to the above annual accounts, ad hoc reports on specific areas such as the report on budgetary and financial management, on financial instruments, on guarantees given and on financial corrections are also prepared.

Reporting and accountability in the Commission:

Image

3.4.   Audit and discharge

Audit and discharge

Audit

Audit

The EU’s annual accounts and resource management are audited by the European Court of Auditors (the Court), its external auditor, which as part of its activities draws up for the EP and the Council:

| (1) | an annual report on the activities financed from the general budget; |
| --- | --- |

(1)

an annual report on the activities financed from the general budget;

| (2) | an opinion, based on its audits and given in the annual report in the form of a statement of assurance, on: (i) the reliability of the accounts; and (ii) the legality and regularity of the underlying transactions involving both revenue collected from taxable persons and payments to final beneficiaries; and |
| --- | --- |

(2)

an opinion, based on its audits and given in the annual report in the form of a statement of assurance, on: (i) the reliability of the accounts; and (ii) the legality and regularity of the underlying transactions involving both revenue collected from taxable persons and payments to final beneficiaries; and

| (3) | special reports giving the findings of audits covering specific areas. |
| --- | --- |

(3)

special reports giving the findings of audits covering specific areas.

Discharge

Discharge

The final step of a budget life cycle is the discharge of the budget for a given financial year. The EP is the discharge authority within the EU. This means that following the audit and finalisation of the annual accounts it falls to the Council to recommend and then to the EP to give a discharge to the Commission and other EU bodies for implementing the EU budget for a given financial year. This decision is based on an examination of the annual accounts, the Commission’s synthesis report and annual evaluation report, the annual report, the audit opinion and special reports of the Court, and replies of the Commission to questions and further information requests.

The discharge represents the political aspect of the external control of budget implementation and is the decision by which the EP, acting on a Council recommendation, ‘releases’ the Commission (and other EU bodies) from its responsibility for management of a given budget by marking the end of that budget’s existence. This discharge procedure may produce three outcomes: the granting, postponement or the refusal of the discharge. Integral to the annual budgetary discharge procedure in the EP are the hearings with Commissioners who are questioned by the Members of the EP’s Budgetary Control Committee regarding the policy areas under their responsibility. The final discharge report including specific recommendations to the Commission for action is adopted in Plenary. The Council discharge recommendations are adopted by Ecofin. Both, the EP’s discharge report as well as the Council discharge recommendations are subject to an annual follow-up report in which the Commission outlines the concrete actions it has taken to implement the recommendations made.

4.   CONSOLIDATED FINANCIAL STATEMENTS OF THE EU: FINANCIAL SITUATION 2014

CONSOLIDATED FINANCIAL STATEMENTS OF THE EU: FINANCIAL SITUATION 2014

4.1.   General trends

General trends

Revenue

Revenue

Five-year trend of revenue in EUR millions:

Image

In 2014, GNI resource revenue decreased while other own resource revenue remained at a similar level and recovery of expenses (financial corrections and recoveries — see note 3.5 of the notes to the financial statements) nearly doubled from EUR 1,8 billion to EUR 3,4 billion — this was due to the advanced stage of closure of the 2000-2006 cohesion programming period and the related withdrawals of non-eligible expenditure made, as well as significant corrections imposed by the Commission in agricultural policy.

3.5

Expenses

Expenses

The main expense items are transfer payments in the context of the European Agricultural Guarantee Fund (EAGF), the European Agricultural Fund for Rural Development (EAFRD) and other rural development instruments, European Regional Development Fund (ERDF) and Cohesion Fund (CF) and the European Social Fund (ESF). In the financial year 2014 these made up almost 70 % of total expenses.

Expenses were generally at a similar level to last year. Decreases were, however, noted for ERDF/Cohesion, which was due to the fact that expenses recognised in 2014 relate only to programming period 2007-2013 whereas no expenses have been booked yet for the current period 2014-2020 due to the slow start-up of programmes (implementation by Member States has only started in 2015).

The EU also recognises future payment obligations as expenses that are not yet shown in the cash-based budgetary accounts. The increased future payment obligations shown under payables for agriculture and rural development and future payment obligations for pension rights acquired by Commissioners, MEPs and staff generally lead to higher expenses and a negative economic result (these payments will be financed by future budgets and are not included yet in revenue).

Economic result

Economic result

The economic result (deficit) of the period increased from EUR 4  365 million in 2013 to EUR 11  280 million in 2014. The main reason for this increase is the significant actuarial loss (net amount of EUR 9,2 billion) related to the pension and other employee benefits liability which occurred due to the decrease in interest rates. Such fluctuations must be expected due to the, internationally applied, accounting rules in place and the current economic environment. Should interest rates increase, a reverse impact would be expected.

Furthermore, as this is an actuarial estimate of the value of the total liability at one point in time, 31 December 2014, and is based on various assumptions valid at this time, this loss does not indicate actual charges to the EU budget, nor does it impact the amounts to be paid to pensioners from the EU budget in the immediate coming years. These payments are already estimated in the MFF 2014-2020 and will be implemented via the annual budgetary process.

Assets

Assets

The most significant items on the asset side of the balance sheet are financial assets (investments, loans, cash) and prefinancing amounts, which make up almost 85 % of the assets of the EU. The amount of loans remains stable at around EUR 60 billion (see note 4.3.2 below) whereas the amount of financial instruments financed from the EU budget increased by almost EUR 2 billion (see note 4.3.1 below). Included on the asset side under ‘Property, plant and equipment’ are assets concerning the Copernicus programme (EUR 1,5 billion) and Galileo assets under construction (EUR 1,5 billion).

4.3.2

4.3.1

In recent years, the EU institutions managed to keep the amounts held as cash and cash equivalents at year-end at a low level. The high cash balance of EUR 17,5 billion at 31 December 2014 is related to the budgetary procedure and due to own resources contributions related to VAT and GNI balances, received from Member States in December 2014 (see note 2.8.1 of the notes to the financial statements).

2.8.1

Cash and cash equivalents at year-end

Cash and cash equivalents at year-end

Image

EUR 163 billion assets and EUR 221 billion liabilities on the 2014 EU balance sheet

EUR 163 billion assets and EUR 221 billion liabilities on the 2014 EU balance sheet

| Asset | Liabilities |
| --- | --- |
| | |

Asset

Asset

Liabilities

Liabilities

Image

Image

Liabilities

Liabilities

The liability side consists primarily of four key items: The pension and other employee benefits liabilities, financial liabilities, payables and accrued charges. The biggest change as compared to 2013 is the increase of the pension and other employee benefits liability from EUR 46,8 billion in 2013 to EUR 58,6 billion in 2014 due primarily to the significant decrease in interest rates (see above).

The excess of liabilities over assets does not mean that the EU institutions are in financial difficulties; rather it means that certain liabilities will be funded by future annual budgets. Many expenses are recognised under accrual accounting rules in 2014 although they may be actually paid in 2015 or later and funded using future budgets. The most significant amounts to be highlighted are the European Agricultural Guarantee Fund (EAGF) activities (paid in 2015) and the employee benefits (to be paid over the next 30-plus years).

4.2.   Prefinancing

Prefinancing

The Commission makes every effort to ensure that the levels of prefinancing are maintained at an appropriate level. A balance has to be struck between making sufficient controls and the timely recognition of expenditure. It should be noted that the level of prefinancing is significantly influenced by the MFF cycle — for example at the beginning of an MFF period one can expect large advances to be paid to Member States under cohesion policy.

The total prefinancing (excl. other advances to Member States) on the EU balance sheet amounts to EUR 45,2 billion, of which 99,8 % relates to Commission activities. Some 76 % of the Commission’s prefinancing is implemented via the shared management mode which means that the implementation of the budget is delegated to Member States (the Commission retains a supervisory role).

Commission prefinancing by management mode

Commission prefinancing by management mode

Image

The majority of expenditure under shared management mode covers agricultural spending and structural actions. The most significant prefinancing amounts relate to the European Regional Development Fund and Cohesion Fund (ERDF & CF), the European Agricultural Fund for Rural Development (EAFRD) and the European Social Fund (ESF).

Shared management spending by fund

Shared management spending by fund

Image

4.3.   Financial instruments

Financial instruments

4.3.1.   Financial instruments financed by the EU budget under direct and indirect management

Financial instruments financed by the EU budget under direct and indirect management

The importance and volume of financial instruments for budget implementation increases from year to year. The basic concept behind this approach, in contrast to the traditional method of budget implementation by giving grants and subsidies, is that for each euro spent from the budget via financial instruments, the final beneficiary receives more than EUR 1 as financial support due to the leverage effect. This intelligent use of the EU budget aims at maximising the impact of the funds available.

Available for sale financial assets of financial instruments financed by the EU budget

Available for sale financial assets of financial instruments financed by the EU budget

Image

In general, there are three main types of financial instruments used:

| — | equity instruments, |
| --- | --- |

—

equity instruments,

| — | loan instruments, and |
| --- | --- |

—

loan instruments, and

| — | guarantee instruments. |
| --- | --- |

—

guarantee instruments.

Details of the major instruments are given below:

Guarantee Fund for external actions (EUR 1  996 million of assets)

Guarantee Fund for external actions (EUR 1  996 million of assets)

The Guarantee Fund for external actions covers loans guaranteed by the EU as a result of a Council decision, in particular European Investment Bank (EIB) lending operations outside the EU and loans under macro-financial assistance (MFA) and Euratom loans outside the EU. It is a long-term instrument (non-current part: EUR 1  489 million) managed by the EIB and intended to cover any defaulting loans guaranteed by the EU. The Fund is endowed by payments from the general budget of the EU (so as to reach 9 % of the capital value of the operations), the proceeds from interest on investments made from the Fund’s assets, and sums recovered from defaulting debtors for whom the Fund has had to activate its guarantee. Any yearly surplus arising shall be paid back as revenue for the EU budget.

The EU is required to include a guarantee reserve to cover loans to third countries. This reserve is intended to cover the requirements of the Guarantee Fund and, where necessary, activated guarantees exceeding the amount available in the Fund, so that these amounts may be charged to the budget. This reserve corresponds to the target amount of 9 % of the loans outstanding at year-end.

Risk-Sharing Finance Facility (EUR 961 million of assets)

Risk-Sharing Finance Facility (EUR 961 million of assets)

The Risk-Sharing Finance Facility (RSFF) is managed by the EIB and the Commission’s investment portfolio is used to provision financial risk for loans and guarantees given by the EIB to eligible research projects. In total, a Commission budget of up to EUR 1 billion is foreseen for RSFF, of which up to EUR 800 million are from the ‘Cooperation’ programme and up to EUR 200 million from the ‘Capacities’ programme. The EIB has committed itself to provide the same amount. There will be no new budget contributions to RSFF under the 2014-2020 MFF. At 31 December 2014 the Commission had contributed, including also EFTA and third country contributions, EUR 856 million to the RSFF. In 2014, EUR 375 million of the EU contribution to the RSFF was transferred to its successor debt instrument under Horizon 2020. The amount disclosed as a contingent liability (note 5.2.1 of the notes to the financial statements) represents the estimated maximum loss at 31 December 2014 that the Commission would suffer in case of defaults on loans or guarantees given by the EIB within the framework of the RSFF. It should be noted that the Commission’s overall risk is limited to the amount it contributes to the Facility.

5.2.1

Horizon 2020 (EUR 643 million of assets)

Horizon 2020 (EUR 643 million of assets)

Horizon 2020 is a new equity instrument under the 2014-2020 MFF. Seen as a means to drive economic growth and create jobs, Horizon 2020 has the political backing of Europe’s leaders and the Members of the EP. They agreed that research is an investment in the future and so put it at the heart of the EU’s blueprint for smart, sustainable and inclusive growth and jobs. By coupling research and innovation, Horizon 2020 is helping to achieve this with its emphasis on excellent science, industrial leadership and tackling societal challenges. The goal is to ensure Europe produces world-class science, removes barriers to innovation and makes it easier for the public and private sectors to work together in delivering innovation. Horizon 2020 is managed by the EIF.

ETF start-up (EUR 524 million of assets)

ETF start-up (EUR 524 million of assets)

The European Technology Start-up Facility (ETF) covers the growth and employment programme, the multiannual programme for enterprise and entrepreneurship (MAP) and the competitiveness and innovation framework programme (CIP), under the trusteeship of the EIF, supporting the creation and financing of start-up SMEs by investing in suitable specialised venture capital funds.

Loan Guarantee instrument for TEN-T projects (EUR 235 million of assets)

Loan Guarantee instrument for TEN-T projects (EUR 235 million of assets)

The Loan Guarantee instrument for TEN-T projects (LGTT) issues guarantees so as to mitigate revenue risk in the early years of TEN-Transport projects. Specifically the guarantee would fully cover stand-by credit lines, which would only be drawn upon in cases where project cash flows were insufficient to service senior debt. The instrument is a joint financial product of the Commission and the EIB. The capital contribution to the LGTT instrument for the 2007-2013 financing period was initially set at EUR 1 billion, split evenly between the Commission and the EIB. The amending Regulation 670/2012 reallocated EUR 200 million to the Project Bond Initiative and another EUR 50 million to grant funding, so the total EU contribution still available to the instrument stands at EUR 250 million.

At 31 December 2014 the Commission had contributed EUR 212 million to the LGTT. The amount recognised as a contingent liability (note 5.2.1 of the notes to the financial statements), represents the estimated maximum loss at 31 December 2014 that the Commission would suffer in case of defaults on loans given by the EIB within the framework of the LGTT operations. It should be noted that the Commission’s overall risk is limited to the amount it contributes to the instrument.

5.2.1

Financial instruments (FI) by type

Financial instruments (FI) by type

| (EUR millions) |
| --- |
| | Total assets | Total liabilities | Guarantees given |
| Loan/Equity/Technical assistance instruments: | | | |
| MEDA Instrument of economic and financial cooperation under the Euro-Mediterranean partnership | 290 | (3) | |
| European Neighbourhood and Partnership Instrument (ENPI) | 167 | (7) | |
| | 457 | (9) | |
| Loan instruments: SME Support Loans | 19 | — | |
| Equity instruments: | | | |
| The High Growth and Innovative SME Facility under Competitiveness & Innovation Framework Programme | 323 | (0) | |
| COSME — Competitiveness of Enterprises and SME | 31 | — | |
| European Fund for Southeast Europe (EFSE) | 118 | — | |
| Enterprise Expansion Fund under the Western Balkan Enterprise Development and Innovation Facility | 10 | 0 | |
| Enterprise Innovation Fund (EIF) under the Western Balkan Enterprise Development and Innovation Facility | 21 | 0 | |
| European Technology Start up Facility 1998 (ETF) | 19 | (0) | |
| Global Energy Efficiency and Renewable Energy Fund (GEEREF) | 72 | — | |
| Multi Annual Framework Programme (MAP) Equity Facility | 183 | (0) | |
| Marguerite Fund | 37 | — | |
| European Progress Microfinance Facility (PMF) for employment and social inclusion | 60 | — | |
| SE4F — Green for Growth Fund to the Eastern Neighbourhood Region | 52 | — | |
| European Energy Efficiency Fund | 89 | — | |
| Technology Transfer Pilot Projects | 2 | (0) | |
| Microfinance Initiative for Asia Debt Fund | 10 | — | |
| SANAD — MENA Fund for Micro-, Small and Medium Enterprises | 9 | — | |
| | 1  035 | (1) | |
| Guarantee instruments: | | | |
| SME Guarantee Facility under Competitiveness & Innovation Framework Programme (CIP SMEG) | 151 | (259) | — |
| COSME LGF — Competitiveness of Enterprises and SME | 39 | (1) | (42) |
| Horizon 2020 — EU Finance for Innovators | 478 | (11) | (98) |
| Horizon 2020 — SME Guarantee | 165 | (1) | (267) |
| Loan Guarantee Instrument for Ten-T Projects (LGTT) | 235 | (3) | (209) |
| Guarantee Facility under the Western Balkan Enterprise Development and Innovation Facility | 21 | (2) | (10) |
| Multi Annual Programme (MAP) for Enterprises | 26 | (41) | — |
| Natural Capital Financing Facility | 3 | — | — |
| Project Bond Instrument (PBI) | 149 | (2) | (138) |
| Private Finance for Energy Efficiency Instrument (PF4EE) | 6 | (0) | — |
| European Progress Microfinance Mandate (PMF TA) | 13 | (9) | — |
| Risk Sharing Finance Facility (RSFF) | 961 | (32) | (883) |
| SME Guarantee Facility | 60 | (15) | — |
| | 2  309 | (376) | (1  647) |
| Total | 3  820 | (386) | (1  647) |
| Guarantee Fund for external actions | 1  996 | (25) | (19  198) |

(EUR millions)

Total assets

Total assets

Total liabilities

Total liabilities

Guarantees given

Guarantees given

Loan/Equity/Technical assistance instruments:

Loan/Equity/Technical assistance instruments:

MEDA Instrument of economic and financial cooperation under the Euro-Mediterranean partnership

290

(3)

European Neighbourhood and Partnership Instrument (ENPI)

167

(7)

457

457

(9)

(9)

Loan instruments: SME Support Loans

Loan instruments: SME Support Loans

19

19

—

Equity instruments:

Equity instruments:

The High Growth and Innovative SME Facility under Competitiveness & Innovation Framework Programme

323

(0)

COSME — Competitiveness of Enterprises and SME

31

—

European Fund for Southeast Europe (EFSE)

118

—

Enterprise Expansion Fund under the Western Balkan Enterprise Development and Innovation Facility

10

0

Enterprise Innovation Fund (EIF) under the Western Balkan Enterprise Development and Innovation Facility

21

0

European Technology Start up Facility 1998 (ETF)

19

(0)

Global Energy Efficiency and Renewable Energy Fund (GEEREF)

72

—

Multi Annual Framework Programme (MAP) Equity Facility

183

(0)

Marguerite Fund

37

—

European Progress Microfinance Facility (PMF) for employment and social inclusion

60

—

SE4F — Green for Growth Fund to the Eastern Neighbourhood Region

52

—

European Energy Efficiency Fund

89

—

Technology Transfer Pilot Projects

2

(0)

Microfinance Initiative for Asia Debt Fund

10

—

SANAD — MENA Fund for Micro-, Small and Medium Enterprises

9

—

1  035

1  035

(1)

(1)

Guarantee instruments:

Guarantee instruments:

SME Guarantee Facility under Competitiveness & Innovation Framework Programme (CIP SMEG)

151

(259)

—

COSME LGF — Competitiveness of Enterprises and SME

39

(1)

(42)

Horizon 2020 — EU Finance for Innovators

478

(11)

(98)

Horizon 2020 — SME Guarantee

165

(1)

(267)

Loan Guarantee Instrument for Ten-T Projects (LGTT)

235

(3)

(209)

Guarantee Facility under the Western Balkan Enterprise Development and Innovation Facility

21

(2)

(10)

Multi Annual Programme (MAP) for Enterprises

26

(41)

—

Natural Capital Financing Facility

3

—

—

Project Bond Instrument (PBI)

149

(2)

(138)

Private Finance for Energy Efficiency Instrument (PF4EE)

6

(0)

—

European Progress Microfinance Mandate (PMF TA)

13

(9)

—

Risk Sharing Finance Facility (RSFF)

961

(32)

(883)

SME Guarantee Facility

60

(15)

—

2  309

2  309

(376)

(376)

(1  647)

(1  647)

Total

Total

3  820

3  820

(386)

(386)

(1  647)

(1  647)

Guarantee Fund for external actions

Guarantee Fund for external actions

1  996

1  996

(25)

(25)

(19  198)

(19  198)

4.3.2.   Borrowing and lending activities managed by the Commission

Borrowing and lending activities managed by the Commission

The EU is empowered by the EU Treaty to adopt borrowing operations to mobilise the financial resources necessary to fulfil specific mandates. The Commission, acting on behalf of the EU, currently operates three main programmes, macro-financial assistance (MFA), balance-of-payments (BOP) assistance and the European Financial Stabilisation Mechanism (EFSM), under which it may grant loans and fund these by issuing debt instruments in the capital markets or with financial institutions.

Image

EU borrowing and lending activities are non-budget operations. The capital required to fund the EU lending operations under the above programmes is raised on the capital markets or with financial institutions. The EU is not permitted to borrow to finance its ordinary budgetary expenses or a budget deficit. The size of the borrowings varies from private placements for amounts of up to EUR 500 million to benchmark-size bond issues (at least EUR 1 billion). In general funds raised are on-lent back-to-back to the beneficiary country, i.e. with the same coupon, maturity and amount. Notwithstanding the back-to-back methodology, the debt service of the funding instruments is a legal obligation of the EU, which will ensure that all payments are made fully and in a timely manner. The Commission has put procedures in place so as to ensure the repayment of borrowings even in case of a loan default. For each country programme, the EP, the Council and the Commission decisions determine the overall granted amount, the (maximum) number of instalments to be disbursed, and the maximum (average) maturity of the loan package. Subsequently, the Commission and the beneficiary country agree loan/funding parameters, including instalments and the payment of tranches. In addition, except for the first one, all instalments of the loan depend on compliance with strict conditions, with agreed terms and conditions similar to International Monetary Fund (IMF) support, in the context of a joint EU/IMF financial assistance, which is another factor influencing the timing of funding. This implies that the timing and maturities of issuances are dependent on the related EU lending activity. Funding is exclusively denominated in euro and the maturity spectrum is 3 to 30 years.

Borrowings of the EU constitute direct and unconditional obligations of the EU and are guaranteed by the 28 Member States. Borrowings undertaken to fund loans to countries outside the EU are covered by the Guarantee Fund for external actions. Should a beneficiary Member State default, the debt service will be drawn from the available treasury balance of the Commission, if possible. If that would not be possible, the Commission would draw the necessary funds from the Member States. EU Member States are legally obliged, according to the EU own resources legislation (Article 12 of Council Regulation 1150/2000), to make available sufficient funds to meet the EU’s obligations. Thus investors are only exposed to the credit risk of the EU, not to that of the beneficiary of loans funded. ‘Back-to-back’ lending ensures that the EU budget does not assume any interest rate or foreign exchange risk.

Balance of Payments

Balance of Payments

The BOP facility, a policy-based financial instrument, provides medium-term financial assistance to Member States of the EU. It enables the granting of loans to Member States which are experiencing, or are seriously threatened with, difficulties in their balance of payments or capital movements. Only Member States which have not adopted the euro may benefit from this facility. BOP assistance to Latvia was granted before the introduction of the euro on 1 January 2014. The maximum outstanding amount of loans granted under the instrument is limited to EUR 50 billion. Borrowings related to these BOP loans are guaranteed by the EU budget — thus at 31 December 2014, the budget is exposed to a maximum possible risk of EUR 8,6 billion regarding these loans (the EUR 8,4 billion below being the nominal value).

| (EUR millions) |
| --- |
| | Hungary | Latvia | Romania | Total |
| Total loans granted | 6  500 | 3  100 | 8  400 | 18  000 |
| Disbursed at 31.12.2013 | 5  500 | 2  900 | 5  000 | 13  400 |
| Disbursed in 2014 | — | — | — | — |
| Loans disbursed 31.12.2014 | 5  500 | 2  900 | 5  000 | 13  400 |
| Loans repaid at 31.12.2014 | (4  000) | (1  000) | — | (5  000) |
| Outstanding amount at 31.12.2014 | 1  500 | 1  900 | 5  000 | 8  400 |

(EUR millions)

EUR millions)

Hungary

Latvia

Romania

Total

Total loans granted

Total loans granted

6  500

6  500

3  100

3  100

8  400

8  400

18  000

18  000

Disbursed at 31.12.2013

5  500

2  900

5  000

13  400

Disbursed in 2014

—

—

—

—

Loans disbursed 31.12.2014

Loans disbursed 31.12.2014

5  500

5  500

2  900

2  900

5  000

5  000

13  400

13  400

Loans repaid at 31.12.2014

(4  000)

(1  000)

—

(5  000)

Outstanding amount at 31.12.2014

Outstanding amount at 31.12.2014

1  500

1  500

1  900

1  900

5  000

5  000

8  400

8  400

A table showing the reimbursement schedule for these loans is given below.

Between November 2008 and May 2009, financial assistance amounting to EUR 14,6 billion was granted to Hungary, Latvia and Romania, of which EUR 13,4 billion had been disbursed by mid-2011. It should be noted that the BOP assistance programme for Hungary expired in November 2010 (with EUR 1 billion undrawn) and the first two repayments of EUR 2 billion in December 2011 and of another EUR 2 billion in November 2014 were received as scheduled. The BOP assistance programme for Latvia expired in January 2012 (with EUR 200 million undrawn) and the first two repayments of EUR 1 billion in April 2014 and EUR 1,2 billion in January 2015 were also received on time. The BOP first assistance programme for Romania expired in May 2012 with the full amount granted, EUR 5 billion, being disbursed. The first repayment of EUR 1,5 billion in January 2015 was received as scheduled.

In February 2011, Romania requested a follow-up precautionary financial assistance (PFA) programme under the BOP facility to support the relaunch of economic growth. On 12 May 2011 the Council decided to make available precautionary EU BOP assistance (PFA) for Romania of up to EUR 1,4 billion (Council Decision 2011/288/EU), however this expired at end-March 2013 without being used. Following Romania’s second request for PFA, the Council decided to provide new EU BOP PFA of up to EUR 2 billion, on 22 October 2013 (Council Decision 2013/531/EU), which will remain available for activation until 30 September 2015. If its activation is requested, this financial assistance shall be provided in the form of a loan with a maximum average maturity of eight years. As this PFA of EUR 2 billion is currently the single active programme under the BOP facility, it is the sole amount still available.

European Financial Stabilisation Mechanism

European Financial Stabilisation Mechanism

| EUR millions |
| --- |
| | Ireland | Portugal | Total |
| Total loans granted | 22  500 | 26  000 | 48  500 |
| Disbursed at 31.12.2013 | 21  700 | 22  100 | 43  800 |
| Disbursed in 2014 | 800 | 2  200 | 3  000 |
| Loans disbursed at 31.12.2014 | 22  500 | 24  300 | 46  800 |
| Loans repaid at 31.12.2014 | — | — | — |
| Loans outstanding at 31.12.2014 | 22  500 | 24  300 | 46  800 |

EUR millions

Ireland

Portugal

Total

Total loans granted

Total loans granted

22  500

22  500

26  000

26  000

48  500

48  500

Disbursed at 31.12.2013

21  700

22  100

43  800

Disbursed in 2014

800

2  200

3  000

Loans disbursed at 31.12.2014

Loans disbursed at 31.12.2014

22  500

22  500

24  300

24  300

46  800

46  800

Loans repaid at 31.12.2014

—

—

—

Loans outstanding at 31.12.2014

Loans outstanding at 31.12.2014

22  500

22  500

24  300

24  300

46  800

46  800

A table showing the reimbursement schedule for these loans is given below.

On 11 May 2010 the Council adopted the EFSM to preserve financial stability in Europe (Council Regulation (EU) no 407/2010). The mechanism based on Article 122(2) TFEU and enables the granting of financial assistance to a Member State in difficulties or seriously threatened with severe difficulties caused by exceptional circumstances beyond its control. The assistance may take the form of a loan or credit line. The Commission borrows funds on the capital markets or with financial institutions on behalf of the EU and lends these funds to the beneficiary Member State. For each country receiving a loan under the EFSM, a quarterly assessment of the fulfilment of the policy conditions attached to the loan is carried out before another instalment is disbursed.

o

The Ecofin Council conclusions of 9 May 2010 restrict the facility to EUR 60 billion but the legal limit is provided in Article 2(2) of the Council Regulation (EU) No 407/2010, which restricts the outstanding amount of loans or credit lines to the margin available under the own resources ceiling. Borrowings related to loans disbursed under the EFSM are guaranteed by the EU budget — thus at 31 December 2014, the budget is exposed to a maximum possible risk of EUR 47,5 billion regarding these loans (the EUR 46,8 billion above being the nominal value). As the borrowings under the EFSM are guaranteed by the EU budget, the EP scrutinises the Commission’s EFSM actions and exercises control in the context of the budget and discharge procedure. As both EFSM programmes have expired, no available amounts are disclosed in the table above.

The Council decided by Implementing Decision in December 2010 on a loan to Ireland of maximum EUR 22,5 billion, and in May 2011 on a loan to Portugal of maximum EUR 26 billion. The initial implementing decisions fixed interest with a margin to result in conditions similar to those of the IMF support. With the adoption of Council Implementing Decisions Nos 2011/682/EU and 2011/683/EU of 11 October 2011, the Council suppressed the interest margin retroactively and extended the maximum average maturity from 7,5 years to 12,5 years and the maturity of individual tranches up to 30 years. With the adoption of Council Implementing Decisions No 2013/313/EU and 2013/323/EU of 21 June 2013, the Council has further lengthened the maximum average maturity of the EFSM loans to Ireland and Portugal by 7 years to 19,5 years. The extension smoothes the debt redemption profile of both countries and lowers their refinancing needs in the post-programme period.

The last three instalments were disbursed in 2014: EUR 0,8 billion for Ireland and EUR 1,8 billion for Portugal in March 2014 and finally EUR 0,4 billion for Portugal in November 2014. EUR 1,7 billion of the financial assistance granted to Portugal has expired without being requested. There are currently no amounts available under EFSM.

The following table provides an overview of the planned reimbursement schedule in nominal value for outstanding EFSM and BOP loan amounts (in EUR billions) at the date of signature of these accounts:

| Year | BOP | EFSM | Total |
| --- | --- | --- | --- |
| Hungary | Latvia | Romania | Total | Ireland | Portugal | Total |
| 2015 | | | | 0 | 5,0 | | 5,0 | 5,0 |
| 2016 | 1,5 | | | 1,5 | | 4,75 | 4,75 | 6,25 |
| 2017 | | | 1,15 | 1,15 | | | 0 | 1,15 |
| 2018 | | | 1,35 | 1,35 | 3,9 | 0,6 | 4,5 | 5,85 |
| 2019 | | 0,5 | 1,0 | 1,5 | | | 0 | 1,5 |
| 2021 | | | | 0 | 3,0 | 6,75 | 9,75 | 9,75 |
| 2022 | | | | 0 | | 2,7 | 2,7 | 2,7 |
| 2024 | | | | 0 | 0,8 | 1,8 | 2,6 | 2,6 |
| 2025 | | 0,2 | | 0,2 | | | 0 | 0,2 |
| 2026 | | | | 0 | 2,0 | 2,0 | 4,0 | 4,0 |
| 2027 | | | | 0 | 1,0 | 2,0 | 3,0 | 3,0 |
| 2028 | | | | 0 | 2,3 | | 2,3 | 2,3 |
| 2029 | | | | 0 | | 0,4 | 0,4 | 0,4 |
| 2032 | | | | 0 | 3,0 | | 3,0 | 3,0 |
| 2038 | | | | 0 | | 1,8 | 1,8 | 1,8 |
| 2042 | | | | 0 | 1,5 | 1,5 | 3,0 | 3,0 |
| Total | 1,5 | 0,7 | 3,5 | 5,7 | 22,5 | 24,3 | 46,8 | 52,5 |

Year

BOP

EFSM

Total

Hungary

Latvia

Romania

Total

Ireland

Portugal

Total

2015

0

5,0

5,0

5,0

2016

1,5

1,5

4,75

4,75

6,25

2017

1,15

1,15

0

1,15

2018

1,35

1,35

3,9

0,6

4,5

5,85

2019

0,5

1,0

1,5

0

1,5

2021

0

3,0

6,75

9,75

9,75

2022

0

2,7

2,7

2,7

2024

0

0,8

1,8

2,6

2,6

2025

0,2

0,2

0

0,2

2026

0

2,0

2,0

4,0

4,0

2027

0

1,0

2,0

3,0

3,0

2028

0

2,3

2,3

2,3

2029

0

0,4

0,4

0,4

2032

0

3,0

3,0

3,0

2038

0

1,8

1,8

1,8

2042

0

1,5

1,5

3,0

3,0

Total

Total

1,5

1,5

0,7

0,7

3,5

3,5

5,7

5,7

22,5

22,5

24,3

24,3

46,8

46,8

52,5

52,5

Macro-financial assistance (MFA)

Macro-financial assistance (MFA)

MFA is a policy-based financial instrument of untied and undesignated balance of payment and/or budget support to partner third-countries geographically close to the EU territory. It takes the form of medium/long term loans or grants or an appropriate combination of both and generally complements financing provided in the context of an IMF-supported adjustment and reform program. These loans are guaranteed by the Guarantee Fund for external actions (see note 2.4 of the financial statements).

2.4

4.3.3.   Inter-governmental financial stability mechanisms outside the EU Treaty framework: European Financial Stability Facility and European Stability Mechanism

Inter-governmental financial stability mechanisms outside the EU Treaty framework: European Financial Stability Facility and European Stability Mechanism

The European Financial Stability Facility (EFSF) was created by the Eurozone Member States with the mandate to safeguard financial stability in Europe by providing financial assistance to Eurozone Member States. The EFSF is not an EU body and is entirely separate from and not consolidated in the EU accounts. It is not guaranteed by the EU budget. Consequently it has no impact on the EU accounts, aside from the possible sanctions revenue described below. With the entry into force of the ESM (see below), the EFSF did not provide new financial assistance after 1 July 2013.

The Commission is responsible for negotiating the policy conditionality attached to the financial assistance and the monitoring of compliance with that conditionality. Regulation 1173/2011 of the Parliament and Council allows for the imposition of sanctions in the form of fines on Member States whose currency is the Euro. These fines, being 0,2 % of the Member State’s GDP in the preceding year, can be applied in cases where a Member State has not taken appropriate actions to correct an excessive budget deficit, or where there has been manipulation of statistics. Similarly, Regulation 1174/2011 on macroeconomic imbalances makes provision for an annual fine on a Eurozone Member State of 0,1 % of GDP in the cases where a Member State has not taken the requested corrective action or in case an insufficient corrective action plan has been submitted. Regulation 1177/2011 updated Regulation 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure. This updated Regulation also foresees the possibility of issuing fines to Eurozone Member States (equal to 0,2 % of GDP plus a variable component). Fines will transit through the EU Budget and then be transferred to the EFSF. This would mean that such amounts would appear as both a budget revenue and expense, thus having no impact on the overall budget result. Likewise they would have no impact on the economic result as presented in the EU financial statements.

The European Stability Mechanism (‘ESM’) is an intergovernmental organisation under public international law outside the EU Treaty framework. The ESM Treaty was signed by the then 17 euro area Member States and became operational in October 2012. The ESM has assumed the tasks fulfilled by the EFSM and the EFSF becoming the sole and permanent mechanism for responding to new requests for financial assistance to euro area Member States. Consequently, the EFSF and the EFSM no longer engage in new financing programmes or enter into new loan facility agreements. It must also be noted that the EU budget will not guarantee ESM borrowings. As this mechanism has its own legal personality and is funded directly by the euro area Member States, it is not an EU body and it has no impact on either the EU accounts or the EU budget, aside from the possible sanctions revenue described below.

Fines collected will pass through the EU budget and be transferred to the ESM once the EFSF is no longer operational. Furthermore, the Treaty on Stability, Coordination and Governance foresees penalty payments on any of the ‘Contracting Parties’ where that Member State has not taken necessary measures to address a breach of deficit criterion. Penalties imposed (which cannot exceed 0,1 % of GDP) will be payable to the ESM if applied to euro area Member States (thus with no impact on the EU budget result, as with the EFSF above), or to the EU budget for non-euro Member States. In the latter case, the sanction amount will be revenue for the EU budget and be reflected as such in its accounts.

5.   ECONOMIC AND FINANCIAL CONTEXT OF EU BUDGET IMPLEMENTATION

ECONOMIC AND FINANCIAL CONTEXT OF EU BUDGET IMPLEMENTATION

Macro-economic environment

Macro-economic environment

In the context of the sovereign debt crisis the economic growth in the EU Member States has slowed down from 2012 to 2013 and increased from 2013 to 2014. This general economic situation of Member States is reflected in the own resource revenue of the EU, which led to a slight increase of traditional own resources and VAT revenue. Since the GNI resource revenue is a residual component which is directly linked to the total level of payment appropriations adopted by the Budget Authority (and these appropriations have been reduced by Member States in the 2014-2020 MFF), the amount of GNI resource revenue decreased in 2014.

The reinforcement of the Stability and Growth Pact in the EU paves the way for sustainable public finances of the EU Member States concerned. The Fiscal pact aims at consolidating the public finances of the Member States and shall enable them to increase their GDP in the years to come.

The policy of the European Central Bank (ECB) of keeping interest rates at a low level supports the stabilisation of the Euro-area economy. The ECB contributes within its mandate to the increase of growth of the euro area.

Gross Domestic Product of EU-28 at market prices

Gross Domestic Product of EU-28 at market prices

Image

GNI resource revenue

GNI resource revenue

Image

Unpaid payment claims

Unpaid payment claims

Due to the macro-economic environment in the EU, the pressure on the national budgets of Member States leads to pressure on the payment appropriations of the EU budget. This development has an immediate effect on the payment claims received from Member States and other beneficiaries. The total of unpaid payment claims at year-end has increased from EUR 24,3 billion in 2013 to EUR 25,8 billion in 2014. Although there will always be outstanding claims due to amounts submitted close to the year-end, the main reason for the exceptional amounts noted in recent years is the shortage of payment appropriations.

Unpaid payment claims must be financed by future budgets. With this in mind, in May 2015 the EP, the Council and the Commission have agreed on a payment plan to bring the EU budget back on a sustainable track. For the EU it is crucial to consider the long-term needs budgetary payment appropriations since it is these which are decided on by the Budgetary Authority and without these, no payments can be made or cash transferred. Once agreed, appropriations are automatically transformed into available cash of the EU through the monthly own resource collection process.

Within the Commission, short-term cash flow forecasting is done weekly (sometimes daily) to ensure that the immediate payment obligations of the EU can be met, respecting the limits of the payment appropriations available in the budget. This short term forecast is the basis used to estimate the amount of own resources to be called monthly from Member States. On the first working day of each month Member States must credit to the Commission’s own resource accounts one-twelfth of the total amount of the VAT and GNI-based resource entered in the Union’s budget. Depending on the Commission’s cash position, Member States may be asked in the first quarter of the year to bring forward, by one or two months, the VAT and GNI based resources. Those advances have to be deducted from calls for funds in later months, depending on the forecasted cash needs.

For the medium and long-term, the Commission monitors in detail the payment requirements of the EU as part of its regular activities. For example, this is required for the preparation of Commission proposals on the MFF, as part of the annual budget preparation and when preparing amending budgets. In the negotiation phase of the MFF, the models used and the assumptions underlying are monitored regularly and updated when necessary. The results of the model simulation are channelled into the budgetary negotiations establishing the MFF payment ceiling.

NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS

The consolidated annual accounts of the European Union for the year 2014 have been prepared on the basis of the information presented by the institutions and bodies under Article 148(2) of the Financial Regulation applicable to the general budget of the European Union. I hereby declare that they were prepared in accordance with Title IX of this Financial Regulation and with the accounting principles, rules and methods set out in the notes to the financial statements.

I have obtained from the accounting officers of these institutions and bodies, who certified its reliability, all the information necessary for the production of the accounts that show the European Union’s assets and liabilities and the budgetary implementation.

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts of the European Commission, I have a reasonable assurance that the accounts present fairly, in all material aspects, the financial position, the results of the operations and the cash flows of the European Union.

[signed]

Manfred KRAFF

Accounting Officer of the Commission

17 July 2015

CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES (1)

1

CONTENTS

CONTENTS

| BALANCE SHEET | 24 |
| --- | --- |

| STATEMENT OF FINANCIAL PERFORMANCE | 25 |
| --- | --- |

| CASHFLOW STATEMENT | 26 |
| --- | --- |

| STATEMENT OF CHANGES IN NET ASSETS | 27 |
| --- | --- |

| NOTES TO THE FINANCIAL STATEMENTS | 28 |
| --- | --- |

| 1. | SIGNIFICANT ACCOUNTING POLICIES | 28 |
| --- | --- | --- |

1.

| 2. | NOTES TO THE BALANCE SHEET | 39 |
| --- | --- | --- |

2.

| 3. | NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE | 61 |
| --- | --- | --- |

3.

| 4. | NOTES TO THE CASHFLOW STATEMENT | 73 |
| --- | --- | --- |

4.

| 5. | CONTINGENT ASSETS AND LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES | 73 |
| --- | --- | --- |

5.

| 6. | PROTECTION OF THE EU BUDGET | 77 |
| --- | --- | --- |

6.

| 7. | FINANCIAL RISK MANAGEMENT | 83 |
| --- | --- | --- |

7.

| 8. | RELATED PARTY DISCLOSURES | 94 |
| --- | --- | --- |

8.

| 9. | EVENTS AFTER THE BALANCE SHEET DATE | 96 |
| --- | --- | --- |

9.

| 10. | SCOPE OF CONSOLIDATION | 96 |
| --- | --- | --- |

10.

BALANCE SHEET

BALANCE SHEET

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| NON-CURRENT ASSETS | | | |
| Intangible assets | 2.1 | 282 | 237 |
| Property, plant and equipment | 2.2 | 7  937 | 6  104 |
| Investments accounted for using the equity method | 2.3 | 409 | 349 |
| Financial assets | 2.4 | 56  438 | 59  844 |
| Prefinancing | 2.5 | 18  358 | 38  072 |
| Exchange receivables and non-exchange recoverables | 2.6 | 1  198 | 498 |
| | | 84  623 | 1 05  104 |
| CURRENT ASSETS | | | |
| Financial assets | 2.4 | 11  811 | 5  571 |
| Prefinancing | 2.5 | 34  237 | 21  367 |
| Exchange receivables and non-exchange recoverables | 2.6 | 14  380 | 13  182 |
| Inventories | 2.7 | 128 | 128 |
| Cash and cash equivalents | 2.8 | 17  545 | 9  510 |
| | | 78  101 | 49  758 |
| TOTAL ASSETS | | 1 62  724 | 1 54  862 |
| NON-CURRENT LIABILITIES | | | |
| Pension and other employee benefits | 2.9 | (58  616) | (46  818) |
| Provisions | 2.10 | (1  537) | (1  323) |
| Financial liabilities | 2.11 | (51  851) | (56  369) |
| | | (1 12  005) | (1 04  510) |
| CURRENT LIABILITIES | | | |
| Provisions | 2.10 | (745) | (545) |
| Financial liabilities | 2.11 | (8  828) | (3  163) |
| Payables | 2.12 | (43  180) | (36  213) |
| Accrued charges and deferred income | 2.13 | (55  973) | (56  282) |
| | | (1 08  726) | (96  204) |
| TOTAL LIABILITIES | | (2 20  730) | (2 00  714) |
| NET ASSETS | | (58  006) | (45  852) |
| Reserves | 2.14 | 4  435 | 4  073 |
| Amounts to be called from Member States (2) | 2.15 | (62  441) | (49  925) |
| NET ASSETS | | (58  006) | (45  852) |

(EUR millions)

Note

31.12.2014

31.12.2013

NON-CURRENT ASSETS

NON-CURRENT ASSETS

Intangible assets

2.1

2.1

282

237

Property, plant and equipment

2.2

2.2

7  937

6  104

Investments accounted for using the equity method

2.3

2.3

409

349

Financial assets

2.4

2.4

56  438

59  844

Prefinancing

2.5

2.5

18  358

38  072

Exchange receivables and non-exchange recoverables

2.6

2.6

1  198

498

84  623

84  623

1 05  104

1 05  104

CURRENT ASSETS

CURRENT ASSETS

Financial assets

2.4

2.4

11  811

5  571

Prefinancing

2.5

2.5

34  237

21  367

Exchange receivables and non-exchange recoverables

2.6

2.6

14  380

13  182

Inventories

2.7

2.7

128

128

Cash and cash equivalents

2.8

2.8

17  545

9  510

78  101

78  101

49  758

49  758

TOTAL ASSETS

TOTAL ASSETS

1 62  724

1 62  724

1 54  862

1 54  862

NON-CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Pension and other employee benefits

2.9

2.9

(58  616)

(46  818)

Provisions

2.10

2.10

(1  537)

(1  323)

Financial liabilities

2.11

2.11

(51  851)

(56  369)

(1 12  005)

(1 12  005)

(1 04  510)

(1 04  510)

CURRENT LIABILITIES

CURRENT LIABILITIES

Provisions

2.10

2.10

(745)

(545)

Financial liabilities

2.11

2.11

(8  828)

(3  163)

Payables

2.12

2.12

(43  180)

(36  213)

Accrued charges and deferred income

2.13

2.13

(55  973)

(56  282)

(1 08  726)

(1 08  726)

(96  204)

(96  204)

TOTAL LIABILITIES

TOTAL LIABILITIES

(2 20  730)

(2 20  730)

(2 00  714)

(2 00  714)

NET ASSETS

NET ASSETS

(58  006)

(58  006)

(45  852)

(45  852)

Reserves

2.14

2.14

4  435

4  073

Amounts to be called from Member States (2)

2

2.15

2.15

(62  441)

(49  925)

NET ASSETS

NET ASSETS

(58  006)

(58  006)

(45  852)

(45  852)

STATEMENT OF FINANCIAL PERFORMANCE

STATEMENT OF FINANCIAL PERFORMANCE

| (EUR millions) |
| --- |
| | Note | 2014 | 2013 (reclassified) (20) |
| REVENUE | | | |
| Revenue from non-exchange transactions | | | |
| GNI resources | 3.1 | 1 04  688 | 1 10  194 |
| Traditional own resources | 3.2 | 17  137 | 15  467 |
| VAT resources | 3.3 | 17  462 | 14  019 |
| Fines | 3.4 | 2  297 | 2  757 |
| Recovery of expenses | 3.5 | 3  418 | 1  777 |
| Other | 3.6 | 5  623 | 4  045 |
| Total | | 1 50  625 | 1 48  259 |
| | | | |
| Revenue from exchange transactions | | | |
| Financial income | 3.7 | 2  298 | 1  991 |
| Other | 3.8 | 1  066 | 1  443 |
| Total | | 3  364 | 3  434 |
| | | 1 53  989 | 1 51  693 |
| EXPENSES
   (22) | | | |
| Implemented by Member States | 3.9 | | |
| European Agricultural Guarantee Fund | | (44  465) | (45  067) |
| European Agricultural Fund for Rural Development and other rural development instruments | | (14  046) | (13  585) |
| European Regional Development Fund and Cohesion Fund | | (43  345) | (47  767) |
| European Social Fund | | (12  651) | (12  126) |
| Other | | (2  307) | (1  525) |
| Implemented by the Commission and executive agencies | 3.10 | (15  311) | (12  519) |
| Implemented by other EU agencies and bodies | 3.11 | (1  025) | (656) |
| Implemented by third countries and international organisations | 3.11 | (2  770) | (2  465) |
| Implemented by other entities | 3.11 | (1  799) | (1  694) |
| Staff and pension costs | 3.12 | (9  662) | (9  058) |
| Changes in employee benefits actuarial assumptions | 3.13 | (9  170) | (2  033) |
| Finance costs | 3.14 | (2  926) | (2  383) |
| Share of net deficit of joint ventures and associates | 3.15 | (640) | (608) |
| Other expenses | 3.16 | (5  152) | (4  572) |
| | | (1 65  269) | (1 56  058) |
| ECONOMIC RESULT OF THE YEAR | | (11  280) | (4  365) |

(EUR millions)

Note

2014

2013 (reclassified) (20)

20

REVENUE

REVENUE

Revenue from non-exchange transactions

Revenue from non-exchange transactions

GNI resources

3.1

3.1

1 04  688

1 10  194

Traditional own resources

3.2

3.2

17  137

15  467

VAT resources

3.3

3.3

17  462

14  019

Fines

3.4

3.4

2  297

2  757

Recovery of expenses

3.5

3.5

3  418

1  777

Other

3.6

3.6

5  623

4  045

Total

Total

1 50  625

1 50  625

1 48  259

1 48  259

Revenue from exchange transactions

Revenue from exchange transactions

Financial income

3.7

3.7

2  298

1  991

Other

3.8

3.8

1  066

1  443

Total

Total

3  364

3  364

3  434

3  434

1 53  989

1 53  989

1 51  693

1 51  693

EXPENSES
   (22)

EXPENSES

22

Implemented by Member States

3.9

3.9

European Agricultural Guarantee Fund

(44  465)

(45  067)

European Agricultural Fund for Rural Development and other rural development instruments

(14  046)

(13  585)

European Regional Development Fund and Cohesion Fund

(43  345)

(47  767)

European Social Fund

(12  651)

(12  126)

Other

(2  307)

(1  525)

Implemented by the Commission and executive agencies

3.10

3.10

(15  311)

(12  519)

Implemented by other EU agencies and bodies

3.11

3.11

(1  025)

(656)

Implemented by third countries and international organisations

3.11

3.11

(2  770)

(2  465)

Implemented by other entities

3.11

3.11

(1  799)

(1  694)

Staff and pension costs

3.12

3.12

(9  662)

(9  058)

Changes in employee benefits actuarial assumptions

3.13

3.13

(9  170)

(2  033)

Finance costs

3.14

3.14

(2  926)

(2  383)

Share of net deficit of joint ventures and associates

3.15

3.15

(640)

(608)

Other expenses

3.16

3.16

(5  152)

(4  572)

(1 65  269)

(1 65  269)

(1 56  058)

(1 56  058)

ECONOMIC RESULT OF THE YEAR

ECONOMIC RESULT OF THE YEAR

(11  280)

(11  280)

(4  365)

(4  365)

CASHFLOW STATEMENT

CASHFLOW STATEMENT

| (EUR millions) |
| --- |
| | Note | 2014 | 2013 |
| Economic result of the year | | (11  280) | (4  365) |
| Operating activities | 4.2 | | |
| Amortisation | | 61 | 48 |
| Depreciation | | 408 | 401 |
| (Increase)/decrease in loans | | (1  298) | 20 |
| (Increase)/decrease in prefinancing | | 6  844 | (1  695) |
| (Increase)/decrease in exchange receivables and non-exchange recoverables | | (1  898) | 923 |
| (Increase)/decrease in inventories | | — | 10 |
| Increase/(decrease) in pension and employee benefits liability | | 11  798 | 4  315 |
| Increase/(decrease) in provisions | | 414 | (196) |
| Increase/(decrease) in financial liabilities | | 1  146 | (330) |
| Increase/(decrease) in payables | | 6  967 | 14  655 |
| Increase/(decrease) in accrued charges and deferred income | | (309) | (12  154) |
| Prior year budgetary surplus taken as non-cash revenue | | (1  005) | (1  023) |
| Other non-cash movements | | 130 | (50) |
| Investing activities | 4.3 | | |
| (Increase)/decrease in intangible assets and property, plant and equipment | | (2  347) | (624) |
| (Increase)/decrease in investments accounted for using the equity method | | (60) | 43 |
| (Increase)/decrease in available for sale financial assets | | (1  536) | (1  142) |
| NET CASHFLOW | | 8  035 | (1  164) |
| Net increase/(decrease) in cash and cash equivalents | | 8  035 | (1  164) |
| Cash and cash equivalents at the beginning of the year | 2.8 | 9  510 | 10  674 |
| Cash and cash equivalents at year-end | 2.8 | 17  545 | 9  510 |

(EUR millions)

Note

2014

2013

Economic result of the year

Economic result of the year

(11  280)

(11  280)

(4  365)

(4  365)

Operating activities

Operating activities

4.2

4.2

Amortisation

61

48

Depreciation

408

401

(Increase)/decrease in loans

(1  298)

20

(Increase)/decrease in prefinancing

6  844

(1  695)

(Increase)/decrease in exchange receivables and non-exchange recoverables

(1  898)

923

(Increase)/decrease in inventories

—

10

Increase/(decrease) in pension and employee benefits liability

11  798

4  315

Increase/(decrease) in provisions

414

(196)

Increase/(decrease) in financial liabilities

1  146

(330)

Increase/(decrease) in payables

6  967

14  655

Increase/(decrease) in accrued charges and deferred income

(309)

(12  154)

Prior year budgetary surplus taken as non-cash revenue

(1  005)

(1  023)

Other non-cash movements

130

(50)

Investing activities

Investing activities

4.3

4.3

(Increase)/decrease in intangible assets and property, plant and equipment

(2  347)

(624)

(Increase)/decrease in investments accounted for using the equity method

(60)

43

(Increase)/decrease in available for sale financial assets

(1  536)

(1  142)

NET CASHFLOW

NET CASHFLOW

8  035

8  035

(1  164)

(1  164)

Net increase/(decrease) in cash and cash equivalents

8  035

(1  164)

Cash and cash equivalents at the beginning of the year

2.8

2.8

9  510

10  674

Cash and cash equivalents at year-end

2.8

2.8

17  545

9  510

STATEMENT OF CHANGES IN NET ASSETS

STATEMENT OF CHANGES IN NET ASSETS

| (EUR millions) |
| --- |
| | Reserves (A) | Amounts to be called from Member States (B) | Net Assets =(A)+(B) |
| | Fair value reserve | Other reserves | Accumulated Surplus/(Deficit) | Economic result of the year |
| BALANCE AS AT 31.12.2012 | 150 | 3  911 | (39  148) | (5  329) | (40  416) |
| Movement in Guarantee Fund reserve | — | 46 | (46) | — | — |
| Fair value movements | (51) | — | — | — | (51) |
| Other | — | 12 | (9) | — | 3 |
| Allocation of the 2012 economic result | — | 5 | (5  334) | 5  329 | — |
| 2012 budget result credited to Member States | — | — | (1  023) | — | (1  023) |
| Economic result of the year | — | — | — | (4  365) | (4  365) |
| BALANCE AS AT 31.12.2013 | 99 | 3  974 | (45  560) | (4  365) | (45  852) |
| Movement in Guarantee Fund reserve | — | 247 | (247) | — | — |
| Fair value movements | 139 | — | — | — | 139 |
| Other | — | (24) | 16 | — | (8) |
| Allocation of the 2013 economic result | — | (0) | (4  365) | 4  365 | — |
| 2013 budget result credited to Member States | — | — | (1  005) | — | (1  005) |
| Economic result of the year | — | — | — | (11  280) | (11  280) |
| BALANCE AS AT 31.12.2014 | 238 | 4  197 | (51  161) | (11  280) | (58  006) |

(EUR millions)

Reserves (A)

Amounts to be called from Member States (B)

Net Assets =(A)+(B)

Fair value reserve

Other reserves

Accumulated Surplus/(Deficit)

Economic result of the year

BALANCE AS AT 31.12.2012

BALANCE AS AT 31.12.2012

150

150

3  911

3  911

(39  148)

(39  148)

(5  329)

(5  329)

(40  416)

(40  416)

Movement in Guarantee Fund reserve

—

46

(46)

—

—

Fair value movements

(51)

—

—

—

(51)

Other

—

12

(9)

—

3

Allocation of the 2012 economic result

—

5

(5  334)

5  329

—

2012 budget result credited to Member States

—

—

(1  023)

—

(1  023)

Economic result of the year

—

—

—

(4  365)

(4  365)

BALANCE AS AT 31.12.2013

BALANCE AS AT 31.12.2013

99

99

3  974

3  974

(45  560)

(45  560)

(4  365)

(4  365)

(45  852)

(45  852)

Movement in Guarantee Fund reserve

—

247

(247)

—

—

Fair value movements

139

—

—

—

139

Other

—

(24)

16

—

(8)

Allocation of the 2013 economic result

—

(0)

(4  365)

4  365

—

2013 budget result credited to Member States

—

—

(1  005)

—

(1  005)

Economic result of the year

—

—

—

(11  280)

(11  280)

BALANCE AS AT 31.12.2014

BALANCE AS AT 31.12.2014

238

238

4  197

4  197

(51  161)

(51  161)

(11  280)

(11  280)

(58  006)

(58  006)

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

1.   SIGNIFICANT ACCOUNTING POLICIES

1.1.   LEGAL BASIS AND ACCOUNTING RULES

LEGAL BASIS AND ACCOUNTING RULES

The accounts of the EU are kept in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1) hereinafter referred to as the ‘Financial Regulation’ and Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 (OJ L 362, 31.12.2012, p. 1) laying down detailed rules of application of this Financial Regulation.

In accordance with Article 143 of the Financial Regulation, the EU prepares its financial statements on the basis of accrual-based accounting rules that are based on International Public Sector Accounting Standards (IPSAS). These accounting rules, adopted by the Accounting Officer of the Commission, have to be applied by all the institutions and EU bodies falling within the scope of consolidation in order to establish a uniform set of rules for accounting, valuation and presentation of the accounts with a view to harmonising the process for drawing up the financial statements and consolidation. The accounts are kept in euros on the basis of the calendar year.

1.2.   ACCOUNTING PRINCIPLES

ACCOUNTING PRINCIPLES

The objective of the financial statements is to provide information about the financial position, performance and cash flows of an entity that is useful to a wide range of users. For the EU as a public sector entity, the objectives are more specifically to provide information useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it. It is with these goals in mind that the present document has been drawn up.

The overall considerations (or accounting principles) to be followed when preparing the financial statements are laid down in EU accounting rule 2 and are the same as those described in IPSAS 1, that is: fair presentation, accrual basis, going concern, consistency of presentation, aggregation, offsetting and comparative information. The qualitative characteristics of financial reporting according to article 144 of the Financial Regulation are relevance, reliability, understandability and comparability.

Preparation of the financial statements in accordance with the above mentioned rules and principles requires management to make estimates that affect the reported amounts of certain items in the balance sheet and statement of financial performance, as well as the disclosures related to financial instruments and contingent assets and liabilities.

1.3.   CONSOLIDATION

CONSOLIDATION

Scope of consolidation

Scope of consolidation

The consolidated financial statements of the EU comprise all significant controlled entities (i.e. the EU institutions (including the Commission) and the EU agencies), associates and joint ventures, this being 52 controlled entities, 7 joint ventures and 1 associate. The complete list of consolidated entities can be found in note 10 of the EU accounts. In comparison with 2013, the scope of consolidation remains unchanged, noting that 1 associate has now been reclassified as a joint venture and following the amalgamation of 2 other associates the resulting entity has been classified as a joint venture.

10

Controlled entities

Controlled entities

The decision to include an entity in the scope of consolidation is based on the control concept. Controlled entities are all entities over which the EU has, directly or indirectly, the power to govern the financial and operating policies so as to be able to benefit from these entities’ activities. This power must be presently exercisable. Controlled entities are fully consolidated. The consolidation begins at the first date on which control exists, and ends when such control no longer exists.

The most common indicators of control within the EU are: creation of the entity through founding treaties or secondary legislation, financing of the entity from the general budget, the existence of voting rights in the governing bodies, audit by the Court and discharge by the European Parliament. It is clear that an individual assessment for each entity needs to be made in order to decide whether one or all of the criteria listed above are sufficient to trigger control.

Under this approach, the EU’s institutions (except the European Central Bank — ECB) and agencies (excluding the agencies of the former 2nd pillar) are considered as under the exclusive control of the EU and are therefore included in the consolidation scope. Furthermore the European Coal and Steel Community (ECSC) in liquidation is also considered as a controlled entity.

All material inter-company transactions and balances between EU controlled entities are eliminated, while unrealised gains and losses on such transactions are not material and so have not been eliminated.

Joint ventures

Joint ventures

A joint venture is a contractual arrangement whereby the EU and one or more parties (the ‘venturers’) undertake an economic activity which is subject to joint control. Joint control is the contractually agreed sharing of control, directly or indirectly, over an activity embodying service potential. Participations in joint ventures are accounted for using the equity method (see 1.5.4 below).

1.5.4

Associates

Associates

Associates are entities over which the EU has, directly or indirectly, significant influence but not control. It is presumed that significant influence exists if the EU holds directly or indirectly 20 % or more of the voting rights. Participations in associates are accounted for using the equity method (see 1.5.4 below).

1.5.4

Non-consolidated entities the funds of which are managed by the Commission

Non-consolidated entities the funds of which are managed by the Commission

The funds of the Sickness Insurance Scheme for staff of the EU, the European Development Fund and the Participants Guarantee Fund are managed by the Commission on their behalf, however since these entities are not controlled by the EU they are not consolidated in its financial statements.

1.4.   BASIS OF PREPARATION

BASIS OF PREPARATION

1.4.1.   
  Currency and basis for conversion

Currency and basis for conversion

Functional and reporting currency

Functional and reporting currency

The financial statements are presented in millions of euros, the euro being the EU’s functional and reporting currency.

Transactions and balances

Transactions and balances

Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of financial performance.

Different conversion methods apply to property, plant and equipment and intangible assets, which retain their value in euros at the rate that applied at the date when they were purchased.

Year-end balances of monetary assets and liabilities denominated in foreign currencies are converted into euros on the basis of the exchange rates applying on 31 December:

Euro exchange rates

Euro exchange rates

| Currency | 31.12.2014 | 31.12.2013 |
| --- | --- | --- |
| BGN | 1,9558 | 1,9558 |
| CZK | 27,7350 | 27,4270 |
| DKK | 7,4453 | 7,4593 |
| GBP | 0,7789 | 0,8337 |
| HRK | 7,6580 | 7,6265 |
| HUF | 315,5400 | 297,0400 |
| LVL | — | 0,7028 |
| LTL | 3,4528 | 3,4528 |
| PLN | 4,2732 | 4,1543 |
| RON | 4,4828 | 4,4710 |
| SEK | 9,3930 | 8,8591 |
| CHF | 1,2024 | 1,2276 |
| JPY | 145,2300 | 144,7200 |
| USD | 1,2141 | 1,3791 |

Currency

31.12.2014

31.12.2013

BGN

1,9558

1,9558

CZK

27,7350

27,4270

DKK

7,4453

7,4593

GBP

0,7789

0,8337

HRK

7,6580

7,6265

HUF

315,5400

297,0400

LVL

—

0,7028

LTL

3,4528

3,4528

PLN

4,2732

4,1543

RON

4,4828

4,4710

SEK

9,3930

8,8591

CHF

1,2024

1,2276

JPY

145,2300

144,7200

USD

1,2141

1,3791

Changes in the fair value of monetary financial instruments denominated in a foreign currency and classified as available for sale that relate to a translation difference are recognised in the statement of financial performance. Translation differences on non-monetary financial assets and liabilities held at fair value through profit or loss are recognised in the statement of financial performance. Translation differences on non-monetary financial instruments classified as available for sale are included in the fair value reserve.

1.4.2.   
  Use of estimates

Use of estimates

In accordance with IPSAS and generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management based on the most reliable information available. Significant estimates include, but are not limited to; amounts for employee benefit liabilities, provisions, financial risk on inventories and accounts receivable, accrued income and charges, contingent assets and liabilities, degree of impairment of intangible assets and property, plant and equipment and amounts disclosed in the notes concerning financial instruments. Actual results could differ from those estimates. Changes in estimates are reflected in the period in which they become known.

1.5.   BALANCE SHEET

BALANCE SHEET

1.5.1.   
  Intangible assets

Intangible assets

Acquired computer software licences are stated at historical cost less accumulated amortisation and impairment losses. The assets are amortised on a straight-line basis over their estimated useful lives. The estimated useful lives of intangible assets depend on their specific economic lifetime or legal lifetime determined by an agreement. Internally developed intangible assets are capitalised when the relevant criteria of the EU accounting rules are met and relate solely to the development phase of the asset. The costs capitalisable include all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management. Costs associated with research activities, non-capitalisable development costs and maintenance costs are recognised as expenses as incurred.

1.5.2.   
  Property, plant and equipment

Property, plant and equipment

All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition, construction or transfer of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits or service potential associated with the item will flow to the EU and its cost can be measured reliably. Repairs and maintenance costs are charged to the statement of financial performance during the financial period in which they are incurred.

Land and works of art are not depreciated as they are deemed to have an indefinite useful life. Assets under construction are not depreciated as these assets are not yet available for use. Depreciation on other assets is calculated using the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

| Type of asset | Straight line depreciation rate |
| --- | --- |
| Buildings | 4 % to 10 % |
| Plant and equipment | 10 % to 25 % |
| Furniture and vehicles | 10 % to 25 % |
| Fixtures and fittings | 10 % to 33 % |
| Computer hardware | 25 % to 33 % |
| Other | 10 % to 33 % |

Type of asset

Straight line depreciation rate

Buildings

4 % to 10 %

Plant and equipment

10 % to 25 %

Furniture and vehicles

10 % to 25 %

Fixtures and fittings

10 % to 33 %

Computer hardware

25 % to 33 %

Other

10 % to 33 %

Gains or losses on disposals are determined by comparing proceeds less selling expenses with the carrying amount of the disposed asset and are included in the statement of financial performance.

Leases

Leases

Leases of tangible assets, where the EU has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The rental obligations, net of finance charges, are included in financial liabilities (non-current and current). The interest element of the finance cost is charged to the statement of financial performance over the lease period so as to produce a constant periodic interest rate on the remaining balance of the liability for each period. The assets held under finance leases are depreciated over the shorter of the assets’ useful life and the lease term.

Leases where the lessor retains a significant portion of the risks and rewards inherent to ownership are classified as operating leases. Payments made under operating leases are charged to the statement of financial performance on a straight-line basis over the period of the lease.

1.5.3.   
  Impairment of non-financial assets

Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation/depreciation and are tested annually for impairment. Assets that are subject to amortisation/depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable (service) amount. The recoverable (service) amount is the higher of an asset’s fair value less costs to sell and its value in use.

Intangible assets and property, plant and equipment residual values and useful lives are reviewed, and adjusted if appropriate, at least once per year. An asset’s carrying amount is written down immediately to its recoverable (service) amount if the asset’s carrying amount is greater than its estimated recoverable (service) amount. If the reasons for impairments recognised in previous years no longer apply, the impairment losses are reversed accordingly.

1.5.4.   
  Investments accounted for using the equity method

Investments accounted for using the equity method

Participations in associates and joint ventures

Participations in associates and joint ventures

Participations in associates and joint ventures are accounted for using the equity method and are initially recognised at cost. The EU’s interest in the results of its associates and joint ventures is recognised in the statement of financial performance, and its share in the movements in reserves is recognised in the reserves. The initial cost together with all movements (further contributions, share of economic results and reserve movements, impairments, and dividends) give the book value of the associate or joint venture in the financial statements at the balance sheet date. Distributions received from an associate or joint venture reduce the carrying amount of the asset.

If the EU’s share of deficits of a joint venture equals or exceeds its interest in the joint venture, the EU discontinues recognising its share of further losses (‘unrecognised losses’). The unrecognised share of losses is the result of a technical accounting exercise needed when using the equity method of accounting. These unrecognised losses do not represent losses for the EU and are due to the fact that the expense recognition normally takes place before the capital increase for the contribution in kind of the venturers other than the EU.

Unrealised gains and losses on transactions between the EU and its associate or joint ventures are not material and have therefore not been eliminated. The accounting policies of associates or joint ventures may differ from those adopted by the EU for like transactions and events in similar circumstances.

If there are indications of impairment, a write-down to the lower recoverable amount is necessary. The recoverable amount is determined as described under 1.5.3. If the reason for impairment ceases to apply at a later date, the impairment loss is reversed to the carrying amount that would have been determined had no impairment loss been recognised.

1.5.3

In cases where the EU holds 20 % or more of an investment capital fund, it does not seek to exert significant influence. Such funds are therefore treated as financial instruments and categorised as available for sale financial assets.

1.5.5.   
  Financial assets

Financial assets

Classification

Classification

The EU classifies their financial assets in the following categories: financial assets at fair value through profit or loss; loans and receivables; held-to-maturity investments; and available for sale financial assets. The classification of the financial instruments is determined at initial recognition and re-evaluated at each balance sheet date.

(i)   Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by the EU. Derivatives are also categorised in this category. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the balance sheet date. During this financial year, the EU did not hold any financial assets in this category.

(ii)   Loans and receivables

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the EU provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in non-current assets, except for maturities within 12 months of the balance sheet date even if the maturity date of the entire loan dates more than 12 months from the balance sheet date.

(iii)   Held-to-maturity investments

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the EU has the positive intention and ability to hold to maturity. During this financial year, the EU did not hold any investments in this category.

(iv)   Available for sale financial assets

Available for sale financial assets

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are classified as either current or non-current assets, depending on the time period in which the EU expects to dispose of them which is usually the remaining maturity at the balance sheet date. Investments in unconsolidated entities and other equity investments (e.g. risk capital operations) that are not accounted for using the equity method are also classified as available for sale financial assets.

Initial recognition and measurement

Initial recognition and measurement

Purchases and sales of financial assets at fair value through profit or loss, held-to-maturity and available for sale are recognised on trade-date — the date on which the EU commits to purchase or sell the asset. Loans are recognised when cash is advanced to the borrowers. Financial instruments are initially recognised at fair value. For all financial assets not carried at fair value through profit or loss transactions costs are added to the fair value at initial recognition. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the statement of financial performance.

The fair value of a financial asset on initial recognition is normally the transaction price (i.e. the fair value of the consideration received). However, when a long-term loan that carries no interest or an interest below market conditions is granted, its fair value can be estimated as the present value of all future cash receipts discounted using the prevailing market rate of interest for a similar instrument with a similar credit rating.

Loans granted are measured at their nominal amount, which is considered to be the fair value of the loan. The reasoning for this is as follows:

| — | The ‘market environment’ for EU lending is very specific and different from the capital market used to issue commercial or government bonds. As lenders in these markets have the opportunity to choose alternative investments, the opportunity possibility is factored into market prices. However, this opportunity for alternative investments does not exist for the EU which is not allowed to invest money on the capital markets; it only borrows funds for the purpose of lending at the same rate. This means that there is no alternative lending or investment option available to the EU for the sums borrowed. Thus, there is no opportunity cost and therefore no basis of comparison with market rates. In fact, the EU lending operation itself represents the market. Essentially, since the opportunity cost ‘option’ is not applicable, the market price does not fairly reflect the substance of the EU lending transactions. Therefore, it is not appropriate to determine the fair value of EU lending with reference to commercial or government bonds. |
| --- | --- |

—

The ‘market environment’ for EU lending is very specific and different from the capital market used to issue commercial or government bonds. As lenders in these markets have the opportunity to choose alternative investments, the opportunity possibility is factored into market prices. However, this opportunity for alternative investments does not exist for the EU which is not allowed to invest money on the capital markets; it only borrows funds for the purpose of lending at the same rate. This means that there is no alternative lending or investment option available to the EU for the sums borrowed. Thus, there is no opportunity cost and therefore no basis of comparison with market rates. In fact, the EU lending operation itself represents the market. Essentially, since the opportunity cost ‘option’ is not applicable, the market price does not fairly reflect the substance of the EU lending transactions. Therefore, it is not appropriate to determine the fair value of EU lending with reference to commercial or government bonds.

| — | Furthermore as there is no active market or similar transactions to compare with, the interest rate to be used by the EU for fair valuing its lending operations under the European Financial Stability Mechanism (EFSM), balance-of-payment (BOP) and other such loans, should be the interest rate charged. |
| --- | --- |

—

Furthermore as there is no active market or similar transactions to compare with, the interest rate to be used by the EU for fair valuing its lending operations under the European Financial Stability Mechanism (EFSM), balance-of-payment (BOP) and other such loans, should be the interest rate charged.

| — | In addition, for these loans, there are compensating effects between loans and borrowings due to their back-to-back character. Thus, the effective interest for the loan equals the effective interest rate for the related borrowings. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly recognised in the statement of financial performance. |
| --- | --- |

—

In addition, for these loans, there are compensating effects between loans and borrowings due to their back-to-back character. Thus, the effective interest for the loan equals the effective interest rate for the related borrowings. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly recognised in the statement of financial performance.

Financial instruments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the EU has transferred substantially all risks and rewards of ownership.

Subsequent measurement

Subsequent measurement

| (i) | Financial assets at fair value through profit or loss are subsequently carried at fair value. Gains and losses arising from changes in the fair value of the ‘financial instruments at fair value through profit or loss’ category are included in the statement of financial performance in the period in which they arise. |
| --- | --- |

(i)

Financial assets at fair value through profit or loss are subsequently carried at fair value. Gains and losses arising from changes in the fair value of the ‘financial instruments at fair value through profit or loss’ category are included in the statement of financial performance in the period in which they arise.

| (ii) | Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. In the case of loans granted on borrowed funds, the same effective interest rate is applied to both the loans and borrowings since these loans have the characteristics of ‘back-to-back operations’ and the differences between the loan and the borrowing conditions and amounts are not material. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly recognised in the statement of financial performance. |
| --- | --- |

(ii)

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. In the case of loans granted on borrowed funds, the same effective interest rate is applied to both the loans and borrowings since these loans have the characteristics of ‘back-to-back operations’ and the differences between the loan and the borrowing conditions and amounts are not material. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly recognised in the statement of financial performance.

| (iii) | Held-to-maturity — the EU currently holds no held-to-maturity investments. |
| --- | --- |

(iii)

Held-to-maturity — the EU currently holds no held-to-maturity investments.

| (iv) | Available for sale financial assets are subsequently carried at fair value. Gains and losses arising from changes in the fair value of available for sale financial assets are recognised in the fair value reserve. When assets classified as available for sale financial assets are derecognised or impaired, the cumulative fair value adjustments previously recognised in the fair value reserve are recognised in the statement of financial performance. Interest on available for sale financial assets calculated using the effective interest method is recognised in the statement of financial performance. Dividends on available for sale equity instruments are recognised when the EU’s right to receive payment is established. |
| --- | --- |

(iv)

Available for sale financial assets are subsequently carried at fair value. Gains and losses arising from changes in the fair value of available for sale financial assets are recognised in the fair value reserve. When assets classified as available for sale financial assets are derecognised or impaired, the cumulative fair value adjustments previously recognised in the fair value reserve are recognised in the statement of financial performance. Interest on available for sale financial assets calculated using the effective interest method is recognised in the statement of financial performance. Dividends on available for sale equity instruments are recognised when the EU’s right to receive payment is established.

The fair values of quoted investments in active markets are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the EU establishes a fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants.

In cases where the fair value of investments in equity instruments that do not have a quoted market price in an active market cannot be reliably measured, these investments are valued at cost less impairment losses.

Impairment of financial assets

Impairment of financial assets

The EU assesses at each balance sheet date whether there is objective evidence that a financial asset is impaired. A financial asset is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

(a)   Assets carried at amortised cost

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of financial performance. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. The calculation of the present value of the estimated future cash flows of a collateralised financial asset reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the statement of financial performance.

(b)   Assets carried at fair value

Assets carried at fair value

In the case of equity investments classified as available for sale financial assets, a significant or permanent (prolonged) decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists for available for sale financial assets, the cumulative loss — measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the statement of financial performance — is removed from reserves and recognised in the statement of financial performance. Impairment losses recognised in the statement of financial performance on equity instruments are not reversed through the statement of financial performance. If, in a subsequent period, the fair value of a debt instrument classified as available for sale financial asset increases and the increase can be objectively related to an event occurring after the impairment loss was recognised, the impairment loss is reversed through the statement of financial performance.

Investments in venture capital funds

Investments in venture capital funds

Investments in Venture Capital Funds are classified as available for sale financial assets and, accordingly, are carried at fair value with gains and losses arising from changes in the fair value (including translation differences) recognised in the fair value reserve. Since they do not have a quoted market price in an active market, investments in Venture Capital Funds are valued on a line-by-line basis at the lower of cost or attributable net asset value. Unrealised gains resulting from the fair value measurement are recognised through reserves and unrealised losses are assessed for impairment so as to determine whether they are recognised as impairment losses in the statement of financial performance or as changes in the fair value reserve.

1.5.6.   
  Inventories

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other directly attributable costs and related production overheads (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. When inventories are held for distribution at no charge or for a nominal charge, they are measured at the lower of cost and current replacement cost. Current replacement cost is the cost the EU would incur to acquire the asset on the reporting date.

1.5.7.   
  Prefinancing amounts

Prefinancing amounts

Prefinancing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be split into a number of payments over a period defined in the particular prefinancing agreement. The float or advance is repaid or used for the purpose for which it was provided during the period defined in the agreement. If the beneficiary does not incur eligible expenditure, he has the obligation to return the prefinancing advance to the EU. The amount of the prefinancing may be reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses) and amounts returned.

At year-end, outstanding prefinancing amounts are valued at the original amount(s) paid less: amounts returned, eligible amounts expensed, estimated eligible amounts not yet cleared at year-end, and value reductions.

Amounts defined in the Financial Regulation as ‘financial instruments under shared management’ are from an accounting point of view classified as prefinancing amounts. These prefinancing amounts are valued at the original amounts paid to Member States less an estimation of amounts utilised.

Interest on prefinancing is recognised as it is earned in accordance with the provisions of the relevant agreement. An estimate of the accrued interest revenue, based on the most reliable information, is made at the year-end and included in the balance sheet.

1.5.8.   
  Exchange receivables and non-exchange recoverables

Exchange receivables and non-exchange recoverables

As the EU accounting rules require a separate presentation of exchange and non-exchange transactions, for the purpose of drawing up the accounts, receivables are defined as stemming from exchange transactions and recoverables are defined as stemming from non-exchange transactions that do not arise out of a contract (sovereign recoverables).

Receivables from exchange transactions meet the definition of financial instruments and are thus classified as loans and receivables and measured accordingly (see 1.5.5 above). The financial instruments notes disclosures concerning receivables from exchange transactions include accrued income and deferred charges from exchange transactions as they are not material.

1.5.5

Recoverables from non-exchange transactions are carried at original amount (adjusted for interest and penalties) less write-down for impairment. A write-down for impairment of recoverables from non-exchange transactions is established when there is objective evidence that the EU will not be able to collect all amounts due according to the original terms of recoverables from non-exchange transactions. The amount of the write-down is the difference between the asset’s carrying amount and the recoverable amount. The amount of the write-down is recognised in the statement of financial performance. A general write-down, based on past experience, is also made for outstanding recovery orders not already subject to a specific write-down. See note 1.5.14 below concerning the treatment of accrued income at year-end. Amounts displayed and disclosed as recoverables from non-exchanges transactions are not financial instruments as they do not arise from a contract. However, in the notes to the financial statements recoverables from non-exchange transactions are disclosed together with receivables from exchange transactions where appropriate.

1.5.14

1.5.9.   
  Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents are financial instruments and classified as available for sale financial assets. They include cash at hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

1.5.10.   
  Pension and other employee benefits

Pension and other employee benefits

Pension obligations

Pension obligations

The EU operates defined benefit pension plans. Whilst staff contribute from their salaries one third of the expected cost of these benefits, the liability is not funded. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date. The defined benefit obligation is calculated by actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised immediately in the statement of financial performance. Past-service costs are recognised immediately in statement of financial performance, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

Post-employment sickness benefits

Post-employment sickness benefits

The EU provides health benefits to its employees through the reimbursement of medical expenses. A separate fund has been created for its day-to-day administration. Both current employees, pensioners, widowers and their beneficiaries benefit from the system. The benefits granted to the ‘inactives’ (pensioners, orphans, etc.) are classified as ‘Post-Employment Employee Benefits’. Given the nature of these benefits, an actuarial calculation is required. The liability in the balance sheet is determined on a similar basis as that for the pension obligations (see above).

1.5.11.   
  Provisions

Provisions

Provisions are recognised when the EU has a present legal or constructive obligation towards third parties as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. The amount of the provision is the best estimate of the expenses expected to be required to settle the present obligation at the reporting date. Where the provision involves a large number of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities (‘expected value’ method).

1.5.12.   
  Financial liabilities

Financial liabilities

Financial liabilities are classified as financial liabilities at fair value through profit or loss or as financial liabilities carried at amortised cost. Borrowings are composed of borrowings from credit institutions and debts evidenced by certificates. They are recognised initially at fair value, being their issue proceeds (fair value of consideration received) net of transaction costs incurred, then subsequently carried at amortised cost using the effective interest method; any difference between proceeds, net of transaction costs, and the redemption value is recognised in the statement of financial performance over the period of the borrowings using the effective interest method.

Financial liabilities are classified as non-current liabilities, except for maturities less than 12 months after the balance sheet date. In the case of loans granted on borrowed funds, the effective interest method may not be applied to loans and borrowings, based on materiality considerations. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly recognised in the statement of financial performance.

Financial liabilities categorised at fair value through profit or loss include derivatives when their fair value is negative. They follow the same accounting treatment as financial assets at fair value through profit or loss, see note 1.5.5. During this financial year, the EU did not hold any financial liabilities in this category.

1.5.5

1.5.13.   
  Payables

Payables

A significant amount of the payables of the EU are not related to exchange transactions such as the purchase of goods or services — instead they are unpaid cost claims from beneficiaries of grants or other EU funding (non-exchange transactions). They are recorded as payables for the requested amount when the cost claim is received. Upon verification and acceptance of the eligible costs, the payables are valued at the accepted and eligible amount.

Payables arising from the purchase of goods and services are recognised at invoice reception for the original amount and corresponding expenses are entered in the accounts when the supplies or services are delivered and accepted by the EU.

1.5.14.   
  Accrued and deferred income and charges

Accrued and deferred income and charges

Transactions and events are recognised in the financial statements in the period to which they relate. At year-end, if an invoice is not yet issued but the service has been rendered, the supplies have been delivered by the EU or a contractual agreement exists (e.g. by reference to a treaty), an accrued income will be recognised in the financial statements. In addition, at year-end, if an invoice is issued but the services have not yet been rendered or the goods supplied have not yet been delivered, the revenue will be deferred and recognised in the subsequent accounting period.

Expenses are also accounted for in the period to which they relate. At the end of the accounting period, accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. The calculation of accrued expenses is done in accordance with detailed operational and practical guidelines issued by the Commission which aim at ensuring that the financial statements provide a faithful representation of the economic and other phenomena they purport to represent.

1.6.   STATEMENT OF FINANCIAL PERFORMANCE

STATEMENT OF FINANCIAL PERFORMANCE

1.6.1.   
  Revenue

Revenue

REVENUE FROM NON-EXCHANGE TRANSACTIONS

REVENUE FROM NON-EXCHANGE TRANSACTIONS

The vast majority of the EU’s revenue relates to non-exchange transactions:

GNI based resources and VAT resources

GNI based resources and VAT resources

Revenue is recognised for the period for which the Commission sends out a call for funds to the Member States claiming their contribution. They are measured at their ‘called amount’. As VAT and GNI resources are based on estimates of the data for the budgetary year concerned, they may be revised as changes occur until the final data are issued by the Member States. The effect of a change in estimate is included when determining the net surplus or deficit for the period in which the change occurred.

Traditional own resources

Traditional own resources

Recoverables from non-exchange transactions and related revenues are recognised when the relevant monthly ‘A’ statements (including duties collected and amounts due that are guaranteed and not contested) are received from the Member States. At the reporting date, revenue collected by the Member States for the period but not yet paid to the Commission is estimated and recognised as accrued income. The quarterly ‘B’ statements (including duties neither collected nor guaranteed, as well as guaranteed amounts that have been contested by the debtor) received from the Member States are recognised as revenue less the collection costs to which they are entitled. In addition, a value reduction is recognised for the amount of the estimated recovery gap.

Fines

Fines

Revenue from fines is recognised when the EU’s decision imposing a fine has been taken and it is officially notified to the addressee. If there are doubts about the undertaking’s solvency, a value reduction on the entitlement is recognised. After the decision to impose a fine, the debtors have two months from the date of notification:

| — | either to accept the decision, in which case they must pay the fine within the time limit laid down and the amount is definitively collected by the EU, |
| --- | --- |

—

either to accept the decision, in which case they must pay the fine within the time limit laid down and the amount is definitively collected by the EU,

| — | or not to accept the decision, in which case they lodge an appeal under EU law. |
| --- | --- |

—

or not to accept the decision, in which case they lodge an appeal under EU law.

However, even if appealed, the principal of the fine must be paid within the time limit of three months laid down as the appeal does not have suspensory effect (Article 278 of the EU Treaty) or, under certain circumstances and subject to the agreement of the Commission’s Accounting Officer, it may present a bank guarantee for the amount instead.

If the undertaking appeals against the decision, and has already provisionally paid the fine, the amount is disclosed as a contingent liability. However, since an appeal against an EU decision by the addressee does not have suspensory effect, the cash received is used to clear the recoverable. If a guarantee is received instead of payment, the fine remains as a recoverable. If it appears probable that the General Court may not rule in favour of the EU, a provision is recognised to cover this risk. If a guarantee had been given instead, then the recoverable outstanding is written-down as required. The accumulated interest received by the Commission on the bank accounts where received payments are deposited is recognised as revenue, and any contingent liability is increased accordingly.

Since 2010, all provisionally cashed fines are managed by the Commission in a specifically created fund (BUFI) and invested in financial instruments categorised as available for sale financial assets.

REVENUE FROM EXCHANGE TRANSACTIONS

REVENUE FROM EXCHANGE TRANSACTIONS

Revenue from the sale of goods and services is recognised when the significant risk and rewards of ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving the provision of services is recognised by reference to the stage of completion of the transaction at the reporting date.

Interest income and expense

Interest income and expense

Interest income and expense are recognised in the statement of financial performance using the effective interest method. This is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. When calculating the effective interest rate, the EU estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest to discount the future cash flows for the purpose of measuring the impairment loss.

Dividend income

Dividend income

Dividend income is recognised when the right to receive payment is established.

1.6.2.   
  Expenses

Expenses

Expenses from non-exchange transactions account for the majority of the EU’s expenses. They relate to transfers to beneficiaries and can be of three types: entitlements, transfers under agreement and discretionary grants, contributions and donations.

Transfers are recognised as expenses in the period during which the events giving rise to the transfer occurred, as long as the nature of the transfer is allowed by regulation (Financial Regulation, Staff Regulations, or other regulation) or an agreement has been signed authorising the transfer; any eligibility criteria have been met by the beneficiary; and a reasonable estimate of the amount can be made.

When a request for payment or cost claim is received and meets the recognition criteria, it is recognised as an expense for the eligible amount. At year-end, incurred eligible expenses due to the beneficiaries but not yet reported are estimated and recorded as accrued expenses.

Expenses from exchange transactions arising from the purchase of goods and services are recognised when the supplies are delivered and accepted by the EU. They are valued at original invoice cost.

1.7.   CONTINGENT ASSETS AND LIABILITIES

CONTINGENT ASSETS AND LIABILITIES

1.7.1.   
  Contingent assets

Contingent assets

A contingent asset is a possible asset that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the EU. A contingent asset is disclosed when an inflow of economic benefits or service potential is probable.

1.7.2.   
  Contingent liabilities

Contingent liabilities

A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the EU; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation or in the rare circumstances where the amount of the obligation cannot be measured with sufficient reliability.

2.   NOTES TO THE BALANCE SHEET

ASSETS

ASSETS

2.1.   INTANGIBLE ASSETS

INTANGIBLE ASSETS

| (EUR millions) |
| --- |
| Gross carrying amount at 31.12.2013 | 474 |
| Additions | 104 |
| Disposals | (2) |
| Transfer between asset categories | 0 |
| Other changes | 1 |
| Gross carrying amount at 31.12.2014 | 577 |
| Accumulated amortisation at 31.12.2013 | (236) |
| Amortisation charge for the year | (61) |
| Disposals | 2 |
| Transfer between asset categories | 0 |
| Other changes | 0 |
| Accumulated amortisation at 31.12.2014 | (295) |
| Net carrying amount at 31.12.2014 | 282 |
| Net carrying amount at 31.12.2013 | 237 |

(EUR millions)

Gross carrying amount at 31.12.2013

474

Additions

104

Disposals

(2)

Transfer between asset categories

0

Other changes

1

Gross carrying amount at 31.12.2014

Gross carrying amount at 31.12.2014

577

577

Accumulated amortisation at 31.12.2013

(236)

Amortisation charge for the year

(61)

Disposals

2

Transfer between asset categories

0

Other changes

0

Accumulated amortisation at 31.12.2014

Accumulated amortisation at 31.12.2014

(295)

(295)

Net carrying amount at 31.12.2014

Net carrying amount at 31.12.2014

282

282

Net carrying amount at 31.12.2013

Net carrying amount at 31.12.2013

237

237

The above amounts relate primarily to computer software.

2.2.   PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

The increase of property, plant and equipment is mainly due to the fact that following the signature of the Copernicus delegation agreement with the European Space Agency (ESA) during 2014, assets of EUR 1  525 million of the Copernicus programme (former GMES programme) have been transferred from ESA to the Commission. In accordance with the Copernicus Regulation adopted in 2014, the EU took over the responsibility for the Copernicus programme and thus must recognise the assets on its balance sheet. EUR 297 million relating to the Sentinel 1A satellite have been recognised as assets under the heading plant and equipment, and EUR 1  228 million relating to the other satellites currently being constructed have been recognised as assets under construction. Copernicus is the European Earth observation programme. It consists of a space component including six series of earth observation satellites and instruments, an in situ component (composed of numerous sensors on the ground, at sea and in the air), and a service component. The following services are to be provided by Copernicus: atmosphere monitoring, climate change monitoring, land monitoring, marine monitoring, and emergency management and security applications.

In addition, also included as assets under construction at 31 December 2014 are EUR 1  478 million (2013: EUR 1  041 million) of assets relating to the Galileo project, the EU’s Global Navigation Satellite System (GNSS), being built with the assistance of ESA. An amount of EUR 17 million of non-capitalisable development costs has been recognised as expenses during the period.

Property, plant and equipment

Property, plant and equipment

| (EUR millions) |
| --- |
| | Land and Buildings | Plant and Equipment | Furniture and Vehicles | Computer Hardware | Other | Finance leases | Assets under construction | Total |
| Gross carrying amount at 31.12.2013 | 4  660 | 608 | 233 | 596 | 248 | 2  692 | 1  599 | 10  635 |
| Additions | 30 | 342 | 18 | 59 | 31 | 9 | 1  779 | 2  267 |
| Disposals | (9) | (58) | (20) | (49) | (22) | 0 | (6) | (164) |
| Transfer between asset categories | 84 | 98 | 10 | 8 | 2 | (8) | (195) | — |
| Other changes | 2 | 1 | 2 | 10 | 1 | — | 1 | 17 |
| Gross carrying amount at 31.12.2014 | 4  768 | 990 | 242 | 623 | 261 | 2  693 | 3  176 | 12  754 |
| Accumulated depreciation at 31.12.2013 | (2  399) | (474) | (168) | (461) | (166) | (863) | | (4  531) |
| Depreciation charge for the year | (153) | (65) | (17) | (74) | (25) | (95) | | (429) |
| Depreciation written back | — | 16 | 0 | 2 | 3 | — | | 21 |
| Disposals | 4 | 42 | 18 | 47 | 18 | 0 | | 128 |
| Transfer between asset categories | — | 4 | (1) | (8) | (2) | 7 | | — |
| Other changes | — | 0 | (1) | (6) | (1) | — | | (8) |
| Accumulated depreciation at 31.12.2014 | (2  549) | (477) | (168) | (501) | (173) | (950) | | (4  817) |
| NET CARRYING AMOUNT AT 31.12.2014 | 2  219 | 513 | 74 | 122 | 89 | 1  743 | 3  176 | 7  937 |
| NET CARRYING AMOUNT AT 31.12.2013 | 2  261 | 134 | 65 | 134 | 83 | 1  829 | 1  599 | 6  104 |

(EUR millions)

Land and Buildings

Plant and Equipment

Furniture and Vehicles

Computer Hardware

Other

Finance leases

Assets under construction

Total

Gross carrying amount at 31.12.2013

4  660

608

233

596

248

2  692

1  599

10  635

Additions

30

342

18

59

31

9

1  779

2  267

Disposals

(9)

(58)

(20)

(49)

(22)

0

(6)

(164)

Transfer between asset categories

84

98

10

8

2

(8)

(195)

—

Other changes

2

1

2

10

1

—

1

17

Gross carrying amount at 31.12.2014

Gross carrying amount at 31.12.2014

4  768

4  768

990

990

242

242

623

623

261

261

2  693

2  693

3  176

3  176

12  754

12  754

Accumulated depreciation at 31.12.2013

(2  399)

(474)

(168)

(461)

(166)

(863)

(4  531)

Depreciation charge for the year

(153)

(65)

(17)

(74)

(25)

(95)

(429)

Depreciation written back

—

16

0

2

3

—

21

Disposals

4

42

18

47

18

0

128

Transfer between asset categories

—

4

(1)

(8)

(2)

7

—

Other changes

—

0

(1)

(6)

(1)

—

(8)

Accumulated depreciation at 31.12.2014

Accumulated depreciation at 31.12.2014

(2  549)

(2  549)

(477)

(477)

(168)

(168)

(501)

(501)

(173)

(173)

(950)

(950)

(4  817)

(4  817)

NET CARRYING AMOUNT AT 31.12.2014

NET CARRYING AMOUNT AT 31.12.2014

2  219

2  219

513

513

74

74

122

122

89

89

1  743

1  743

3  176

3  176

7  937

7  937

NET CARRYING AMOUNT AT 31.12.2013

NET CARRYING AMOUNT AT 31.12.2013

2  261

2  261

134

134

65

65

134

134

83

83

1  829

1  829

1  599

1  599

6  104

6  104

2.3.   INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Participations in joint ventures | 2.3.1 | — | — |
| Participations in associates | 2.3.2 | 409 | 349 |
| Total | | 409 | 349 |

(EUR millions)

Note

31.12.2014

31.12.2013

Participations in joint ventures

2.3.1

2.3.1

—

—

Participations in associates

2.3.2

2.3.2

409

349

Total

Total

409

409

349

349

Participations in joint ventures and associates are accounted for using the equity method.

2.3.1.   
  Participations in joint ventures

Participations in joint ventures

| (EUR millions) |
| --- |
| | GJU | SESAR | ITER | Clean Sky | IMI | ECSEL | FCH | Total |
| Participations at 31.12.2013 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Contributions | 0 | 95 | 118 | 125 | 166 | 75 | 69 | 647 |
| Share of net result | 0 | (95) | (118) | (125) | (166) | (75) | (69) | (647) |
| Other equity movements | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Participations at 31.12.2014 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Unrecognised share of loss (5) | — | (230) | (36) | (99) | (73) | (40) | (116) | (594) |

(EUR millions)

GJU

SESAR

ITER

Clean Sky

IMI

ECSEL

FCH

Total

Participations at 31.12.2013

0

0

0

0

0

0

0

0

Contributions

0

95

118

125

166

75

69

647

Share of net result

0

(95)

(118)

(125)

(166)

(75)

(69)

(647)

Other equity movements

0

0

0

0

0

0

0

0

Participations at 31.12.2014

Participations at 31.12.2014

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Unrecognised share of loss (5)

5

—

(230)

(36)

(99)

(73)

(40)

(116)

(594)

The following carrying amounts are attributable to the Commission based on its percentage of participation:

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Non-current assets | 250 | 198 |
| Current assets | 178 | 63 |
| Non-current liabilities | — | — |
| Current liabilities | (813) | (394) |
| Revenue | 2 | 1 |
| Expenses | (666) | (412) |

(EUR millions)

31.12.2014

31.12.2013

Non-current assets

250

198

Current assets

178

63

Non-current liabilities

—

—

Current liabilities

(813)

(394)

Revenue

2

1

Expenses

(666)

(412)

Galileo Joint Undertaking in liquidation

Galileo Joint Undertaking in liquidation

The Galileo Joint Undertaking (GJU) was put into liquidation at the end of 2006 and the process is still ongoing. The entity was inactive and still undergoing liquidation in 2014.

SESAR Joint Undertaking

SESAR Joint Undertaking

At 31 December 2014, the Commission held 43,53 % of the ownership participation in SESAR.

ITER International fusion energy organisation (ITER)

ITER International fusion energy organisation (ITER)

The EU (Euratom) contribution to ITER International is given through the Fusion for Energy Agency, including also the contributions from Member States and from Switzerland. The total contribution is legally considered as a Euratom contribution to ITER since the Member States and Switzerland do not have ownership interests in ITER. As the EU legally holds the participation in the joint venture ITER International, it must recognise the participation in its accounts. At 31 December 2014, the Commission held 40,61 % of the ownership participation in ITER.

Joint Technology Initiatives

Joint Technology Initiatives

Public private partnerships (PPPs) in the form of Joint Technology Initiatives (JTIs), which were implemented through Joint Undertakings within the meaning of Article 187 of the Treaty, have been created in order to implement the objectives of the Lisbon Growth and Jobs Agenda. The Clean Sky Joint Undertaking (JU), the IMI JU, the ECSEL JU (amalgamation of the former Artemis and ENIAC JUs) and the FCH JU are PPPs created in the form of JTIs. The ownership participation at year-end is as follows: 61,39 % in Clean Sky, 80,47 % in IMI, 95,47 % in ECSEL and 70,85 % in FCH.

2.3.2.   
  Participations in associates

Participations in associates

European Investment Fund

European Investment Fund

The participation of the Commission in the European Investment Fund (EIF) is treated as associate using the equity method of accounting. The EIF is the EU’s financial institution specialising in providing risk capital and guarantees to SMEs.

| (EUR millions) |
| --- |
| | EIF |
| Participation at 31.12.2013 | 349 |
| Contributions | 38 |
| Share of net result | 7 |
| Other equity movements | 15 |
| Participation at 31.12.2014 | 409 |

(EUR millions)

EIF

Participation at 31.12.2013

349

Contributions

38

Share of net result

7

Other equity movements

15

Participation at 31.12.2014

Participation at 31.12.2014

409

409

The following carrying amounts are attributable to the Commission based on its percentage of participation:

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Assets | 497 | 499 |
| Liabilities | (87) | (240) |
| Revenue | 38 | 37 |
| Surplus/(deficit) | 21 | (221) |

(EUR millions)

31.12.2014

31.12.2013

Assets

497

499

Liabilities

(87)

(240)

Revenue

38

37

Surplus/(deficit)

21

(221)

The Commission has paid in 20 % of its participation, the balance being uncalled, corresponding to an amount of EUR 809 million.

| (EUR millions) |
| --- |
| | Total EIF capital | Commission subscription |
| Total share capital | 4  161 | 1  011 |
| Paid-in | (832) | (202) |
| Uncalled | 3  329 | 809 |

(EUR millions)

Total EIF capital

Commission subscription

Total share capital

Total share capital

4  161

4  161

1  011

1  011

Paid-in

(832)

(202)

Uncalled

Uncalled

3  329

3  329

809

809

2.4.   FINANCIAL ASSETS

FINANCIAL ASSETS

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Non-current financial assets | | | |
| Available for sale financial assets | 2.4.1 | 6  550 | 5  497 |
| Loans | 2.4.2 | 49  888 | 54  347 |
| Total | | 56  438 | 59  844 |
| Current financial assets | | | |
| Available for sale financial assets | 2.4.1 | 2  856 | 2  373 |
| Loans | 2.4.2 | 8  955 | 3  198 |
| Total | | 11  811 | 5  571 |
| Total | | 68  249 | 65  415 |

(EUR millions)

Note

31.12.2014

31.12.2013

Non-current financial assets

Non-current financial assets

Available for sale financial assets

2.4.1

2.4.1

6  550

5  497

Loans

2.4.2

2.4.2

49  888

54  347

Total

56  438

56  438

59  844

59  844

Current financial assets

Current financial assets

Available for sale financial assets

2.4.1

2.4.1

2  856

2  373

Loans

2.4.2

2.4.2

8  955

3  198

Total

11  811

11  811

5  571

5  571

Total

Total

68  249

68  249

65  415

65  415

2.4.1.   
  Available for sale financial assets

Available for sale financial assets

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| BUFI investments | 3  068 | 1  910 |
| Guarantee Fund for external actions (6) | 1  825 | 1  773 |
| ECSC in Liquidation | 1  699 | 1  696 |
| Risk Sharing Finance Facility (RSFF) | 842 | 1  197 |
| Horizon 2020 | 514 | — |
| ETF Start up | 399 | 339 |
| European Bank for Reconstruction and Development (EBRD) | 188 | 188 |
| Loan Guarantee Instrument for TEN-T projects (LGTT) | 186 | 121 |
| Risk Capital Operations | 145 | 124 |
| Project Bond Initiative | 125 | 67 |
| European Fund for South East Europe | 117 | 116 |
| Other available for sale financial assets | 298 | 339 |
| Total | 9  406 | 7  870 |
| Non-current | 6  550 | 5  497 |
| Current | 2  856 | 2  373 |

(EUR millions)

31.12.2014

31.12.2013

BUFI investments

3  068

1  910

Guarantee Fund for external actions (6)

6

1  825

1  773

ECSC in Liquidation

1  699

1  696

Risk Sharing Finance Facility (RSFF)

842

1  197

Horizon 2020

514

—

ETF Start up

399

339

European Bank for Reconstruction and Development (EBRD)

188

188

Loan Guarantee Instrument for TEN-T projects (LGTT)

186

121

Risk Capital Operations

145

124

Project Bond Initiative

125

67

European Fund for South East Europe

117

116

Other available for sale financial assets

298

339

Total

Total

9  406

9  406

7  870

7  870

Non-current

6  550

5  497

Current

2  856

2  373

The EU holds available for sale financial assets mainly in the form of guarantee instruments and equity instruments. The increase as compared to 2013 is mainly due to more than EUR 2 billion of new fines being imposed in 2014 and invested in the BUFI fund, less open fine cases settled during 2014. Additionally, Horizon 2020, which is the eighth phase of the Framework Programmes for Research and Technological Development (‘FP8’), began in 2014 and had assets of over half a billion euros at year-end.

Fair value hierarchy of available for sale financial assets:

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Level 1: Quoted prices in active markets | 8  183 | 6  669 |
| Level 2: Observable inputs other than quoted prices | 76 | 76 |
| Level 3: Valuation techniques with inputs not based on observable market data | 1  147 | 1  126 |
| Total | 9  406 | 7  870 |

(EUR millions)

31.12.2014

31.12.2013

Level 1: Quoted prices in active markets

8  183

6  669

Level 2: Observable inputs other than quoted prices

76

76

Level 3: Valuation techniques with inputs not based on observable market data

1  147

1  126

Total

Total

9  406

9  406

7  870

7  870

During the period there were no transfers between the abovementioned fair value measurement levels.

Reconciliation of financial assets measured using valuation techniques with inputs not based on observable market data (level 3):

| (EUR millions) |
| --- |
| Opening balance at 31.12.2013 | 1  126 |
| Purchases and sales | (57) |
| Gains or losses for the period recognised in surplus or deficit | (2) |
| Gains or losses recognised in net assets | 81 |
| Transfers into level 3 | — |
| Transfers out of level 3 | — |
| Other | (1) |
| Closing balance at 31.12.2014 | 1  147 |

(EUR millions)

Opening balance at 31.12.2013

1  126

Purchases and sales

(57)

Gains or losses for the period recognised in surplus or deficit

(2)

Gains or losses recognised in net assets

81

Transfers into level 3

—

Transfers out of level 3

—

Other

(1)

Closing balance at 31.12.2014

Closing balance at 31.12.2014

1  147

1  147

European Bank for Reconstruction and Development

European Bank for Reconstruction and Development

As the European Bank for Reconstruction and Development (EBRD) is not quoted on any stock exchange and in view of the contractual restrictions included in the EBRD’s articles of incorporation relating, amongst others, to the sale of participating interests, capped at acquisition cost and only authorised to existing shareholders, the Commission’s shareholding is valued at cost less any write-down for impairment.

| (EUR millions) |
| --- |
| | Total EBRD capital | Commission subscription |
| Total Share Capital | 29  674 | 900 |
| Paid-in | (6  202) | (188) |
| Uncalled | 23  472 | 712 |

(EUR millions)

Total EBRD capital

Commission subscription

Total Share Capital

29  674

900

Paid-in

(6  202)

(188)

Uncalled

Uncalled

23  472

23  472

712

712

2.4.2.   
  Loans

Loans

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Non-current | 49  888 | 54  347 |
| Current | 8  955 | 3  198 |
| Total | 58  843 | 57  545 |

(EUR millions)

31.12.2014

31.12.2013

Non-current

49  888

54  347

Current

8  955

3  198

Total

Total

58  843

58  843

57  545

57  545

This heading includes loans granted from borrowed funds (EUR 58  509 million) as well as loans granted from the budget, i.e. loans with special conditions and ECSC in Liquidation housing loans (EUR 139 million). Also included are short-term deposits (EUR 195 million), which are categorised as loans.

Loans granted from borrowed funds

Loans granted from borrowed funds

| (EUR millions) |
| --- |
| | MFA | Euratom | BOP | EFSM | ECSC in Liquidation | Total |
| Total at 31.12.2013 | 569 | 387 | 11  623 | 44  468 | 211 | 57  258 |
| New loans | 1  360 | — | — | 3  000 | — | 4  360 |
| Repayments | (96) | (39) | (3  000) | — | — | (3  135) |
| Exchange differences | — | 1 | — | — | 15 | 16 |
| Changes in carrying amount | 9 | — | (33) | 39 | (5) | 10 |
| Impairment | — | — | — | — | — | — |
| Total at 31.12.2014 | 1  842 | 349 | 8  590 | 47  507 | 221 | 58  509 |
| Non-current | 1  762 | 299 | 5  700 | 41  800 | 211 | 49  772 |
| Current | 80 | 50 | 2  890 | 5  707 | 10 | 8  737 |

(EUR millions)

MFA

Euratom

BOP

EFSM

ECSC in Liquidation

Total

Total at 31.12.2013

569

387

11  623

44  468

211

57  258

New loans

1  360

—

—

3  000

—

4  360

Repayments

(96)

(39)

(3  000)

—

—

(3  135)

Exchange differences

—

1

—

—

15

16

Changes in carrying amount

9

—

(33)

39

(5)

10

Impairment

—

—

—

—

—

—

Total at 31.12.2014

Total at 31.12.2014

1  842

1  842

349

349

8  590

8  590

47  507

47  507

221

221

58  509

58  509

Non-current

1  762

299

5  700

41  800

211

49  772

Current

80

50

2  890

5  707

10

8  737

The current/non-current presentation of the loans on the Commission’s balance sheet (e.g. EFSM, BOP, Euratom, MFA) has been improved from the notion of looking solely at the final maturity of the loan to the notion of looking at the re-payments due at year-end. Guarantees from third-parties of EUR 349 million (2013: EUR 387 million) have been received covering Euratom loans. At 31.12.2014, EUR 250 million relating to a loan facility agreement under MFA assistance were granted to Ukraine but not yet disbursed.

Loans effective interest rates (expressed as a range of interest rates)

Loans effective interest rates (expressed as a range of interest rates)

| | 31.12.2014 | 31.12.2013 |
| --- | --- | --- |
| Macro Financial Assistance (MFA) | 0,181 %-4,54 % | 0,27 %-4,54 % |
| Euratom | 0,26 %-5,76 % | 0,34 %-5,76 % |
| Balance of Payment (BOP) | 2,375 %-3,625 % | 2,375 %-3,625 % |
| European Financial Stability Mechanism (EFSM) | 1,875 %-3,750 % | 2,375 %-3,750 % |
| ECSC in Liquidation | 5,2354 %-5,8103 % | 5,2354 %-5,8103 % |

31.12.2014

31.12.2013

Macro Financial Assistance (MFA)

0,181 %-4,54 %

0,27 %-4,54 %

Euratom

0,26 %-5,76 %

0,34 %-5,76 %

Balance of Payment (BOP)

2,375 %-3,625 %

2,375 %-3,625 %

European Financial Stability Mechanism (EFSM)

1,875 %-3,750 %

2,375 %-3,750 %

ECSC in Liquidation

5,2354 %-5,8103 %

5,2354 %-5,8103 %

2.5.   PREFINANCING

PREFINANCING

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Non-current prefinancing | | | |
| Prefinancing | 2.5.1 | 15  980 | 34  819 |
| Other advances to Member States | 2.5.2 | 2  378 | 3  253 |
| Total | | 18  358 | 38  072 |
| Current prefinancing | | | |
| Prefinancing | 2.5.1 | 29  222 | 16  403 |
| Other advances to Member States | 2.5.2 | 5  015 | 4  963 |
| Total | | 34  237 | 21  367 |
| Total | | 52  595 | 59  439 |

(EUR millions)

Note

31.12.2014

31.12.2013

Non-current prefinancing

Non-current prefinancing

Prefinancing

2.5.1

2.5.1

15  980

34  819

Other advances to Member States

2.5.2

2.5.2

2  378

3  253

Total

18  358

18  358

38  072

38  072

Current prefinancing

Current prefinancing

Prefinancing

2.5.1

2.5.1

29  222

16  403

Other advances to Member States

2.5.2

2.5.2

5  015

4  963

Total

34  237

34  237

21  367

21  367

Total

Total

52  595

52  595

59  439

59  439

Prefinancing represents a large portion of the EU’s total assets, and thus receives proper and regular attention. It should be noted that the level of prefinancing amounts in the various programmes must be sufficient to ensure the necessary float for the beneficiary to start the project, while also safeguarding the financial interests of the EU and taking into consideration legal, operational and cost-effectiveness constraints. All these elements have been given due consideration by the Commission in an effort to improve the follow-up of prefinancing.

2.5.1.   
  Prefinancing

Prefinancing

| (EUR millions) |
| --- |
| | Gross amount | Cleared via cut-off | Net amount at 31.12.2014 | Gross amount | Cleared via cut-off | Net amount at 31.12.2013 |
| Shared Management | | | | | | |
| EAFRD & other rural development instruments | 5  644 | (2  115) | 3  529 | 6  359 | (1  032) | 5  327 |
| ERDF & CF | 24  934 | (2  182) | 22  752 | 25  701 | (2  164) | 23  537 |
| ESF | 6  884 | (953) | 5  931 | 6  857 | (492) | 6  365 |
| Other | 4  626 | (2  535) | 2  091 | 4  191 | (2  054) | 2  137 |
| Direct Management | | | | | | |
| Implemented by: | | | | | | |
| Commission | 13  173 | (10  215) | 2  958 | 14  841 | (9  459) | 5  382 |
| EU executive agencies | 9  079 | (6  618) | 2  461 | 8  558 | (5  108) | 3  450 |
| Indirect Management | | | | | | |
| Implemented by: | | | | | | |
| Other EU agencies & bodies | 548 | (98) | 450 | 412 | (21) | 391 |
| Third countries | 1  981 | (1  169) | 812 | 1  678 | (782) | 896 |
| International organisations | 6  236 | (3  476) | 2  760 | 4  172 | (2  460) | 1  712 |
| Other entities | 4  370 | (2  910) | 1  460 | 5  503 | (3  478) | 2  025 |
| Total | 77  474 | (32  273) | 45  202 | 78  272 | (27  050) | 51  222 |
| Non-current | 15  980 | — | 15  980 | 34  819 | — | 34  819 |
| Current | 61  495 | (32  273) | 29  222 | 43  453 | (27  050) | 16  403 |

(EUR millions)

Gross amount

Cleared via cut-off

Net amount at 31.12.2014

Gross amount

Cleared via cut-off

Net amount at 31.12.2013

Shared Management

Shared Management

EAFRD & other rural development instruments

5  644

(2  115)

3  529

6  359

(1  032)

5  327

ERDF & CF

24  934

(2  182)

22  752

25  701

(2  164)

23  537

ESF

6  884

(953)

5  931

6  857

(492)

6  365

Other

4  626

(2  535)

2  091

4  191

(2  054)

2  137

Direct Management

Direct Management

Implemented by:

Commission

13  173

(10  215)

2  958

14  841

(9  459)

5  382

EU executive agencies

9  079

(6  618)

2  461

8  558

(5  108)

3  450

Indirect Management

Indirect Management

Implemented by:

Other EU agencies & bodies

548

(98)

450

412

(21)

391

Third countries

1  981

(1  169)

812

1  678

(782)

896

International organisations

6  236

(3  476)

2  760

4  172

(2  460)

1  712

Other entities

4  370

(2  910)

1  460

5  503

(3  478)

2  025

Total

Total

77  474

77  474

(32  273)

(32  273)

45  202

45  202

78  272

78  272

(27  050)

(27  050)

51  222

51  222

Non-current

15  980

—

15  980

34  819

—

34  819

Current

61  495

(32  273)

29  222

43  453

(27  050)

16  403

The decrease in total prefinancing noted under shared management and direct management is attributed primarily to the closure of programing period 2007-2013 and the gradual set-up of programmes under the period 2014-2020. Prefinancing related to the old programmes is decreasing due to the acceptance of costs, while lower level of advances have been paid out concerning the new programming period.

For structural funds this transition between programming periods also explains the movement between current and non-current balances. New prefinancing paid concerning the programming period 2014-2020 is typically booked as non-current; these advances are still limited in amount (due to the late adoption of new programmes). The programming period 2007-2013 is in its closing phase and thus more amounts become due within twelve months.

Guarantees received in respect of prefinancing

Guarantees received in respect of prefinancing

These are guarantees that the Commission requests from beneficiaries that are not Member States, in certain cases when paying out advance payments (prefinancing). There are two values to disclose for this type of guarantee, the ‘nominal’ and the ‘ongoing’ values. For the ‘nominal’ value, the generating event is linked to the existence of the guarantee. For the ‘ongoing’ value, the guarantee’s generating event is the prefinancing payment and/or subsequent clearings. At 31 December 2014 the ‘nominal’ value of guarantees received in respect of prefinancing amounted to EUR 957 million while the ‘ongoing’ value of those guarantees was EUR 605 million (2013: EUR 1  124 million and EUR 887 million respectively).

Certain prefinancing amounts paid out under the 7th Research Framework Programme for research and technological development (FP7) and under Horizon 2020 are effectively covered by a Participants Guarantee Fund (PGF). The PGF is a mutual benefit instrument set up to cover the risks relating to non-payment of amounts by the beneficiaries during the implementation of the indirect actions of FP7 and Horizon 2020. All participants of indirect actions receiving a grant from the EU contribute 5 % of the total contribution to the PGF’s capital.

At 31 December 2014 prefinancing amounts covered by the PGF totalled EUR 1,8 billion (2013: EUR 4,5 billion). The decrease relates to the fact that 2014 was the last year for signing FP7 projects with less funds available for new projects. The EU (represented by the Commission) acts as an executive agent of the participants of the PGF, but the fund is owned by the participants.

At year-end, the PGF had total assets of EUR 1  640 million (2013: EUR 1  658 million). The assets of the PGF also include financial assets that are managed by the Directorate-General for Economic and Financial Affairs. As the PGF is a separate entity the assets of the fund are not consolidated in these EU annual accounts.

2.5.2.   
  Other advances to Member States

Other advances to Member States

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Advances to Member States for financial instruments under shared management | | |
| Non-current | 2  090 | 2  118 |
| Current | 1  733 | 2  118 |
| Total | 3  823 | 4  236 |
| Aid Schemes | | |
| Non-current | 288 | 1  135 |
| Current | 3  282 | 2  845 |
| Total | 3  570 | 3  981 |
| Total | 7  393 | 8  216 |

(EUR millions)

31.12.2014

31.12.2013

Advances to Member States for financial instruments under shared management

Advances to Member States for financial instruments under shared management

Non-current

2  090

2  118

Current

1  733

2  118

Total

3  823

3  823

4  236

4  236

Aid Schemes

Aid Schemes

Non-current

288

1  135

Current

3  282

2  845

Total

3  570

3  570

3  981

3  981

Total

Total

7  393

7  393

8  216

8  216

Under the framework of the structural funds programmes 2007-2013 and also under the European Agricultural Fund for Rural Development, advance payments can be made from the EU budget to Member States so as to contribute to financial instruments (be it in the form of loans, equity investments or guarantees) set up and managed under the responsibility of the Member States (i.e. shared management). Monies that are unused by these instruments at year-end are the property of the EU (as with all prefinancing) and are thus treated as an asset on the EU’s balance sheet. However, the basic legal acts do not oblige the Member States to provide periodic reports to the Commission on the use made of these advances, and in some cases not even identify them in the statements of expenditure submitted to the Commission. Information reported by Member States on unused amounts at end 2014 is not available in time for inclusion in these accounts. Thus, on the basis of information received from Member States on unused amounts as at 31 December 2013 and disbursements made during 2014, an estimation is made at year-end of the value of this asset. Furthermore, this estimation is now based on an extension of the implementation period for these instruments from 31 December 2015 to 31 March 2017. The outstanding balance for these instruments at year-end is estimated on the assumption that funds will be used in full and evenly over the remaining period of operation. At the end of this period the Commission will examine the actual use of funds and will reflect in the accounts amounts that have not been used.

The total contribution requested by Member States to the Commission concerning these instruments was EUR 10  904 million, of which EUR 1  088 million remained unpaid at year-end. In 2014, no amounts relating to the 2014-2020 programming period have been paid.

Similar to the above, advances paid by the Member States for various aid schemes (state aid, market measures of EAGF) that were not used at year-end are recorded as assets on the Commission’s balance sheet. The Commission has estimated the value of these advances based on information provided by the Member States; the resulting amounts are included under the Aid Schemes sub-headings above.

2.6.   EXCHANGE RECEIVABLES AND NON-EXCHANGE RECOVERABLES

EXCHANGE RECEIVABLES AND NON-EXCHANGE RECOVERABLES

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Non-current | | | |
| Recoverables from non-exchange transactions | 2.6.1 | 1  158 | 478 |
| Receivables from exchange transactions | 2.6.2 | 40 | 20 |
| Total | | 1  198 | 498 |
| Current | | | |
| Recoverables from non-exchange transactions | 2.6.1 | 13  828 | 12  478 |
| Receivables from exchange transactions | 2.6.2 | 551 | 704 |
| Total | | 14  380 | 13  182 |
| Total | | 15  578 | 13  680 |

(EUR millions)

Note

31.12.2014

31.12.2013

Non-current

Non-current

Recoverables from non-exchange transactions

2.6.1

2.6.1

1  158

478

Receivables from exchange transactions

2.6.2

2.6.2

40

20

Total

1  198

1  198

498

498

Current

Current

Recoverables from non-exchange transactions

2.6.1

2.6.1

13  828

12  478

Receivables from exchange transactions

2.6.2

2.6.2

551

704

Total

14  380

14  380

13  182

13  182

Total

Total

15  578

15  578

13  680

13  680

2.6.1.   
  Recoverables from non-exchange transactions

Recoverables from non-exchange transactions

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Non-current | | | |
| Member States | 2.6.1.1 | 305 | 478 |
| Accrued income and deferred charges | 2.6.1.3 | 853 | — |
| Total | | 1  158 | 478 |
| Current | | | |
| Member States | 2.6.1.1 | 10  679 | 5  574 |
| Fines | 2.6.1.2 | 2  270 | 4  071 |
| Accrued income and deferred charges | 2.6.1.3 | 832 | 2  741 |
| Other recoverables | | 48 | 92 |
| Total | | 13  828 | 12  478 |
| Total | | 14  987 | 12  957 |

(EUR millions)

Note

31.12.2014

31.12.2013

Non-current

Non-current

Member States

2.6.1.1

2.6.1.1

305

478

Accrued income and deferred charges

2.6.1.3

2.6.1.3

853

—

Total

1  158

1  158

478

478

Current

Current

Member States

2.6.1.1

2.6.1.1

10  679

5  574

Fines

2.6.1.2

2.6.1.2

2  270

4  071

Accrued income and deferred charges

2.6.1.3

2.6.1.3

832

2  741

Other recoverables

48

92

Total

13  828

13  828

12  478

12  478

Total

Total

14  987

14  987

12  957

12  957

2.6.1.1.   Recoverables from Member States

Recoverables from Member States

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Established in the A account | 2  789 | 47 |
| Established in the separate account | 1  617 | 1  228 |
| Own resources to be received | 5  413 | 3  054 |
| Impairment | (1  144) | (743) |
| Other | 12 | 6 |
| Own resources recoverables | 8  686 | 3  592 |
| European Agricultural Guarantee Fund (EAGF) | 2  250 | 2  294 |
| European Agricultural Fund for Rural Development (EAFRD) | 52 | 82 |
| Temporary Rural Development Instrument (TRDI) | 27 | 45 |
| Special Accession Programme for Agriculture and Rural Development (SAPARD) | 166 | 155 |
| Impairment | (840) | (819) |
| EAGF and rural development recoverables | 1  655 | 1  757 |
| Prefinancing recovery expected | 437 | 542 |
| VAT paid and recoverable | 44 | 68 |
| Other recoverables from Member States | 161 | 94 |
| Total | 10  984 | 6  053 |
| Non-current | 305 | 478 |
| Current | 10  679 | 5  574 |

(EUR millions)

31.12.2014

31.12.2013

Established in the A account

2  789

47

Established in the separate account

1  617

1  228

Own resources to be received

5  413

3  054

Impairment

(1  144)

(743)

Other

12

6

Own resources recoverables

Own resources recoverables

8  686

8  686

3  592

3  592

European Agricultural Guarantee Fund (EAGF)

2  250

2  294

European Agricultural Fund for Rural Development (EAFRD)

52

82

Temporary Rural Development Instrument (TRDI)

27

45

Special Accession Programme for Agriculture and Rural Development (SAPARD)

166

155

Impairment

(840)

(819)

EAGF and rural development recoverables

EAGF and rural development recoverables

1  655

1  655

1  757

1  757

Prefinancing recovery expected

Prefinancing recovery expected

437

437

542

542

VAT paid and recoverable

VAT paid and recoverable

44

44

68

68

Other recoverables from Member States

Other recoverables from Member States

161

161

94

94

Total

Total

10  984

10  984

6  053

6  053

Non-current

305

478

Current

10  679

5  574

The non-current amounts due from Member States relate to non-executed conformity clearance decisions for the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) to be implemented in annual instalments and/or deferrals.

Own resources recoverables

Own resources recoverables

The significant increase of recoverables established in the A account is explained by EUR 2  756 million of custom duties and sugar levies of November and December that were recognised as accrued income in previous years.

The amount of own resources to be received relates to the Amending Budgets No 2 to 7/2014 adopted on 17 December 2014. According to Article 10 of Council Regulation 1150/2000 of 22 May 2000 (OJ L 130, 31.5.2000, p. 1) the entries corresponding to the readjustments of own resources contributions were carried out on the first working day of February 2015. The adjustments to Member States’ national EU budget contributions based on VAT and GNI take place every year on the first working day of December. The adjustment in 2014 included major revisions for GNI dating back to 2002. Thus the adjustment was unprecedented in size, totalling EUR 9,5 billion across all EU Member States.

In order to address this exceptional situation, the Council adopted on 18 December 2014 a Commission proposal allowing Member States to defer payment, interest free, under strict conditions, up to 1 September 2015. Accordingly, six Member States opted to pay their adjustments in 2015. The deferred payment amounts to EUR 5,4 billion, as included in the above table.

EAGF and rural development recoverables

EAGF and rural development recoverables

This item primarily covers the amounts owed by Member States at 31 December, as declared and certified by the Member States at 15 October. An estimation is made for the recoverables arising after this declaration and up to 31 December. The Commission also estimates a write-down for the amounts owed by beneficiaries that are unlikely to be recovered. The fact that such an adjustment is made does not mean that the Commission is waiving future recovery of these amounts. A deduction of 20 % is also included in the adjustment, and corresponds to what Member States are allowed to retain to cover administrative costs.

2.6.1.2.   Fines

Fines

This concerns amounts to be recovered relating to fines issued by the Commission of EUR 2  424 million (2013: EUR 4  310 million) less a write-down of EUR 155 million (2013: EUR 239 million). Guarantees totalling EUR 1  916 million were received for the fines outstanding at year-end (2013: EUR 3  244 million). It should be noted that EUR 183 million of these receivables were due for payment after 31 December 2014.

The decrease in the balance of the open fines at year-end is due to the fact that fines totalling EUR 4,1 billion became definitive and so were transferred to the budget during 2014.

2.6.1.3.   Accrued income and deferred charges

Accrued income and deferred charges

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Own resources accrued income | — | 2  424 |
| Cohesion, Agriculture & Rural Development Funds: financial corrections | 1  502 | 31 |
| Other accrued income | 83 | 201 |
| Impairment on accrued income | — | — |
| Deferred charges relating to non-exchange transactions | 101 | 85 |
| Total | 1  686 | 2  741 |
| Non-current | 853 | — |
| Current | 832 | 2  741 |

(EUR millions)

31.12.2014

31.12.2013

Own resources accrued income

—

2  424

Cohesion, Agriculture & Rural Development Funds: financial corrections

1  502

31

Other accrued income

83

201

Impairment on accrued income

—

—

Deferred charges relating to non-exchange transactions

101

85

Total

Total

1  686

1  686

2  741

2  741

Non-current

853

—

Current

832

2  741

It should be noted that the own resources accrued income, mainly custom duties of November and December, are now disclosed under current recoverables.

2.6.2.   
  Receivables from exchange transactions

Receivables from exchange transactions

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Non-current | | |
| Other receivables | 40 | 20 |
| Total | 40 | 20 |
| Current | | |
| Customers | 211 | 381 |
| Impairment on receivables from customers | (103) | (100) |
| Deferred charges relating to exchange transactions | 219 | 352 |
| Other | 224 | 71 |
| Total | 551 | 704 |
| Total | 591 | 724 |

(EUR millions)

31.12.2014

31.12.2013

Non-current

Non-current

Other receivables

40

20

Total

40

40

20

20

Current

Current

Customers

211

381

Impairment on receivables from customers

(103)

(100)

Deferred charges relating to exchange transactions

219

352

Other

224

71

Total

551

551

704

704

Total

Total

591

591

724

724

2.7.   INVENTORIES

INVENTORIES

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Scientific materials | 66 | 81 |
| Other | 62 | 47 |
| Total | 128 | 128 |

(EUR millions)

31.12.2014

31.12.2013

Scientific materials

66

81

Other

62

47

Total

Total

128

128

128

128

2.8.   CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Accounts with Treasuries and Central Banks | | 11  840 | 2  505 |
| Current accounts | | 303 | 168 |
| Imprest accounts | | 4 | 4 |
| Transfers (cash in transit) | | — | (1) |
| Other term deposits | | 28 | 29 |
| Bank accounts for budget implementation and other term deposits | 2.8.1 | 12  174 | 2  705 |
| Cash belonging to financial instruments | 2.8.2 | 1  275 | 1  406 |
| Cash relating to fines | 2.8.3 | 2  738 | 4  165 |
| Cash relating to other institutions, agencies and bodies | | 1  358 | 1  234 |
| Total | | 17  545 | 9  510 |

(EUR millions)

Note

31.12.2014

31.12.2013

Accounts with Treasuries and Central Banks

11  840

2  505

Current accounts

303

168

Imprest accounts

4

4

Transfers (cash in transit)

—

(1)

Other term deposits

28

29

Bank accounts for budget implementation and other term deposits

Bank accounts for budget implementation and other term deposits

2.8.1

2.8.1

12  174

12  174

2  705

2  705

Cash belonging to financial instruments

Cash belonging to financial instruments

2.8.2

2.8.2

1  275

1  275

1  406

1  406

Cash relating to fines

Cash relating to fines

2.8.3

2.8.3

2  738

2  738

4  165

4  165

Cash relating to other institutions, agencies and bodies

Cash relating to other institutions, agencies and bodies

1  358

1  358

1  234

1  234

Total

Total

17  545

17  545

9  510

9  510

2.8.1.   
  Bank accounts for budget implementation and other term deposits

Bank accounts for budget implementation and other term deposits

This heading covers the funds which the Commission keeps in its accounts in each Member State and EFTA country (treasury or central bank), as well as in commercial bank current accounts, imprest accounts and petty cash.

The high balance at the end of 2014 is mainly due to own resources contributions related to VAT and GNI balances paid by Member States in December 2014, as well as the amending budgets reducing the Member States’ contributions, which were adopted in December 2014 and returned to Member States via amending budgets in early 2015.

2.8.2.   
  Cash belonging to financial instruments

Cash belonging to financial instruments

Amounts shown under this heading primarily concern cash equivalents managed by fiduciaries on behalf of the Commission for the purpose of implementing particular financial instrument programmes funded by the EU budget. The cash belonging to financial instruments can only be used in the programme concerned.

2.8.3.   
  Cash relating to fines

Cash relating to fines

This is cash received in connection with fines issued by the Commission for which the case is still open. These amounts are kept in specific deposit accounts that are not used for any other activities. Where an appeal has been lodged or where it is unknown if an appeal will be made by the other party, the underlying amount is shown as contingent liability in note 5.2.

5.2

The decrease in this balance is due to the fact that since 2010, all provisionally cashed fines are managed by the Commission in a specifically created fund (BUFI) and invested in financial instruments categorised as available for sale (see note 2.4.1).

2.4.1

LIABILITIES

LIABILITIES

2.9.   PENSION AND OTHER EMPLOYEE BENEFITS

PENSION AND OTHER EMPLOYEE BENEFITS

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Pensions — staff | 2.9.1 | 50  897 | 40  933 |
| Pensions — other | 2.9.2 | 1  322 | 1  016 |
| Joint Sickness Insurance Scheme | 2.9.3 | 6  396 | 4  869 |
| Total | | 58  616 | 46  818 |

(EUR millions)

Note

31.12.2014

31.12.2013

Pensions — staff

2.9.1

2.9.1

50  897

40  933

Pensions — other

2.9.2

2.9.2

1  322

1  016

Joint Sickness Insurance Scheme

2.9.3

2.9.3

6  396

4  869

Total

Total

58  616

58  616

46  818

46  818

The significant increase in the employee benefits liability is explained by the sizeable decrease in the discount rate applied, resulting in a large actuarial loss for the year (net EUR 9,2 billion).

As shown below, the real discount rate has decreased dramatically from 1,8 % to 0,7 %, reflecting the underlying economic conditions. This change alone accounts for almost all of the increase in the liability since changes in other variables (such as new members, service cost and interest cost) were in line with the previous year’s figures. Such actuarial fluctuations must be expected based on the, internationally applied, accounting rules in place and the current economic environment — should interest rates increase, a reverse impact would be expected.

Furthermore, as this is an actuarial estimate of the value of the total liability at one point in time, 31 December 2014, and is based on various assumptions valid at this time, this loss does not indicate actual charges to the EU budget. Nor does this valuation impact the amounts to be paid to pensioners from the EU budget in the immediate coming years — these payments are already estimated in the MFF 2014-2020 and will be implemented via the annual budgetary process.

2.9.1.   
  Pensions — staff

Pensions — staff

In accordance with Article 83 of the Staff Regulations, the payment of the benefits provided for in the staff pension scheme (PSEO: Pension Scheme of European Officials) constitutes a charge to the EU’s budget. The scheme is not funded, but the Member States guarantee the payment of these benefits collectively according to the scale fixed for the financing of this expense. In addition, officials contribute one third to the long-term financing of this scheme via a compulsory contribution from their salaries.

The liabilities of the pension scheme were assessed on the basis of the number of staff and retired staff at 31 December 2014 and on the rules of the Staff Regulations applicable at this date. This valuation was carried out in accordance with the methodology of IPSAS 25 (and therefore also EU accounting rule 12). The method used to calculate this liability is the projected unit credit method. The main actuarial assumptions for the staff pension liability used in the valuation were as follows:

| | 31.12.2014 | 31.12.2013 |
| --- | --- | --- |
| Nominal discount rate | 2,0 % | 3,7 % |
| Expected inflation rate | 1,3 % | 1,9 % |
| Real discount rate | 0,7 % | 1,8 % |
| Probability of marriage: man/woman | 81 %/49 % | 81 %/49 % |
| General salary growth/pension revaluation | (0,2) % | (0,2) % |
| International Civil Servants Life Table (ICSLT) | ICSLT 2013 | ICSLT 2013 |

31.12.2014

31.12.2013

Nominal discount rate

2,0 %

3,7 %

Expected inflation rate

1,3 %

1,9 %

Real discount rate

0,7 %

1,8 %

Probability of marriage: man/woman

81 %/49 %

81 %/49 %

General salary growth/pension revaluation

(0,2) %

(0,2) %

International Civil Servants Life Table (ICSLT)

ICSLT 2013

ICSLT 2013

2.9.2.   
  Pensions — others

Pensions — others

This refers to the liability relating to the pension obligations towards Members and former Members of the Commission, the Court of Justice (and General Court) and the Court of Auditors, the Secretaries General of the Council, the Ombudsman, the European Data Protection Supervisor, and the European Union Civil Service Tribunal. Also included under this heading is a liability relating to the pensions of Members of the European Parliament.

2.9.3.   
  Joint Sickness Insurance Scheme

Joint Sickness Insurance Scheme

A valuation is also made for the estimated liability that the EU has regarding the Joint Sickness Insurance Scheme in relation to its retired staff. The discount rate and the general salary growth used in the calculation are consistent with those used in the staff pension valuation, thus the reasons for the movements in the liability are similar to those of the staff pension liability.

Movements in employee benefits liabilities

Movements in employee benefits liabilities

| (EUR millions) |
| --- |
| | Pensions — staff | Pensions — other | Joint Sickness Insurance Scheme |
| Gross liability at 31.12.2013 | 45  947 | 1  289 | 5  133 |
| Service/normal cost | 2  153 | 62 | — |
| Interest cost | 1  683 | 44 | 49 |
| Benefits paid | (1  368) | (47) | (68) |
| Actuarial losses (7) | 8  255 | 191 | 1  554 |
| Change due to newcomers | 461 | 67 | — |
| Gross liability at 31.12.2014 | 57  131 | 1  606 | 6  668 |
| Correction coefficients applied to pensions | 1  371 | N/A | N/A |
| Deduction of taxes on pensions | (7  605) | (119) | N/A |
| Plan assets | N/A | (165) | (272) |
| Net liability at 31.12.2014 | 50  897 | 1  322 | 6  396 |

(EUR millions)

Pensions — staff

Pensions — other

Joint Sickness Insurance Scheme

Gross liability at 31.12.2013

45  947

1  289

5  133

Service/normal cost

2  153

62

—

Interest cost

1  683

44

49

Benefits paid

(1  368)

(47)

(68)

Actuarial losses (7)

7

8  255

191

1  554

Change due to newcomers

461

67

—

Gross liability at 31.12.2014

Gross liability at 31.12.2014

57  131

57  131

1  606

1  606

6  668

6  668

Correction coefficients applied to pensions

1  371

N/A

N/A

Deduction of taxes on pensions

(7  605)

(119)

N/A

Plan assets

N/A

(165)

(272)

Net liability at 31.12.2014

Net liability at 31.12.2014

50  897

50  897

1  322

1  322

6  396

6  396

Five-year trend of pension and other employee benefits liability

Five-year trend of pension and other employee benefits liability

| (EUR millions) |
| --- |
| | 31.12.2010 | 31.12.2011 | 31.12.2012 | 31.12.2013 | 31.12.2014 |
| Employee benefits liability | 37  172 | 34  835 | 42  503 | 46  818 | 58  616 |

(EUR millions)

31.12.2010

31.12.2011

31.12.2012

31.12.2013

31.12.2014

Employee benefits liability

37  172

34  835

42  503

46  818

58  616

2.10.   PROVISIONS

PROVISIONS

| (EUR millions) |
| --- |
| | Amount at 31.12.2013 | Additional provisions | Unused amounts reversed | Amounts used | Transfer to current | Change in estimation | Amount at 31.12.2014 |
| Legal cases | 487 | 567 | (97) | (229) | — | 0 | 728 |
| Nuclear site dismantling | 963 | — | — | (31) | — | 159 | 1  091 |
| Financial | 282 | 117 | (0) | (76) | — | 9 | 332 |
| Fines | — | 30 | — | — | — | — | 30 |
| Other | 135 | 94 | (53) | (73) | — | (0) | 102 |
| Total | 1  867 | 807 | (150) | (409) | — | 168 | 2  282 |
| Non-current | 1  323 | 241 | (93) | (28) | (69) | 164 | 1  537 |
| Current | 545 | 566 | (57) | (381) | 69 | 4 | 745 |

(EUR millions)

Amount at 31.12.2013

Additional provisions

Unused amounts reversed

Amounts used

Transfer to current

Change in estimation

Amount at 31.12.2014

Legal cases

487

567

(97)

(229)

—

0

728

Nuclear site dismantling

963

—

—

(31)

—

159

1  091

Financial

282

117

(0)

(76)

—

9

332

Fines

—

30

—

—

—

—

30

Other

135

94

(53)

(73)

—

(0)

102

Total

Total

1  867

1  867

807

807

(150)

(150)

(409)

(409)

—

168

168

2  282

2  282

Non-current

1  323

241

(93)

(28)

(69)

164

1  537

Current

545

566

(57)

(381)

69

4

745

Legal cases

Legal cases

This is the estimate of amounts that will probably have to be paid out after the year-end in relation to a number of ongoing legal cases. The increase in the provision is due primarily to lost legal cases relating to the ERDF. This significant increase was only partly compensated by unused amounts concerning the settlement of a traditional own resources case concerning sugar levies — see also note 3.2.

3.2

Nuclear site dismantlement

Nuclear site dismantlement

In 2012 a consortium of independent experts updated their 2008 study on the estimated costs of the decommissioning of the Joint Research Centre (JRC) nuclear facilities and waste management programme. Their estimate of EUR 989 million (previously EUR 1  222 million) was taken as the basis for this provision. In 2014 that basis for the provision was again updated as per the ‘2014 updated JRC Strategy on Decommissioning and Waste Management’ (D&WM). It represents the follow up of the comments raised by the Review of the JRC D&WM programme made by external experts. In accordance with EU accounting rules, this provision is indexed for inflation and then discounted to its net present value (using the Euro zero-coupon swap curve). At 31 December 2014, this results in a provision of EUR 1  091 million, split between amounts expected to be used in 2015 (EUR 27 million) and afterwards (EUR 1  064 million).

In view of the estimated duration of this programme (around 20 years), it should be pointed out that there is some uncertainty about this estimate, and the final cost could be different from the amounts currently recorded.

Financial provisions

Financial provisions

These concern mainly provisions which represent the estimated losses that will be incurred in relation to the guarantees given by the different financial instruments, where the European Investment Fund (EIF) and the European Investment Bank (EIB) are empowered to issue guarantees in their own name but on behalf of and at the risk of the Commission. The financial risk linked to the drawn and undrawn guarantees is, however, capped. Non-current financial provisions are discounted to their net present value (using the Euro Swap annual rate).

2.11.   FINANCIAL LIABILITIES

FINANCIAL LIABILITIES

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Non-current financial liabilities | | | |
| Borrowings | 2.11.1 | 49  743 | 54  153 |
| Other financial liabilities | 2.11.2 | 2  108 | 2  216 |
| Total | | 51  851 | 56  369 |
| Current financial liabilities | | | |
| Borrowings | 2.11.1 | 8  727 | 3  065 |
| Other financial liabilities | 2.11.2 | 101 | 99 |
| Total | | 8  828 | 3  163 |
| Total | | 60  680 | 59  533 |

(EUR millions)

Note

31.12.2014

31.12.2013

Non-current financial liabilities

Non-current financial liabilities

Borrowings

2.11.1

2.11.1

49  743

54  153

Other financial liabilities

2.11.2

2.11.2

2  108

2  216

Total

51  851

51  851

56  369

56  369

Current financial liabilities

Current financial liabilities

Borrowings

2.11.1

2.11.1

8  727

3  065

Other financial liabilities

2.11.2

2.11.2

101

99

Total

8  828

8  828

3  163

3  163

Total

Total

60  680

60  680

59  533

59  533

2.11.1.   
  Borrowings

Borrowings

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Borrowings | 58  491 | 57  237 |
| Elimination: Guarantee Fund for external actions (8) | (20) | (20) |
| Total | 58  470 | 57  218 |

(EUR millions)

31.12.2014

31.12.2013

Borrowings

58  491

57  237

Elimination: Guarantee Fund for external actions (8)

8

(20)

(20)

Total

Total

58  470

58  470

57  218

57  218

Borrowings by financial instrument

Borrowings by financial instrument

| (EUR millions) |
| --- |
| | MFA | Euratom | BOP | EFSM | ECSC (in liquida-tion) | Total |
| Total at 31.12.2013 | 569 | 387 | 11  623 | 44  468 | 190 | 57  237 |
| New borrowings | 1  360 | — | — | 3  000 | — | 4  360 |
| Repayments | (96) | (39) | (3  000) | — | — | (3  135) |
| Exchange differences | — | 1 | — | — | 14 | 15 |
| Changes in carrying amounts | 9 | — | (33) | 39 | (1) | 14 |
| Total at 31.12.2014 | 1  842 | 349 | 8  590 | 47  507 | 203 | 58  491 |
| Non-current | 1  762 | 299 | 5  700 | 41  800 | 193 | 49  754 |
| Current | 80 | 50 | 2  890 | 5  707 | 10 | 8  737 |

(EUR millions)

MFA

Euratom

BOP

EFSM

ECSC (in liquida-tion)

Total

Total at 31.12.2013

Total at 31.12.2013

569

569

387

387

11  623

11  623

44  468

44  468

190

190

57  237

57  237

New borrowings

1  360

—

—

3  000

—

4  360

Repayments

(96)

(39)

(3  000)

—

—

(3  135)

Exchange differences

—

1

—

—

14

15

Changes in carrying amounts

9

—

(33)

39

(1)

14

Total at 31.12.2014

Total at 31.12.2014

1  842

1  842

349

349

8  590

8  590

47  507

47  507

203

203

58  491

58  491

Non-current

1  762

299

5  700

41  800

193

49  754

Current

80

50

2  890

5  707

10

8  737

Borrowings also include debts evidenced by certificates amounting to EUR 58  261 million (2013: EUR 56  981 million). The changes in carrying amount correspond to the change in accrued interests.

The current/non-current presentation of the borrowings on the Commission’s balance sheet (e.g. MFA, Euratom, BOP and EFSM) has been improved from the notion of looking solely at the final maturity of the loan to the notion of looking at the repayments due at year-end.

Borrowings effective interest rates (expressed as a range of interest rates)

Borrowings effective interest rates (expressed as a range of interest rates)

| | 31.12.2014 | 31.12.2013 |
| --- | --- | --- |
| Macro Financial Assistance (MFA) | 0,181 %-4,54 % | 0,27 %-4,54 % |
| Euratom | 0,138 %-5,6775 % | 0,291 %-5,6775 % |
| Balance of Payment (BOP) | 2,375 %-3,625 % | 2,375 %-3,625 % |
| European Financial Stability Mechanism (EFSM) | 1,875 %-3,750 % | 2,375 %-3,750 % |
| ECSC in Liquidation | 6,92 %-9,78 % | 6,92 %-9,78 % |

31.12.2014

31.12.2013

Macro Financial Assistance (MFA)

0,181 %-4,54 %

0,27 %-4,54 %

Euratom

0,138 %-5,6775 %

0,291 %-5,6775 %

Balance of Payment (BOP)

2,375 %-3,625 %

2,375 %-3,625 %

European Financial Stability Mechanism (EFSM)

1,875 %-3,750 %

2,375 %-3,750 %

ECSC in Liquidation

6,92 %-9,78 %

6,92 %-9,78 %

2.11.2.   
  Other financial liabilities

Other financial liabilities

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Non-current | | |
| Finance lease liabilities | 1  674 | 1  756 |
| Buildings paid for in instalments | 371 | 369 |
| Other | 63 | 91 |
| Total | 2  108 | 2  216 |
| Current | | |
| Finance lease liabilities | 81 | 82 |
| Buildings paid for in instalments | 20 | 17 |
| Total | 101 | 99 |
| Total | 2  209 | 2  315 |

(EUR millions)

31.12.2014

31.12.2013

Non-current

Non-current

Finance lease liabilities

1  674

1  756

Buildings paid for in instalments

371

369

Other

63

91

Total

2  108

2  108

2  216

2  216

Current

Current

Finance lease liabilities

81

82

Buildings paid for in instalments

20

17

Total

101

101

99

99

Total

Total

2  209

2  209

2  315

2  315

Finance lease liabilities

Finance lease liabilities

| (EUR millions) |
| --- |
| | Future amounts to be paid |
| < 1 year | 1-5 years | > 5 years | Total Liability |
| Land and buildings | 75 | 358 | 1  309 | 1  742 |
| Other tangible assets | 6 | 8 | — | 14 |
| Total at 31.12.2014 | 81 | 366 | 1  309 | 1  755 |
| Interest element | 70 | 272 | 392 | 734 |
| Total future minimum lease payments at 31.12.2014 | 151 | 638 | 1  700 | 2  489 |
| Total future minimum lease payments at 31.12.2013 | 171 | 672 | 1  884 | 2  727 |

(EUR millions)

Future amounts to be paid

< 1 year

1-5 years

> 5 years

Total Liability

Land and buildings

75

358

1  309

1  742

Other tangible assets

6

8

—

14

Total at 31.12.2014

Total at 31.12.2014

81

81

366

366

1  309

1  309

1  755

1  755

Interest element

70

272

392

734

Total future minimum lease payments at 31.12.2014

Total future minimum lease payments at 31.12.2014

151

151

638

638

1  700

1  700

2  489

2  489

Total future minimum lease payments at 31.12.2013

Total future minimum lease payments at 31.12.2013

171

171

672

672

1  884

1  884

2  727

2  727

2.12.   PAYABLES

PAYABLES

| (EUR millions) |
| --- |
| | Gross Amount | Adjustments (9) | Net Amount |
| 2014 | | | |
| Cost claims & invoices received from: | | | |
| Member States: | | | |
| European Agricultural Fund for Rural Development & other rural development instruments | 318 | (23) | 295 |
| European Regional Development Fund & Cohesion Fund | 19  928 | (2  306) | 17  622 |
| European Social Fund | 5  893 | (272) | 5  621 |
| Other | 751 | (93) | 658 |
| Private and public entities | 1  718 | (106) | 1  612 |
| Total costs claims & invoices received | 28  608 | (2  800) | 25  808 |
| European Agricultural Guarantee Fund | 11  066 | N/A | 11  066 |
| Sundry payables | 156 | N/A | 156 |
| Own resources payables | 5  945 | N/A | 5  945 |
| Other | 204 | N/A | 204 |
| Total at 31.12.2014 | 45  980 | (2  800) | 43  180 |
| 2013 | | | |
| Total costs claims & invoices received | 27  257 | (2  918) | 24  339 |
| European Agricultural Guarantee Fund | 11  252 | N/A | 11  252 |
| Sundry payables | 147 | N/A | 147 |
| Own resources payables | 244 | N/A | 244 |
| Other | 231 | N/A | 231 |
| Total at 31.12.2013 | 39  131 | (2  918) | 36  213 |

(EUR millions)

Gross Amount

Adjustments (9)

9

Net Amount

2014

2014

Cost claims & invoices received from:

Member States:

European Agricultural Fund for Rural Development & other rural development instruments

318

(23)

295

European Regional Development Fund & Cohesion Fund

19  928

(2  306)

17  622

European Social Fund

5  893

(272)

5  621

Other

751

(93)

658

Private and public entities

1  718

(106)

1  612

Total costs claims & invoices received

Total costs claims & invoices received

28  608

28  608

(2  800)

(2  800)

25  808

25  808

European Agricultural Guarantee Fund

11  066

N/A

11  066

Sundry payables

156

N/A

156

Own resources payables

5  945

N/A

5  945

Other

204

N/A

204

Total at 31.12.2014

Total at 31.12.2014

45  980

45  980

(2  800)

(2  800)

43  180

43  180

2013

2013

Total costs claims & invoices received

Total costs claims & invoices received

27  257

27  257

(2  918)

(2  918)

24  339

24  339

European Agricultural Guarantee Fund

11  252

N/A

11  252

Sundry payables

147

N/A

147

Own resources payables

244

N/A

244

Other

231

N/A

231

Total at 31.12.2013

Total at 31.12.2013

39  131

39  131

(2  918)

(2  918)

36  213

36  213

Payables include cost statements received by the Commission under the framework of grant activities. They are credited for the amount being claimed from the moment the demand is received. If the counterpart is a Member State, they are classified as such. It is the same procedure for invoices and credit notes received under procurement activities. The cost claims concerned have been taken into account through the year-end cut off procedures. Following these cut-off entries, estimated eligible amounts have therefore been recorded in the accounts as expenses, while the remaining part is disclosed as ‘Estimated non-eligible amounts and pending prepayments’ (see below).

Own resources payables refer to the contribution of Member States to the EU budget to be reimbursed at year-end following the last amending budget of 2014 (EUR 5,9 billion). The significant increase compared to last year is due to the GNI revisions made at year-end (see also note 2.6.1.1).

2.6.1.1

Estimated non-eligible amounts and pending prepayments

Estimated non-eligible amounts and pending prepayments

Payables are reduced by that part of the requests for reimbursement received, but not yet checked, that was estimated to be non-eligible. The largest amounts concern the Structural Actions DGs. Payables are also reduced by the part of requests for reimbursement received concerning other advances to Member States (see note 2.5.2) still to pay at year-end (EUR 2,0 billion).

2.5.2

Requests for prefinancing

Requests for prefinancing

In addition to the above amounts, EUR 1,3 billion of requests for prefinancing have been received and were not yet paid at year-end. According to the EU accounting rules, these amounts are not booked as payables.

2.13.   ACCRUED CHARGES AND DEFERRED INCOME

ACCRUED CHARGES AND DEFERRED INCOME

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Accrued charges | 55  798 | 56  085 |
| Deferred income | 56 | 62 |
| Other | 118 | 134 |
| Total | 55  973 | 56  282 |

(EUR millions)

31.12.2014

31.12.2013

Accrued charges

55  798

56  085

Deferred income

56

62

Other

118

134

Total

Total

55  973

55  973

56  282

56  282

The split of accrued charges is as follows:

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| European Agricultural Guarantee Fund | 33  667 | 33  491 |
| European Agricultural Fund for Rural Development & other rural development instruments | 13  414 | 12  458 |
| European Regional Development Fund and Cohesion Fund | 3  157 | 4  371 |
| European Social Fund | 976 | 1  109 |
| Other | 4  584 | 4  656 |
| Total | 55  798 | 56  085 |

(EUR millions)

31.12.2014

31.12.2013

European Agricultural Guarantee Fund

33  667

33  491

European Agricultural Fund for Rural Development & other rural development instruments

13  414

12  458

European Regional Development Fund and Cohesion Fund

3  157

4  371

European Social Fund

976

1  109

Other

4  584

4  656

Total

Total

55  798

55  798

56  085

56  085

NET ASSETS

NET ASSETS

2.14.   RESERVES

RESERVES

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Fair value reserve | 2.14.1 | 238 | 99 |
| Guarantee Fund reserve | 2.14.2 | 2  372 | 2  125 |
| Other reserves | 2.14.3 | 1  825 | 1  849 |
| Total | | 4  435 | 4  073 |

(EUR millions)

Note

31.12.2014

31.12.2013

Fair value reserve

2.14.1

2.14.1

238

99

Guarantee Fund reserve

2.14.2

2.14.2

2  372

2  125

Other reserves

2.14.3

2.14.3

1  825

1  849

Total

Total

4  435

4  435

4  073

4  073

2.14.1.   
  Fair value reserve

Fair value reserve

In accordance with the EU accounting rules, the adjustment to fair value of available for sale financial assets is accounted for through the fair value reserve.

Movements of the fair value reserve relating to available for sale financial assets during the period:

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Included in fair value reserve | 135 | (25) |
| Included in the statement of financial performance | (10) | (25) |
| Total | 125 | (50) |

(EUR millions)

2014

2013

Included in fair value reserve

135

(25)

Included in the statement of financial performance

(10)

(25)

Total

Total

125

125

(50)

(50)

In addition, an amount of EUR 15 million in the overall movement of the fair value reserve relates to investments accounted for using the equity method.

2.14.2.   
  Guarantee Fund reserve

Guarantee Fund reserve

This reserve reflects the 9 % target amount of the outstanding amounts guaranteed by the Fund that is required to be kept as assets.

2.14.3.   
  Other reserves

Other reserves

The amount relates primarily to the ECSC in liquidation reserve (EUR 1  532 million) for the assets of the Research Fund for Coal and Steel, which was created in the context of the winding-up of the ECSC.

2.15.   AMOUNTS TO BE CALLED FROM MEMBER STATES

AMOUNTS TO BE CALLED FROM MEMBER STATES

| (EUR millions) |
| --- |
| Amounts to be called from Member States at 31.12.2013 | 49  925 |
| Return of 2013 budget surplus to Member States | 1  005 |
| Movement in Guarantee Fund reserve | 247 |
| Other reserve movements | (15) |
| Economic result of the year | 11  280 |
| Total amounts to be called from Member States at 31.12.2014 | 62  441 |

(EUR millions)

Amounts to be called from Member States at 31.12.2013

49  925

Return of 2013 budget surplus to Member States

1  005

Movement in Guarantee Fund reserve

247

Other reserve movements

(15)

Economic result of the year

11  280

Total amounts to be called from Member States at 31.12.2014

Total amounts to be called from Member States at 31.12.2014

62  441

62  441

This amount represents that part of the expenses incurred by the EU up to 31 December that must be funded by future budgets. Many expenses are recognised under accrual accounting rules in the year N although they may be actually paid in year N+1 (or later) and therefore funded using the budget of year N+1 (or later). The inclusion in the accounts of these liabilities coupled with the fact that the corresponding amounts are financed from future budgets, results in liabilities greatly exceeding assets at the year-end. The most significant amounts to be highlighted are the European Agricultural Guarantee Fund activities. The majority of the amounts to be called are in fact paid by the Member States in less than 12 months after the end of the financial year in question as part of the budget of the following year.

It should also be noted that the above has no effect on the budget result — budget revenue should always equal or exceed budget expenditure and any excess of revenue is returned to Member States.

3.   NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

REVENUE

REVENUE

REVENUE FROM NON-EXCHANGE TRANSACTIONS

REVENUE FROM NON-EXCHANGE TRANSACTIONS

3.1.   GNI RESOURCES

GNI RESOURCES

Own resources revenue is the primary element of the EU’s operating revenue. Of the three categories of own resources, traditional own resources (‘TOR’), the VAT-based resources and the GNI-based resources, the GNI revenue of EUR 1 04  688 million (2013: EUR 1 10  194 million) is the most significant.

3.2.   TRADITIONAL OWN RESOURCES

TRADITIONAL OWN RESOURCES

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Customs duties | 17  204 | 15  268 |
| Sugar levies | (67) | 199 |
| Total | 17  137 | 15  467 |

(EUR millions)

2014

2013

Customs duties

17  204

15  268

Sugar levies

(67)

199

Total

Total

17  137

17  137

15  467

15  467

Traditional own resources comprise custom duties and sugar levies. Member States retain, by way of collection costs, 20 % of traditional own resources, and the above amounts are shown net of this deduction.

It should also be noted that following a Court ruling on the sugar levies regulation challenged by certain companies and Member States, an amount of EUR 200 million was reimbursed to the concerned parties in 2014. The related provision, originally booked in 2012, was thus used in 2014.

3.3.   VAT RESOURCES

VAT RESOURCES

According to the Own Resources Decision No 2007/436/EC, Euratom, the VAT contributions are calculated applying a uniform rate of 0,30 % to the harmonised VAT base of each Member State. At the same time this decision foresaw a lower call rate for Austria (0,225 %), Germany (0,15 %), and the Netherlands and Sweden (0,10 %). However this exception was granted for the period 2007-2013 only. Thus in 2014 the uniform rate of 0,30 % became applicable again to all Member States and will remain until a new Own Resources Decision enters into force. This explains the increase in VAT revenue from EUR 14  019 million in 2013 to EUR 17  462 million in 2014.

REVENUE FROM NON-EXCHANGE TRANSACTIONS: TRANSFERS

REVENUE FROM NON-EXCHANGE TRANSACTIONS: TRANSFERS

3.4.   FINES

FINES

These revenues (EUR 2  297 million) relate to fines imposed by the Commission for breach of infringement rules, mainly related to competition cases. Receivables and related revenues are recognised when the Commission decision imposing a fine has been taken and it is officially notified to the addressee.

The main amount in 2014 concerns the market for automotive bearings. The Commission imposed fines for a total amount of EUR 953 million on producers of car and truck bearings for operating a cartel.

3.5.   RECOVERY OF EXPENSES

RECOVERY OF EXPENSES

| (EUR millions) |
| --- |
| | | 2014 | 2013 |
| Shared management | | 3  328 | 1  628 |
| Direct management | | 45 | 69 |
| Indirect management | | 45 | 6 |
| Decentralised management | | — | 41 |
| Joint management | | — | 33 |
| Total | | 3  418 | 1  777 |

(EUR millions)

2014

2013

Shared management

3  328

1  628

Direct management

45

69

Indirect management

45

6

Decentralised management

—

41

Joint management

—

33

Total

Total

3  418

3  418

1  777

1  777

This heading represents mainly the recovery orders issued by the Commission that are cashed or offset against (i.e. deducted from) subsequent payments recorded in the Commission’s accounting system, made so as to recover expenditure previously paid out from the general budget. These operations are based on controls, audits or eligibility analysis. Recovery orders issued by Member States to beneficiaries of EAGF expenditure, as well as the variation of accrued income estimations from the previous year-end to the current, are also included.

It should be noted that these figures represent the accounting impact of EU corrective activities only, based on the EU accounting rules in force. For this reason, these figures cannot and do not show the full extent of the measures taken to protect the EU budget, particularly for Cohesion policy where specific mechanisms are in place to ensure the correction of ineligible expenditure, most of which do not involve the issuance of a recovery order. Moreover, recoveries of prefinancing amounts are also not included as revenue, in accordance with the EU accounting rules. More details on financial corrections and the recovery of expenses are given in note 6.

6

Shared management makes up the bulk of the total:

Agriculture: EAGF and rural development

Agriculture: EAGF and rural development

In the framework of the EAGF and the EAFRD, amounts accounted for as revenue of the year under this heading are financial corrections of the year and reimbursements declared by Member States and recovered during the year, as well as the net increase in the outstanding amounts declared by Member States to be recovered at year-end concerning fraud and irregularities.

Cohesion policy

Cohesion policy

The main amounts related to Cohesion policy include recovery orders issued by the Commission to recover undue expenditure made in previous years, amounts related to financial corrections implemented by withdrawals during the year, as well as deductions from expenditure less the decrease in accrued income at year-end.

Other recovery orders issued in Cohesion policy concern the recovery of prefinancing — see note 6.4. These amounts are not shown as revenue, but credited to the prefinancing heading on the balance sheet.

6.4

Total recovery of expenses almost doubled compared to last year due to the advanced closure of the 2000-2006 Cohesion programming period and the related withdrawals made, as well as significant corrections imposed by the Directorate-General for Agriculture and Rural Development in 2014.

3.6.   OTHER REVENUE FROM NON-EXCHANGE TRANSACTIONS

OTHER REVENUE FROM NON-EXCHANGE TRANSACTIONS

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Transfer of assets | 1  448 | — |
| Budgetary adjustments | 794 | 1  187 |
| Staff taxes and contributions | 1  276 | 1  137 |
| Contributions from third countries | 336 | 373 |
| Agricultural levies | 409 | 48 |
| Adjustment of provisions | 369 | 208 |
| Other | 990 | 1  091 |
| Total | 5  623 | 4  045 |

(EUR millions)

2014

2013

Transfer of assets

1  448

—

Budgetary adjustments

794

1  187

Staff taxes and contributions

1  276

1  137

Contributions from third countries

336

373

Agricultural levies

409

48

Adjustment of provisions

369

208

Other

990

1  091

Total

Total

5  623

5  623

4  045

4  045

Transfer of assets revenue relates to the transfer of satellites under the Copernicus programme (former GMES programme) from the European Space Agency (ESA) to the Commission (see note 2.2). This transfer is a non-exchange transaction according to the EU accounting rules and will occur in future periods for the remaining Copernicus satellites currently under construction.

2.2

The budgetary adjustments include the budget surplus from 2013 (EUR 1  005 million) which is indirectly refunded to Member States by deduction of the amounts of own resources they have to transfer to the EU in the following year — thus it is a revenue for 2014.

Staff taxes and contributions revenue arises primarily from deductions from staff salaries and is made up of two significant amounts — staff pension contributions and taxes on income.

Contributions from third countries are contributions from EFTA countries and accession countries.

Agricultural levies concern milk levies which are a market management tool aimed at penalising milk producers who exceed their reference quantities. As it is not linked to prior payments by the Commission, it is in practice considered as revenue for a specific purpose. The increase in milk levies this year is due to eight Member States exceeding their milk quotas for deliveries in 2013/2014, meaning that they must therefore pay penalties (known as a ‘superlevy’). The dairy quota regime was abolished on 1 April 2015.

REVENUE FROM EXCHANGE TRANSACTIONS

REVENUE FROM EXCHANGE TRANSACTIONS

3.7.   FINANCIAL INCOME

FINANCIAL INCOME

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Interest income on: | | |
| Prefinancing | 16 | 29 |
| Late payments | 387 | 88 |
| Available for sale financial assets | 65 | 71 |
| Loans | 1  722 | 1  712 |
| Cash and cash equivalents | 10 | 21 |
| Impaired financial assets | 0 | — |
| Other | 1 | 1 |
| Interest income | 2  202 | 1  922 |
| Dividend income | 6 | 6 |
| Realised gains on sale of financial assets | 30 | 24 |
| Other financial income | 61 | 40 |
| Total | 2  298 | 1  991 |

(EUR millions)

2014

2013

Interest income on:

Prefinancing

16

29

Late payments

387

88

Available for sale financial assets

65

71

Loans

1  722

1  712

Cash and cash equivalents

10

21

Impaired financial assets

0

—

Other

1

1

Interest income

Interest income

2  202

2  202

1  922

1  922

Dividend income

Dividend income

6

6

6

6

Realised gains on sale of financial assets

Realised gains on sale of financial assets

30

30

24

24

Other financial income

Other financial income

61

61

40

40

Total

Total

2  298

2  298

1  991

1  991

Interest income on loans relates mainly to loans granted from borrowed funds (see note 2.4.2).

2.4.2

Net gains or losses on financial assets

Net gains or losses on financial assets

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Net gains/(losses) on available for sale financial assets | 13 | 24 |

(EUR millions)

2014

2013

Net gains/(losses) on available for sale financial assets

13

24

3.8.   OTHER REVENUE FROM EXCHANGE TRANSACTIONS

OTHER REVENUE FROM EXCHANGE TRANSACTIONS

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Property, plant and equipment related revenue | 16 | 38 |
| Foreign exchange gains | 478 | 336 |
| Other | 571 | 1  070 |
| Total | 1  066 | 1  443 |

(EUR millions)

2014

2013

Property, plant and equipment related revenue

16

38

Foreign exchange gains

478

336

Other

571

1  070

Total

Total

1  066

1  066

1  443

1  443

Other revenue from exchange transactions are primarily management fee revenue and revenue relating to receivables previously impaired.

EXPENSES

EXPENSES

TRANSFER PAYMENTS AND SUBSIDIES BY MANAGEMENT MODE

TRANSFER PAYMENTS AND SUBSIDIES BY MANAGEMENT MODE

3.9.   SHARED MANAGEMENT

SHARED MANAGEMENT

| (EUR millions) |
| --- |
| Implemented by Member States | 2014 | 2013 |
| European Agricultural Guarantee Fund | 44  465 | 45  067 |
| European Agricultural Fund for Rural Development & other rural development instruments | 14  046 | 13  585 |
| European Regional Development Fund and Cohesion Fund | 43  345 | 47  767 |
| European Social Fund | 12  651 | 12  126 |
| Other | 2  307 | 1  525 |
| Total | 1 16  814 | 1 20  070 |

(EUR millions)

Implemented by Member States

2014

2013

European Agricultural Guarantee Fund

44  465

45  067

European Agricultural Fund for Rural Development & other rural development instruments

14  046

13  585

European Regional Development Fund and Cohesion Fund

43  345

47  767

European Social Fund

12  651

12  126

Other

2  307

1  525

Total

Total

1 16  814

1 16  814

1 20  070

1 20  070

The structural funds programmes are in the final phase of the programming period 2007-2013, but also in the launching phase of the programming period 2014-2020.

The largest part of the decrease compared to 2013 concerns the European Regional Development Fund and the Cohesion Fund. Expenses recognised in 2014 relate to programming period 2007-2013 as no expenses have been booked yet for the current period due to the slow start up of programmes (implementation by Member States has only started in 2015).

The decrease in European Agricultural Guarantee Fund expenses can be mainly attributed to the impact of the financial discipline mechanism.

The sub-heading ‘Other’ mainly includes: Asylum and Migration (EUR 0,6 billion), Internal Security (EUR 0,5 billion), Fisheries and Maritime Affairs (EUR 0,5 billion), the European Solidarity Fund (EUR 0,2 billion) and the European Globalisation Adjustment Fund (EUR 0,1 billion).

3.10.   DIRECT MANAGEMENT

DIRECT MANAGEMENT

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Implemented by the Commission | 10  431 | 8  722 |
| Implemented by EU Executive Agencies | 4  880 | 3  797 |
| Total | 15  311 | 12  519 |

(EUR millions)

2014

2013

Implemented by the Commission

10  431

8  722

Implemented by EU Executive Agencies

4  880

3  797

Total

Total

15  311

15  311

12  519

12  519

These amounts mainly concern the implementation of research policy (EUR 8,9 billion) and networks programmes (EUR 1,5 billion), as well as European Neighbourhood Policy (EUR 1,5 billion) and development cooperation (EUR 1,3 billion) instruments.

The increase of the amounts in 2014 is due primarily to development cooperation where there was a EUR 0,5 billion increase (including a EUR 250 million payment to Ukraine), energy (EUR 1,1 billion) and research programmes managed by Executive Agencies (EUR 1,1 billion due to an increasing number of ongoing projects).

3.11.   INDIRECT MANAGEMENT

INDIRECT MANAGEMENT

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Implemented by other EU agencies & bodies | 1  025 | 656 |
| Implemented by third countries | 1  005 | 720 |
| Implemented by international organisations | 1  765 | 1  745 |
| Implemented by other entities | 1  799 | 1  694 |
| Total | 5  594 | 4  815 |

(EUR millions)

2014

2013

Implemented by other EU agencies & bodies

1  025

656

Implemented by third countries

1  005

720

Implemented by international organisations

1  765

1  745

Implemented by other entities

1  799

1  694

Total

Total

5  594

5  594

4  815

4  815

3.12.   STAFF AND PENSION COSTS

STAFF AND PENSION COSTS

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Staff costs | 5  693 | 5  527 |
| Pension costs | 3  970 | 3  531 |
| Total | 9  662 | 9  058 |

(EUR millions)

2014

2013

Staff costs

5  693

5  527

Pension costs

3  970

3  531

Total

Total

9  662

9  662

9  058

9  058

Pension costs represent elements of the movements that have arisen following the actuarial revaluation of the employee benefits liabilities other than actuarial assumptions.

3.13.   CHANGES IN EMPLOYEE BENEFITS ACTUARIAL ASSUMPTIONS

CHANGES IN EMPLOYEE BENEFITS ACTUARIAL ASSUMPTIONS

The actuarial loss of net EUR 9,2 billion shown under this heading relates to the employee benefits liabilities recognised on the balance sheet (see note 2.9). The exceptionally high amount is due to the dramatic decrease in interest rates, which reflects the underlying economic conditions.

2.9

3.14.   FINANCE COSTS

FINANCE COSTS

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Interest expenses: | | |
| Borrowings | 1  712 | 1  697 |
| Other | 22 | 22 |
| Finance leases | 90 | 99 |
| Impairment losses on available for sale financial assets | 3 | 8 |
| Impairment losses on loans and receivables | 1  030 | 469 |
| Realised loss on sale of financial assets | 17 | — |
| Other finance costs | 51 | 87 |
| Total | 2  926 | 2  383 |

(EUR millions)

2014

2013

Interest expenses:

Borrowings

1  712

1  697

Other

22

22

Finance leases

90

99

Impairment losses on available for sale financial assets

3

8

Impairment losses on loans and receivables

1  030

469

Realised loss on sale of financial assets

17

—

Other finance costs

51

87

Total

Total

2  926

2  926

2  383

2  383

The amount of interest expense on borrowings corresponds to interest income on loans (back-to-back transactions).

3.15.   SHARE OF NET RESULT OF JOINT VENTURES AND ASSOCIATES

SHARE OF NET RESULT OF JOINT VENTURES AND ASSOCIATES

In accordance with the equity method of accounting, the EU includes in its statement of financial performance its share of the net result of its joint ventures and associates (see also notes 2.3.1 and 2.3.2).

2.3.1

2.3.2

3.16.   OTHER EXPENSES

OTHER EXPENSES

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Administrative and IT expenses | 2  070 | 2  034 |
| Property, plant and equipment related expenses | 1  186 | 1  105 |
| Foreign exchange losses | 370 | 395 |
| Adjustment of provisions | 688 | 399 |
| Other | 839 | 640 |
| Total | 5  152 | 4  572 |

(EUR millions)

2014

2013

Administrative and IT expenses

2  070

2  034

Property, plant and equipment related expenses

1  186

1  105

Foreign exchange losses

370

395

Adjustment of provisions

688

399

Other

839

640

Total

Total

5  152

5  152

4  572

4  572

Expenses relating to research and development are included in administrative and IT expenses and are as follows:

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Research costs | 353 | 335 |
| Non-capitalised development costs | 54 | 74 |
| Total | 406 | 409 |

(EUR millions)

2014

2013

Research costs

353

335

Non-capitalised development costs

54

74

Total

Total

406

406

409

409

Included under Property, plant and equipment related expenses are EUR 369 million (2013: EUR 388 million) relating to operating leases. Amounts committed to be paid during the remaining term of these lease contracts are as follows:

| (EUR millions) |
| --- |
| | Future amounts to be paid | |
| | < 1 year | 1-5 years | > 5 years | Total |
| Buildings | 332 | 988 | 934 | 2  254 |
| IT materials and other equipment | 7 | 15 | 0 | 22 |
| Total | 339 | 1  003 | 934 | 2  276 |

(EUR millions)

Future amounts to be paid

< 1 year

1-5 years

> 5 years

Total

Buildings

332

988

934

2  254

IT materials and other equipment

7

15

0

22

Total

Total

339

339

1  003

1  003

934

934

2  276

2  276

3.17.   SEGMENT REPORTING BY MULTI ANNUAL FINANCIAL FRAMEWORK HEADING (MFF)

SEGMENT REPORTING BY MULTI ANNUAL FINANCIAL FRAMEWORK HEADING (MFF)

| (EUR millions) |
| --- |
| | Smart and inclusive growth | Sustainable growth | Security and citizenship | Global Europe | Administration | Not assigned to MFF heading (10) | Total |
| GNI resources | — | — | — | — | — | 1 04  688 | 1 04  688 |
| Traditional own resources | — | — | — | — | — | 17  137 | 17  137 |
| VAT | — | — | — | — | — | 17  462 | 17  462 |
| Fines | — | — | — | — | — | 2  297 | 2  297 |
| Recovery of expenses | 1  136 | 2  226 | 3 | 53 | — | 0 | 3  418 |
| Other | 1  981 | 508 | 4 | 53 | 4  590 | (1  513) | 5  623 |
| Revenue from non-exchange transactions | 3  117 | 2  734 | 6 | 106 | 4  590 | 1 40  072 | 1 50  625 |
| Financial income | 66 | 3 | 0 | 36 | 1 | 2  192 | 2  298 |
| Other | 119 | (11) | (4) | 97 | 215 | 649 | 1  066 |
| Revenue from exchange transactions | 185 | (8) | (4) | 134 | 216 | 2  841 | 3  364 |
| Total revenue | 3  302 | 2  726 | 2 | 240 | 4  806 | 1 42  913 | 1 53  989 |
| Expenses implemented by Member States: | | | | | | | |
| EAGF | — | (44  465) | — | — | — | — | (44  465) |
| EAFRD & other rural development instruments | — | (14  033) | — | (12) | — | — | (14  046) |
| ERDF & CF | (43  345) | — | — | — | — | — | (43  345) |
| ESF | (12  651) | — | — | — | — | — | (12  651) |
| Other | (561) | (542) | (1  109) | (94) | — | — | (2  307) |
| Implemented by the EC and executive agencies | (9  809) | (339) | (1  114) | (4  046) | 9 | (12) | (15  311) |
| Implemented by other EU agencies and bodies | (789) | (58) | (473) | (40) | — | 334 | (1  025) |
| Implemented by third countries and int. org. | (246) | 4 | (8) | (2  520) | (0) | — | (2  770) |
| Implemented by other entities | (1  317) | — | (5) | (478) | (0) | 1 | (1  799) |
| Staff and pension costs | (1  538) | (324) | (362) | (566) | (6  066) | (806) | (9  662) |
| Changes in employee benefits actuarial assumptions | — | — | — | — | (9  170) | — | (9  170) |
| Finance costs | (152) | (25) | (1) | (26) | (557) | (2  165) | (2  926) |
| Share of net deficit of joint ventures/associates | (640) | — | — | — | — | — | (640) |
| Other expenses | (1  397) | (60) | (115) | (126) | (3  069) | (385) | (5  152) |
| Total expenses | (72  444) | (59  843) | (3  189) | (7  908) | (18  853) | (3  032) | (1 65  269) |
| Economic result of the year | (69  141) | (57  117) | (3  186) | (7  668) | (14  047) | 1 39  880 | (11  280) |

(EUR millions)

Smart and inclusive growth

Sustainable growth

Security and citizenship

Global Europe

Administration

Not assigned to MFF heading (10)

10

Total

GNI resources

—

—

—

—

—

1 04  688

1 04  688

Traditional own resources

—

—

—

—

—

17  137

17  137

VAT

—

—

—

—

—

17  462

17  462

Fines

—

—

—

—

—

2  297

2  297

Recovery of expenses

1  136

2  226

3

53

—

0

3  418

Other

1  981

508

4

53

4  590

(1  513)

5  623

Revenue from non-exchange transactions

Revenue from non-exchange transactions

3  117

3  117

2  734

2  734

6

6

106

106

4  590

4  590

1 40  072

1 40  072

1 50  625

1 50  625

Financial income

66

3

0

36

1

2  192

2  298

Other

119

(11)

(4)

97

215

649

1  066

Revenue from exchange transactions

Revenue from exchange transactions

185

185

(8)

(8)

(4)

(4)

134

134

216

216

2  841

2  841

3  364

3  364

Total revenue

Total revenue

3  302

3  302

2  726

2  726

2

2

240

240

4  806

4  806

1 42  913

1 42  913

1 53  989

1 53  989

Expenses implemented by Member States:

EAGF

—

(44  465)

—

—

—

—

(44  465)

EAFRD & other rural development instruments

—

(14  033)

—

(12)

—

—

(14  046)

ERDF & CF

(43  345)

—

—

—

—

—

(43  345)

ESF

(12  651)

—

—

—

—

—

(12  651)

Other

(561)

(542)

(1  109)

(94)

—

—

(2  307)

Implemented by the EC and executive agencies

(9  809)

(339)

(1  114)

(4  046)

9

(12)

(15  311)

Implemented by other EU agencies and bodies

(789)

(58)

(473)

(40)

—

334

(1  025)

Implemented by third countries and int. org.

(246)

4

(8)

(2  520)

(0)

—

(2  770)

Implemented by other entities

(1  317)

—

(5)

(478)

(0)

1

(1  799)

Staff and pension costs

(1  538)

(324)

(362)

(566)

(6  066)

(806)

(9  662)

Changes in employee benefits actuarial assumptions

—

—

—

—

(9  170)

—

(9  170)

Finance costs

(152)

(25)

(1)

(26)

(557)

(2  165)

(2  926)

Share of net deficit of joint ventures/associates

(640)

—

—

—

—

—

(640)

Other expenses

(1  397)

(60)

(115)

(126)

(3  069)

(385)

(5  152)

Total expenses

Total expenses

(72  444)

(72  444)

(59  843)

(59  843)

(3  189)

(3  189)

(7  908)

(7  908)

(18  853)

(18  853)

(3  032)

(3  032)

(1 65  269)

(1 65  269)

Economic result of the year

Economic result of the year

(69  141)

(69  141)

(57  117)

(57  117)

(3  186)

(3  186)

(7  668)

(7  668)

(14  047)

(14  047)

1 39  880

1 39  880

(11  280)

(11  280)

The display of revenue and expenses by MFF heading is based on estimation as not all commitments are linked to an MFF heading.

3.18.   RECLASSIFICATION OF 2013 FIGURES

RECLASSIFICATION OF 2013 FIGURES

So as to better present information to the users of these accounts, the layout of the statement of financial performance has been restructured in the 2014 accounts. As required by the EU accounting rules, a reclassification of the 2013 figures is made, noting that no amounts have been changed, only the presentation of the existing figures — revenues, expenses and the result remain as originally published in the 2013 accounts. An overview of the impact of the changes is given below:

| (EUR millions) |
| --- |
| | Own resource and contributions revenue | Other operating revenue | Total operating revenue | Administrative expenses | Operating expenses | Total operating expenses | Surplus from operating activities | Financial revenue | Financial expenses | Movement pension and other employee benefits liability | Share of net deficit of joint ventures and associates | Economic result of the year | 2013 (reclassified) |
| 2013 (published) | 1 41  241 | 8  415 | 1 49  655 | (9  269) | (1 38  571) | (1 47  840) | 1  815 | 2  038 | (2  045) | (5  565) | (608) | (4  365) | |
| Revenue from non-exchange transactions | | | | | | | | | | | | | |
| GNI Resources | 1 10  194 | — | 1 10  194 | — | — | — | — | — | — | — | — | — | 1 10  194 |
| Traditional own resources | 15  467 | — | 15  467 | — | — | — | — | — | — | — | — | — | 15  467 |
| VAT | 14  019 | — | 14  019 | — | — | — | — | — | — | — | — | — | 14  019 |
| Fines | — | 2  757 | 2  757 | — | — | — | — | — | — | — | — | — | 2  757 |
| Recovery of expenses | | 1  777 | 1  777 | — | — | — | — | — | — | — | — | — | 1  777 |
| Other | 1  561 | 2  484 | 4  045 | — | — | — | — | — | — | — | — | — | 4  045 |
| Total | 1 41  241 | 7  018 | 1 48  259 | — | — | — | — | — | — | — | — | — | 1 48  259 |
| Revenue from exchange transactions | | | | | | | | | | | | | |
| Financial income | — | — | — | — | — | — | — | 1  991 | — | — | — | — | 1  991 |
| Other | — | 1  397 | 1  397 | — | — | — | — | 47 | — | — | — | — | 1  443 |
| Total | — | 1  397 | 1  397 | — | — | — | — | 2  038 | — | — | — | — | 3  434 |
| TOTAL REVENUE | 1 41  241 | 8  415 | 1 49  655 | — | — | — | — | 2  038 | — | — | — | — | 1 51  693 |

(EUR millions)

Own resource and contributions revenue

Other operating revenue

Total operating revenue

Administrative expenses

Operating expenses

Total operating expenses

Surplus from operating activities

Financial revenue

Financial expenses

Movement pension and other employee benefits liability

Share of net deficit of joint ventures and associates

Economic result of the year

2013 (reclassified)

2013 (published)

2013 (published)

1 41  241

1 41  241

8  415

8  415

1 49  655

1 49  655

(9  269)

(9  269)

(1 38  571)

(1 38  571)

(1 47  840)

(1 47  840)

1  815

1  815

2  038

2  038

(2  045)

(2  045)

(5  565)

(5  565)

(608)

(608)

(4  365)

(4  365)

Revenue from non-exchange transactions

Revenue from non-exchange transactions

GNI Resources

1 10  194

—

1 10  194

—

—

—

—

—

—

—

—

—

1 10  194

Traditional own resources

15  467

—

15  467

—

—

—

—

—

—

—

—

—

15  467

VAT

14  019

—

14  019

—

—

—

—

—

—

—

—

—

14  019

Fines

—

2  757

2  757

—

—

—

—

—

—

—

—

—

2  757

Recovery of expenses

1  777

1  777

—

—

—

—

—

—

—

—

—

1  777

Other

1  561

2  484

4  045

—

—

—

—

—

—

—

—

—

4  045

Total

Total

1 41  241

1 41  241

7  018

7  018

1 48  259

1 48  259

—

—

—

—

—

—

—

—

—

1 48  259

1 48  259

Revenue from exchange transactions

Revenue from exchange transactions

Financial income

—

—

—

—

—

—

—

1  991

—

—

—

—

1  991

Other

—

1  397

1  397

—

—

—

—

47

—

—

—

—

1  443

Total

Total

—

1  397

1  397

1  397

1  397

—

—

—

—

2  038

2  038

—

—

—

—

3  434

3  434

TOTAL REVENUE

TOTAL REVENUE

1 41  241

1 41  241

8  415

8  415

1 49  655

1 49  655

—

—

—

—

2  038

2  038

—

—

—

—

1 51  693

1 51  693

| (EUR millions) |
| --- |
| | Own resource and contributions revenue | Other operating revenue | Total | Administrative expenses | Operating expenses | Total operating expenses | Surplus from operating activities | Financial revenue | Financial expenses | Movement pension and other employee benefits liability | Share of net deficit of joint ventures and associates | Economic result of the year | 2013 (reclassified) |
| Expenses implemented by Member States: | | | | | | | | | | | | | |
| European Agricultural Guarantee Fund | — | — | — | — | (45  067) | (45  067) | — | — | — | — | — | — | (45  067) |
| European Agricultural Fund for Rural Development and other rural development instruments | — | — | — | — | (13  585) | (13  585) | — | — | — | — | — | — | (13  585) |
| European Regional Development Fund and Cohesion Fund | — | — | — | — | (47  767) | (47  767) | — | — | — | — | — | — | (47  767) |
| European Social Fund | — | — | — | — | (12  126) | (12  126) | — | — | — | — | — | — | (12  126) |
| Other | — | — | — | — | (1  525) | (1  525) | — | — | — | — | — | — | (1  525) |
| Implemented by the Commission and executive agencies | — | — | — | — | (12  519) | (12  519) | — | — | — | — | — | — | (12  519) |
| Implemented by other EU agencies and bodies | — | — | — | — | (656) | (656) | — | — | — | — | — | — | (656) |
| Implemented by third countries and int. organisations | — | — | — | — | (2  465) | (2  465) | — | — | — | — | — | — | (2  465) |
| Implemented by other entities | — | — | — | — | (1  694) | (1  694) | — | — | — | — | — | — | (1  694) |
| Staff and pension costs | — | — | — | (5  527) | — | (5  527) | — | — | — | (3  531) | — | — | (9  058) |
| Changes in employee benefits actuarial assumptions | — | — | — | — | — | — | — | — | — | (2  033) | — | — | (2  033) |
| Finance costs | — | — | — | — | (469) | (469) | — | — | (1  914) | — | — | — | (2  383) |
| Share of net deficit of joint ventures and associates | — | — | — | — | — | — | — | — | — | — | (608) | — | (608) |
| Other expenses | — | — | — | (3  742) | (699) | (4  442) | — | — | (131) | — | — | — | (4  572) |
| TOTAL EXPENSES | — | — | — | (9  269) | (1 38  571) | (1 47  840) | — | — | (2  045) | (5  565) | (608) | — | (1 56  058) |
| Economic result of the year | 1 41  241 | 8  415 | 1 49  655 | (9  269) | (1 38  571) | (1 47  840) | 1  815 | 2  038 | (2  045) | (5  565) | (608) | — | (4  365) |

(EUR millions)

Own resource and contributions revenue

Other operating revenue

Total

Administrative expenses

Operating expenses

Total operating expenses

Surplus from operating activities

Financial revenue

Financial expenses

Movement pension and other employee benefits liability

Share of net deficit of joint ventures and associates

Economic result of the year

2013 (reclassified)

Expenses implemented by Member States:

European Agricultural Guarantee Fund

—

—

—

—

(45  067)

(45  067)

—

—

—

—

—

—

(45  067)

European Agricultural Fund for Rural Development and other rural development instruments

—

—

—

—

(13  585)

(13  585)

—

—

—

—

—

—

(13  585)

European Regional Development Fund and Cohesion Fund

—

—

—

—

(47  767)

(47  767)

—

—

—

—

—

—

(47  767)

European Social Fund

—

—

—

—

(12  126)

(12  126)

—

—

—

—

—

—

(12  126)

Other

—

—

—

—

(1  525)

(1  525)

—

—

—

—

—

—

(1  525)

Implemented by the Commission and executive agencies

—

—

—

—

(12  519)

(12  519)

—

—

—

—

—

—

(12  519)

Implemented by other EU agencies and bodies

—

—

—

—

(656)

(656)

—

—

—

—

—

—

(656)

Implemented by third countries and int. organisations

—

—

—

—

(2  465)

(2  465)

—

—

—

—

—

—

(2  465)

Implemented by other entities

—

—

—

—

(1  694)

(1  694)

—

—

—

—

—

—

(1  694)

Staff and pension costs

—

—

—

(5  527)

—

(5  527)

—

—

—

(3  531)

—

—

(9  058)

Changes in employee benefits actuarial assumptions

—

—

—

—

—

—

—

—

—

(2  033)

—

—

(2  033)

Finance costs

—

—

—

—

(469)

(469)

—

—

(1  914)

—

—

—

(2  383)

Share of net deficit of joint ventures and associates

—

—

—

—

—

—

—

—

—

—

(608)

—

(608)

Other expenses

—

—

—

(3  742)

(699)

(4  442)

—

—

(131)

—

—

—

(4  572)

TOTAL EXPENSES

TOTAL EXPENSES

—

—

—

(9  269)

(9  269)

(1 38  571)

(1 38  571)

(1 47  840)

(1 47  840)

—

—

(2  045)

(2  045)

(5  565)

(5  565)

(608)

(608)

—

(1 56  058)

(1 56  058)

Economic result of the year

Economic result of the year

1 41  241

1 41  241

8  415

8  415

1 49  655

1 49  655

(9  269)

(9  269)

(1 38  571)

(1 38  571)

(1 47  840)

(1 47  840)

1  815

1  815

2  038

2  038

(2  045)

(2  045)

(5  565)

(5  565)

(608)

(608)

—

(4  365)

(4  365)

4.   NOTES TO THE CASHFLOW STATEMENT

4.1.   PURPOSE AND PREPARATION OF THE CASHFLOW STATEMENT

PURPOSE AND PREPARATION OF THE CASHFLOW STATEMENT

Cash flow information is used to provide a basis for assessing the ability of the EU to generate cash and cash equivalents, and its needs to utilise those cash flows.

The cash flow statement is prepared using the indirect method. This means that the economic result for the financial year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of revenue or expense associated with investing cash flows.

Cash flows arising from transactions in a foreign currency are recorded in the EU’s reporting currency (Euro), by applying to the foreign currency amount the exchange rate between the euro and the foreign currency at the date of the cash flow.

The cash flow statement reports cash flows during the period classified by operating and investing activities (the EU does not have financing activities).

4.2.   OPERATING ACTIVITIES

OPERATING ACTIVITIES

Operating activities are the activities of the EU that are not investing activities. These are the majority of the activities performed. Loans granted to beneficiaries (and the related borrowings, when applicable) are not considered as investing (or financing) activities as they are part of the general objectives and thus daily operations of the EU. Operating activities also include investments such as EIF, EBRD and venture capital funds. Indeed, the objective of these activities is to contribute to the achievement of policy targeted outcomes.

4.3.   INVESTING ACTIVITIES

INVESTING ACTIVITIES

Investing activities are the acquisition and disposal of intangible assets and property, plant and equipment and of other investments which are not included in cash equivalents. Investing activities do not include loans granted to beneficiaries. The objective is to show the real investments made by the EU.

5.   CONTINGENT ASSETS AND LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES

5.1.   CONTINGENT ASSETS

CONTINGENT ASSETS

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Guarantees received: | | |
| Performance guarantees | 400 | 441 |
| Other guarantees | 27 | 39 |
| Other contingent assets | 49 | 16 |
| Total | 476 | 496 |

(EUR millions)

31.12.2014

31.12.2013

Guarantees received:

Performance guarantees

400

441

Other guarantees

27

39

Other contingent assets

49

16

Total

Total

476

476

496

496

Performance guarantees are requested to ensure that beneficiaries of EU funding meet the obligations of their contracts with the EU.

5.2.   CONTINGENT LIABILITIES

CONTINGENT LIABILITIES

| (EUR millions) |
| --- |
| | Note | 31.12.2014 | 31.12.2013 |
| Guarantees given | 5.2.1 | 20  862 | 22  162 |
| Fines | 5.2.2 | 5  602 | 5  227 |
| EAGF, rural development and pre-accession | 5.2.3 | 505 | 1  537 |
| Cohesion policy | 5.2.4 | 9 | 137 |
| Legal cases and other disputes | 5.2.5 | 789 | 689 |
| Other contingent liabilities | | 5 | 52 |
| Total | | 27  772 | 29  805 |

(EUR millions)

Note

31.12.2014

31.12.2013

Guarantees given

5.2.1

5.2.1

20  862

22  162

Fines

5.2.2

5.2.2

5  602

5  227

EAGF, rural development and pre-accession

5.2.3

5.2.3

505

1  537

Cohesion policy

5.2.4

5.2.4

9

137

Legal cases and other disputes

5.2.5

5.2.5

789

689

Other contingent liabilities

5

52

Total

Total

27  772

27  772

29  805

29  805

All contingent liabilities, except those relating to fines, would be financed, should they fall due, by the EU budget in the years to come.

5.2.1.   
  Guarantees given

Guarantees given

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Guarantees on loans granted by the EIB | | |
| 65 % guarantee | 18  283 | 19  077 |
| 70 % guarantee | 447 | 1  361 |
| 75 % guarantee | 168 | 257 |
| 100 % guarantee | 300 | 461 |
| Total | 19  198 | 21  156 |
| Other guarantees given | 1  664 | 1  006 |
| Total | 20  862 | 22  162 |

(EUR millions)

31.12.2014

31.12.2013

Guarantees on loans granted by the EIB

65 % guarantee

18  283

19  077

70 % guarantee

447

1  361

75 % guarantee

168

257

100 % guarantee

300

461

Total

Total

19  198

19  198

21  156

21  156

Other guarantees given

1  664

1  006

Total

Total

20  862

20  862

22  162

22  162

The EU budget guarantees loans signed and granted by the EIB from its own resources to third countries at 31 December 2014 (including loans granted to Member States before accession). However, the EU’s guarantee is limited to a percentage of the ceiling of the credit lines authorised: 65 % (for agreements signed until 2007), 70 %, 75 % or 100 %. Where the ceiling is not reached, the EU guarantee covers the full amount. For agreements signed after 2007 (mandates 2007-2013 and 2014-2020), the EU’s guarantee is limited to 65 % of the outstanding balances and not to the credit lines authorised. At 31 December 2014 the amount outstanding totalled EUR 19  198 million and this, therefore, is the maximum exposure faced by the EU. At 31 December 2014, about 82 % of EIB lending operations (sovereign and sub-sovereign lending operations) are covered by a comprehensive guarantee, while on the remaining operations the EIB benefits from political risk coverage only.

Other guarantees given relate mainly to the Risk-Sharing Finance Facility (EUR 883 million), to Horizon 2020 (EUR 365 million) and to the Loan Guarantee Instrument for Ten-T Projects (EUR 209 million).

5.2.2.   
  Fines

Fines

These amounts concern fines imposed by the Commission for infringement of competition rules that have been provisionally paid and where either an appeal has been lodged or where it is unknown if an appeal will be made. The contingent liability will be maintained until a decision by the Court of Justice on the case is final. Interest earned on provisional payments is included in the economic result of the year and also as a contingent liability to reflect the uncertainty of the Commission’s title to these amounts.

5.2.3.   
  EAGF, rural development and pre-accession

EAGF, rural development and pre-accession

These are contingent liabilities towards the Member States connected with the EAGF conformity decisions, rural development and pre-accession financial corrections pending judgement of the Court of Justice. The determination of the final amount of the liability and the year in which the effect of successful appeals will be charged to the budget will depend on the length of the procedure before the Court.

5.2.4.   
  Cohesion policy

Cohesion policy

These are contingent liabilities towards the Member States in conjunction with actions under cohesion policy awaiting the oral hearing date or pending judgement of the Court of Justice.

5.2.5.   
  Legal cases and other disputes

Legal cases and other disputes

This heading relates to actions for damages currently being brought against the EU, other legal disputes and the estimated legal costs. It should be noted that in an action for damages under Article 288 EC the applicant must demonstrate a sufficiently serious breach by the institution of a rule of law intended to confer rights on individuals, real harm suffered by the applicant, and a direct causal link between the unlawful act and the harm.

5.3.   OTHER SIGNIFICANT DISCLOSURES

OTHER SIGNIFICANT DISCLOSURES

5.3.1.   
  Outstanding budgetary commitments not yet expensed

Outstanding budgetary commitments not yet expensed

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Outstanding budgetary commitments not yet expensed | 1 44  741 | 1 78  399 |

(EUR millions)

31.12.2014

31.12.2013

Outstanding budgetary commitments not yet expensed

1 44  741

1 78  399

The amount disclosed above is the budgetary RAL (‘Reste à Liquider’) less related amounts that have been included as expenses in the 2014 statement of financial performance. The budgetary RAL is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multiannual programmes. At 31 December 2014 the budgetary RAL totalled EUR 1 89  585 million (2013: EUR 2 22  410 million).

5.3.2.   
  Significant legal commitments

Significant legal commitments

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Structural actions | 4 33  527 | 150 |
| Protocol with Mediterranean countries | 264 | 264 |
| Fisheries agreements | 176 | 79 |
| Galileo | 719 | — |
| Copernicus | 3  476 | — |
| Trans-European Transport Networks (TEN-T) | — | 850 |
| Other contractual commitments | 3  127 | 3  531 |
| Total | 4 41  288 | 4  873 |

(EUR millions)

31.12.2014

31.12.2013

Structural actions

4 33  527

150

Protocol with Mediterranean countries

264

264

Fisheries agreements

176

79

Galileo

719

—

Copernicus

3  476

—

Trans-European Transport Networks (TEN-T)

—

850

Other contractual commitments

3  127

3  531

Total

Total

4 41  288

4 41  288

4  873

4  873

These commitments originated because the Commission entered into long-term legal commitments in respect of amounts that were not yet covered by commitment appropriations in the budget. This can relate to multiannual programmes such as Structural Actions or amounts that the Commission is committed to pay in the future under administrative contracts existing at the balance sheet date (e.g. relating to the provision of services such as security, cleaning, etc., but also contractual commitments concerning specific projects such as building works). The significant increase of legal commitments relating to Structural Actions is due to the start of the 2014-2020 MFF during the reporting period.

Structural actions

Structural actions

The table below shows a comparison between the legal commitments for which budget commitments have not yet been made and the maximum commitments in relation to the amounts foreseen in the MFF 2014-2020. The future obligations represent the outstanding amounts for which the Commission is still committed to make payments after 31 December 2014.

| (EUR millions) |
| --- |
| Funds | Financial framework 2014-2020 | Legal commitments concluded | Budget commitments | Decommitments | Legal commitments less budget commitments | Future obligations |
| (A) | (B) | (C) | (D) | (=B-C+D) | (=A-C-D) |
| European Regional Development Fund and Cohesion Fund | 2 59  799 | 1 33  163 | 16  837 | — | 1 16  325 | 2 42  962 |
| European Social Fund | 89  624 | 57  828 | 9  273 | — | 48  555 | 80  350 |
| Fund for European Aid to the most Deprived | 3  814 | 3  723 | 501 | — | 3  222 | 3  313 |
| HEADING 1B: COHESION POLICY FUNDS | 3 53  236 | 1 94  714 | 26  611 | — | 1 68  102 | 3 26  625 |
| European Agricultural Fund for Rural Development | 99  348 | 20  707 | 3  295 | — | 17  413 | 96  053 |
| European Maritime and Fisheries Fund | 5  749 | 140 | 19 | — | 121 | 5  730 |
| HEADING 2: NATURAL RESOURCES | 1 05  097 | 20  847 | 3  314 | — | 17  533 | 1 01  783 |
| Asylum and Migration Fund | 2  752 | — | — | — | — | 2  752 |
| Internal Security Fund | 2  367 | — | — | — | — | 2  367 |
| HEADING 3: SECURITY & CITIZENSHIP | 5  119 | — | — | — | — | 5  119 |
| Total | 4 63  452 | 2 15  561 | 29  925 | — | 1 85  636 | 4 33  527 |

(EUR millions)

Funds

Financial framework 2014-2020

Legal commitments concluded

Budget commitments

Decommitments

Legal commitments less budget commitments

Future obligations

(A)

(B)

(C)

(D)

(=B-C+D)

(=A-C-D)

European Regional Development Fund and Cohesion Fund

2 59  799

1 33  163

16  837

—

1 16  325

2 42  962

European Social Fund

89  624

57  828

9  273

—

48  555

80  350

Fund for European Aid to the most Deprived

3  814

3  723

501

—

3  222

3  313

HEADING 1B: COHESION POLICY FUNDS

HEADING 1B: COHESION POLICY FUNDS

3 53  236

3 53  236

1 94  714

1 94  714

26  611

26  611

—

1 68  102

1 68  102

3 26  625

3 26  625

European Agricultural Fund for Rural Development

99  348

20  707

3  295

—

17  413

96  053

European Maritime and Fisheries Fund

5  749

140

19

—

121

5  730

HEADING 2: NATURAL RESOURCES

HEADING 2: NATURAL RESOURCES

1 05  097

1 05  097

20  847

20  847

3  314

3  314

—

17  533

17  533

1 01  783

1 01  783

Asylum and Migration Fund

2  752

—

—

—

—

2  752

Internal Security Fund

2  367

—

—

—

—

2  367

HEADING 3: SECURITY & CITIZENSHIP

HEADING 3: SECURITY & CITIZENSHIP

5  119

5  119

—

—

—

—

5  119

5  119

Total

Total

4 63  452

4 63  452

2 15  561

2 15  561

29  925

29  925

—

1 85  636

1 85  636

4 33  527

4 33  527

Protocols with Mediterranean countries

Protocols with Mediterranean countries

These commitments relate to financial protocols with Mediterranean non-member countries. The amount included here is the difference between the total amount of the protocols signed and the amount of the budget commitments entered in the accounts. These protocols are international treaties that cannot be wound up without the agreement of both parties, although the winding-up process is ongoing.

Fisheries agreements

Fisheries agreements

These are commitments entered into with third countries for operations under international fisheries agreements.

Galileo

Galileo

These are amounts committed to the Galileo programme developing a European Global Navigation Satellite System — see also note 2.2.

2.2

Copernicus

Copernicus

Copernicus is the European Earth observation programme — see also note 2.2.

2.2

TEN-T

TEN-T

The 2013 amount related to grants in the field of the Trans-European Transport Networks (TEN-T) for the period 2007-2013. Since the programme is finished there are no new legal commitments without budgetary commitments in 2014.

Other contractual commitments

Other contractual commitments

The amounts included under this disclosure correspond to amounts committed to be paid during the term of the contracts. The largest amounts included here relate to EUR 1  933 million for the Fusion for Energy Joint Undertaking in the context of the ITER project and EUR 547 million for mainly building contracts of the European Parliament.

6.   PROTECTION OF THE EU BUDGET

6.1.   PROTECTION OF THE EU BUDGET — SUMMARY

PROTECTION OF THE EU BUDGET — SUMMARY

An important consideration in implementing the EU budget is the need to ensure the proper prevention or detection and subsequent correction of errors, irregularities and fraud. The Court provides in its annual report a statement of assurance on the legality and regularity of transactions underlying the accounts, as well as observations and statistics on the material level of error in the payments underlying the accounts. The statement of assurance accompanies these accounts in its publication in the Official Journal.

The Commission protects the EU budget, i.e. EU spending, from undue or irregular expenditure via two main methods:

| 1. | preventive mechanisms; and |
| --- | --- |

1.

preventive mechanisms; and

| 2. | corrective mechanisms (primarily financial corrections imposed on or agreed with Member States and, to a lesser extent, recoveries from recipients of EU payments). |
| --- | --- |

2.

corrective mechanisms (primarily financial corrections imposed on or agreed with Member States and, to a lesser extent, recoveries from recipients of EU payments).

The corrective mechanisms are based on a wide range of measures, which apply both before and after the Commission makes (or reimburses) expenditure.

The objective of this note is to present an overview and best estimates of how the EU budget is protected from expenditure in breach of law. This note represents a voluntary disclosure of information that is not required by the accounting standards and includes data which is not drawn directly from the accounting system (see below).

More details on these figures and on the preventive and corrective mechanisms laid down in the applicable legislation can be found in the communication on the protection of the EU budget prepared by the Commission and sent to the Discharge Authority and the Court every September — this is available on the Europa website of the Directorate-General for Budget. This Communication not only provides more details on the figures in this note (in particular break-downs of financial corrections per Member State), it also includes additional information (such as data on net financial corrections which lead to assigned revenue for the EU budget, and the results of the corrective work done by Member States). Further information on the corrective capacity is also available in the Communication: Synthesis of the Commission’s management achievements in 2014 (the ‘Synthesis Report’ issued in June 2015) — this is also available on the Europa website.

6.1.1.   
  Financial corrections

Financial corrections

Under shared management, Member States are primarily responsible for preventing or detecting and addressing serious deficiencies in the management and control systems, while the Commission ensures an overall supervisory role. Where serious failings in the management and control systems of Member States have led or could lead to individual or systemic errors, irregularities or fraud, the Commission can apply financial corrections. The term ‘financial correction’ covers a wide range of actions, resulting from the Commission’s (and other EU bodies’) supervisory and audit role, including cases where the Commission bases the corrective actions on work done by national authorities. Where amounts unduly spent cannot be identified precisely, the Commission may apply extrapolated or flat-rate corrections in accordance with the sector-specific rules.

Financial corrections are presented under two main categories in this note:

| 1. | Financial corrections confirmed/decided (Table 6.2.1): These amounts have been either confirmed (i.e. agreed) by the Member State concerned or adopted by a Commission decision. Corrections by Commission decision are recorded as revenue or negative expenses in the accounting system (see notes 3.5 and 3.9). |
| --- | --- |

1.

Financial corrections confirmed/decided (Table 6.2.1): These amounts have been either confirmed (i.e. agreed) by the Member State concerned or adopted by a Commission decision. Corrections by Commission decision are recorded as revenue or negative expenses in the accounting system (see notes 3.5 and 3.9).

confirmed/decided

6.2.1

3.5

3.9

| 2. | Financial corrections implemented (Table 6.2.2): These amounts represent the final step of the process whereby the observed situation of undue expenditure is definitively corrected. Several implementation mechanisms are foreseen in the sector-based regulatory frameworks. |
| --- | --- |

2.

Financial corrections implemented (Table 6.2.2): These amounts represent the final step of the process whereby the observed situation of undue expenditure is definitively corrected. Several implementation mechanisms are foreseen in the sector-based regulatory frameworks.

implemented

6.2.2

Included under both categories are ‘corrections at source’ resulting from the Commission’s supervisory role (see above). These corrections are deducted before cost claims are made or payments are processed by the Commission.

6.1.2.   
  Recoveries

Recoveries

Under shared management, and in accordance with the Financial Regulation and sector regulations, Member States (and not the Commission) are primarily responsible for identifying and for recovering in accordance with national rules and procedures, from beneficiaries amounts unduly paid. For the EAGF, amounts recovered from the beneficiaries are credited to the EU budget as assigned revenue, after deduction applied by Member States of 20 % to cover administrative costs. For EAFRD and Cohesion policy, recoveries are taken into consideration in a future reimbursement claim received by the Commission, and therefore can be reused for the programme within the programming period — after the end of the eligibility period it is credited to the EU budget as assigned revenue.

Under direct and indirect management, and in accordance with the Financial Regulation, recovery orders should be established by the authorising officer for amounts unduly paid. Recoveries are then implemented by direct bank transfer from the debtor or by offsetting from other amounts that the Commission owes to the debtor. The Financial Regulation foresees additional procedures to ensure the collection of recovery orders overdue, which are the object of a specific follow-up by the Accounting Officer of the Commission. Commission services implement recoveries also ‘at source’ by deducting ineligible expenditure (which has been identified in previous or current cost claims) from payments made.

6.1.3.   
  Impact of financial corrections and recoveries

Impact of financial corrections and recoveries

The primary objective of financial corrections and recoveries is to ensure that EU funds are used in accordance with the legal framework. However, the methods used, and thus the impact of corrective measures, varies significantly between different areas of spending, and between the different corrective measures. Financial corrections and recoveries related to the common agricultural policy (CAP), as well as recoveries under EAGF and internal and external policies, result in the return of previously paid irregular amounts to the EU budget. Irregular amounts detected under Cohesion policy and recoveries under rural development are, up to now, often corrected by the Member State and consequently replaced by other eligible projects — these amounts do not return to the EU budget. However, after the end of the eligibility period/after closure of the programme, amounts are credited to the EU budget as revenue. See 6.2.2 below for more details.

6.2.2

Furthermore, the corrective capacity is based on a wide range of measures, which apply both before and after the Commission makes (or reimburses) expenditure. Corrections are applied by the Commission following cost claims made by Member States and other beneficiaries and/or payments made by the Commission.

6.2.   FINANCIAL CORRECTIONS AND RECOVERIES 2014

FINANCIAL CORRECTIONS AND RECOVERIES 2014

6.2.1.   
  Financial corrections and recoveries confirmed/decided in 2014

Financial corrections and recoveries confirmed/decided in 2014

| (EUR millions) |
| --- |
| | Financial Corrections | Recoveries | 2014 Total | 2013 Total |
| Agriculture: | | | | |
| EAGF | 1  649 | 213 | 1  862 | 1  070 |
| Rural Development | 220 | 165 | 385 | 386 |
| Cohesion Policy: | | | | |
| ERDF (11) | 1  330 | — | 1  330 | 338 |
| Cohesion Fund | 292 | — | 292 | 220 |
| ESF | 342 | 1 | 343 | 874 |
| FIFG/EFF | 39 | 29 | 67 | 34 |
| EAGGF Guidance | 13 | 5 | 18 | 3 |
| Other | — | — | — | 16 |
| Internal policy areas | 5 | 293 | 298 | 396 |
| External policy areas | N/A | 127 | 127 | 93 |
| Administration | N/A | 5 | 5 | 6 |
| Total confirmed/decided in 2014 | 3  890 | 838 | 4  728 | |
| Total confirmed/decided in 2013 | 2  495 | 941 | | 3  436 |

(EUR millions)

Financial Corrections

Recoveries

2014 Total

2013 Total

Agriculture:

EAGF

1  649

213

1  862

1  070

Rural Development

220

165

385

386

Cohesion Policy:

ERDF (11)

11

1  330

—

1  330

338

Cohesion Fund

292

—

292

220

ESF

342

1

343

874

FIFG/EFF

39

29

67

34

EAGGF Guidance

13

5

18

3

Other

—

—

—

16

Internal policy areas

5

5

293

293

298

298

396

396

External policy areas

N/A

N/A

127

127

127

127

93

93

Administration

N/A

N/A

5

5

5

5

6

6

Total confirmed/decided in 2014

Total confirmed/decided in 2014

3  890

3  890

838

838

4  728

4  728

Total confirmed/decided in 2013

Total confirmed/decided in 2013

2  495

2  495

941

941

3  436

3  436

Included in the above amounts for 2014 are financial corrections and recoveries made at source totalling EUR 1  137 million — agriculture EUR 21 million, cohesion EUR 834 million, internal policies EUR 207 million, external policies EUR 71 million, and administration EUR 4 million.

Corrections at source for ERDF and Cohesion Fund are disclosed in 2014 for the first time in both tables 6.2.1 and 6.2.2 — the 2013 comparative amounts do not, therefore, include such corrections. The amounts disclosed for these funds in 2014 are cumulative and thus include amounts relating to prior years.

6.2.1

6.2.2

6.2.2.   
  Financial corrections and recoveries implemented in 2014

Financial corrections and recoveries implemented in 2014

| (EUR millions) |
| --- |
| | Financial Corrections | Recoveries | 2014 Total | 2013 Total |
| Agriculture: | | | | |
| EAGF | 796 | 150 | 946 | 636 |
| Rural Development | 86 | 167 | 252 | 359 |
| Cohesion Policy: | | | | |
| ERDF (12) | 1  083 | 1 | 1  084 | 622 |
| Cohesion Fund | 236 | — | 236 | 277 |
| ESF | 289 | 1 | 290 | 882 |
| FIFG/EFF | 41 | 25 | 66 | 28 |
| EAGGF Guidance | 13 | 5 | 18 | 16 |
| Other | — | — | — | 16 |
| Internal policy areas | 5 | 274 | 279 | 401 |
| External policy areas | N/A | 108 | 108 | 93 |
| Administration | N/A | 5 | 5 | 6 |
| Total implemented in 2014 | 2  549 | 736 | 3  285 | |
| Total implemented in 2013 | 2  472 | 862 | | 3  334 |

(EUR millions)

Financial Corrections

Recoveries

2014 Total

2013 Total

Agriculture:

EAGF

796

150

946

636

Rural Development

86

167

252

359

Cohesion Policy:

ERDF (12)

12

1  083

1

1  084

622

Cohesion Fund

236

—

236

277

ESF

289

1

290

882

FIFG/EFF

41

25

66

28

EAGGF Guidance

13

5

18

16

Other

—

—

—

16

Internal policy areas

5

274

279

401

External policy areas

N/A

N/A

108

108

108

108

93

93

Administration

N/A

N/A

5

5

5

5

6

6

Total implemented in 2014

Total implemented in 2014

2  549

2  549

736

736

3  285

3  285

Total implemented in 2013

Total implemented in 2013

2  472

2  472

862

862

3  334

3  334

Included in the above amounts for 2014 are financial corrections and recoveries made at source totalling EUR 782 million — Agriculture EUR 6 million, Cohesion EUR 494 million, internal policies EUR 207 million, external policies EUR 71 million and administration EUR 4 million.

Agriculture and Rural Development:

Agriculture and Rural Development:

Financial corrections relate to weaknesses detected in Member States’ management and control systems based on audits performed by the Commission within the multiannual conformity clearance procedures. In addition, corrections also come from the annual financial clearance decisions. Financial corrections are an incentive for Member States to improve their management and control systems and, together with recoveries protect the EU budget from expenditure in breach of law.

The amount confirmed/decided includes conformity clearance Decision No 2015/103 (EUR 1  243 million and EUR 166 million for EAGF and EAFRD respectively), which was established before the year-end by the Commission services but formally adopted by the Commission in January 2015 only. These amounts are also included as accrued income as at 31 December 2014.

For EAGF and for EAFRD, financial corrections higher than 0,01 % of the GDP may, at the request of the Member State concerned, be implemented in three annual instalments. In addition, in a few cases (Member States subject to financial assistance in accordance with the European Financial Stability Framework Agreement signed on 7 June 2010), the date of implementation was deferred by 18 months. These modalities aim at ensuring that the actual reimbursement by the Member States concerned to the EU budget can be managed without putting at risk the national budgets. Deferrals and instalments have an impact of EUR 566 million (EAGF: EUR 515 million and EAFRD: EUR 51 million) on the difference observed between the amounts confirmed/decided and the actual implementation. The remaining amount is explained by the Decision No 2015/103 confirmed in December 2014 but adopted in January 2015 only — see above.

Recoveries of irregularities made by paying agencies reduce future claims for reimbursement by the Commission to Member States. For EAGF the Commission records the full amount paid to farmers as spending. It accounts for the difference between payments made to farmers and the amounts reimbursed to paying agencies as assigned revenue, available to fund agricultural spending. For EAFRD the Commission records as spending the net eligible amount after deduction of corrections and recoveries.

Cohesion policy:

Cohesion policy:

Under cohesion policy, financial corrections relate to weaknesses detected in Member States' management and control systems based on audits performed by the Commission. They are mainly applied when authorities in the Member States withdraw expenditure initially declared and replace it with new expenditure. In such cases, the Member States do not lose EU funds. Member States can also declare additional projects and would in practice be equivalent to receiving a lower co-financing rate at the level of the priority axis/programme since the excluded ineligible expenditure may need to be financed by the national public budget.

Where these measures are not possible or not allowed, financial corrections leading to a loss of EU funds for the Member State concerned are applied. This may occur after programmes are closed or where Member States are unable to present sufficient eligible expenditure or projects.

Financial corrections implemented in 2014 referred to corrections confirmed/decided in 2014 (being EUR 1  365 million) or in previous periods (EUR 297 million).

Cohesion policy financial corrections were implemented as follows in 2014:

| (EUR millions) |
| --- |
| | ERDF | Cohesion Fund | ESF | FIFG/EFF | EAGGF Guidance | Total |
| Decommitment/Deduction at closure 2000-2006 | 448 | 136 | 114 | 8 | 8 | 714 |
| Withdrawal by Member State 2007-2013 | 242 | 22 | 92 | 16 | — | 372 |
| Recovery orders | 24 | 17 | 19 | 17 | 5 | 82 |
| Corrections at source | 370 | 60 | 64 | — | — | 494 |
| Total implemented in 2014 | 1  083 | 236 | 289 | 41 | 13 | 1  662 |

(EUR millions)

ERDF

Cohesion Fund

ESF

FIFG/EFF

EAGGF Guidance

Total

Decommitment/Deduction at closure 2000-2006

448

136

114

8

8

714

Withdrawal by Member State 2007-2013

242

22

92

16

—

372

Recovery orders

24

17

19

17

5

82

Corrections at source

370

60

64

—

—

494

Total implemented in 2014

Total implemented in 2014

1  083

1  083

236

236

289

289

41

41

13

13

1  662

1  662

6.3.   PREVENTIVE MECHANISMS OF THE COMMISSION

PREVENTIVE MECHANISMS OF THE COMMISSION

The Commission uses a number of preventive mechanisms to protect the EU budget. Under direct management, preventive actions include checks made by the responsible services on eligibility of expenditure being claimed by beneficiaries. These ex ante controls are embedded in the programmes’ management processes and are intended to provide reasonable assurance on the legality and regularity of expenditure being paid. The Commission services can also provide guidance, particularly on contractual issues, with the aim of ensuring a sound and efficient management of funding and therefore a lower risk of irregularities.

ex ante

Under the shared management mode (i.e. agricultural and cohesion policy expenditure), Member States are primarily responsible throughout the expenditure life cycle for ensuring that expenditure paid out from the EU budget is legal and regular. Preventive mechanisms also exist at the level of the Commission in its role of supervising body. The Commission may:

| — | interrupt the payment deadline for a maximum period of 6 months if:






  (a) | there is evidence to suggest a significant deficiency in the functioning of the management and control systems of the Member State concerned; or |
| --- | --- | --- |

—

interrupt the payment deadline for a maximum period of 6 months if:

(a)

there is evidence to suggest a significant deficiency in the functioning of the management and control systems of the Member State concerned; or

| (b) | the Commission services have to carry out additional verifications following information that expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected. |
| --- | --- |

(b)

the Commission services have to carry out additional verifications following information that expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected.

Once a case is closed (after a lifting letter is sent), the interrupted amount can be processed and paid out to the Member State authorities under the condition that sufficient credits are available and that there are no other issues affecting the programme,

| — | suspend all or part of an interim payment to a Member State in the following three cases:






  (a) | where there is evidence of serious deficiency in the management and control system of the programme and the Member State has not taken the necessary corrective measures; or |
| --- | --- | --- |

—

suspend all or part of an interim payment to a Member State in the following three cases:

(a)

where there is evidence of serious deficiency in the management and control system of the programme and the Member State has not taken the necessary corrective measures; or

| (b) | where expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected; or |
| --- | --- |

(b)

where expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected; or

| (c) | if there has been a serious breach by a Member State of its management and control obligations. |
| --- | --- |

(c)

if there has been a serious breach by a Member State of its management and control obligations.

Where the required measures are not taken by the Member State, the Commission may decide to impose a financial correction.

Interruptions:

Interruptions:

| (EUR millions) |
| --- |
| | 2007-2013 programming period |
| Total open cases at 31.12.2013 | New cases 2014 | Closed cases during 2014 | Total open cases at 31.12.2014 |
| Fund | Number of cases | Amount | Number of cases | Amount | Number of cases | Amount | Number of cases | Amount |
| EAFRD (13) | 2 | 1 | 15 | 79 | 17 | 80 | — | — |
| ERDF & Cohesion Fund | 101 | 1  608 | 134 | 6  227 | 137 | 3  998 | 98 | 3  837 |
| ESF | 20 | 272 | 31 | 1  323 | 19 | 625 | 32 | 970 |
| EFF | 10 | 97 | 13 | 103 | 15 | 186 | 8 | 14 |
| Total | 133 | 1  978 | 193 | 7  732 | 188 | 4  889 | 138 | 4  821 |

(EUR millions)

2007-2013 programming period

Total open cases at 31.12.2013

New cases 2014

Closed cases during 2014

Total open cases at 31.12.2014

Fund

Fund

Number of cases

Amount

Number of cases

Amount

Number of cases

Amount

Number of cases

Amount

EAFRD (13)

13

2

1

15

79

17

80

—

—

ERDF & Cohesion Fund

101

1  608

134

6  227

137

3  998

98

3  837

ESF

20

272

31

1  323

19

625

32

970

EFF

10

97

13

103

15

186

8

14

Total

Total

133

133

1  978

1  978

193

193

7  732

7  732

188

188

4  889

4  889

138

138

4  821

4  821

Suspensions and reductions:

Suspensions and reductions:

Concerning ERDF and the Cohesion Fund, five suspension decisions were still in force at the end of 2013 (the decision for lifting one was taken in 2013 but officially notified in 2014). Decisions to lift the suspensions for two programmes were taken during 2014. The other three suspension decisions remained in force at the end of 2014. Four new suspension decisions were adopted in 2014. Two were still in force at year-end.

ERDF

Cohesion Fund

Concerning ESF, one suspension decision adopted in 2011 was still in force at end of 2014. Out of the 11 suspension decisions adopted in 2013, seven remained in force at the end of 2014. During 2014, 11 new suspension decisions were adopted and were still effective at end 2014.

ESF

One suspension decision was taken in 2014 for EFF following a deficiency identified in the management and control system of a Member State related to the EU measure to reduce fishing overcapacity.

EFF

There were no suspension decisions taken in 2014 for EAFRD. For EAGF, there was one reduction made in 2014 while there were three reduction decisions adopted for EAFRD. At year-end there were five EAFRD reduction cases ongoing.

EAFRD

EAGF

6.4.   RECOVERY OF UNUSED PREFINANCING AMOUNTS

RECOVERY OF UNUSED PREFINANCING AMOUNTS

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| Agriculture: | | |
| EAGF | — | — |
| Rural Development | — | — |
| Cohesion Policy: | | |
| ERDF | — | 68 |
| Cohesion Fund | — | 4 |
| ESF | 9 | 53 |
| FIFG/EFF | 10 | 7 |
| EAGGF Guidance | 6 | 3 |
| Internal policy areas | 278 | 208 |
| External policy areas | 95 | 91 |
| Administration | 2 | 1 |
| Total recovered | 400 | 435 |

(EUR millions)

2014

2013

Agriculture:

EAGF

—

—

Rural Development

—

—

Cohesion Policy:

ERDF

—

68

Cohesion Fund

—

4

ESF

9

53

FIFG/EFF

10

7

EAGGF Guidance

6

3

Internal policy areas

278

208

External policy areas

95

91

Administration

2

1

Total recovered

Total recovered

400

400

435

435

Recoveries of unused prefinancing amounts should not be confused with irregular expenditure recovered. Where the Commission services identify and recover such expenditure in relation to prefinancing amounts paid out, these are included in the normal financial correction or recovery processes described above. For more details on prefinancing, see also note 2.5.

2.5.

7.   FINANCIAL RISK MANAGEMENT

The following disclosures with regard to the financial risk management of the EU relate to:

| — | lending and borrowing activities carried out by the Commission through: EFSM, BOP, MFA, and Euratom actions and the ECSC in liquidation, |
| --- | --- |

—

lending and borrowing activities carried out by the Commission through: EFSM, BOP, MFA, and Euratom actions and the ECSC in liquidation,

| — | the treasury operations carried out by the Commission in order to implement the EU budget, including the receipt of fines, |
| --- | --- |

—

the treasury operations carried out by the Commission in order to implement the EU budget, including the receipt of fines,

| — | the Guarantee Fund for external actions, and |
| --- | --- |

—

the Guarantee Fund for external actions, and

| — | financial instruments financed by the budget. |
| --- | --- |

—

financial instruments financed by the budget.

7.1.   TYPES OF RISK

TYPES OF RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate, because of variations in market prices. Market risk embodies not only the potential for loss, but also the potential for gain. It comprises currency risk, interest rate risk and other price risk (the EU has no significant other price risk).

Market risk

| (1) | Currency risk is the risk that the EU’s operations or its investments' value will be affected by changes in exchange rates. This risk arises from the change in price of one currency against another. |
| --- | --- |

(1)

Currency risk is the risk that the EU’s operations or its investments' value will be affected by changes in exchange rates. This risk arises from the change in price of one currency against another.

Currency risk

| (2) | Interest rate risk is the possibility of a reduction in the value of a security, especially a bond, resulting from an increase in interest rates. In general, higher interest rates will lead to lower prices of fixed rate bonds, and vice versa. |
| --- | --- |

(2)

Interest rate risk is the possibility of a reduction in the value of a security, especially a bond, resulting from an increase in interest rates. In general, higher interest rates will lead to lower prices of fixed rate bonds, and vice versa.

Interest rate risk

Credit risk is the risk of loss due to a debtor’s/borrower’s non-payment of a loan or other line of credit (either the principal or interest or both) or other failure to meet a contractual obligation. The default events include a delay in repayments, restructuring of borrower repayments and bankruptcy.

Credit risk

Liquidity risk is the risk that arises from the difficulty of selling an asset; for example, the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss or meet an obligation.

Liquidity risk

7.2.   RISK MANAGEMENT POLICIES

RISK MANAGEMENT POLICIES

The implementation of the EU budget relies increasingly on the use of financial instruments. The basic concept behind this new approach, in contrast to the traditional method of budget implementation by giving grants and subsidies, is that for each euro spent from the budget via financial instruments, the final beneficiary receives more than EUR 1 as financial support due to the leverage effect. This intelligent use of the EU budget maximises the impact of the funds available. For more information on the amounts concerned, see note 2.4.

2.4

Common to most financial instruments is the fact that the implementation is delegated to either the EIB group (including EIF) based on an agreement between the EC and the EIB or to other financial intermediaries. Agreements signed with these intermediaries include strict conditions and obligations on the intermediaries so as ensure that EU monies are properly managed and properly reported on. Once a financial contribution to one of the instruments has been committed, the funds are transferred to a specifically created bank account of the financial intermediary (i.e. a fiduciary account). The financial intermediary may, depending on the instrument in question, use the funds on this fiduciary account to provide loans, issue debt instruments, etc. Proceeds from financial instruments have to, as a general rule, be reimbursed to the EU budget.

The risk as regards these financial instruments is usually limited to a ceiling as indicated in the underlying agreements which is the budgeted amount foreseen for the instrument. As the Commission often bears the ‘first loss piece’ and since instruments are intended to finance riskier beneficiaries (who have difficulties in obtaining funding from commercial lenders), it is therefore likely that at least some losses to the EU budget will occur.

Borrowing and lending activities

Borrowing and lending activities

The lending and borrowing transactions, as well as related treasury management, are carried out by the EU according to the respective Council Decisions, if applicable, and internal guidelines. Written procedure manuals covering specific areas such as borrowings, loans and treasury management have been developed and are used by the relevant operating units. As a general rule, there are no activities to compensate interest rate variations or foreign currency variations (‘hedging’ activities) carried-out as lending operations are generally financed by ‘back-to-back’ borrowings, which thus do not generate open interest rate or currency positions. The application of the ‘back-to-back’ character is checked regularly.

Treasury

Treasury

The rules and principles for the management of the Commission’s treasury operations are laid down in the Council Regulation 1150/2000 (amended by Council Regulations 2028/2004 and 105/2009) and in the Financial Regulation and its rules of application.

As a result of the above regulations, the following main principles apply:

| — | Own resources are paid by the Member States into accounts opened for this purpose in the name of the Commission with the Treasury or the body appointed by each Member State. The Commission may draw on the above accounts solely to cover its cash requirements. |
| --- | --- |

—

Own resources are paid by the Member States into accounts opened for this purpose in the name of the Commission with the Treasury or the body appointed by each Member State. The Commission may draw on the above accounts solely to cover its cash requirements.

| — | Own resources are paid by Member States in their own national currencies, while the Commission’s payments are mostly denominated in euros. |
| --- | --- |

—

Own resources are paid by Member States in their own national currencies, while the Commission’s payments are mostly denominated in euros.

| — | Bank accounts opened in the name of the Commission may not be overdrawn. This restriction does not apply to the Commission’s own resource accounts in case of a default on loans contracted or guaranteed pursuant to EU Council regulations and decision and under certain conditions in case the cash resource requirements are in excess of the assets of the accounts. |
| --- | --- |

—

Bank accounts opened in the name of the Commission may not be overdrawn. This restriction does not apply to the Commission’s own resource accounts in case of a default on loans contracted or guaranteed pursuant to EU Council regulations and decision and under certain conditions in case the cash resource requirements are in excess of the assets of the accounts.

| — | Funds held in bank accounts denominated in currencies other than euros are either used for payments in the same currencies or periodically converted into euros. |
| --- | --- |

—

Funds held in bank accounts denominated in currencies other than euros are either used for payments in the same currencies or periodically converted into euros.

In addition to the own resources accounts, other bank accounts are opened by the Commission, with central banks and commercial banks, for the purpose of executing payments and receiving receipts other than the Member State contributions to the budget.

Treasury and payment operations are highly automated and rely on modern information systems. Specific procedures are applied to guarantee system security and to ensure segregation of duties in line with the Financial Regulation, the Commission’s internal control standards, and audit principles.

A written set of guidelines and procedures regulates the management of the Commission’s treasury and payment operations with the objective of limiting operational and financial risk and ensuring an adequate level of control. They cover the different areas of operation (for example: payment execution and cash management, cash flow forecasting, business continuity, etc.), and compliance with the guidelines and procedures is checked regularly. Additionally, information is exchanged between Directorate General for the Budget and Directorate-General for Economic and Financial Affairs on risk management and best exposures.

Fines

Fines

Provisionally cashed fines: deposits

Provisionally cashed fines: deposits

Amounts received before 2010 remain in bank accounts with banks specifically selected for the deposit of provisionally cashed fines. The selection of banks is conducted in compliance with tender procedures defined by the Financial Regulation. Placement of funds with specific banks is determined by the internal risk management policy defining the credit rating requirements and the amount of funds which could be placed in proportion to the counterparty equity. Financial and operational risks are identified and evaluated and compliance with internal policies and procedures is checked regularly.

Provisionally cashed fines: BUFI portfolio

Provisionally cashed fines: BUFI portfolio

Fines imposed and provisionally cashed from 2010 onwards are invested in a specifically created fund, BUFI. The main objectives of the Fund are the reduction of risks associated with financial markets and the equal treatment of all fined entities by offering a guaranteed return calculated on the same basis. The asset management for provisionally cashed fines is carried out by the Commission in accordance with internal asset management guidelines. Procedural manuals covering specific areas such as treasury management have been developed and are used by the relevant operating units. Financial and operational risks are identified and evaluated and compliance with internal guidelines and procedures is checked regularly.

The objectives of the asset management activities are to invest the fines provisionally paid to the Commission in such a way as to:

| (a) | ensure that the funds are easily available when needed; while |
| --- | --- |

(a)

ensure that the funds are easily available when needed; while

| (b) | aiming at delivering, under normal circumstances, a return which on average is at least equal to the return of the BUFI benchmark minus costs incurred. |
| --- | --- |

(b)

aiming at delivering, under normal circumstances, a return which on average is at least equal to the return of the BUFI benchmark minus costs incurred.

Investments are restricted essentially to the following categories: term deposits with euro-area central banks, euro-area sovereign debt agencies, fully state-owned or state-guaranteed banks or supranational institutions, and bonds, bills and Certificates of Deposit issued by either sovereign or supranational institutions.

Bank guarantees

Bank guarantees

Significant amounts of guarantees issued by financial institutions are held by the Commission in relation to the fines it imposes on companies breaching EU competition rules (see note 2.6.1.2). These guarantees are provided by fined companies as an alternative to making provisional payments. The guarantees are managed in compliance with the internal risk management policy. Financial and operational risks are identified and evaluated and compliance with internal policies and procedures is checked regularly.

2.6.1.2

Guarantee Fund

Guarantee Fund

The rules and principles for the asset management of the Guarantee Fund are laid out in the Convention between the Commission and the EIB dated 25 November 1994 and the subsequent amendments dated 17/23 September 1996, 8 May 2002, 25 February 2008 and 9 November 2010. The Guarantee Fund operates only in euros. It exclusively invests in this currency in order to avoid any foreign currency risk. Management of the assets is based upon the traditional rules of prudence adhered to for financial activities. It is required to pay particular attention to reducing the risks and to ensuring that the managed assets can be sold or transferred without significant delay, taking into account the commitments covered.

7.2.1.   
  Reconciliation of carrying amount and fair value of financial instruments

Reconciliation of carrying amount and fair value of financial instruments

Reconciliation of the carrying amounts and fair value of financial assets by class

Reconciliation of the carrying amounts and fair value of financial assets by class

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Carrying amount | Fair value | Carrying amount | Fair value |
| Financial assets at fair value | | | | |
| Available for sale financial assets | 9  406 | 9  406 | 7  870 | 7  870 |
| Cash and cash equivalents | 17  545 | 17  545 | 9  510 | 9  510 |
| Total | 26  951 | 26  951 | 17  380 | 17  380 |
| Financial assets at amortised cost | | | | |
| Loans | 58  843 | 58  843 | 57  545 | 57  545 |
| Exchange receivables and non-exchange recoverables | 15  578 | 15  578 | 13  680 | 13  680 |
| Total | 74  421 | 74  421 | 71  225 | 71  225 |
| Total | 1 01  372 | 1 01  372 | 88  605 | 88  605 |

(EUR millions)

31.12.2014

31.12.2013

Carrying amount

Fair value

Carrying amount

Fair value

Financial assets at fair value

Financial assets at fair value

Available for sale financial assets

9  406

9  406

7  870

7  870

Cash and cash equivalents

17  545

17  545

9  510

9  510

Total

26  951

26  951

26  951

26  951

17  380

17  380

17  380

17  380

Financial assets at amortised cost

Financial assets at amortised cost

Loans

58  843

58  843

57  545

57  545

Exchange receivables and non-exchange recoverables

15  578

15  578

13  680

13  680

Total

74  421

74  421

74  421

74  421

71  225

71  225

71  225

71  225

Total

Total

1 01  372

1 01  372

1 01  372

1 01  372

88  605

88  605

88  605

88  605

Reconciliation of the carrying amounts and fair value of financial liabilities by class

Reconciliation of the carrying amounts and fair value of financial liabilities by class

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| | Carrying amount | Fair value | Carrying amount | Fair value |
| Financial liabilities at fair value | — | — | — | — |
| Financial liabilities at amortised cost | | | | |
| Borrowings | 58  470 | 58  470 | 57  218 | 57  218 |
| Finance lease liabilities | 1  755 | 1  755 | 1  838 | 1  838 |
| Payables | 43  180 | 43  180 | 36  213 | 36  213 |
| Other | 454 | 454 | 477 | 477 |
| Total | 1 03  859 | 1 03  859 | 95  746 | 95  746 |

(EUR millions)

31.12.2014

31.12.2013

Carrying amount

Fair value

Carrying amount

Fair value

Financial liabilities at fair value

Financial liabilities at fair value

—

—

—

—

Financial liabilities at amortised cost

Financial liabilities at amortised cost

Borrowings

58  470

58  470

57  218

57  218

Finance lease liabilities

1  755

1  755

1  838

1  838

Payables

43  180

43  180

36  213

36  213

Other

454

454

477

477

Total

Total

1 03  859

1 03  859

1 03  859

1 03  859

95  746

95  746

95  746

95  746

7.3.   CURRENCY RISK

CURRENCY RISK

Financial instruments exposure of the EU to currency risk at year-end — net position

Financial instruments exposure of the EU to currency risk at year-end — net position

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| USD | GBP | DKK | SEK | EUR | Other | Total | USD | GBP | DKK | SEK | EUR | Other | Total |
| Financial assets | | | | | | | | | | | | | | |
| Available for sale financial assets | 68 | 77 | 7 | 9 | 9  203 | 42 | 9  406 | 39 | 66 | 13 | 19 | 7  732 | — | 7  870 |
| Loans (14) | 2 | 0 | — | — | 303 | 28 | 334 | 1 | — | — | — | 277 | 8 | 286 |
| Receivables and recoverables | 2 | 4  102 | 50 | 88 | 11  197 | 140 | 15  578 | 1 | 1  050 | 42 | 79 | 12  284 | 224 | 13  680 |
| Cash and cash equivalents | 44 | 1  157 | 471 | 928 | 14  180 | 764 | 17  545 | 39 | 140 | 446 | 257 | 8  225 | 403 | 9  510 |
| Total | 116 | 5  336 | 528 | 1  024 | 34  883 | 974 | 42  862 | 80 | 1  256 | 501 | 355 | 28  518 | 635 | 31  345 |
| Financial liabilities | | | | | | | | | | | | | | |
| Payables | 0 | (10) | 0 | 0 | (43  168) | (2) | (43  180) | — | (5) | — | — | (36  156) | (52) | (36  213) |
| Total | 0 | (10) | 0 | 0 | (43  168) | (2) | (43  180) | — | (5) | — | — | (36  156) | (52) | (36  213) |
| Total | 116 | 5  326 | 528 | 1  024 | (8  284) | 972 | (318) | 80 | 1  251 | 501 | 355 | (7  638) | 583 | (4  868) |

(EUR millions)

31.12.2014

31.12.2013

USD

GBP

DKK

SEK

EUR

Other

Total

USD

GBP

DKK

SEK

EUR

Other

Total

Financial assets

Financial assets

Available for sale financial assets

68

77

7

9

9  203

42

9  406

39

66

13

19

7  732

—

7  870

Loans (14)

14

2

0

—

—

303

28

334

1

—

—

—

277

8

286

Receivables and recoverables

2

4  102

50

88

11  197

140

15  578

1

1  050

42

79

12  284

224

13  680

Cash and cash equivalents

44

1  157

471

928

14  180

764

17  545

39

140

446

257

8  225

403

9  510

Total

116

116

5  336

5  336

528

528

1  024

1  024

34  883

34  883

974

974

42  862

42  862

80

80

1  256

1  256

501

501

355

355

28  518

28  518

635

635

31  345

31  345

Financial liabilities

Financial liabilities

Payables

0

(10)

0

0

(43  168)

(2)

(43  180)

—

(5)

—

—

(36  156)

(52)

(36  213)

Total

0

0

(10)

(10)

0

0

0

0

(43  168)

(43  168)

(2)

(2)

(43  180)

(43  180)

—

(5)

(5)

—

—

(36  156)

(36  156)

(52)

(52)

(36  213)

(36  213)

Total

Total

116

116

5  326

5  326

528

528

1  024

1  024

(8  284)

(8  284)

972

972

(318)

(318)

80

80

1  251

1  251

501

501

355

355

(7  638)

(7  638)

583

583

(4  868)

(4  868)

If the EUR had strengthened against other currencies by 10 %, then it would have had the following impact:

| (EUR millions) |
| --- |
| | Economic result |
| USD | GBP | DKK | SEK | Other |
| 31.12.2014 | (4) | (483) | (47) | (92) | 0 |
| 31.12.2013 | (3) | (107) | (44) | (30) | — |

(EUR millions)

Economic result

USD

GBP

DKK

SEK

Other

31.12.2014

(4)

(483)

(47)

(92)

0

31.12.2013

(3)

(107)

(44)

(30)

—

| (EUR millions) |
| --- |
| | Net assets |
| USD | GBP | DKK | SEK | Other |
| 31.12.2014 | (6) | (7) | (1) | (1) | — |
| 31.12.2013 | (4) | (6) | (1) | (2) | — |

(EUR millions)

Net assets

USD

GBP

DKK

SEK

Other

31.12.2014

(6)

(7)

(1)

(1)

—

31.12.2013

(4)

(6)

(1)

(2)

—

If the EUR had weakened against these currencies by 10 % then it would have had the following impact:

| (EUR millions) |
| --- |
| | Economic result |
| USD | GBP | DKK | SEK | Other |
| 31.12.2014 | 5 | 591 | 58 | 113 | — |
| 31.12.2013 | 4 | 131 | 53 | 38 | — |

(EUR millions)

Economic result

USD

GBP

DKK

SEK

Other

31.12.2014

5

591

58

113

—

31.12.2013

4

131

53

38

—

| (EUR millions) |
| --- |
| | Net assets |
| USD | GBP | DKK | SEK | Other |
| 31.12.2014 | 8 | 9 | 1 | 1 | — |
| 31.12.2013 | 4 | 7 | 1 | 2 | — |

(EUR millions)

Net assets

USD

GBP

DKK

SEK

Other

31.12.2014

8

9

1

1

—

31.12.2013

4

7

1

2

—

Borrowing and lending activities

Borrowing and lending activities

Most financial assets and liabilities are in EUR, so in these cases the EU has no foreign currency risk. However, the EU does give loans in USD through the financial instrument Euratom, which are financed by borrowings with an equivalent amount in USD (back-to-back operation). At the balance sheet date the EU has no foreign currency risk with regard to Euratom.

Treasury

Treasury

Own resources paid by Member States in currencies other than EUR are kept on the own resources accounts, in accordance with the Own Resources Regulation. They are converted into EUR when they are needed to cover for the execution of payments. The procedures applied for the management of these funds are dictated by the above referenced regulation. In a limited number of cases, these funds are directly used for payments to be executed in the same currencies.

A number of accounts in EU currencies other than EUR, and in USD and CHF, are held by the Commission with commercial banks, for the purpose of executing payments denominated in these same currencies. These accounts are replenished depending on the amount of payments to be executed, as a consequence their balances do not represent exposure to currency risk.

When miscellaneous receipts (other than own resources) are received in currencies other than EUR, they are either transferred to Commission’s accounts held in the same currencies, if they are needed to cover the execution of payments, or converted into EUR and transferred to accounts held in EUR. Imprest accounts held in currencies other than EUR are replenished depending on the estimated short term local payments needs in the same currencies. Balances on these accounts are kept within their respective ceilings.

Fines

Fines

Provisionally cashed fines (deposits and BUFI portfolio) and bank guarantees

Provisionally cashed fines (deposits and BUFI portfolio) and bank guarantees

Since all fines are imposed and paid in euros, there is no foreign currency risk.

Guarantee Fund

Guarantee Fund

The financial assets of the Guarantee Fund are in euros so there is no currency risk. The loans subrogated to the EU as result of calls on the Guarantee Fund following payment defaults by a loan beneficiary are carried out in their original currency and therefore expose the EU to currency risk. There are no activities to compensate foreign currency variations (‘hedging’ activities) due to uncertainty relating to the loans repayment timing.

7.4.   INTEREST RATE RISK

INTEREST RATE RISK

The following table illustrates the interest rate sensitivity of available for sale financial assets assuming a possible change in interest rates of +/- 1 %.

| (EUR millions) |
| --- |
| | Increase (+)/decrease (-) in basis points | Effect on economic result and net assets |
| 31.12.2014: Available for sale financial assets | + 100 | (138) |
| | - 100 | 149 |
| 31.12.2013: Available for sale financial assets | + 100 | (94) |
| | - 100 | 95 |

(EUR millions)

Increase (+)/decrease (-) in basis points

Effect on economic result and net assets

31.12.2014: Available for sale financial assets

- 100

(138)

- 100

149

31.12.2013: Available for sale financial assets

- 100

(94)

- 100

95

The sensitivity analysis only considers the impact on the price risk (fair value) of the available for sale financial assets. The impact on surplus or deficit for variable interest rate instruments has not been considered.

Borrowing and lending activities

Borrowing and lending activities

Borrowings and loans with variable interest rates

Borrowings and loans with variable interest rates

Due to the nature of its borrowing and lending activities, the EU has significant interest-bearing assets and liabilities. MFA and Euratom borrowings issued at variable rates expose the EU to interest rate risk. However, the interest rate risks that arise from borrowings are offset by equivalent loans in terms and conditions (back-to-back). At the balance sheet date, the EU has loans (expressed in nominal amounts) with variable rates of EUR 484 million (2013: EUR 583 million), with a re-pricing taking place every 6 months.

Borrowings and loans with fixed interest rates

Borrowings and loans with fixed interest rates

The EU also has MFA and Euratom loans with fixed rates totalling EUR 1  692 million in 2014 (2013: EUR 367 million) and which have a final maturity date of less than one year (EUR 10 million), between one and five years (EUR 146 million) and more than five years (EUR 1  536 million). More significantly, the EU has nine loans under the financial instrument BOP with fixed interest rates totalling EUR 8,4 billion in 2014 (2013: EUR 11,4 billion) and which have a final maturity of less than one year (EUR 2,7 billion), between one and five years (EUR 5,5 billion) and more than five years (EUR 0,2 billion). Under the financial instrument EFSM, the EU has 21 loans with fixed interest rates totalling EUR 46,8 billion in 2014 (2013: EUR 43,8 billion) which have a final maturity date of less than one year (EUR 5 million), between one and five years (EUR 9,2 billion) and more than five years (EUR 32,5 billion).

Treasury

Treasury

The Commission’s treasury does not borrow any money; as a consequence it is not exposed to interest rate risk. Interest is however calculated on balances held on the different banks accounts. The Commission has therefore put in place measures to ensure that interest earned on its bank accounts regularly reflects market interest rates, as well as their possible fluctuation.

Accounts opened with Member States Treasuries for own resources receipts are non-interest bearing and free of charges. Accounts held with National Central Banks may be remunerated at the official rates applied by each institution.

Overnight balances held on commercial bank accounts earn interest on a daily basis. This is based on variable market rates to which a contractual margin (positive or negative) is applied. For most of the accounts, the interest calculation is linked to the EONIA (euro overnight index average) and is adjusted to reflect any fluctuations of this rate. For some other accounts, the interest calculation is linked to the ECB marginal rate for its main refinancing operations. The rates applied are in general contractually floored at zero. As a result no risk exists that the Commission earns interest at rates lower than market rates.

Fines

Fines

Provisionally cashed fines (deposits, BUFI portfolio) and bank guarantees

Provisionally cashed fines (deposits, BUFI portfolio) and bank guarantees

Deposits and bank guarantees are not exposed to interest rate risks. Interest earned by deposits reflects market interest rates as well as their possible fluctuation. There are no bonds with variable interest rates in the BUFI portfolio. The interest rate sensitivity parameter, the duration of the portfolio, follows very closely the duration of the BUFI index. Therefore any negative effects on the asset valuation would be matched on the side of the BUFI liability. There remains only a remote exposure to the interest rate risk in case such negative effects during the fine’s maturity period would result in an overall negative index performance.

Guarantee Fund

Guarantee Fund

Debt securities within the Guarantee Fund issued at variable interest rates are subject to the volatility effects of these rates, whereas debt securities at fixed rates have a risk with regard to their fair value. Fixed rate bonds represent approximately 65 % of the investment portfolio at the balance sheet date (2013: 58 %).

7.5.   CREDIT RISK

CREDIT RISK

The amounts that represent the EU’s exposure to credit risk at the end of the reporting period are the carrying amounts of the financial instruments as disclosed in note 2.

2

Financial assets that are neither past due nor impaired

Financial assets that are neither past due nor impaired

| (EUR millions) |
| --- |
| | Total | Neither past due nor impaired | Past due but not impaired |
| < 1 year | 1-5 years | > 5 years |
| Loans | 58  843 | 58  843 | — | — | — |
| Receivables and recoverables | 15  578 | 7  968 | 5  624 | 1  847 | 138 |
| Total at 31.12.2014 | 74  421 | 66  811 | 5  624 | 1  847 | 138 |
| Loans | 57  544 | 57  542 | 1 | 1 | — |
| Receivables and recoverables | 13  680 | 10  029 | 1  091 | 2  117 | 443 |
| Total at 31.12.2013 | 71  224 | 67  571 | 1  092 | 2  118 | 443 |

(EUR millions)

Total

Neither past due nor impaired

Past due but not impaired

< 1 year

1-5 years

> 5 years

Loans

58  843

58  843

—

—

—

Receivables and recoverables

15  578

7  968

5  624

1  847

138

Total at 31.12.2014

Total at 31.12.2014

74  421

74  421

66  811

66  811

5  624

5  624

1  847

1  847

138

138

Loans

57  544

57  542

1

1

—

Receivables and recoverables

13  680

10  029

1  091

2  117

443

Total at 31.12.2013

Total at 31.12.2013

71  224

71  224

67  571

67  571

1  092

1  092

2  118

2  118

443

443

Credit quality of financial assets that are neither past due nor impaired

Credit quality of financial assets that are neither past due nor impaired

| (EUR millions) |
| --- |
| | 31.12.2014 | 31.12.2013 |
| Available for sale | Loans & Receivables | Cash | Total | Available for sale | Loans & Receivables | Cash | Total |
| Counterparties with external credit rating | | | | | | | | |
| Prime and high grade | 7  511 | 2  951 | 13  947 | 24  409 | 6  226 | 4  779 | 7  121 | 18  126 |
| Upper medium grade | 359 | 25  045 | 2  932 | 28  335 | 138 | 209 | 1  760 | 2  107 |
| Lower medium grade | 347 | 6  001 | 301 | 6  649 | 322 | 31  889 | 284 | 32  495 |
| Non-investment grade | 42 | 28  191 | 317 | 28  550 | 57 | 26  786 | 256 | 27  099 |
| Total | 8  259 | 62  188 | 17  497 | 87  944 | 6  743 | 63  663 | 9  421 | 79  827 |
| Counterparties without external credit rating | | | | | | | | |
| Group 1 | — | 4  488 | 48 | 4  537 | — | 3  771 | 89 | 3  860 |
| Group 2 | — | 136 | — | 136 | — | 137 | — | 137 |
| Total | — | 4  624 | 48 | 4  673 | — | 3  908 | 89 | 3  997 |
| Total | 8  259 | 66  812 | 17  545 | 92  616 | 6  743 | 67  571 | 9  510 | 83  824 |

(EUR millions)

31.12.2014

31.12.2013

Available for sale

Loans & Receivables

Cash

Total

Available for sale

Loans & Receivables

Cash

Total

Counterparties with external credit rating

Counterparties with external credit rating

Prime and high grade

7  511

2  951

13  947

24  409

6  226

4  779

7  121

18  126

Upper medium grade

359

25  045

2  932

28  335

138

209

1  760

2  107

Lower medium grade

347

6  001

301

6  649

322

31  889

284

32  495

Non-investment grade

42

28  191

317

28  550

57

26  786

256

27  099

Total

8  259

8  259

62  188

62  188

17  497

17  497

87  944

87  944

6  743

6  743

63  663

63  663

9  421

9  421

79  827

79  827

Counterparties without external credit rating

Counterparties without external credit rating

Group 1

—

4  488

48

4  537

—

3  771

89

3  860

Group 2

—

136

—

136

—

137

—

137

Total

—

4  624

4  624

48

48

4  673

4  673

—

3  908

3  908

89

89

3  997

3  997

Total

Total

8  259

8  259

66  812

66  812

17  545

17  545

92  616

92  616

6  743

6  743

67  571

67  571

9  510

9  510

83  824

83  824

Not included in the above table are available for sale financial assets in the form of equity instruments without external credit rating. The four risk categories mentioned above are in principle based on the rating categories of external rating agencies and correspond to:

| — | prime and high grade: Moody P-1, Aaa — Aa3; S&P A-1+, A-1, AAA — AA -; Fitch F1+, F1, AAA — AA- |
| --- | --- |

—

prime and high grade: Moody P-1, Aaa — Aa3; S&P A-1+, A-1, AAA — AA -; Fitch F1+, F1, AAA — AA-

| — | upper medium grade: Moody P-2, A1 — A3; S&P A-2, A+ — A-; Fitch F2, A+ — A- |
| --- | --- |

—

upper medium grade: Moody P-2, A1 — A3; S&P A-2, A+ — A-; Fitch F2, A+ — A-

| — | lower medium grade: Moody P-3, Baa1 — Baa3, S&P A-3, BBB+ — BBB-; Fitch F-3, BBBB+ — BBB- |
| --- | --- |

—

lower medium grade: Moody P-3, Baa1 — Baa3, S&P A-3, BBB+ — BBB-; Fitch F-3, BBBB+ — BBB-

| — | non-investment grade: Moody not prime, Ba1 — C; S&P B, C, BB+ — D; Fitch B, C, BB+ — D |
| --- | --- |

—

non-investment grade: Moody not prime, Ba1 — C; S&P B, C, BB+ — D; Fitch B, C, BB+ — D

Please note that the EU uses these external agencies rating categories as a reference point notably for financial instruments and commercial banks, but may, after making its own analysis of individual cases, keep amounts in one of the above risk categories even though one or more of the above mentioned rating agencies may have downgraded the corresponding counterparty. As regards non-rated counterparties’ group 1 relates to debtors without defaults in the past and group 2 relates to debtors with defaults in the past.

The amounts displayed above under Loans and receivables categorised in non-investment grade relate primarily to financial support loans disbursed by the Commission to Member States in financial difficulties and recoverables against certain Members States based on own resources regulations or other legal basis. The amount under cash relates to own resources bank accounts opened in the Treasury or in the central banks of Member States to hold the own resources contributions as foreseen in the regulation. The Commission may draw on these accounts solely to cover cash requirements arising from execution of the budget.

Borrowing and lending activities

Borrowing and lending activities

Exposure to credit risk is managed firstly by obtaining country guarantees in the case of Euratom, then through the Guarantee Fund (MFA & Euratom), then by the possibility of drawing the necessary funds from the Commission’s own resources accounts with the Member States and ultimately through the Budget of the EU. The Own Resources legislation fixes the ceiling for own resources payments at 1,23 % of Member States’ GNI and during 2014 1,06 % was actually used to cover payment appropriations. This means that at 31 December 2014 there existed an available margin of 0,17 % to cover these guarantees. The Guarantee Fund for external actions was set up in 1994 to cover default risks related to borrowings which finance loans to countries outside the EU. In any case, the exposure to credit risk is mitigated by the possibility to draw on the Commission’s own resources accounts with Member States in excess of the assets on those accounts in case a debtor would be unable to reimburse the amounts due in full. To this end, the EU is entitled to call upon all the Member States to ensure compliance with the EU’s legal obligation towards its lenders.

As far as treasury operations are concerned, guidelines on the choice of counterparties must be applied. Accordingly, the operating unit will be able to enter into deals only with eligible banks having sufficient counterparty limits.

Treasury

Treasury

Most of the Commission’s treasury resources are kept, in accordance with Council Regulation 1150/2000 on own resources, in the accounts opened by Member States for the payment of their contributions (own resources). All such accounts are held with Member States' treasuries or national central banks. These institutions carry the lowest credit (or counterparty) risk for the Commission as the exposure is with its Member States. For the part of the Commission’s treasury resources kept with commercial banks, in order to cover the execution of payments, replenishment of these accounts is made on a just-in-time basis and is automatically managed by the treasury cash management system. Minimum cash levels, proportional to the average amount of daily payments executed from it, are kept on each account. As a consequence the amounts kept overnight on these accounts remain constantly at low levels (overall between EUR 1 million and EUR 20 million on average, spread over more than 20 accounts) and so ensure the Commission’s risk exposure is limited. These amounts should be viewed with regard to the daily overall treasury balances which fluctuated in 2014 between EUR 100 million and EUR 34 billion, and with an overall amount of payments executed in 2014 that equals EUR 142 billion.

In addition, specific guidelines are applied for the selection of commercial banks in order to further minimise counterparty risk to which the Commission is exposed:

| — | All commercial banks are selected by call for tenders. The minimum short term credit rating required for admission to the tendering procedures is Moody’s P-1 or equivalent. A lower level may be accepted in specific and duly justified circumstances. |
| --- | --- |

—

All commercial banks are selected by call for tenders. The minimum short term credit rating required for admission to the tendering procedures is Moody’s P-1 or equivalent. A lower level may be accepted in specific and duly justified circumstances.

| — | The credit ratings of the commercial banks where the Commission has accounts are reviewed on a daily basis. Intensified monitoring measures and daily reviews of commercial banks' ratings were adopted in the context of the financial crisis, and kept in place during 2014. |
| --- | --- |

—

The credit ratings of the commercial banks where the Commission has accounts are reviewed on a daily basis. Intensified monitoring measures and daily reviews of commercial banks' ratings were adopted in the context of the financial crisis, and kept in place during 2014.

| — | In delegations outside the EU, imprest accounts are held with local banks selected by a simplified tendering procedure. Rating requirements depend on the local situation and may significantly differ from one country to another. In order to limit risk exposure, balances on these accounts are kept at the lowest possible levels (taking into account operational needs), they are regularly replenished, and the applied ceilings are reviewed on a yearly basis. |
| --- | --- |

—

In delegations outside the EU, imprest accounts are held with local banks selected by a simplified tendering procedure. Rating requirements depend on the local situation and may significantly differ from one country to another. In order to limit risk exposure, balances on these accounts are kept at the lowest possible levels (taking into account operational needs), they are regularly replenished, and the applied ceilings are reviewed on a yearly basis.

Fines

Fines

Provisionally cashed fines: deposits

Provisionally cashed fines: deposits

Banks holding deposits for the fines provisionally cashed before 2010 are selected by tender procedure in compliance with the risk management policy which defines the credit rating requirements and the amount of funds which could be placed in proportion to the counterparty equity.

For commercial banks that have been specifically selected for the deposit of provisionally cashed fines, a minimum long-term rating A (S&P or equivalent) and a minimum short term rating A-1 (S&P or equivalent) is required as a general rule. Specific measures are applied in case banks in this group are subject to downgrade. In addition, the amount deposited with each bank is limited to a certain percentage of its own funds, which varies depending on the rating level of each institution. The calculation of such limits also takes into account the amount of outstanding guarantees issued to the Commission by the same institution. The compliance of outstanding deposits with the applicable policy requirements is reviewed regularly.

Provisionally cashed fines: BUFI portfolio

Provisionally cashed fines: BUFI portfolio

For investments from provisionally cashed fines, the Commission takes on exposure to credit risk which is the risk that a counterparty will be unable to pay amounts in full when due. The highest concentration of exposure is towards France and Germany as these countries represents 43 % and 27 % respectively of the total nominal volume of the portfolio.

Bank guarantees

Bank guarantees

Significant amounts of guarantees issued by financial institutions are also held by the Commission in relation to the fines it imposes on companies breaching EU competition rules (see note 2.6.1.2). These guarantees are provided by fined companies as an alternative to making provisional payments. The risk management policy applied for the acceptance of such guarantees has been reviewed in 2012 and a new combination of credit rating requirements and limited percentages per counterpart (proportional to each counterpart’s own funds) has been defined in the light of the current financial environment in the EU. It continues to ensure a high credit quality for the Commission. The compliance of the outstanding guarantees with the applicable policy requirements is reviewed regularly.

2.6.1.2

Guarantee Fund

Guarantee Fund

In accordance with the agreement between the EU and the EIB on the management of the Guarantee Fund, all interbank investments should have a minimum rating from Moody’s or equivalent of P-1. As at 31 December 2014 fixed term deposits of EUR 147 million were made with such counterparties (2013: EUR 151 million).

7.6.   LIQUIDITY RISK

LIQUIDITY RISK

Maturity analysis of financial liabilities by remaining contractual maturity

Maturity analysis of financial liabilities by remaining contractual maturity

| (EUR millions) |
| --- |
| | < 1 year | 1-5 years | > 5 years | Total |
| Borrowings | 8  727 | 15  386 | 34  357 | 58  470 |
| Finance lease liabilities | 81 | 366 | 1  309 | 1  755 |
| Payables | 43  180 | — | — | 43  180 |
| Other | 20 | 97 | 336 | 454 |
| Total at 31.12.2014 | 52  008 | 15  849 | 36  002 | 1 03  859 |
| Borrowings | 3  065 | 21  454 | 32  699 | 57  218 |
| Finance lease liabilities | 82 | 353 | 1  403 | 1  838 |
| Payables | 36  213 | — | — | 36  213 |
| Other | 17 | 84 | 375 | 477 |
| Total at 31.12.2013 | 39  377 | 21  891 | 34  477 | 95  746 |

(EUR millions)

< 1 year

1-5 years

> 5 years

Total

Borrowings

8  727

15  386

34  357

58  470

Finance lease liabilities

81

366

1  309

1  755

Payables

43  180

—

—

43  180

Other

20

97

336

454

Total at 31.12.2014

Total at 31.12.2014

52  008

52  008

15  849

15  849

36  002

36  002

1 03  859

1 03  859

Borrowings

3  065

21  454

32  699

57  218

Finance lease liabilities

82

353

1  403

1  838

Payables

36  213

—

—

36  213

Other

17

84

375

477

Total at 31.12.2013

Total at 31.12.2013

39  377

39  377

21  891

21  891

34  477

34  477

95  746

95  746

Borrowing and lending activities

Borrowing and lending activities

The liquidity risk that arises from borrowings is generally offset by equivalent loans in terms and conditions (back-to-back operations). For MFA and Euratom, the Guarantee Fund serves as a liquidity reserve (or safety net) in case of payment default and payment delays of borrowers. For BOP, the Council Regulation 431/2009 provides for a procedure allowing sufficient time to mobilise funds through the Commission’s own resources accounts with the Member States. For EFSM, the Council Regulation 407/2010 provides for a similar procedure.

Treasury

Treasury

EU budget principles ensure that overall cash resources for a given year are always sufficient for the execution of all payments. In fact, the total Member States contributions equal the amount of payment appropriations for the budgetary year. Member States’ contributions, however, are received in twelve monthly instalments throughout the year, while payments are subject to certain seasonality. Moreover, in accordance with the Council Regulation 1150/2000 (Own Resources Regulation), Member States contributions relating to (amending) budgets approved after the 16th of a given month (N) only become available in month N+2, while the related payment appropriations are immediately available. In order to ensure that available treasury resources are always sufficient to cover the payments to be executed in any given month, procedures regarding regular cash forecasting are in place, and own resources or additional funding can be called up in advance from Member States if needed, up to certain limits and under certain conditions. Seasonality of expenditure and overall budgetary restrictions in recent years have resulted in the need for increased monitoring of the rhythm of payments over the year. In addition to the above, in the context of the Commission’s daily treasury operations, automated cash management tools ensure that sufficient liquidity is available on each of the Commission’s bank accounts, on a daily basis.

Guarantee Fund

Guarantee Fund

The fund is managed according to the principle that the assets shall have a sufficient degree of liquidity and mobilisation in relation to the relevant commitments. The fund must maintain a minimum of EUR 100 million in a portfolio with a maturity of less than twelve months which is to be invested in monetary instruments. As at 31 December 2014 these investments, including cash, amounted to EUR 148 million. Furthermore, a minimum of 20 % of the fund’s nominal value shall comprise monetary instruments, fixed-rate bonds with a remaining maturity of no more than one year, and floating-rate bonds. As at 31 December 2014 this ratio stood at 49 %.

8.   RELATED PARTY DISCLOSURES

8.1.   RELATED PARTIES

RELATED PARTIES

The related parties of the EU are the EU consolidated entities and the key management personnel of these entities. Transactions between these entities take place as part of the normal operations of the EU and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.

8.2.   KEY MANAGEMENT ENTITLEMENTS

KEY MANAGEMENT ENTITLEMENTS

For the purposes of presenting information on related party transactions concerning the key management of the EU, such persons are shown here under five categories:

Category 1: the Presidents of the European Council, the Commission and the Court of Justice of the European Union

Category 1:

Category 2: the Vice-president of the Commission and High Representative of the EU for Foreign Affairs and Security Policy and the other Vice-presidents of the Commission

Category 2:

Category 3: the Secretary-General of the Council, the Members of the Commission, the Judges and Advocates General of the Court of Justice of the European Union, the President and Members of the General Court, the President and Members of the European Civil Service Tribunal, the Ombudsman and the European Data Protection Supervisor

Category 3:

Category 4: the President and Members of the European Court of Auditors

Category 4:

Category 5: the highest ranking civil servants of the Institutions and Agencies

Category 5:

A summary of their entitlements is given below — further information can be found in the Staff Regulations published on the Europa website which is the official document describing the rights and obligations of all officials of the EU. Key management personnel have not received any preferential loans from the EU.

KEY MANAGEMENT FINANCIAL ENTITLEMENTS

KEY MANAGEMENT FINANCIAL ENTITLEMENTS

| EUR |
| --- |
| Entitlement (per employee) | Category 1 | Category 2 | Category 3 | Category 4 | Category 5 |
| Basic salary (per month) | 25  352 | 22  964 | 18  371 | 19  840 | 11  775 |
| | | -  23  882 | -  20  667 | -  21  126 | -  18  518 |
| | | | | | |
| Residential/Expatriation allowance | 15 % | 15 % | 15 % | 15 % | 0-4 %-16 % |
| | | | | | |
| Family allowances: | | | | | |
| Household (% salary) | 2 % +
  171,88 | 2 % + 
  171,88 | 2 % + 
  171,88 | 2 % +
  171,88 | 2 % +
  171,88 |
| Dependent child | 375,59 | 375,59 | 375,59 | 375,59 | 375,59 |
| Pre-school | 91,75 | 91,75 | 91,75 | 91,75 | 91,75 |
| Education, or | 254,83 | 254,83 | 254,83 | 254,83 | 254,83 |
| Education outside place of work | 509,66 | 509,66 | 509,66 | 509,66 | 509,66 |
| Presiding judges allowance | N/A | N/A | 554,17 - 607,71 | N/A | N/A |
| | | | | | |
| Representation allowance | 1  418,07 | 0 -  911,38 | 554,17- 607,71 | N/A | N/A |
| | | | | | |
| Annual travel costs | N/A | N/A | N/A | N/A | N/A |
| | | | | | |
| Transfers to Member State: | | | | | |
| Education allowance (15) | Yes | Yes | Yes | Yes | Yes |
| % of salary (15) | 5 % | 5 % | 5 % | 5 % | 5 % |
| % of salary with no cc | max 25 % | max 25 % | max 25 % | max 25 % | max 25 % |
| Representation expenses | Reimbursed | Reimbursed | Reimbursed | N/A | N/A |
| | | | | | |
| Taking up duty: | | | | | |
| Installation expenses | 50  703,52 | 45  927,10 | 36  741,68 | 39  681,02 | Reimbursed |
| | | -  47  764,18 | -  41  334,40 | -  42  252,94 | |
| Family travel expenses | Reimbursed | Reimbursed | Reimbursed | Reimbursed | Reimbursed |
| Moving expenses | Reimbursed | Reimbursed | Reimbursed | Reimbursed | Reimbursed |
| Leaving office: | | | | | |
| Resettlement expenses | 25  352 | 22  964 | 18  371 | 19  840 | Reimbursed |
| | | -  23  882 | -  20  667 | -  21  126 | |
| Family travel expenses | Reimbursed | Reimbursed | Reimbursed | Reimbursed | Reimbursed |
| Moving expenses | Reimbursed | Reimbursed | Reimbursed | Reimbursed | Reimbursed |
| Transition (% salary) (16) | 40 % - 65 % | 40 % - 65 % | 40 % - 65 % | 40 % - 65 % | N/A |
| Sickness insurance | Covered | Covered | Covered | Covered | Covered |
| Pension (% salary, before tax) | Max 70 % | Max 70 % | Max 70 % | Max 70 % | Max 70 % |
| | | | | | |
| Deductions: | | | | | |
| Tax on salary | 8 % - 45 % | 8 % - 45 % | 8 % - 45 % | 8 % - 45 % | 8 % - 45 % |
| Sickness insurance (% salary) | 1,7 % | 1,7 % | 1,7 % | 1,7 % | 1,7 % |
| Special levy on salary | 7 % | 7 % | 7 % | 7 % | 6-7 % |
| Pension deduction | N/A | N/A | N/A | N/A | 10,9-10,1 % (17) |
| Number of persons at year-end | 3 | 8 | 93 | 28 | 112 |

EUR

Entitlement (per employee)

Category 1

Category 2

Category 3

Category 4

Category 5

Basic salary (per month)

Basic salary (per month)

25  352

25  352

22  964

22  964

18  371

18  371

19  840

19  840

11  775

11  775

-  23  882

-  23  882

-  20  667

-  20  667

-  21  126

-  21  126

-  18  518

-  18  518

Residential/Expatriation allowance

Residential/Expatriation allowance

15 %

15 %

15 %

15 %

15 %

15 %

15 %

15 %

0-4 %-16 %

0-4 %-16 %

Family allowances:

Family allowances:

Household (% salary)

2 % +

171,88

2 % +

171,88

2 % +

171,88

2 % +

171,88

2 % +

171,88

Dependent child

375,59

375,59

375,59

375,59

375,59

Pre-school

91,75

91,75

91,75

91,75

91,75

Education, or

254,83

254,83

254,83

254,83

254,83

Education outside place of work

509,66

509,66

509,66

509,66

509,66

Presiding judges allowance

Presiding judges allowance

N/A

N/A

N/A

N/A

554,17 - 607,71

554,17 - 607,71

N/A

N/A

N/A

N/A

Representation allowance

Representation allowance

1  418,07

1  418,07

0 -  911,38

0 -  911,38

554,17- 607,71

554,17- 607,71

N/A

N/A

N/A

N/A

Annual travel costs

Annual travel costs

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Transfers to Member State:

Transfers to Member State:

Education allowance (15)

15

Yes

Yes

Yes

Yes

Yes

% of salary (15)

15

5 %

5 %

5 %

5 %

5 %

% of salary with no cc

max 25 %

max 25 %

max 25 %

max 25 %

max 25 %

Representation expenses

Representation expenses

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

N/A

N/A

N/A

N/A

Taking up duty:

Taking up duty:

Installation expenses

50  703,52

45  927,10

36  741,68

39  681,02

Reimbursed

-  47  764,18

-  41  334,40

-  42  252,94

Family travel expenses

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Moving expenses

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Leaving office:

Leaving office:

Resettlement expenses

25  352

22  964

18  371

19  840

Reimbursed

-  23  882

-  20  667

-  21  126

Family travel expenses

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Moving expenses

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Transition (% salary) (16)

16

40 % - 65 %

40 % - 65 %

40 % - 65 %

40 % - 65 %

N/A

Sickness insurance

Covered

Covered

Covered

Covered

Covered

Pension (% salary, before tax)

Pension (% salary, before tax)

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Max 70 %

Deductions:

Deductions:

Tax on salary

8 % - 45 %

8 % - 45 %

8 % - 45 %

8 % - 45 %

8 % - 45 %

Sickness insurance (% salary)

Sickness insurance (% salary)

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

1,7 %

Special levy on salary

7 %

7 %

7 %

7 %

6-7 %

Pension deduction

N/A

N/A

N/A

N/A

10,9-10,1 % (17)

17

Number of persons at year-end

Number of persons at year-end

3

3

8

8

93

93

28

28

112

112

9.   EVENTS AFTER THE BALANCE SHEET DATE

At the date of signing of these accounts, no material issues had come to the attention of the Accounting Officer of the Commission or were reported to him that would require separate disclosure under this section. The accounts and related notes were prepared using the most recently available information and this is reflected in the information presented.

10.   SCOPE OF CONSOLIDATION

A.   CONTROLLED ENTITIES (52)

CONTROLLED ENTITIES (52)

1.   Institutions and consultative bodies (11)

Institutions and consultative bodies (11)

European Parliament

European Council

European Commission

Committee of the Regions

Court of Justice of the European Union

European External Action Service

European Data Protection Supervisor

European Economic and Social Committee

European Ombudsman

European Court of Auditors

Council of the European Union

2.   EU Agencies (39)

EU Agencies (39)

2.1.   Executive Agencies (6)

Executive Agencies (6)

Education, Audiovisual and Culture Executive Agency

Consumers, Health, Agriculture and Food Executive Agency

Research Executive Agency

Executive Agency for Small and Medium-sized Enterprises

Innovation and Networks Executive Agency

European Research Council Executive Agency

2.2.   Decentralised Agencies (33)

Decentralised Agencies (33)

European Maritime Safety Agency

European Medicines Agency

European GNSS Agency

European Chemicals Agency

Fusion for Energy Joint Undertaking (European Joint Undertaking for ITER and the Development of Fusion Energy)

Eurojust

European Institute for Gender Equality

European Agency for Safety and Health at Work

European Centre for Disease Prevention and Control

European Environment Agency

European Centre for the Development of Vocational Training

European Agency for the Cooperation of Energy Regulators

European Banking Authority

European Asylum Support Office

Office for the Body of European Regulators for Electronic Communication

European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union

eu-LISA (European Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice)

European Food Safety Authority

European Railway Agency

Community Plant Variety Office

European Fisheries Control Agency

European Monitoring Centre for Drugs and Drug Addiction

European Police College (CEPOL)

European Police Office (Europol)

European Aviation Safety Agency

European Union Agency for Network and Information Security

European Union Agency for Fundamental Rights

European Insurance and Occupational Pensions Authority

Translation Centre for the Bodies of the European Union

European Securities and Markets Authority

European Training Foundation

European Foundation for the Improvement of Living and Working Conditions

Office for Harmonization in the Internal Market (Trade Marks and Designs)

3.   Other controlled entities (2)

Other controlled entities (2)

European Coal and Steel Community (in liquidation)

European Institute of Innovation and Technology

B.   JOINT VENTURES (7)

JOINT VENTURES (7)

ITER International Fusion Energy Organisation

SESAR Joint Undertaking

Fuel Cells and Hydrogen 2 Joint Undertaking

Clean Sky 2 Joint Undertaking

Galileo Joint Undertaking (in liquidation)

Innovative Medicines Initiative 2 Joint Undertaking

ECSEL Joint Undertaking (18)

18

C.   ASSOCIATES (1)

ASSOCIATES (1)

European Investment Fund

AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET AND EXPLANATORY NOTES (19)

19

CONTENTS

CONTENTS

| EU BUDGET RESULT | 101 |
| --- | --- |

EU BUDGET RESULT

| RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT | 102 |
| --- | --- |

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT

| STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS | 103 |
| --- | --- |

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

| NOTES TO THE AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET | 106 |
| --- | --- |

NOTES TO THE AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET

| 1. | THE EU BUDGET CYCLE | 106 |
| --- | --- | --- |

1.

| 1.1. | MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020 | 106 |
| --- | --- | --- |

1.1.

| 1.2. | POLICY AREAS | 107 |
| --- | --- | --- |

1.2.

| 1.3. | ANNUAL BUDGET | 107 |
| --- | --- | --- |

1.3.

| 2. | NOTES TO THE EU BUDGET RESULT | 108 |
| --- | --- | --- |

2.

| 2.1. | CALCULATION OF THE BUDGET RESULT | 108 |
| --- | --- | --- |

2.1.

| 2.2. | IMPLEMENTATION OF THE 2014 EU BUDGET | 109 |
| --- | --- | --- |

2.2.

| 3. | NOTES TO THE RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT | 110 |
| --- | --- | --- |

3.

| 4. | IMPLEMENTATION OF EU BUDGET REVENUE | 111 |
| --- | --- | --- |

4.

| 4.1. | SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE | 111 |
| --- | --- | --- |

4.1.

| 4.2. | REVENUE IMPLEMENTATION | 114 |
| --- | --- | --- |

4.2.

| 5. | IMPLEMENTATION OF EU BUDGET EXPENDITURE | 117 |
| --- | --- | --- |

5.

| 5.1. | MFF: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS | 117 |
| --- | --- | --- |

5.1.

| 5.2. | MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS | 118 |
| --- | --- | --- |

5.2.

| 5.3. | MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS | 119 |
| --- | --- | --- |

5.3.

| 5.4. | MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL) | 120 |
| --- | --- | --- |

5.4.

| 5.5. | MFF: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN | 121 |
| --- | --- | --- |

5.5.

| 5.6. | POLICY AREA: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS | 122 |
| --- | --- | --- |

5.6.

| 5.7. | POLICY AREA: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS | 126 |
| --- | --- | --- |

5.7.

| 5.8. | POLICY AREA: IMPLEMENTATION OF PAYMENT APPROPRIATIONS | 130 |
| --- | --- | --- |

5.8.

| 5.9. | POLICY AREA: MOVEMENTS IN COMMITMENTS OUTSTANDING | 132 |
| --- | --- | --- |

5.9.

| 5.10. | POLICY AREA: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN | 134 |
| --- | --- | --- |

5.10.

| 5.11. | IMPLEMENTATION OF 2014 EXPENDITURE | 137 |
| --- | --- | --- |

5.11.

| 6. | IMPLEMENTATION OF THE INSTITUTIONS AND AGENCIES BUDGET | 138 |
| --- | --- | --- |

6.

| 6.1. | INSTITUTIONS: SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE | 138 |
| --- | --- | --- |

6.1.

| 6.2. | INSTITUTIONS: IMPLEMENTATION OF COMMITMENT AND PAYMENT APPROPRIATIONS | 139 |
| --- | --- | --- |

6.2.

| 6.3. | AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS AND AMOUNTS RECEIVED | 141 |
| --- | --- | --- |

6.3.

| 6.4. | COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY | 142 |
| --- | --- | --- |

6.4.

| 6.5. | BUDGET RESULT INCLUDING AGENCIES | 144 |
| --- | --- | --- |

6.5.

EU BUDGET RESULT

EU BUDGET RESULT

| (EUR millions) |
| --- |
| | Note | 2014 | 2013 |
| Revenue for the financial year | 4.1 | 1 43  940 | 1 49  504 |
| Payments against current year’s budget appropriations | 5.3 | (1 41  193) | (1 47  567) |
| Payment appropriations carried over to year N+1 | | (1  787) | (1  329) |
| Cancellation of unused payment appropriations carried over from year N-1 | | 25 | 34 |
| Evolution of assigned revenue | | 336 | 403 |
| Exchange differences for the year | | 110 | (42) |
| Budget result
   (20) | 2.2 | 1  432 | 1  002 |

(EUR millions)

Note

2014

2013

Revenue for the financial year

4.1

1 43  940

1 49  504

Payments against current year’s budget appropriations

5.3

(1 41  193)

(1 47  567)

Payment appropriations carried over to year N+1

(1  787)

(1  329)

Cancellation of unused payment appropriations carried over from year N-1

25

34

Evolution of assigned revenue

336

403

Exchange differences for the year

110

(42)

Budget result
   (20)

Budget result

20

2.2

2.2

1  432

1  432

1  002

1  002

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT

| (EUR millions) |
| --- |
| | 2014 | 2013 |
| ECONOMIC RESULT OF THE YEAR | (11  280) | (4  365) |
| Revenue | | |
| Entitlements established in current year but not yet collected | (6  573) | (2  071) |
| Entitlements established in previous years and collected in current year | 4  809 | 3  357 |
| Accrued revenue (net) | (4  877) | (134) |
| Expenses | | |
| Accrued expenses (net) | 9  223 | 3  216 |
| Expenses prior year paid in current year | (821) | (1  123) |
| Net-effect prefinancing | 457 | (902) |
| Payment appropriations carried over to next year | (1  979) | (1  528) |
| Payments made from carry-overs & cancellation of unused payment appropriations | 1  858 | 1  538 |
| Movement in provisions | 12  164 | 4  136 |
| Other | (1  719) | (1  027) |
| Economic result Agencies and ECSC | 170 | (93) |
| BUDGET RESULT OF THE YEAR | 1  432 | 1  002 |

(EUR millions)

2014

2013

ECONOMIC RESULT OF THE YEAR

ECONOMIC RESULT OF THE YEAR

(11  280)

(11  280)

(4  365)

(4  365)

Revenue

Revenue

Entitlements established in current year but not yet collected

(6  573)

(2  071)

Entitlements established in previous years and collected in current year

4  809

3  357

Accrued revenue (net)

(4  877)

(134)

Expenses

Expenses

Accrued expenses (net)

9  223

3  216

Expenses prior year paid in current year

(821)

(1  123)

Net-effect prefinancing

457

(902)

Payment appropriations carried over to next year

(1  979)

(1  528)

Payments made from carry-overs & cancellation of unused payment appropriations

1  858

1  538

Movement in provisions

12  164

4  136

Other

(1  719)

(1  027)

Economic result Agencies and ECSC

Economic result Agencies and ECSC

170

170

(93)

(93)

BUDGET RESULT OF THE YEAR

BUDGET RESULT OF THE YEAR

1  432

1  432

1  002

1  002

For further explanations on the reconciliation of economic with budget result see note 3.

3

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

BUDGET REVENUE

| (EUR millions) |
| --- |
| | Initial adopted budget | Amending budgets | Final adopted budget | Revenue |
| 1. | Own resources | 1 33  960 | (5  572) | 1 28  388 | 1 28  867 |
| | Of which customs duties | 16  186 | (12) | 16  174 | 16  499 |
| | Of which VAT | 17  882 | (192) | 17  690 | 17  746 |
| | Of which GNI | 99  767 | (5  154) | 94  614 | 94  863 |
| 3. | Surpluses, balances and adjustments | — | 5  101 | 5  101 | 5  100 |
| 4. | Revenue accruing from persons working with the institutions and with other Union bodies | 1  275 | — | 1  275 | 1  251 |
| 5. | Revenue accruing from the administrative operation of the institutions | 54 | — | 54 | 578 |
| 6. | Contributions and refunds in connection with Union agreements and programmes | 60 | — | 60 | 3  225 |
| 7. | Interests on late payments and fines | 123 | 3  850 | 3  973 | 4  607 |
| 8. | Borrowing and lending operations | 2 | 151 | 153 | 297 |
| 9. | Miscellaneous revenue | 30 | — | 30 | 15 |
| Total | 1 35  505 | 3  530 | 1 39  034 | 1 43  940 |

(EUR millions)

Initial adopted budget

Amending budgets

Final adopted budget

Revenue

1.

Own resources

1 33  960

(5  572)

1 28  388

1 28  867

Of which customs duties

Of which customs duties

16  186

16  186

(12)

(12)

16  174

16  174

16  499

16  499

Of which VAT

Of which VAT

17  882

17  882

(192)

(192)

17  690

17  690

17  746

17  746

Of which GNI

Of which GNI

99  767

99  767

(5  154)

(5  154)

94  614

94  614

94  863

94  863

3.

Surpluses, balances and adjustments

—

5  101

5  101

5  100

4.

Revenue accruing from persons working with the institutions and with other Union bodies

1  275

—

1  275

1  251

5.

Revenue accruing from the administrative operation of the institutions

54

—

54

578

6.

Contributions and refunds in connection with Union agreements and programmes

60

—

60

3  225

7.

Interests on late payments and fines

123

3  850

3  973

4  607

8.

Borrowing and lending operations

2

151

153

297

9.

Miscellaneous revenue

30

—

30

15

Total

Total

1 35  505

1 35  505

3  530

3  530

1 39  034

1 39  034

1 43  940

1 43  940

For details of the 2014 revenue implementation see note 4.

4

BUDGET EXPENDITURE: COMMITMENTS BY MULTIANNUAL FINANCIAL FRAMEWORK (MFF) HEADING

| (EUR millions) |
| --- |
| | Initial adopted budget | Amending budgets & transfers | Final adopted budget | Additional appropriations (21) | Total appropriations available | Commitments made |
| 1. | Smart and inclusive growth | 63  986 | — | 63  986 | 3  625 | 67  611 | 45  972 |
| | 1a: Competitiveness for growth and jobs | 16  484 | — | 16  484 | 2  645 | 19  129 | 18  018 |
| | 1b: Economic, social and territorial cohesion | 47  502 | — | 47  502 | 980 | 48  482 | 27  954 |
| 2. | Sustainable growth: natural resources | 59  267 | (76) | 59  191 | 2  105 | 61  296 | 48  263 |
| | of which: market related expenditure and direct payments | 43  778 | — | 43  778 | 1  724 | 45  502 | 44  293 |
| 3. | Security and citizenship | 2  172 | — | 2  172 | 84 | 2  256 | 1  507 |
| 4. | Global Europe | 8  325 | 98 | 8  423 | 577 | 9  000 | 8  489 |
| 5. | Administration | 8  405 | (1) | 8  405 | 766 | 9  171 | 8  884 |
| | of which: Administrative expenditure of the institutions | 3  532 | (0) | 3  531 | 400 | 3  931 | 3  789 |
| 6. | Compensations | 29 | — | 29 | — | 29 | 29 |
| 8. | Negative reserve | — | — | — | — | — | — |
| 9. | Special Instruments | 456 | 29 | 485 | 92 | 577 | 64 |
| Total | 1 42  640 | 50 | 1 42  690 | 7  249 | 1 49  939 | 1 13  208 |

(EUR millions)

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Additional appropriations (21)

21

Total appropriations available

Commitments made

1.

Smart and inclusive growth

63  986

—

63  986

3  625

67  611

45  972

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

16  484

16  484

—

16  484

16  484

2  645

2  645

19  129

19  129

18  018

18  018

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

47  502

47  502

—

47  502

47  502

980

980

48  482

48  482

27  954

27  954

2.

Sustainable growth: natural resources

59  267

(76)

59  191

2  105

61  296

48  263

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

43  778

43  778

—

43  778

43  778

1  724

1  724

45  502

45  502

44  293

44  293

3.

Security and citizenship

2  172

—

2  172

84

2  256

1  507

4.

Global Europe

8  325

98

8  423

577

9  000

8  489

5.

Administration

8  405

(1)

8  405

766

9  171

8  884

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

3  532

3  532

(0)

(0)

3  531

3  531

400

400

3  931

3  931

3  789

3  789

6.

Compensations

29

—

29

—

29

29

8.

Negative reserve

—

—

—

—

—

—

9.

Special Instruments

456

29

485

92

577

64

Total

Total

1 42  640

1 42  640

50

50

1 42  690

1 42  690

7  249

7  249

1 49  939

1 49  939

1 13  208

1 13  208

BUDGET EXPENDITURE: PAYMENTS BY MULTIANNUAL FINANCIAL FRAMEWORK (MFF) HEADING

| (EUR millions) |
| --- |
| | Initial adopted budget | Amending budgets & transfers | Final adopted budget | Additional appropriations (22) | Total appropriations available | Payments made |
| 1. | Smart and inclusive growth | 62  393 | 3  470 | 65  863 | 3  836 | 69  699 | 67  683 |
| | 1a: Competitiveness for growth and jobs | 11  441 | 415 | 11  857 | 3  451 | 15  308 | 13  331 |
| | 1b: Economic, social and territorial cohesion | 50  951 | 3  055 | 54  006 | 385 | 54  392 | 54  352 |
| 2. | Sustainable growth: natural resources | 56  459 | (500) | 55  959 | 2  003 | 57  962 | 56  584 |
| | of which: market related expenditure and direct payments | 43  777 | (1) | 43  776 | 1  738 | 45  514 | 44  287 |
| 3. | Security and citizenship | 1  677 | (17) | 1  660 | 88 | 1  747 | 1  711 |
| 4. | Global Europe | 6  191 | 734 | 6  925 | 556 | 7  481 | 7  206 |
| 5. | Administration | 8  406 | 0 | 8  406 | 1  634 | 10  040 | 8  819 |
| | of which: Administrative expenditure of the institutions | 3  532 | (0) | 3  531 | 944 | 4  475 | 3  729 |
| 6. | Compensations | 29 | — | 29 | — | 29 | 29 |
| 8. | Negative reserve | — | — | — | — | — | — |
| 9. | Special Instruments | 350 | (157) | 193 | 344 | 536 | 465 |
| Total | 1 35  505 | 3  530 | 1 39  034 | 8  460 | 1 47  495 | 1 42  497 |
| |

(EUR millions)

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Additional appropriations (22)

22

Total appropriations available

Payments made

1.

Smart and inclusive growth

62  393

3  470

65  863

3  836

69  699

67  683

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

11  441

11  441

415

415

11  857

11  857

3  451

3  451

15  308

15  308

13  331

13  331

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

50  951

50  951

3  055

3  055

54  006

54  006

385

385

54  392

54  392

54  352

54  352

2.

Sustainable growth: natural resources

56  459

(500)

55  959

2  003

57  962

56  584

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

43  777

43  777

(1)

(1)

43  776

43  776

1  738

1  738

45  514

45  514

44  287

44  287

3.

Security and citizenship

1  677

(17)

1  660

88

1  747

1  711

4.

Global Europe

6  191

734

6  925

556

7  481

7  206

5.

Administration

8  406

0

8  406

1  634

10  040

8  819

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

3  532

3  532

(0)

(0)

3  531

3  531

944

944

4  475

4  475

3  729

3  729

6.

Compensations

29

—

29

—

29

29

8.

Negative reserve

—

—

—

—

—

—

9.

Special Instruments

350

(157)

193

344

536

465

Total

Total

1 35  505

1 35  505

3  530

3  530

1 39  034

1 39  034

8  460

8  460

1 47  495

1 47  495

1 42  497

1 42  497

For details of the 2014 expenditure implementation see note 5 and for the explanation note 5.11.

5

5.11

NOTES TO THE AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET

NOTES TO THE AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET

1.   THE EU BUDGET CYCLE

The budgetary accounts are kept in accordance with the Financial Regulation (FR) and its rules of application. The general budget, the main instrument of the Union’s financial policy, is the instrument which provides for and authorises the Union’s revenue and expenditure every year. In accordance with the FR, there are two main elements: the multi annual financial framework (MFF), which sets the main ceilings for a period of 7 years, and the annual budget procedure.

1.1.   MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020

MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020

| (EUR millions) |
| --- |
| | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Total |
| 1. | Smart and inclusive growth |

(EUR millions)

2014

2015

2016

2017

2018

2019

2020

Total

1.

Smart and inclusive growth

63  973

66  813

69  304

72  342

75  271

78  752

82  466

5 08  921

| 1.a | Competitiveness for growth and jobs |
| --- | --- |

1.a

Competitiveness for growth and jobs

16  560

17  666

18  467

19  925

21  239

23  082

25  191

1 42  130

| 1.b | Economic, social and territorial cohesion |
| --- | --- |

1.b

Economic, social and territorial cohesion

47  413

49  147

50  837

52  417

54  032

55  670

57  275

3 66  791

| 2. | Sustainable growth: natural resources |
| --- | --- |

2.

Sustainable growth: natural resources

59  303

59  599

59  909

60  191

60  267

60  344

60  421

4 20  034

of which: market related expenditure and direct payments

43  779

44  313

44  624

44  859

44  885

44  912

44  937

3 12  309

| 3. | Security and citizenship |
| --- | --- |

3.

Security and citizenship

2  179

2  246

2  378

2  514

2  656

2  801

2  951

17  725

| 4. | Global Europe |
| --- | --- |

4.

Global Europe

8  335

8  749

9  143

9  432

9  825

10  268

10  510

66  262

| 5. | Administration |
| --- | --- |

5.

Administration

8  721

9  076

9  483

9  918

10  346

10  786

11  254

69  584

of which: Administrative expenditure of the institutions

7  056

7  351

7  679

8  007

8  360

8  700

9  071

56  224

| 6. | Compensations |
| --- | --- |

6.

Compensations

29

—

—

—

—

—

—

29

Commitment appropriations:

Commitment appropriations:

1 42  540

1 42  540

1 46  483

1 46  483

1 50  217

1 50  217

1 54  397

1 54  397

1 58  365

1 58  365

1 62  951

1 62  951

1 67  602

1 67  602

1 0 82  555

1 0 82  555

Total payment appropriations:

Total payment appropriations:

1 35  866

1 35  866

1 41  901

1 41  901

1 44  685

1 44  685

1 42  771

1 42  771

1 49  074

1 49  074

1 53  362

1 53  362

1 56  295

1 56  295

1 0 23  954

1 0 23  954

The above table shows the MFF ceilings at current prices. 2014 was the first financial year covered by the new MFF 2014-2020. The overall ceiling for commitments appropriations for 2014 was EUR 1 42  540 million, equivalent to 1,06 % of GNI, while the corresponding ceiling for payment appropriations was EUR 1 35  866 million, or 1,01 % of GNI.

New flexibility provisions have been agreed for the 2014-2020 MFF. One of the new provisions is a possibility to mobilise a contingency margin (in exceptional circumstances). This allows for the mobilising of appropriations above the ceilings for a given year, with corresponding reductions in other years in order not to increase the total amount of payment and commitment appropriations over the whole 2014-2020 period. The contingency margin was mobilised in 2014 in order to provide EUR 3  168 million in payment appropriations over and above the payment ceiling for 2014.

The reprogramming of unused 2014 commitment appropriations to 2015 and 2016 (according to MFF Article 19) was agreed in April 2015 with a revision of the MFF ceilings and a related amending budget for 2015. The main impacts in 2015 were under Heading 1(b) (EUR 11,2 billion) and Heading 2 (EUR 5 billion), while for 2016 the main change is to Heading 2 (EUR 4,4 billion).

An explanation of the various headings of the MFF is given below:

Heading 1 — Smart and inclusive growth

Heading 1 — Smart and inclusive growth

This heading is divided into two separate, but interlinked components

| — | Competitiveness for growth and jobs, encompassing expenditure on research and innovation, education and training, European Connecting Facility, social policy, the internal market and accompanying policies. |
| --- | --- |

—

Competitiveness for growth and jobs, encompassing expenditure on research and innovation, education and training, European Connecting Facility, social policy, the internal market and accompanying policies.

| — | Economic, social and territorial cohesion, designed to enhance convergence of the least developed Member States and regions, to complement the EU strategy for sustainable development outside the less prosperous regions and to support inter-regional cooperation. |
| --- | --- |

—

Economic, social and territorial cohesion, designed to enhance convergence of the least developed Member States and regions, to complement the EU strategy for sustainable development outside the less prosperous regions and to support inter-regional cooperation.

Heading 2 — Sustainable growth: natural resources

Heading 2 — Sustainable growth: natural resources

Heading 2 includes the common agricultural and fisheries policies, rural development and environmental measures, in particular Natura 2000.

Heading 3 — Security and citizenship

Heading 3 — Security and citizenship

Heading 3 (Security and citizenship) reflects the growing importance attached to certain fields where the EU has been assigned particular tasks — justice and home affairs, border protection, immigration and asylum policy, public health and consumer protection, culture, youth, information and dialogue with citizens.

Heading 4 — Global Europe

Heading 4 — Global Europe

Heading 4 covers all external action, including development cooperation, humanitarian aid, pre-accession and neighbourhood instruments. The EDF remains outside of the EU budget and is not part of the MFF.

Heading 5 — Administration

Heading 5 — Administration

This heading covers administrative expenditure for all institutions, pensions and the European Schools. For the Institutions other than the Commission, these costs make up the total of their expenditure.

Heading 6 — Compensations

Heading 6 — Compensations

In accordance with the political agreement that new Member States should not become net-contributors to the budget at the very beginning of their membership, compensation was foreseen under this heading. This amount was available as transfers to them to balance their budgetary receipts and contributions.

1.2.   POLICY AREAS

POLICY AREAS

As part of its use of Activity Based Management (ABM) the Commission implements Activity Based Budgeting (ABB) in its planning and management processes. ABB involves a budget structure where budget titles correspond to policy areas and budget chapters to activities. ABB aims to provide a clear framework for translating the Commission’s policy objectives into action, either through legislative, financial or any other public policy means. By structuring the Commission’s work in terms of activities, a clear picture is obtained of the Commission’s undertakings and simultaneously a common framework is established for priority setting. Resources are allocated to priorities during the budget procedure, using the activities as the building blocks for budgeting purposes. By establishing such a link between activities and the resources allocated to them, ABB aims to increase efficiency and effectiveness in the use of resources in the Commission.

A policy area may be defined as a homogeneous grouping of activities constituting parts of the Commission’s work, which are relevant for the decision-making process. Each policy area corresponds, in general, to a Directorate General, and encompassing an average of about 6 or 7 individual activities. Policy areas are mainly operational, since their core activities aim at benefiting a third-party beneficiary within their respective domains of activity. The operational budget is completed with the necessary administrative expenditure for each policy area.

1.3.   ANNUAL BUDGET

ANNUAL BUDGET

Every year, the Commission estimates all the Institutions' revenue and expenditure for the year and draws up a draft budget which it sends to the budgetary authority. On the basis of this draft budget, the Council sets out its position, which is then the subject of negotiations between the two arms of the budgetary authority. The President of Parliament declares that the joint draft has been finally adopted, thus making the budget enforceable. During the year in question, amending budgets are adopted. The task of executing the budget is mainly the responsibility of the Commission.

The budget structure for the Commission consists of administrative and operational appropriations. The other Institutions have only administrative appropriations. Furthermore, the budget distinguishes between two types of appropriations: non-differentiated and differentiated. Non-differentiated appropriations are used to finance operations of an annual nature (which comply with the principle of annuality). Differentiated appropriations are used in order to reconcile the principle of annuality with the need to manage multiannual operations. Differentiated appropriations are split into commitment and payment appropriations:

| — | commitment appropriations: cover the total cost of the legal obligations entered into for the current financial year for operations extending over a number of years. However, budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments where the basic act so provides, |
| --- | --- |

—

commitment appropriations: cover the total cost of the legal obligations entered into for the current financial year for operations extending over a number of years. However, budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments where the basic act so provides,

commitment appropriations

| — | payment appropriations: cover expenditure arising from commitments entered into in the current financial year and/or earlier financial years. |
| --- | --- |

—

payment appropriations: cover expenditure arising from commitments entered into in the current financial year and/or earlier financial years.

payment appropriations

Origin of Appropriations

Origin of Appropriations

The main source of appropriations is the Union’s adopted budget for the current year. However, there are other types of appropriations resulting from the provisions of the Financial Regulation. They come from previous financial years or outside sources:

| — | budget appropriations from initial adopted budget and amending budgets, |
| --- | --- |

—

budget appropriations from initial adopted budget and amending budgets,

budget appropriations

| — | appropriations carried over from previous year, |
| --- | --- |

—

appropriations carried over from previous year,

appropriations carried over

| — | assigned revenue which is made up of refunds, EFTA appropriations, revenue from third parties/other countries, work for third parties and appropriations made available again as a result of repayment of payments on account. |
| --- | --- |

—

assigned revenue which is made up of refunds, EFTA appropriations, revenue from third parties/other countries, work for third parties and appropriations made available again as a result of repayment of payments on account.

assigned revenue

Composition of Total Available Budget

Composition of Total Available Budget

| — | initial adopted budget = appropriations voted in year N-1, |
| --- | --- |

—

initial adopted budget = appropriations voted in year N-1,

| — | amending budgets adopted, |
| --- | --- |

—

amending budgets adopted,

| — | additional appropriations = assigned revenue + appropriations carried over from the previous financial year or made available again following decommitments. |
| --- | --- |

—

additional appropriations = assigned revenue + appropriations carried over from the previous financial year or made available again following decommitments.

2.   NOTES TO THE EU BUDGET RESULT

2.1.   CALCULATION OF THE BUDGET RESULT

CALCULATION OF THE BUDGET RESULT

The budget result of the EU is returned to the Member States during the following year through deduction of their amounts due for that year.

The amounts of own resources entered in the accounts are those credited during the course of the year to the accounts opened in the Commission’s name by the governments of the Member States. Revenue comprises also, in the case of a surplus, of the budget result for the previous financial year. The other revenue entered in the accounts is the amount actually received during the course of the year.

For the purposes of calculating the budget result for the year, expenditure comprises payments made against the year’s appropriations plus any of the appropriations for that year that are carried over to the following year. Payments made against the year’s appropriations means payments that are made by the accounting officer by 31 December of the financial year. For the EAGF, payments are those effected by the Member States between 16 October N-1 and 15 October N, provided that the accounting officer was notified of the commitment and authorisation by 31 January N+1. EAGF expenditure may be subject to a conformity decision following controls in the Member States.

The budget result comprises two elements: the result of the EU and the result of the participation of the EFTA countries belonging to the EEA. In accordance with Article 15 of Regulation No 1150/2000 on own resources, this result represents the difference between:

| — | total revenue received for the financial year, and |
| --- | --- |

—

total revenue received for the financial year, and

| — | total payments made against current year’s appropriations plus the total amount of that year’s appropriations carried over to the following year. |
| --- | --- |

—

total payments made against current year’s appropriations plus the total amount of that year’s appropriations carried over to the following year.

The following are added to or deducted from the resulting figure:

| — | the net balance of cancellations of payment appropriations carried over from previous years and any payments which, because of fluctuations in the euro rate, exceed non-differentiated appropriations carried over from the previous year, |
| --- | --- |

—

the net balance of cancellations of payment appropriations carried over from previous years and any payments which, because of fluctuations in the euro rate, exceed non-differentiated appropriations carried over from the previous year,

| — | the evolution of assigned revenue, and |
| --- | --- |

—

the evolution of assigned revenue, and

| — | the net exchange-rate gains or losses recorded during the year. |
| --- | --- |

—

the net exchange-rate gains or losses recorded during the year.

Appropriations carried over from the previous financial year in respect of contributions by and work for third parties, which by definition never lapse, are included as additional appropriations for the financial year. This explains the difference between carry-overs from the previous year in the 2014 budget implementation statements and those carried over to the following year in the 2013 budget implementation statements. Appropriations made available again following the repayment of payments on account are disregarded when calculating the budget result.

Payment appropriations carried over include: automatic carry-overs and carry-overs by decision. The cancellation of unused payment appropriations carried over from the previous year shows the cancellations of appropriations carried over automatically and by decision.

2.2.   IMPLEMENTATION OF THE 2014 EU BUDGET

IMPLEMENTATION OF THE 2014 EU BUDGET

Budget surplus of EUR 1,4 billion:

Budget surplus of EUR 1,4 billion:

| — | the surplus comes primarily from the revenue side (EUR 1,2 billion), from over-execution of custom duties (EUR 0,5 billion) and additional, non-budgeted, fines (EUR 0,6 billion), |
| --- | --- |

—

the surplus comes primarily from the revenue side (EUR 1,2 billion), from over-execution of custom duties (EUR 0,5 billion) and additional, non-budgeted, fines (EUR 0,6 billion),

| — | the minor surplus on the expenditure side (EUR 142 million) comes mainly from the other institutions as the Commission implementation rate is practically 100 %, |
| --- | --- |

—

the minor surplus on the expenditure side (EUR 142 million) comes mainly from the other institutions as the Commission implementation rate is practically 100 %,

| — | the remaining EUR 110 million of surplus comes from exchange rate gains. |
| --- | --- |

—

the remaining EUR 110 million of surplus comes from exchange rate gains.

Revenue:

Revenue:

| — | revenue, totalling EUR 143,9 billion, was EUR 4,9 billion higher than the final adopted budget due primarily to assigned revenue under headings 5 and 6 — see Table 4.1 below, |
| --- | --- |

—

revenue, totalling EUR 143,9 billion, was EUR 4,9 billion higher than the final adopted budget due primarily to assigned revenue under headings 5 and 6 — see Table 4.1 below,

4.1

| — | fines revenue of EUR 4,2 billion was used to finance the increased need for payment appropriations, |
| --- | --- |

—

fines revenue of EUR 4,2 billion was used to finance the increased need for payment appropriations,

| — | there was an exceptionally high revision of GNI own resources made in 2014 (EUR 9,5 billion) covering the period back to 2002. This, however, had a negligible impact on the budget revenue for 2014 since amounts were effectively adjusted between Member States (some are to receive refunds, others have to pay) and, moreover, most amounts have been deferred until 2015. |
| --- | --- |

—

there was an exceptionally high revision of GNI own resources made in 2014 (EUR 9,5 billion) covering the period back to 2002. This, however, had a negligible impact on the budget revenue for 2014 since amounts were effectively adjusted between Member States (some are to receive refunds, others have to pay) and, moreover, most amounts have been deferred until 2015.

Expenditure:

Expenditure:

| — | initial payment appropriations (EUR 135,5 billion) were exceptionally low — 6 % lower than the final adopted budget for 2013. Amending budgets eventually increased the final adopted appropriations to EUR 139 million — see Table 5.1, |
| --- | --- |

—

initial payment appropriations (EUR 135,5 billion) were exceptionally low — 6 % lower than the final adopted budget for 2013. Amending budgets eventually increased the final adopted appropriations to EUR 139 million — see Table 5.1,

5.1

| — | total payments amounted to EUR 142,5 billion (2013: EUR 148,5 billion) — see Table 5.3, |
| --- | --- |

—

total payments amounted to EUR 142,5 billion (2013: EUR 148,5 billion) — see Table 5.3,

5.3

| — | under-implementation of payments (after carry-overs) of EUR 32 million is one of the lowest recorded, confirming the tight constraints imposed on payment appropriations. |
| --- | --- |

—

under-implementation of payments (after carry-overs) of EUR 32 million is one of the lowest recorded, confirming the tight constraints imposed on payment appropriations.

Commitments and RAL:

Commitments and RAL:

| — | available commitment appropriations of EUR 149,9 billion were only implemented at an overall level of 76 % and a large amount of appropriations were carried over or reprogrammed to 2015 — see Table 5.2, |
| --- | --- |

—

available commitment appropriations of EUR 149,9 billion were only implemented at an overall level of 76 % and a large amount of appropriations were carried over or reprogrammed to 2015 — see Table 5.2,

5.2

| — | outstanding commitments (‘RAL’) decreased significantly from EUR 222,4 billion at end 2013 to EUR 189,6 billion at end 2014 — see Table 5.9. This reflects the low implementation of commitments at the start of new programming period — had all appropriations for the new programmes been committed in 2014, the RAL would have remained at a similar level as 2013. |
| --- | --- |

—

outstanding commitments (‘RAL’) decreased significantly from EUR 222,4 billion at end 2013 to EUR 189,6 billion at end 2014 — see Table 5.9. This reflects the low implementation of commitments at the start of new programming period — had all appropriations for the new programmes been committed in 2014, the RAL would have remained at a similar level as 2013.

5.9

A more detailed analysis of budgetary adjustments, their relevant context, their justification and their impact is presented in Commission’s Report on Budgetary and Financial Management 2014, Part A ‘Overview at budget level’ and Part B dealing with each heading of the multiannual financial framework.

3.   NOTES TO THE RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT

In accordance with the Financial Regulation, the economic result of the year is calculated on the basis of accrual accounting principles, while the budget result is based on modified cash accounting rules. As the economic result and the budget result both cover the same underlying transactions, it is a useful control to ensure that they are reconcilable.

Reconciling items — revenue

Reconciling items — revenue

The actual budgetary revenue for a financial year corresponds to the revenue collected from entitlements established in the course of the year and amounts collected from entitlements established in previous years. Therefore the entitlements established in the current year but not yet collected are to be deducted from the economic result for reconciliation purposes as they do not form part of budgetary revenue. On the contrary the entitlements established in previous years and collected in current year must be added to the economic result for reconciliation purposes.

The net accrued revenue mainly consists of accrued revenue for agriculture, own resources and interests and dividends. Only the net effect, i.e. accrued revenue for current year minus reversal accrued revenue from previous year, is taken into consideration.

Reconciling items — expenditure

Reconciling items — expenditure

Net accrued expenses mainly consists of accruals made for year-end cut-off purposes, i.e. eligible expenses incurred by beneficiaries of EU funds but not yet reported to the Commission. While accrued expenses are not considered as budgetary expenditure, payments made in the current year relating to invoices registered in prior years are part of current year’s budgetary expenditure.

The net effect of prefinancing is the combination of: (1) the new prefinancing amounts paid in the current year and recognised as budgetary expenditure of the year; and (2) the clearing of the prefinancing paid in current year or previous years through the acceptance of eligible costs. The latter represent an expense in accrual terms but not in the budgetary accounts since the payment of the initial prefinancing had already been considered as a budgetary expenditure at the time of its payment.

Besides the payments made against the year’s appropriations, the appropriations for that year that are carried forward to the next year also need to be taken into account in calculating the budget result for the year (in accordance with Article 15 of Regulation No 1150/2000). The same applies for the budgetary payments made in the current year from carry-overs from previous years, and the cancellation of unused payment appropriations.

The movement in provisions relates to year-end estimates made in the financial statements (employee benefits mainly) that do not impact the budgetary accounts. Other reconciling amounts comprise different elements such as asset depreciation, asset acquisitions, capital lease payments and financial participations for which the budgetary and accrual accounting treatments differ.

4.   IMPLEMENTATION OF EU BUDGET REVENUE

4.1.   SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE

SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE

| (EUR millions) |
| --- |
| Title | Income appropriations | Entitlements established | Revenue | Receipts as | Outstanding |
| Initial adopted budget | Final adopted budget | Current year | Carried over | Total | On entitlements current year | On entitlements carried over | Total | % of budget |
| 1. | Own resources | 1 33  960 | 1 28  388 | 1 28  853 | 46 | 1 28  899 | 1 28  841 | 25 | 1 28  867 | 100,37 % | 32 |
| 3. | Surpluses, balances and adjustments | — | 5  101 | 10  507 | — | 10  507 | 5  100 | — | 5  100 | 99,98 % | 5  407 |
| 4. | Revenue accruing from persons working with the institutions and other Union bodies | 1  275 | 1  275 | 1  248 | 12 | 1  260 | 1  240 | 11 | 1  251 | 98,14 % | 8 |
| 5. | Revenue accruing from the administrative operation of the institutions | 54 | 54 | 578 | 21 | 599 | 563 | 15 | 578 | 1  075,46 % | 21 |
| 6. | Contributions and refunds in connection with Union agreements and programmes | 60 | 60 | 3  267 | 228 | 3  496 | 3  120 | 105 | 3  225 | 5  374,97 % | 271 |
| 7. | Interests on late payments and fines | 123 | 3  973 | 2  206 | 10  416 | 12  622 | 1  131 | 3  475 | 4  607 | 115,95 % | 8  016 |
| 8. | Borrowing and lending operations | 2 | 153 | 46 | 255 | 301 | 43 | 254 | 297 | 193,72 % | 3 |
| 9. | Miscellaneous revenue | 30 | 30 | 15 | 10 | 25 | 13 | 2 | 15 | 50,01 % | 10 |
| Total | 1 35  505 | 1 39  034 | 1 46  721 | 10  988 | 1 57  709 | 1 40  052 | 3  888 | 1 43  940 | 103,53 % | 13  769 |

(EUR millions)

Title

Income appropriations

Entitlements established

Revenue

Receipts as

Outstanding

Initial adopted budget

Final adopted budget

Current year

Carried over

Total

On entitlements current year

On entitlements carried over

Total

% of budget

1.

1.

Own resources

1 33  960

1 28  388

1 28  853

46

1 28  899

1 28  841

25

1 28  867

100,37 %

32

3.

3.

Surpluses, balances and adjustments

—

5  101

10  507

—

10  507

5  100

—

5  100

99,98 %

5  407

4.

4.

Revenue accruing from persons working with the institutions and other Union bodies

1  275

1  275

1  248

12

1  260

1  240

11

1  251

98,14 %

8

5.

5.

Revenue accruing from the administrative operation of the institutions

54

54

578

21

599

563

15

578

1  075,46 %

21

6.

6.

Contributions and refunds in connection with Union agreements and programmes

60

60

3  267

228

3  496

3  120

105

3  225

5  374,97 %

271

7.

7.

Interests on late payments and fines

123

3  973

2  206

10  416

12  622

1  131

3  475

4  607

115,95 %

8  016

8.

8.

Borrowing and lending operations

2

153

46

255

301

43

254

297

193,72 %

3

9.

9.

Miscellaneous revenue

30

30

15

10

25

13

2

15

50,01 %

10

Total

Total

1 35  505

1 35  505

1 39  034

1 39  034

1 46  721

1 46  721

10  988

10  988

1 57  709

1 57  709

1 40  052

1 40  052

3  888

3  888

1 43  940

1 43  940

103,53 %

103,53 %

13  769

13  769

Detail Title 1: Own resources

Detail Title 1: Own resources

| (EUR millions) |
| --- |
| Chapter | Income appropriations | Entitlements established | Revenue | Receipts as | Outstanding |
| Initial budget voted | Final adopted budget | Current year | Carried over | Total | On entitlements current year | On entitlements carried over | Total | % of budget |
| 11. | Sugar levies | 125 | (90) | (69) | — | (69) | (69) | — | (69) | 77,12 % | — |
| 12. | Customs duties | 16  186 | 16  174 | 16  485 | 46 | 16  531 | 16  473 | 25 | 16  499 | 102,01 % | 32 |
| 13. | VAT | 17  882 | 17  690 | 17  746 | — | 17  746 | 17  746 | — | 17  746 | 100,32 % | — |
| 14. | GNI | 99  767 | 94  614 | 94  863 | — | 94  863 | 94  863 | — | 94  863 | 100,26 % | — |
| 15. | Correction of budgetary imbalances | — | — | (172) | — | (172) | (172) | — | (172) | 0,00 % | — |
| Total | 1 33  960 | 1 28  388 | 1 28  853 | 46 | 1 28  899 | 1 28  841 | 25 | 1 28  867 | 100,37 % | 32 |

(EUR millions)

Chapter

Income appropriations

Entitlements established

Revenue

Receipts as

Outstanding

Initial budget voted

Final adopted budget

Current year

Carried over

Total

On entitlements current year

On entitlements carried over

Total

% of budget

11.

11.

Sugar levies

125

(90)

(69)

—

(69)

(69)

—

(69)

77,12 %

—

12.

12.

Customs duties

16  186

16  174

16  485

46

16  531

16  473

25

16  499

102,01 %

32

13.

13.

VAT

17  882

17  690

17  746

—

17  746

17  746

—

17  746

100,32 %

—

14.

14.

GNI

99  767

94  614

94  863

—

94  863

94  863

—

94  863

100,26 %

—

15.

15.

Correction of budgetary imbalances

—

—

(172)

—

(172)

(172)

—

(172)

0,00 %

—

Total

Total

1 33  960

1 33  960

1 28  388

1 28  388

1 28  853

1 28  853

46

46

1 28  899

1 28  899

1 28  841

1 28  841

25

25

1 28  867

1 28  867

100,37 %

100,37 %

32

32

Detail Title 3: Surpluses, balances and adjustments on own resources

Detail Title 3: Surpluses, balances and adjustments on own resources

| (EUR millions) |
| --- |
| Chapter | Income appropriations | Entitlements established | Revenue | Receipts as | Outstanding |
| Initial budget voted | Final adopted budget | Current year | Carried over | Total | On entitlements current year | On entitlements carried over | Total | % of budget |
| 30. | Surplus from previous year | — | 1  005 | 1  005 | — | 1  005 | 1  005 | — | 1  005 | 100,00 % | — |
| 31. | VAT balances | — | (81) | (284) | — | (284) | (79) | — | (79) | 97,59 % | (205) |
| 32. | GNI balances | — | 4  176 | 9  825 | — | 9  825 | 4  212 | — | 4  212 | 100,87 % | 5  613 |
| 34. | Adjustment for non-participation in JHAP | — | — | (2) | — | (2) | (2) | — | (2) | 0,00 % | — |
| 35. | United Kingdom correction — adjustments | — | — | (18) | — | (18) | (18) | — | (18) | 0,00 % | — |
| 36. | United Kingdom correction — Intermediate calculation | — | — | (19) | — | (19) | (19) | — | (19) | 0,00 % | — |
| Total | — | 5  101 | 10  507 | — | 10  507 | 5  100 | — | 5  100 | 99,98 % | 5  407 |

(EUR millions)

Chapter

Income appropriations

Entitlements established

Revenue

Receipts as

Outstanding

Initial budget voted

Final adopted budget

Current year

Carried over

Total

On entitlements current year

On entitlements carried over

Total

% of budget

30.

30.

Surplus from previous year

—

1  005

1  005

—

1  005

1  005

—

1  005

100,00 %

—

31.

31.

VAT balances

—

(81)

(284)

—

(284)

(79)

—

(79)

97,59 %

(205)

32.

32.

GNI balances

—

4  176

9  825

—

9  825

4  212

—

4  212

100,87 %

5  613

34.

34.

Adjustment for non-participation in JHAP

—

—

(2)

—

(2)

(2)

—

(2)

0,00 %

—

35.

35.

United Kingdom correction — adjustments

—

—

(18)

—

(18)

(18)

—

(18)

0,00 %

—

36.

36.

United Kingdom correction — Intermediate calculation

—

—

(19)

—

(19)

(19)

—

(19)

0,00 %

—

Total

Total

—

5  101

5  101

10  507

10  507

—

10  507

10  507

5  100

5  100

—

5  100

5  100

99,98 %

99,98 %

5  407

5  407

4.2.   REVENUE IMPLEMENTATION

REVENUE IMPLEMENTATION

4.2.1.   
  Overview of 2014 revenue

Overview of 2014 revenue

In the initial adopted EU budget, signed by the President of the European Parliament on 20 November 2013, the amount of payment appropriations was EUR 1 35  505 million and the amount to be financed by own resources totalled EUR 1 33  960 million. The revenue and expenditure estimates in the initial budget are typically adjusted during the budgetary year, such modifications being presented in Amending Budgets. Adjustments in the GNI-based own resources ensure that budgeted revenue matches exactly budgeted expenditure. In accordance with the principle of equilibrium, budget revenue and expenditure (payment appropriations) must be in balance.

During 2014, seven amending budgets were adopted. Taking them into account, the total final adopted revenue for 2014 amounted to EUR 1 39  034 million. This was financed by own resources totalling EUR 1 28  388 million (thus EUR 5  572 million less than initially forecasted) and the remainder by other revenue. The increased need for financing payment appropriations was covered mainly by income coming from fines. Moreover, the surplus from the previous financial year and extraordinary income coming from the VAT and GNI adjustments of previous years reduced substantially Member States' GNI balancing contribution.

The Amending Budgets No 2 and No 3/2014 included fines and related interest on undertakings totalling EUR 3  850 million that were known at the time when the corresponding Draft Amending Budgets were established. By 31 December 2014, other fines became definitive, either after a definitive judgement or because companies did not appeal new fine decisions.

Revenue, contributions and refunds in connection with EU agreements and programmes total an amount of EUR 3  225 million. The principal amounts concern the EAGF and EAFRD (and in particular the clearance of accounts and irregularities), the participation of third countries in research programmes and other contributions and refunds to EU programmes/activities. A substantial part of this total is made up of earmarked revenue, which typically gives rise to the entering of additional appropriations on the expenditure side.

As far as the own resources result is concerned, the collection of traditional own resources was close to the forecasted amounts. This is primarily because the budget estimates that were modified at the time the Draft Amending Budget No 4/2014 was established (they were decreased by EUR 646 million according to the new forecasts of spring 2014), were once again amended in the Draft Amending Budget No 6/2014 to take into account the actual rhythm of collection. Thus they were increased by EUR 420 million.

The final Member States’ VAT and GNI payments also correspond closely to the final budgetary estimate. The differences between the forecasted amounts and the amounts actually paid are due to the differences between the euro rates used for budgetary purposes and the rates in force at the time when the Member States outside the EMU actually made their payments.

The adjustment in 2014 included major revisions for the GNI dating back to 2002. Thus the adjustment was unprecedented in size totalling EUR 9,5 billion across all EU Member States. In order to address the exceptional situation, the Council adopted on 18 December a Commission proposal (Council Regulation (EU, Euratom) No 1377/2014 of 18 December 2014) allowing Member States to defer payment, interest free, under strict conditions, up to 1 September 2015. Accordingly six Member States opted to pay their adjustments in 2015. The deferred payment amounts to EUR 5,4 billion.

The amount of own resources to be received relates to the Amending Budgets Numbers 2 to 7/2014 adopted on 17 December 2014. According to Article 10 of Council Regulation 1150/2000 of 22 May 2000 (OJ L 130, 31.5.2000, p. 1) the entries corresponding to the readjustments of own resources contributions were carried out on the first working day of February 2015. The adjustments to Member States’ national EU budget contributions based on VAT and GNI takes place every year on the first working day of December.

4.2.2.   
  Own resources revenue

Own resources revenue

The vast majority of revenue comes from own resources. This is laid down in Article 311 of the Treaty on the Functioning of the EU, which states that: ‘Without prejudice to other revenue, the budget shall be financed wholly from own resources.’ The bulk of budgetary expenditure is financed by own resources.

Own resources can be divided into the following categories:

| (1) | Traditional own resources (TOR) consist of customs duties and sugar levies. These own resources are levied on economic operators and collected by Member States on behalf of the EU. However, Member States keep 25 % as a compensation for their collection costs (20 % as of 2014). Customs duties are levied on imports of products coming from third countries, at rates based on the Common Customs Tariff. Sugar levies are paid by sugar producers to finance the export refunds for sugar. TOR usually account for +/- 13 % of own resource revenue. |
| --- | --- |

(1)

Traditional own resources (TOR) consist of customs duties and sugar levies. These own resources are levied on economic operators and collected by Member States on behalf of the EU. However, Member States keep 25 % as a compensation for their collection costs (20 % as of 2014). Customs duties are levied on imports of products coming from third countries, at rates based on the Common Customs Tariff. Sugar levies are paid by sugar producers to finance the export refunds for sugar. TOR usually account for +/- 13 % of own resource revenue.

| (2) | The own resource based on value added tax (VAT) is levied on Member States' VAT bases, which are harmonised for this purpose in accordance with EU rules. The same percentage is levied on the harmonised base of each Member State. However, the VAT base to take into account is capped at 50 % of each Member State’s GNI. The VAT-based resource usually accounts for around 12 % of own resource revenue. |
| --- | --- |

(2)

The own resource based on value added tax (VAT) is levied on Member States' VAT bases, which are harmonised for this purpose in accordance with EU rules. The same percentage is levied on the harmonised base of each Member State. However, the VAT base to take into account is capped at 50 % of each Member State’s GNI. The VAT-based resource usually accounts for around 12 % of own resource revenue.

| (3) | The resource based on gross national income (GNI) is used to balance budget revenue and expenditure, i.e. to finance the part of the budget not covered by any other sources of revenue. The same percentage rate is levied on each Member States’ GNI, which is established in accordance with EU rules. The GNI-based resource usually accounts for +/- 75 % of own resource revenue. |
| --- | --- |

(3)

The resource based on gross national income (GNI) is used to balance budget revenue and expenditure, i.e. to finance the part of the budget not covered by any other sources of revenue. The same percentage rate is levied on each Member States’ GNI, which is established in accordance with EU rules. The GNI-based resource usually accounts for +/- 75 % of own resource revenue.

The allocation of own resources is made in accordance with the rules laid down in the Council Decision No 2007/436/EC, Euratom of 7 June 2007 on the system of the EU’s own resources (ORD 2007). A new decision establishing the system of the EU’s own resources has been adopted for the 2014-2020 period (ORD 2014: Council Decision No 2014/335/EU, Euratom of 26 May 2014). The 2014 ORD will enter into force after it has been ratified by all Member States according to their constitutional rules (expected for beginning of 2016). Until then, the 2007 ORD remains valid. The retroactive effects (the ORD 2014 will apply from 1 January 2014) will be taken into account in the budgetary year when the decision will enter into force.

4.2.3.   
  Traditional own resources

Traditional own resources

Traditional own resources: All established traditional own resource amounts must be entered in one or other of the accounts kept by the competent authorities.

| — | in the ordinary account provided for in Article 6(3)(a) of Regulation No 1150/2000: all amounts recovered or guaranteed, |
| --- | --- |

—

in the ordinary account provided for in Article 6(3)(a) of Regulation No 1150/2000: all amounts recovered or guaranteed,

| — | in the separate account provided for in Article 6(3)(b) of Regulation No 1150/2000: all amounts not yet recovered and/or not guaranteed; amounts guaranteed but challenged may also be entered in this account. |
| --- | --- |

—

in the separate account provided for in Article 6(3)(b) of Regulation No 1150/2000: all amounts not yet recovered and/or not guaranteed; amounts guaranteed but challenged may also be entered in this account.

For the separate account, the Member States quarterly statement to the Commission includes:

| — | the balance to be recovered during the previous quarter, |
| --- | --- |

—

the balance to be recovered during the previous quarter,

| — | the established entitlements during the quarter in question, |
| --- | --- |

—

the established entitlements during the quarter in question,

| — | rectifications of the base (corrections/cancellations) during the quarter in question, |
| --- | --- |

—

rectifications of the base (corrections/cancellations) during the quarter in question,

| — | amounts written off (which cannot be made available according to Article 17(2) of Regulation 1150/2000), |
| --- | --- |

—

amounts written off (which cannot be made available according to Article 17(2) of Regulation 1150/2000),

| — | the amounts recovered during the quarter in question, |
| --- | --- |

—

the amounts recovered during the quarter in question,

| — | the balance to be recovered at the end of the quarter in question. |
| --- | --- |

—

the balance to be recovered at the end of the quarter in question.

Traditional own resources must be entered in the Commission’s account with the Treasury or the body appointed by the Member State at the latest on the first working day following the 19th day of the second month following the month during which the entitlement was established (or recovered in the case of the separate account). Member States retain, by way of collection costs, 25 % of traditional own resources (20 % according to the 2014 ORD). The contingent own resources entitlements are adjusted on the basis of the likelihood of their recovery.

4.2.4.   
  VAT-based resources and GNI-based resources

VAT-based resources and GNI-based resources

VAT-based own resources derive from the application of a uniform rate, for all Member States, to the harmonised VAT base determined in accordance with the rules of Article 2(1)(b) of the ORD 2007. The uniform rate is fixed at 0,30 % except for the period 2007-2013 in which the rate of call for Austria was fixed at 0,225 %, for Germany at 0,15 % and for Netherlands and Sweden at 0,10 %. The VAT base is capped at 50 % of GNI for all Member States. According to the 2014 ORD, the rate of call will remain at 0,3 %, except for the period 2014-2020 the rate of call for Germany, the Netherlands and Sweden will be fixed at 0,15 %.

The GNI-based resource is a variable resource intended to supply the revenue required, in any given year, to cover expenditure exceeding the amount collected from traditional own resources, VAT resources and miscellaneous revenue. The revenue derives from the application of a uniform rate to the aggregate GNI of all the Member States. VAT and GNI-based resources are determined on the basis of forecasts of VAT and GNI bases made when the draft budget is being prepared. These forecasts are subsequently revised; the figures are updated during the budget year in question by means of an amending budget. The actual figures for the VAT and GNI bases are available in the course of the year following the budget year in question. The Commission calculates the differences between the amounts due by the Member States by reference to the actual bases and the sums actually paid on the basis of the (revised) forecasts. These VAT and GNI balances, either positive or negative, are called in by the Commission from the Member States for the first working day of December of the year following the budget year in question. The Council adopted on 18 December 2014 Regulation (EU, Euratom) No 1377/2014 which allows Member States, under certain conditions, to defer making available the amounts of VAT and GNI balances until the first working day of September of the following year. Corrections may still be made to the actual VAT and GNI bases during the subsequent four years, unless a reservation is issued. The balances calculated earlier are adjusted and the difference is called in at the same time as the VAT and GNI balances for the previous budget year.

When conducting controls of VAT statements and GNI data, the Commission may notify reservations to the Member States regarding certain points which may have consequences to their own resources contributions. These points, for example, may result from an absence of acceptable data, or a need to develop a suitable methodology. These reservations have to be seen as potential claims on the Member States for uncertain amounts as their financial impact cannot be estimated with accuracy. When the exact amount can be determined, the corresponding VAT and GNI-based resources are called either in connection with VAT and GNI balances or by individual calls for funds.

4.2.5.   
  UK correction

UK correction

This mechanism reduces the own resources payments of the UK in proportion to what is known as its ‘budgetary imbalance’ and increases the own resources payments of the other Member States correspondingly. The budgetary imbalance correction mechanism in favour of the United Kingdom was instituted by the European Council in Fontainebleau (June 1984) and the resulting Own Resources Decision of 7 May 1985. The purpose of the mechanism was to reduce the budgetary imbalance of the UK through a reduction in its payments to the EU. Germany, Austria, Sweden and Netherlands benefit from a reduced financing of the correction (restricted to one fourth of their normal share).

4.2.6.   
  Gross reduction

Gross reduction

The European Council of 15 and 16 December 2005 concluded that the Netherlands and Sweden shall benefit from gross reductions in their annual GNI-based contributions during the period 2007-2013. Reflecting these conclusions, the 2007 ORD provides that the Netherlands shall benefit from a gross reduction in its annual GNI contribution of EUR 605 million and Sweden from a gross reduction in its annual GNI contribution of EUR 150 million, measured at 2004 prices. The European Council of 7—8 February 2013 concluded that Denmark, the Netherlands and Sweden are to benefit from gross reductions in their annual contributions based on gross national income (GNI) for the period 2014-2020 only and that Austria is to benefit from gross reductions in its annual GNI-based contributions for the period 2014-2016 only. Denmark, the Netherlands and Sweden shall benefit from gross reductions in their annual GNI-based contribution of EUR 130 million, EUR 695 million and EUR 185 million respectively. Austria shall benefit from a gross reduction in its annual GNI-based contribution of EUR 30 million in 2014, EUR 20 million in 2015 and EUR 10 million in 2016 (all amounts in 2011 prices). These provisions were taken up in the 2014 ORD and will be applied (retroactively) after its entry into force.

5.   IMPLEMENTATION OF EU BUDGET EXPENDITURE

5.1.   MFF: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS

MFF: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| MFF Heading | Commitment appropriations | Payment appropriations |
| Budget appropriations | Additional appropriations | Total appropriations available | Budget appropriations | Additional appropriations | Total appropriations available |
| Initial adopted budget | Amending budgets & transfers | Final adopted budget | Carry-overs | Assigned revenue | Initial adopted budget | Amending budgets & transfers | Final adopted budget | Carry-overs | Assigned revenue |
| 1 | 2 | 3=1+2 | 4 | 5 | 6=3+4+5 | 7 | 8 | 9=7+8 | 10 | 11 | 12=9+10+11 |
| 1. | Smart and inclusive growth | 63  986 | (0) | 63  986 | 150 | 3  474 | 67  611 | 62  393 | 3  470 | 65  863 | 289 | 3  548 | 69  699 |
| | 1a: Competitiveness for growth and jobs | 16  484 | — | 16  484 | 0 | 2  645 | 19  129 | 11  441 | 415 | 11  857 | 128 | 3  323 | 15  308 |
| | 1b: Economic, social and territorial cohesion | 47  502 | — | 47  502 | 150 | 830 | 48  482 | 50  951 | 3  055 | 54  006 | 161 | 224 | 54  392 |
| 2. | Sustainable growth: natural resources | 59  267 | (76) | 59  191 | — | 2  105 | 61  296 | 56  459 | (500) | 55  959 | 35 | 1  968 | 57  962 |
| | of which: market related expenditure and direct payments | 43  778 | — | 43  778 | — | 1  724 | 45  502 | 43  777 | (1) | 43  776 | 13 | 1  724 | 45  514 |
| 3. | Security and citizenship | 2  172 | 0 | 2  172 | 3 | 81 | 2  256 | 1  677 | (17) | 1  660 | 10 | 78 | 1  747 |
| 4. | Global Europe | 8  325 | 98 | 8  423 | 6 | 571 | 9  000 | 6  191 | 734 | 6  925 | 35 | 521 | 7  481 |
| 5. | Administration | 8  405 | (1) | 8  405 | 1 | 765 | 9  171 | 8  406 | 0 | 8  406 | 772 | 862 | 10  040 |
| | of which: Administrative expenditure of the institutions | 3  532 | — | 3  531 | 1 | 399 | 3  931 | 3  532 | — | 3  531 | 452 | 492 | 4  475 |
| 6. | Compensations | 29 | — | 29 | — | — | 29 | 29 | — | 29 | — | — | 29 |
| 8. | Negative reserve | — | — | — | — | — | — | — | — | — | — | — | — |
| 9. | Special Instruments | 456 | 29 | 485 | 18 | 74 | 577 | 350 | (157) | 193 | 270 | 74 | 536 |
| Total | 1 42  640 | 50 | 1 42  690 | 179 | 7  070 | 1 49  939 | 1 35  505 | 3  530 | 1 39  034 | 1  410 | 7  050 | 1 47  495 |

(EUR millions)

MFF Heading

Commitment appropriations

Payment appropriations

Budget appropriations

Additional appropriations

Total appropriations available

Budget appropriations

Additional appropriations

Total appropriations available

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Carry-overs

Assigned revenue

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Carry-overs

Assigned revenue

1

2

3=1+2

4

5

6=3+4+5

7

8

9=7+8

10

11

12=9+10+11

1.

1.

Smart and inclusive growth

63  986

(0)

63  986

150

3  474

67  611

62  393

3  470

65  863

289

3  548

69  699

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

16  484

16  484

—

16  484

16  484

0

0

2  645

2  645

19  129

19  129

11  441

11  441

415

415

11  857

11  857

128

128

3  323

3  323

15  308

15  308

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

47  502

47  502

—

47  502

47  502

150

150

830

830

48  482

48  482

50  951

50  951

3  055

3  055

54  006

54  006

161

161

224

224

54  392

54  392

2.

2.

Sustainable growth: natural resources

59  267

(76)

59  191

—

2  105

61  296

56  459

(500)

55  959

35

1  968

57  962

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

43  778

43  778

—

43  778

43  778

—

1  724

1  724

45  502

45  502

43  777

43  777

(1)

(1)

43  776

43  776

13

13

1  724

1  724

45  514

45  514

3.

3.

Security and citizenship

2  172

0

2  172

3

81

2  256

1  677

(17)

1  660

10

78

1  747

4.

4.

Global Europe

8  325

98

8  423

6

571

9  000

6  191

734

6  925

35

521

7  481

5.

5.

Administration

8  405

(1)

8  405

1

765

9  171

8  406

0

8  406

772

862

10  040

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

3  532

3  532

—

3  531

3  531

1

1

399

399

3  931

3  931

3  532

3  532

—

3  531

3  531

452

452

492

492

4  475

4  475

6.

6.

Compensations

29

—

29

—

—

29

29

—

29

—

—

29

8.

8.

Negative reserve

—

—

—

—

—

—

—

—

—

—

—

—

9.

9.

Special Instruments

456

29

485

18

74

577

350

(157)

193

270

74

536

Total

Total

1 42  640

1 42  640

50

50

1 42  690

1 42  690

179

179

7  070

7  070

1 49  939

1 49  939

1 35  505

1 35  505

3  530

3  530

1 39  034

1 39  034

1  410

1  410

7  050

7  050

1 47  495

1 47  495

5.2.   MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS

MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| MFF Heading | | Commitments made | Appropriations carried over to 2015 | Appropriations lapsing |
| Total appropriations available | From final adopted budget | From carry-overs | From assigned revenue | Total | % | Assigned revenue | Carry-overs by decision | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9=7+8 | 10=9/1 | 11 | 12 | 13 | 14=11+12+13 | 15=14/1 |
| 1. | Smart and inclusive growth | 67  611 | 44  260 | 150 | 1  561 | 45  972 | 67,99 % | 1  913 | 8  480 | 10  392 | 15,37 % | 11  246 | — | 0 | 11  247 | 16,63 % |
| | 1a: Competitiveness for growth and jobs | 19  129 | 16  466 | 0 | 1  552 | 18  018 | 94,19 % | 1  092 | — | 1  092 | 5,71 % | 18 | — | 0 | 19 | 0,10 % |
| | 1b: Economic, social and territorial cohesion | 48  482 | 27  794 | 150 | 9 | 27  954 | 57,66 % | 820 | 8  480 | 9  300 | 19,18 % | 11  228 | — | — | 11  228 | 23,16 % |
| 2. | Sustainable growth: natural resources | 61  296 | 46  866 | — | 1  397 | 48  263 | 78,74 % | 708 | 2  866 | 3  575 | 5,83 % | 9  458 | — | — | 9  458 | 15,43 % |
| | of which: market related expenditure and direct payments | 45  502 | 42  910 | — | 1  383 | 44  293 | 97,34 % | 341 | 868 | 1  209 | 2,66 % | 0 | — | — | 0 | 0,00 % |
| 3. | Security and citizenship | 2  256 | 1  463 | 3 | 41 | 1  507 | 66,81 % | 40 | 254 | 294 | 13,02 % | 455 | — | — | 455 | 20,17 % |
| 4. | Global Europe | 9  000 | 8  280 | 6 | 203 | 8  489 | 94,32 % | 368 | 136 | 504 | 5,60 % | 7 | — | 0 | 7 | 0,07 % |
| 5. | Administration | 9  171 | 8  313 | 1 | 571 | 8  884 | 96,87 % | 195 | 4 | 199 | 2,17 % | 88 | — | — | 88 | 0,96 % |
| | of which: Administrative expenditure of the institutions | 3  931 | 3  445 | 1 | 343 | 3  789 | 96,40 % | 56 | 4 | 60 | 0,00 % | 82 | — | — | 82 | 2,09 % |
| 6. | Compensations | 29 | 29 | — | — | 29 | 100,00 % | — | — | — | 0,00 % | — | — | — | — | 0,00 % |
| 8. | Negative reserve | — | — | — | — | — | 0,00 % | — | — | — | 0,00 % | — | — | — | — | 0,00 % |
| 9. | Special Instruments | 577 | 45 | 18 | — | 64 | 11,06 % | 74 | 361 | 435 | 75,37 % | 78 | — | — | 78 | 13,57 % |
| Total | 1 49  939 | 1 09  256 | 179 | 3  772 | 1 13  208 | 75,50 % | 3  297 | 12  101 | 15  399 | 10,27 % | 21  333 | — | 0 | 21  333 | 14,23 % |

(EUR millions)

MFF Heading

Commitments made

Appropriations carried over to 2015

Appropriations lapsing

Total appropriations available

From final adopted budget

From carry-overs

From assigned revenue

Total

%

Assigned revenue

Carry-overs by decision

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9=7+8

10=9/1

11

12

13

14=11+12+13

15=14/1

1.

Smart and inclusive growth

67  611

44  260

150

1  561

45  972

67,99 %

1  913

8  480

10  392

15,37 %

11  246

—

0

11  247

16,63 %

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

19  129

19  129

16  466

16  466

0

0

1  552

1  552

18  018

18  018

94,19 %

94,19 %

1  092

1  092

—

1  092

1  092

5,71 %

5,71 %

18

18

—

0

0

19

19

0,10 %

0,10 %

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

48  482

48  482

27  794

27  794

150

150

9

9

27  954

27  954

57,66 %

57,66 %

820

820

8  480

8  480

9  300

9  300

19,18 %

19,18 %

11  228

11  228

—

—

11  228

11  228

23,16 %

23,16 %

2.

Sustainable growth: natural resources

61  296

46  866

—

1  397

48  263

78,74 %

708

2  866

3  575

5,83 %

9  458

—

—

9  458

15,43 %

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

45  502

45  502

42  910

42  910

—

1  383

1  383

44  293

44  293

97,34 %

97,34 %

341

341

868

868

1  209

1  209

2,66 %

2,66 %

0

0

—

—

0

0

0,00 %

0,00 %

3.

Security and citizenship

2  256

1  463

3

41

1  507

66,81 %

40

254

294

13,02 %

455

—

—

455

20,17 %

4.

Global Europe

9  000

8  280

6

203

8  489

94,32 %

368

136

504

5,60 %

7

—

0

7

0,07 %

5.

Administration

9  171

8  313

1

571

8  884

96,87 %

195

4

199

2,17 %

88

—

—

88

0,96 %

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

3  931

3  931

3  445

3  445

1

1

343

343

3  789

3  789

96,40 %

96,40 %

56

56

4

4

60

60

0,00 %

0,00 %

82

82

—

—

82

82

2,09 %

2,09 %

6.

Compensations

29

29

—

—

29

100,00 %

—

—

—

0,00 %

—

—

—

—

0,00 %

8.

Negative reserve

—

—

—

—

—

0,00 %

—

—

—

0,00 %

—

—

—

—

0,00 %

9.

Special Instruments

577

45

18

—

64

11,06 %

74

361

435

75,37 %

78

—

—

78

13,57 %

Total

Total

1 49  939

1 49  939

1 09  256

1 09  256

179

179

3  772

3  772

1 13  208

1 13  208

75,50 %

75,50 %

3  297

3  297

12  101

12  101

15  399

15  399

10,27 %

10,27 %

21  333

21  333

—

0

0

21  333

21  333

14,23 %

14,23 %

5.3.   MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS

MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| MFF Heading | | Payments made | Appropriations carried over | Appropriations lapsing |
| Total appropriations available | From final adopted budget | From carry-overs | From assigned revenue | Total | % | Automatic carry-overs | Carry-overs by decision | Assigned revenue | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9 | 10=7+8+9 | 11=10/1 | 12 | 13 | 14 | 15=12+ 13+14 | 16= 15/1 |
| 1. | Smart and inclusive growth | 69  699 | 65  730 | 267 | 1  686 | 67  683 | 97,11 % | 121 | 0 | 1  860 | 1  980 | 2,84 % | 12 | 22 | 2 | 36 | 0,05 % |
| | 1a: Competitiveness for growth and jobs | 15  308 | 11  740 | 108 | 1  483 | 13  331 | 87,09 % | 104 | 0 | 1  838 | 1  943 | 12,69 % | 12 | 20 | 2 | 33 | 0,22 % |
| | 1b: Economic, social and territorial cohesion | 54  392 | 53  990 | 159 | 203 | 54  352 | 99,93 % | 16 | — | 21 | 38 | 0,07 % | 0 | 2 | — | 2 | 0,00 % |
| 2. | Sustainable growth: natural resources | 57  962 | 55  050 | 33 | 1  502 | 56  584 | 97,62 % | 34 | 868 | 467 | 1  369 | 2,36 % | 7 | 2 | — | 9 | 0,02 % |
| | of which: market related expenditure and direct payments | 45  514 | 42  891 | 12 | 1  383 | 44  287 | 97,30 % | 16 | 868 | 341 | 1  226 | 2,69 % | 0 | 1 | — | 2 | 0,00 % |
| 3. | Security and citizenship | 1  747 | 1  648 | 8 | 55 | 1  711 | 97,94 % | 8 | 0 | 23 | 31 | 1,75 % | 4 | 2 | 0 | 5 | 0,31 % |
| 4. | Global Europe | 7  481 | 6  880 | 29 | 297 | 7  206 | 96,32 % | 34 | 9 | 224 | 267 | 3,57 % | 2 | 6 | 0 | 8 | 0,10 % |
| 5. | Administration | 10  040 | 7  643 | 697 | 480 | 8  819 | 87,84 % | 673 | 4 | 382 | 1  060 | 10,55 % | 86 | 75 | — | 161 | 1,61 % |
| | of which: Administrative expenditure of the institutions | 4  475 | 3  027 | 402 | 300 | 3  729 | 83,33 % | 418 | 4 | 192 | 614 | 13,72 % | 82 | 50 | — | 132 | 2,94 % |
| 6. | Compensations | 29 | 29 | — | — | 29 | 100,00 % | — | — | — | — | 0,00 % | — | — | — | — | 0,00 % |
| 8. | Negative reserve | — | — | — | — | — | 0,00 % | — | — | — | — | 0,00 % | — | — | — | — | 0,00 % |
| 9. | Special Instruments | 536 | 157 | 270 | 38 | 465 | 86,70 % | 0 | 36 | 35 | 71 | 13,28 % | 0 | 0 | — | 0 | 0,02 % |
| Total | 1 47  495 | 1 37  136 | 1  304 | 4  057 | 1 42  497 | 96,61 % | 870 | 917 | 2  991 | 4  778 | 3,24 % | 112 | 106 | 2 | 220 | 0,15 % |

(EUR millions)

MFF Heading

Payments made

Appropriations carried over

Appropriations lapsing

Total appropriations available

From final adopted budget

From carry-overs

From assigned revenue

Total

%

Automatic carry-overs

Carry-overs by decision

Assigned revenue

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9

10=7+8+9

11=10/1

12

13

14

15=12+ 13+14

16= 15/1

1.

Smart and inclusive growth

69  699

65  730

267

1  686

67  683

97,11 %

121

0

1  860

1  980

2,84 %

12

22

2

36

0,05 %

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

15  308

15  308

11  740

11  740

108

108

1  483

1  483

13  331

13  331

87,09 %

87,09 %

104

104

0

0

1  838

1  838

1  943

1  943

12,69 %

12,69 %

12

12

20

20

2

2

33

33

0,22 %

0,22 %

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

54  392

54  392

53  990

53  990

159

159

203

203

54  352

54  352

99,93 %

99,93 %

16

16

—

21

21

38

38

0,07 %

0,07 %

0

0

2

2

—

2

2

0,00 %

0,00 %

2.

Sustainable growth: natural resources

57  962

55  050

33

1  502

56  584

97,62 %

34

868

467

1  369

2,36 %

7

2

—

9

0,02 %

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

45  514

45  514

42  891

42  891

12

12

1  383

1  383

44  287

44  287

97,30 %

97,30 %

16

16

868

868

341

341

1  226

1  226

2,69 %

2,69 %

0

0

1

1

—

2

2

0,00 %

0,00 %

3.

Security and citizenship

1  747

1  648

8

55

1  711

97,94 %

8

0

23

31

1,75 %

4

2

0

5

0,31 %

4.

Global Europe

7  481

6  880

29

297

7  206

96,32 %

34

9

224

267

3,57 %

2

6

0

8

0,10 %

5.

Administration

10  040

7  643

697

480

8  819

87,84 %

673

4

382

1  060

10,55 %

86

75

—

161

1,61 %

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

4  475

4  475

3  027

3  027

402

402

300

300

3  729

3  729

83,33 %

83,33 %

418

418

4

4

192

192

614

614

13,72 %

13,72 %

82

82

50

50

—

132

132

2,94 %

2,94 %

6.

Compensations

29

29

—

—

29

100,00 %

—

—

—

—

0,00 %

—

—

—

—

0,00 %

8.

Negative reserve

—

—

—

—

—

0,00 %

—

—

—

—

0,00 %

—

—

—

—

0,00 %

9.

Special Instruments

536

157

270

38

465

86,70 %

0

36

35

71

13,28 %

0

0

—

0

0,02 %

Total

Total

1 47  495

1 47  495

1 37  136

1 37  136

1  304

1  304

4  057

4  057

1 42  497

1 42  497

96,61 %

96,61 %

870

870

917

917

2  991

2  991

4  778

4  778

3,24 %

3,24 %

112

112

106

106

2

2

220

220

0,15 %

0,15 %

5.4.   MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL)

MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL)

| (EUR millions) |
| --- |
| MFF Heading | Commitments outstanding at the end of the previous year | Commitments of the year | |
| Commitments carried forward from previous year | Decommitments/Revaluations/Cancellations | Payments | Commitments outstanding at year-end | Commitments made during the year | Payments | Cancellation of commitments which cannot be carried over | Commitments outstanding at year-end | Total commitments outstanding at year-end |
| 1. | Smart and inclusive growth | 1 66  761 | (2  037) | (60  662) | 1 04  062 | 45  972 | (7  021) | (4) | 38  947 | 1 43  009 |
| | 1a: Competitiveness for growth and jobs | 29  657 | (808) | (8  167) | 20  681 | 18  018 | (5  164) | (4) | 12  850 | 33  532 |
| | 1b: Economic, social and territorial cohesion | 1 37  105 | (1  229) | (52  494) | 83  381 | 27  954 | (1  857) | (0) | 26  096 | 1 09  477 |
| 2. | Sustainable growth: natural resources | 27  978 | (275) | (11  930) | 15  773 | 48  263 | (44  655) | (0) | 3  609 | 19  382 |
| | of which: market related expenditure and direct payments | 40 | (3) | (21) | 16 | 44  293 | (44  266) | — | 27 | 43 |
| 3. | Security and citizenship | 3  092 | (306) | (944) | 1  841 | 1  507 | (767) | — | 740 | 2  582 |
| 4. | Global Europe | 23  285 | (721) | (5  490) | 17  075 | 8  489 | (1  716) | (1) | 6  772 | 23  846 |
| 5. | Administration | 892 | (182) | (709) | 1 | 8  884 | (8  110) | (9) | 765 | 766 |
| | of which: Administrative expenditure of the institutions | 557 | (156) | (402) | — | 3  789 | (3  328) | (8) | 453 | 453 |
| 6. | Compensations | — | — | — | — | 29 | (29) | — | — | — |
| 8. | Negative reserve | — | — | — | — | — | — | — | — | — |
| 9. | Special Instruments | 401 | (0) | (401) | — | 64 | (64) | — | 0 | 0 |
| Total | 2 22  410 | (3  522) | (80  136) | 1 38  753 | 1 13  208 | (62  361) | (14) | 50  832 | 1 89  585 |

(EUR millions)

MFF Heading

Commitments outstanding at the end of the previous year

Commitments of the year

Commitments carried forward from previous year

Decommitments/Revaluations/Cancellations

Payments

Commitments outstanding at year-end

Commitments made during the year

Payments

Cancellation of commitments which cannot be carried over

Commitments outstanding at year-end

Total commitments outstanding at year-end

1.

Smart and inclusive growth

1 66  761

(2  037)

(60  662)

1 04  062

45  972

(7  021)

(4)

38  947

1 43  009

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

29  657

29  657

(808)

(808)

(8  167)

(8  167)

20  681

20  681

18  018

18  018

(5  164)

(5  164)

(4)

(4)

12  850

12  850

33  532

33  532

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

1 37  105

1 37  105

(1  229)

(1  229)

(52  494)

(52  494)

83  381

83  381

27  954

27  954

(1  857)

(1  857)

(0)

(0)

26  096

26  096

1 09  477

1 09  477

2.

Sustainable growth: natural resources

27  978

(275)

(11  930)

15  773

48  263

(44  655)

(0)

3  609

19  382

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

40

40

(3)

(3)

(21)

(21)

16

16

44  293

44  293

(44  266)

(44  266)

—

27

27

43

43

3.

Security and citizenship

3  092

(306)

(944)

1  841

1  507

(767)

—

740

2  582

4.

Global Europe

23  285

(721)

(5  490)

17  075

8  489

(1  716)

(1)

6  772

23  846

5.

Administration

892

(182)

(709)

1

8  884

(8  110)

(9)

765

766

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

557

557

(156)

(156)

(402)

(402)

—

3  789

3  789

(3  328)

(3  328)

(8)

(8)

453

453

453

453

6.

Compensations

—

—

—

—

29

(29)

—

—

—

8.

Negative reserve

—

—

—

—

—

—

—

—

—

9.

Special Instruments

401

(0)

(401)

—

64

(64)

—

0

0

Total

Total

2 22  410

2 22  410

(3  522)

(3  522)

(80  136)

(80  136)

1 38  753

1 38  753

1 13  208

1 13  208

(62  361)

(62  361)

(14)

(14)

50  832

50  832

1 89  585

1 89  585

5.5.   MFF: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN

MFF: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN

| (EUR millions) |
| --- |
| MFF Heading | <2008 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Total |
| 1. | Smart and inclusive growth | 2  915 | 414 | 1  578 | 4  327 | 11  007 | 27  951 | 55  870 | 38  947 | 1 43  009 |
| | 1a: Competitiveness for growth and jobs | 255 | 211 | 1  260 | 2  274 | 3  001 | 5  451 | 8  230 | 12  850 | 33  532 |
| | 1b: Economic, social and territorial cohesion | 2  660 | 203 | 318 | 2  053 | 8  007 | 22  500 | 47  640 | 26  096 | 1 09  477 |
| 2. | Sustainable growth: natural resources | 338 | 50 | 93 | 116 | 193 | 3  524 | 11  459 | 3  609 | 19  382 |
| | of which: market related expenditure and direct payments | 0 | — | — | 0 | 0 | 9 | 7 | 27 | 43 |
| 3. | Security and citizenship | 14 | 31 | 73 | 158 | 261 | 497 | 807 | 740 | 2  582 |
| 4. | Global Europe | 944 | 539 | 842 | 1  336 | 2  800 | 4  686 | 5  928 | 6  772 | 23  846 |
| 5. | Administration | — | — | — | — | — | 0 | 1 | 765 | 766 |
| | of which: Administrative expenditure of the institutions | — | — | — | — | — | — | — | 453 | 453 |
| 6. | Compensations | — | — | — | — | — | — | — | — | — |
| 8. | Negative reserve | — | — | — | — | — | — | — | — | — |
| 9. | Special Instruments | — | — | — | — | — | — | 0 | 0 | 0 |
| Total | 4  211 | 1  034 | 2  586 | 5  937 | 14  261 | 36  658 | 74  066 | 50  832 | 1 89  585 |

(EUR millions)

MFF Heading

<2008

2008

2009

2010

2011

2012

2013

2014

Total

1.

Smart and inclusive growth

2  915

414

1  578

4  327

11  007

27  951

55  870

38  947

1 43  009

1a: Competitiveness for growth and jobs

1a: Competitiveness for growth and jobs

255

255

211

211

1  260

1  260

2  274

2  274

3  001

3  001

5  451

5  451

8  230

8  230

12  850

12  850

33  532

33  532

1b: Economic, social and territorial cohesion

1b: Economic, social and territorial cohesion

2  660

2  660

203

203

318

318

2  053

2  053

8  007

8  007

22  500

22  500

47  640

47  640

26  096

26  096

1 09  477

1 09  477

2.

Sustainable growth: natural resources

338

50

93

116

193

3  524

11  459

3  609

19  382

of which: market related expenditure and direct payments

of which: market related expenditure and direct payments

0

0

—

—

0

0

0

0

9

9

7

7

27

27

43

43

3.

Security and citizenship

14

31

73

158

261

497

807

740

2  582

4.

Global Europe

944

539

842

1  336

2  800

4  686

5  928

6  772

23  846

5.

Administration

—

—

—

—

—

0

1

765

766

of which: Administrative expenditure of the institutions

of which: Administrative expenditure of the institutions

—

—

—

—

—

—

—

453

453

453

453

6.

Compensations

—

—

—

—

—

—

—

—

—

8.

Negative reserve

—

—

—

—

—

—

—

—

—

9.

Special Instruments

—

—

—

—

—

—

0

0

0

Total

Total

4  211

4  211

1  034

1  034

2  586

2  586

5  937

5  937

14  261

14  261

36  658

36  658

74  066

74  066

50  832

50  832

1 89  585

1 89  585

5.6.   POLICY AREA: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS

POLICY AREA: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| Policy Area | Commitment appropriations | Payment appropriations |
| Budget appropriations | Additional appropriations | Total appropriations available | Budget appropriations | Additional appropriations | Total appropriations available |
| Initial adopted budget | Amending budgets & Transfers | Final adopted budget | Carried over | Assigned revenue | Initial adopted budget | Amending budgets & Transfers | Final adopted budget | Carried over | Assigned revenue |
| 1 | 2 | 3=1+2 | 4 | 5 | 6=3+4+5 | 7 | 8 | 9=7+8 | 10 | 11 | 12=9+10+11 |
| 01 | Economic & fin. affairs | 213 | 20 | 233 | — | 118 | 351 | 297 | 2 | 300 | 8 | 121 | 429 |
| 02 | Enterprise and Industry | 2  536 | (10) | 2  526 | — | 228 | 2  754 | 2  105 | 60 | 2  165 | 14 | 308 | 2  486 |
| 03 | Competition | 94 | (1) | 93 | — | 6 | 100 | 94 | (1) | 93 | 8 | 6 | 107 |
| 04 | Empl., social aff. & incl. | 13  839 | 90 | 13  929 | 168 | 581 | 14  678 | 11  622 | (341) | 11  280 | 51 | 191 | 11  522 |
| 05 | Agriculture & rural dev. | 58  047 | (22) | 58  025 | — | 2  117 | 60  141 | 55  635 | (518) | 55  117 | 22 | 1  981 | 57  120 |
| 06 | Mobility and transport | 2  867 | (7) | 2  860 | — | 71 | 2  931 | 1  003 | 1 | 1  004 | 6 | 80 | 1  089 |
| 07 | Environment | 407 | 1 | 408 | — | 22 | 430 | 346 | 1 | 347 | 18 | 19 | 384 |
| 08 | Research & Innovation | 6  215 | (53) | 6  162 | — | 1  031 | 7  193 | 4  107 | (11) | 4  096 | 35 | 1  490 | 5  621 |
| 09 | Commun. networks, content and technology | 1  637 | (26) | 1  612 | — | 148 | 1  759 | 961 | 107 | 1  068 | 16 | 259 | 1  343 |
| 10 | Direct research | 425 | (23) | 401 | — | 580 | 982 | 420 | (23) | 397 | 55 | 497 | 949 |
| 11 | Maritime aff & Fisheries | 1  066 | (76) | 991 | — | 30 | 1  021 | 780 | 8 | 788 | 5 | 30 | 823 |
| 12 | Intern. market & serv. | 117 | 1 | 118 | 0 | 15 | 133 | 117 | (3) | 114 | 6 | 15 | 134 |
| 13 | Regional & urban policy | 33  073 | 81 | 33  154 | — | 354 | 33  508 | 40  223 | 3  244 | 43  467 | 391 | 136 | 43  995 |
| 14 | Taxation & cust. union | 157 | 0 | 158 | — | 7 | 164 | 122 | 10 | 133 | 7 | 6 | 146 |
| 15 | Education and culture | 2  820 | 57 | 2  877 | — | 453 | 3  330 | 2  242 | 178 | 2  420 | 12 | 537 | 2  969 |
| 16 | Communication | 246 | 2 | 248 | — | 11 | 259 | 245 | 6 | 251 | 14 | 11 | 276 |
| 17 | Health & consum. prot. | 618 | (2) | 616 | 1 | 26 | 643 | 567 | (13) | 553 | 12 | 25 | 590 |
| 18 | Home affairs | 1  201 | 0 | 1  202 | 2 | 39 | 1  243 | 763 | 5 | 768 | 4 | 31 | 803 |
| 19 | Foreign pol. instr. | 733 | (55) | 678 | 5 | 55 | 739 | 463 | 74 | 537 | 3 | 52 | 593 |
| 20 | Trade | 121 | (2) | 119 | — | 3 | 122 | 115 | 1 | 116 | 3 | 3 | 123 |
| 21 | Develop. & Cooperation | 5  084 | 121 | 5  204 | 1 | 263 | 5  469 | 3  658 | 286 | 3  944 | 26 | 222 | 4  192 |
| 22 | Enlargement | 1  520 | (45) | 1  475 | — | 13 | 1  488 | 904 | (12) | 892 | 5 | 12 | 908 |
| 23 | Human. aid & Civil prot. | 1  006 | 158 | 1  164 | — | 75 | 1  240 | 851 | 564 | 1  415 | 8 | 75 | 1  498 |
| 24 | Fight against fraud | 78 | (2) | 77 | — | 1 | 77 | 75 | 0 | 75 | 9 | 1 | 84 |
| 25 | Commission’s policy coord. & legal advice | 194 | (0) | 194 | — | 11 | 205 | 195 | (0) | 195 | 15 | 11 | 221 |
| 26 | Commission’s admin. | 1  001 | (40) | 961 | 0 | 162 | 1  124 | 991 | (30) | 961 | 160 | 164 | 1  285 |
| 27 | Budget | 96 | (11) | 84 | — | 8 | 92 | 96 | (11) | 84 | 7 | 8 | 99 |
| 28 | Audit | 12 | (0) | 12 | — | 1 | 12 | 12 | (0) | 12 | 1 | 1 | 13 |
| 29 | Statistics | 132 | 0 | 132 | — | 14 | 146 | 152 | (21) | 131 | 6 | 22 | 160 |
| 30 | Pensions & related exp. | 1  450 | 44 | 1  494 | — | 2 | 1  495 | 1  450 | 44 | 1  494 | — | 2 | 1  495 |
| 31 | Language Services | 388 | 3 | 391 | — | 87 | 478 | 388 | 3 | 391 | 20 | 87 | 498 |
| 32 | Energy | 933 | 24 | 958 | — | 128 | 1  086 | 588 | 68 | 656 | 5 | 144 | 805 |
| 33 | Justice | 203 | 2 | 205 | — | 11 | 216 | 193 | (6) | 187 | 4 | 12 | 202 |
| 34 | Climate action | 121 | 0 | 122 | — | 1 | 122 | 43 | 9 | 52 | 3 | 1 | 55 |
| 40 | Reserves | 456 | (179) | 277 | — | — | 277 | 150 | (150) | — | — | — | — |
| 90 | Other Institutions | 3  532 | (0) | 3  531 | 1 | 399 | 3  931 | 3  532 | (0) | 3  531 | 452 | 492 | 4  475 |
| Total | 1 42  640 | 50 | 1 42  690 | 179 | 7  070 | 1 49  939 | 1 35  505 | 3  530 | 1 39  034 | 1  410 | 7  050 | 1 47  495 |

(EUR millions)

Policy Area

Commitment appropriations

Payment appropriations

Budget appropriations

Additional appropriations

Total appropriations available

Budget appropriations

Additional appropriations

Total appropriations available

Initial adopted budget

Amending budgets & Transfers

Final adopted budget

Carried over

Assigned revenue

Initial adopted budget

Amending budgets & Transfers

Final adopted budget

Carried over

Assigned revenue

1

2

3=1+2

4

5

6=3+4+5

7

8

9=7+8

10

11

12=9+10+11

01

01

Economic & fin. affairs

213

20

233

—

118

351

297

2

300

8

121

429

02

02

Enterprise and Industry

2  536

(10)

2  526

—

228

2  754

2  105

60

2  165

14

308

2  486

03

03

Competition

94

(1)

93

—

6

100

94

(1)

93

8

6

107

04

04

Empl., social aff. & incl.

13  839

90

13  929

168

581

14  678

11  622

(341)

11  280

51

191

11  522

05

05

Agriculture & rural dev.

58  047

(22)

58  025

—

2  117

60  141

55  635

(518)

55  117

22

1  981

57  120

06

06

Mobility and transport

2  867

(7)

2  860

—

71

2  931

1  003

1

1  004

6

80

1  089

07

07

Environment

407

1

408

—

22

430

346

1

347

18

19

384

08

08

Research & Innovation

6  215

(53)

6  162

—

1  031

7  193

4  107

(11)

4  096

35

1  490

5  621

09

09

Commun. networks, content and technology

1  637

(26)

1  612

—

148

1  759

961

107

1  068

16

259

1  343

10

10

Direct research

425

(23)

401

—

580

982

420

(23)

397

55

497

949

11

11

Maritime aff & Fisheries

1  066

(76)

991

—

30

1  021

780

8

788

5

30

823

12

12

Intern. market & serv.

117

1

118

0

15

133

117

(3)

114

6

15

134

13

13

Regional & urban policy

33  073

81

33  154

—

354

33  508

40  223

3  244

43  467

391

136

43  995

14

14

Taxation & cust. union

157

0

158

—

7

164

122

10

133

7

6

146

15

15

Education and culture

2  820

57

2  877

—

453

3  330

2  242

178

2  420

12

537

2  969

16

16

Communication

246

2

248

—

11

259

245

6

251

14

11

276

17

17

Health & consum. prot.

618

(2)

616

1

26

643

567

(13)

553

12

25

590

18

18

Home affairs

1  201

0

1  202

2

39

1  243

763

5

768

4

31

803

19

19

Foreign pol. instr.

733

(55)

678

5

55

739

463

74

537

3

52

593

20

20

Trade

121

(2)

119

—

3

122

115

1

116

3

3

123

21

21

Develop. & Cooperation

5  084

121

5  204

1

263

5  469

3  658

286

3  944

26

222

4  192

22

22

Enlargement

1  520

(45)

1  475

—

13

1  488

904

(12)

892

5

12

908

23

23

Human. aid & Civil prot.

1  006

158

1  164

—

75

1  240

851

564

1  415

8

75

1  498

24

24

Fight against fraud

78

(2)

77

—

1

77

75

0

75

9

1

84

25

25

Commission’s policy coord. & legal advice

194

(0)

194

—

11

205

195

(0)

195

15

11

221

26

26

Commission’s admin.

1  001

(40)

961

0

162

1  124

991

(30)

961

160

164

1  285

27

27

Budget

96

(11)

84

—

8

92

96

(11)

84

7

8

99

28

28

Audit

12

(0)

12

—

1

12

12

(0)

12

1

1

13

29

29

Statistics

132

0

132

—

14

146

152

(21)

131

6

22

160

30

30

Pensions & related exp.

1  450

44

1  494

—

2

1  495

1  450

44

1  494

—

2

1  495

31

31

Language Services

388

3

391

—

87

478

388

3

391

20

87

498

32

32

Energy

933

24

958

—

128

1  086

588

68

656

5

144

805

33

33

Justice

203

2

205

—

11

216

193

(6)

187

4

12

202

34

34

Climate action

121

0

122

—

1

122

43

9

52

3

1

55

40

40

Reserves

456

(179)

277

—

—

277

150

(150)

—

—

—

—

90

90

Other Institutions

3  532

(0)

3  531

1

399

3  931

3  532

(0)

3  531

452

492

4  475

Total

Total

1 42  640

1 42  640

50

50

1 42  690

1 42  690

179

179

7  070

7  070

1 49  939

1 49  939

1 35  505

1 35  505

3  530

3  530

1 39  034

1 39  034

1  410

1  410

7  050

7  050

1 47  495

1 47  495

5.6.1.   
  Policy area: comparison of budget and actual commitments

Policy area: comparison of budget and actual commitments

| (EUR millions) |
| --- |
| Policy Area | Initial adopted budget | Amending budgets & transfers | Final adopted budget | Additional appropriations (23) | Total appropriations available | Commitments made |
| 01 | Economic and financial affairs | 213 | 20 | 233 | 118 | 351 | 236 |
| 02 | Enterprise and Industry | 2  536 | (10) | 2  526 | 228 | 2  754 | 2  608 |
| 03 | Competition | 94 | (1) | 93 | 6 | 100 | 97 |
| 04 | Employment, social affairs and inclusion | 13  839 | 90 | 13  929 | 750 | 14  678 | 10  312 |
| 05 | Agriculture and rural development | 58  047 | (22) | 58  025 | 2  117 | 60  141 | 47  789 |
| 06 | Mobility and transport | 2  867 | (7) | 2  860 | 71 | 2  931 | 2  879 |
| 07 | Environment | 407 | 1 | 408 | 22 | 430 | 423 |
| 08 | Research and Innovation | 6  215 | (53) | 6  162 | 1  031 | 7  193 | 7  002 |
| 09 | Communications networks, content and technology | 1  637 | (26) | 1  612 | 148 | 1  759 | 1  708 |
| 10 | Direct research | 425 | (23) | 401 | 580 | 982 | 535 |
| 11 | Maritime affairs and Fisheries | 1  066 | (76) | 991 | 30 | 1  021 | 218 |
| 12 | Internal market and services | 117 | 1 | 118 | 16 | 133 | 123 |
| 13 | Regional and urban policy | 33  073 | 81 | 33  154 | 354 | 33  508 | 17  078 |
| 14 | Taxation and customs union | 157 | — | 158 | 7 | 164 | 160 |
| 15 | Education and culture | 2  820 | 57 | 2  877 | 453 | 3  330 | 3  223 |
| 16 | Communication | 246 | 2 | 248 | 11 | 259 | 252 |
| 17 | Health and consumer protection | 618 | (2) | 616 | 27 | 643 | 624 |
| 18 | Home affairs | 1  201 | — | 1  202 | 41 | 1  243 | 523 |
| 19 | Foreign policy instruments | 733 | (55) | 678 | 61 | 739 | 687 |
| 20 | Trade | 121 | (2) | 119 | 3 | 122 | 120 |
| 21 | Development and Cooperation | 5  084 | 121 | 5  204 | 264 | 5  469 | 5  353 |
| 22 | Enlargement | 1  520 | (45) | 1  475 | 13 | 1  488 | 1  440 |
| 23 | Humanitarian aid and Civil protection | 1  006 | 158 | 1  164 | 75 | 1  240 | 1  187 |
| 24 | Fight against fraud | 78 | (2) | 77 | 1 | 77 | 77 |
| 25 | Commission’s policy coordination & legal advice | 194 | — | 194 | 11 | 205 | 198 |
| 26 | Commission’s administration | 1  001 | (40) | 961 | 162 | 1  124 | 1  070 |
| 27 | Budget | 96 | (11) | 84 | 8 | 92 | 89 |
| 28 | Audit | 12 | — | 12 | 1 | 12 | 12 |
| 29 | Statistics | 132 | — | 132 | 14 | 146 | 140 |
| 30 | Pensions and related expenditure | 1  450 | 44 | 1  494 | 2 | 1  495 | 1  493 |
| 31 | Language Services | 388 | 3 | 391 | 87 | 478 | 444 |
| 32 | Energy | 933 | 24 | 958 | 128 | 1  086 | 990 |
| 33 | Justice | 203 | 2 | 205 | 11 | 216 | 209 |
| 34 | Climate action | 121 | — | 122 | 1 | 122 | 122 |
| 40 | Reserves | 456 | (179) | 277 | — | 277 | — |
| 90 | Other Institutions | 3  532 | — | 3  531 | 400 | 3  931 | 3  789 |
| Total | 1 42  640 | 50 | 1 42  690 | 7  249 | 1 49  939 | 1 13  208 |

(EUR millions)

Policy Area

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Additional appropriations (23)

23

Total appropriations available

Commitments made

01

Economic and financial affairs

213

20

233

118

351

236

02

Enterprise and Industry

2  536

(10)

2  526

228

2  754

2  608

03

Competition

94

(1)

93

6

100

97

04

Employment, social affairs and inclusion

13  839

90

13  929

750

14  678

10  312

05

Agriculture and rural development

58  047

(22)

58  025

2  117

60  141

47  789

06

Mobility and transport

2  867

(7)

2  860

71

2  931

2  879

07

Environment

407

1

408

22

430

423

08

Research and Innovation

6  215

(53)

6  162

1  031

7  193

7  002

09

Communications networks, content and technology

1  637

(26)

1  612

148

1  759

1  708

10

Direct research

425

(23)

401

580

982

535

11

Maritime affairs and Fisheries

1  066

(76)

991

30

1  021

218

12

Internal market and services

117

1

118

16

133

123

13

Regional and urban policy

33  073

81

33  154

354

33  508

17  078

14

Taxation and customs union

157

—

158

7

164

160

15

Education and culture

2  820

57

2  877

453

3  330

3  223

16

Communication

246

2

248

11

259

252

17

Health and consumer protection

618

(2)

616

27

643

624

18

Home affairs

1  201

—

1  202

41

1  243

523

19

Foreign policy instruments

733

(55)

678

61

739

687

20

Trade

121

(2)

119

3

122

120

21

Development and Cooperation

5  084

121

5  204

264

5  469

5  353

22

Enlargement

1  520

(45)

1  475

13

1  488

1  440

23

Humanitarian aid and Civil protection

1  006

158

1  164

75

1  240

1  187

24

Fight against fraud

78

(2)

77

1

77

77

25

Commission’s policy coordination & legal advice

194

—

194

11

205

198

26

Commission’s administration

1  001

(40)

961

162

1  124

1  070

27

Budget

96

(11)

84

8

92

89

28

Audit

12

—

12

1

12

12

29

Statistics

132

—

132

14

146

140

30

Pensions and related expenditure

1  450

44

1  494

2

1  495

1  493

31

Language Services

388

3

391

87

478

444

32

Energy

933

24

958

128

1  086

990

33

Justice

203

2

205

11

216

209

34

Climate action

121

—

122

1

122

122

40

Reserves

456

(179)

277

—

277

—

90

Other Institutions

3  532

—

3  531

400

3  931

3  789

Total

Total

1 42  640

1 42  640

50

50

1 42  690

1 42  690

7  249

7  249

1 49  939

1 49  939

1 13  208

1 13  208

5.7.   POLICY AREA: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS

POLICY AREA: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| Policy Area | | Commitments made | Appropriations carried over to 2015 | Appropriations lapsing |
| Total appropriations available | From final adopted budget | From carry-overs | From assigned revenue | Total | % | Assigned revenue | Carry-overs by decision | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9=7+8 | 10=9/1 | 11 | 12 | 13 | 14=11+12+13 | 15=14/1 |
| 01 | Economic and financial affairs | 351 | 233 | — | 3 | 236 | 67,1 % | 115 | — | 115 | 32,9 % | 0 | — | — | 0 | 0,1 % |
| 02 | Enterprise and Industry | 2  754 | 2  526 | — | 82 | 2  608 | 94,7 % | 146 | — | 146 | 5,3 % | 0 | — | — | 0 | 0,0 % |
| 03 | Competition | 100 | 93 | — | 3 | 97 | 97,2 % | 3 | — | 3 | 2,8 % | 0 | — | — | 0 | 0,1 % |
| 04 | Employment, social affairs and inclusion | 14  678 | 10  139 | 168 | 5 | 10  312 | 70,3 % | 576 | 2  161 | 2  737 | 18,6 % | 1  629 | — | 0 | 1  629 | 11,1 % |
| 05 | Agriculture and rural development | 60  141 | 46  400 | — | 1  389 | 47  789 | 79,5 % | 728 | 2  912 | 3  640 | 6,1 % | 8  712 | — | — | 8  712 | 14,5 % |
| 06 | Mobility and transport | 2  931 | 2  854 | — | 25 | 2  879 | 98,2 % | 46 | — | 46 | 1,6 % | 6 | — | 0 | 7 | 0,2 % |
| 07 | Environment | 430 | 407 | — | 16 | 423 | 98,3 % | 6 | — | 6 | 1,4 % | 1 | — | — | 1 | 0,3 % |
| 08 | Research and Innovation | 7  193 | 6  162 | — | 840 | 7  002 | 97,3 % | 191 | — | 191 | 2,7 % | — | — | — | — | 0,0 % |
| 09 | Communications networks, content and technology | 1  759 | 1  612 | — | 97 | 1  708 | 97,1 % | 51 | — | 51 | 2,9 % | 0 | — | — | 0 | 0,0 % |
| 10 | Direct research | 982 | 401 | — | 134 | 535 | 54,5 % | 447 | — | 447 | 45,5 % | — | — | — | — | 0,0 % |
| 11 | Maritime affairs and Fisheries | 1  021 | 216 | — | 2 | 218 | 21,4 % | 28 | 28 | 56 | 5,5 % | 746 | — | — | 746 | 73,1 % |
| 12 | Internal market and services | 133 | 118 | 0 | 5 | 123 | 92,3 % | 10 | — | 10 | 7,5 % | 0 | — | — | 0 | 0,1 % |
| 13 | Regional and urban policy | 33  508 | 17  066 | — | 11 | 17  078 | 51,0 % | 343 | 6  481 | 6  824 | 20,4 % | 9  607 | — | — | 9  607 | 28,7 % |
| 14 | Taxation and customs union | 164 | 157 | — | 2 | 160 | 97,2 % | 5 | — | 5 | 2,8 % | 0 | — | — | 0 | 0,0 % |
| 15 | Education and culture | 3  330 | 2  877 | — | 347 | 3  223 | 96,8 % | 106 | — | 106 | 3,2 % | 0 | — | — | 0 | 0,0 % |
| 16 | Communication | 259 | 246 | — | 6 | 252 | 97,3 % | 5 | — | 5 | 1,8 % | 3 | — | — | 3 | 1,0 % |
| 17 | Health and consumer protection | 643 | 604 | 1 | 19 | 624 | 97,0 % | 7 | 7 | 13 | 2,1 % | 6 | — | — | 6 | 0,9 % |
| 18 | Home affairs | 1  243 | 508 | 2 | 13 | 523 | 42,1 % | 26 | 247 | 273 | 22,0 % | 447 | — | — | 447 | 36,0 % |
| 19 | Foreign policy instruments | 739 | 661 | 5 | 21 | 687 | 93,1 % | 34 | 15 | 49 | 6,6 % | 2 | — | — | 2 | 0,3 % |
| 20 | Trade | 122 | 118 | — | 2 | 120 | 97,9 % | 2 | 0 | 2 | 1,4 % | 1 | — | — | 1 | 0,7 % |
| 21 | Development and Cooperation | 5  469 | 5  195 | 1 | 157 | 5  353 | 97,9 % | 107 | 7 | 114 | 2,1 % | 2 | — | — | 2 | 0,0 % |
| 22 | Enlargement | 1  488 | 1  434 | — | 6 | 1  440 | 96,8 % | 6 | 40 | 46 | 3,1 % | 1 | — | 0 | 1 | 0,1 % |
| 23 | Humanitarian aid and Civil protection | 1  240 | 1  163 | — | 24 | 1  187 | 95,8 % | 52 | — | 52 | 4,2 % | 1 | — | — | 1 | 0,1 % |
| 24 | Fight against fraud | 77 | 77 | — | — | 77 | 98,9 % | 1 | — | 1 | 1,0 % | 0 | — | — | 0 | 0,1 % |
| 25 | Commission’s policy coordination & legal advice | 205 | 192 | — | 6 | 198 | 96,6 % | 5 | — | 5 | 2,5 % | 2 | — | — | 2 | 0,8 % |
| 26 | Commission’s administration | 1  124 | 960 | 0 | 110 | 1  070 | 95,3 % | 52 | — | 52 | 4,6 % | 1 | — | — | 1 | 0,1 % |
| 27 | Budget | 92 | 84 | — | 4 | 89 | 96,6 % | 3 | — | 3 | 3,4 % | — | — | — | — | 0,1 % |
| 28 | Audit | 12 | 12 | — | 0 | 12 | 96,6 % | 0 | — | 0 | 3,2 % | 0 | — | — | 0 | 0,2 % |
| 29 | Statistics | 146 | 131 | — | 8 | 140 | 95,7 % | 5 | — | 5 | 3,7 % | 1 | — | — | 1 | 0,6 % |
| 30 | Pensions and related expenditure | 1  495 | 1  493 | — | — | 1  493 | 99,8 % | 2 | — | 2 | 0,1 % | 1 | — | — | 1 | 0,0 % |
| 31 | Language Services | 478 | 391 | — | 53 | 444 | 92,9 % | 34 | — | 34 | 7,1 % | 0 | — | — | 0 | 0,0 % |
| 32 | Energy | 1  086 | 955 | — | 34 | 990 | 91,1 % | 94 | — | 94 | 8,6 % | 3 | — | 0 | 3 | 0,3 % |
| 33 | Justice | 216 | 205 | — | 4 | 209 | 96,5 % | 7 | — | 7 | 3,2 % | 1 | — | — | 1 | 0,4 % |
| 34 | Climate action | 122 | 121 | — | 0 | 122 | 99,4 % | 0 | — | 0 | 0,4 % | 0 | — | — | 0 | 0,2 % |
| 40 | Reserves | 277 | — | — | — | — | 0,0 % | — | 199 | 199 | 71,8 % | 78 | — | — | 78 | 28,2 % |
| 90 | Other Institutions | 3  931 | 3  445 | 1 | 343 | 3  789 | 96,4 % | 56 | 4 | 60 | 1,5 % | 82 | — | — | 82 | 2,1 % |
| Total | 1 49  939 | 1 09  256 | 179 | 3  772 | 1 13  208 | 75,5 % | 3  297 | 12  101 | 15  399 | 10,3 % | 21  333 | — | 0 | 21  333 | 14,2 % |

(EUR millions)

Policy Area

Commitments made

Appropriations carried over to 2015

Appropriations lapsing

Total appropriations available

From final adopted budget

From carry-overs

From assigned revenue

Total

%

Assigned revenue

Carry-overs by decision

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9=7+8

10=9/1

11

12

13

14=11+12+13

15=14/1

01

Economic and financial affairs

351

233

—

3

236

67,1 %

115

—

115

32,9 %

0

—

—

0

0,1 %

02

Enterprise and Industry

2  754

2  526

—

82

2  608

94,7 %

146

—

146

5,3 %

0

—

—

0

0,0 %

03

Competition

100

93

—

3

97

97,2 %

3

—

3

2,8 %

0

—

—

0

0,1 %

04

Employment, social affairs and inclusion

14  678

10  139

168

5

10  312

70,3 %

576

2  161

2  737

18,6 %

1  629

—

0

1  629

11,1 %

05

Agriculture and rural development

60  141

46  400

—

1  389

47  789

79,5 %

728

2  912

3  640

6,1 %

8  712

—

—

8  712

14,5 %

06

Mobility and transport

2  931

2  854

—

25

2  879

98,2 %

46

—

46

1,6 %

6

—

0

7

0,2 %

07

Environment

430

407

—

16

423

98,3 %

6

—

6

1,4 %

1

—

—

1

0,3 %

08

Research and Innovation

7  193

6  162

—

840

7  002

97,3 %

191

—

191

2,7 %

—

—

—

—

0,0 %

09

Communications networks, content and technology

1  759

1  612

—

97

1  708

97,1 %

51

—

51

2,9 %

0

—

—

0

0,0 %

10

Direct research

982

401

—

134

535

54,5 %

447

—

447

45,5 %

—

—

—

—

0,0 %

11

Maritime affairs and Fisheries

1  021

216

—

2

218

21,4 %

28

28

56

5,5 %

746

—

—

746

73,1 %

12

Internal market and services

133

118

0

5

123

92,3 %

10

—

10

7,5 %

0

—

—

0

0,1 %

13

Regional and urban policy

33  508

17  066

—

11

17  078

51,0 %

343

6  481

6  824

20,4 %

9  607

—

—

9  607

28,7 %

14

Taxation and customs union

164

157

—

2

160

97,2 %

5

—

5

2,8 %

0

—

—

0

0,0 %

15

Education and culture

3  330

2  877

—

347

3  223

96,8 %

106

—

106

3,2 %

0

—

—

0

0,0 %

16

Communication

259

246

—

6

252

97,3 %

5

—

5

1,8 %

3

—

—

3

1,0 %

17

Health and consumer protection

643

604

1

19

624

97,0 %

7

7

13

2,1 %

6

—

—

6

0,9 %

18

Home affairs

1  243

508

2

13

523

42,1 %

26

247

273

22,0 %

447

—

—

447

36,0 %

19

Foreign policy instruments

739

661

5

21

687

93,1 %

34

15

49

6,6 %

2

—

—

2

0,3 %

20

Trade

122

118

—

2

120

97,9 %

2

0

2

1,4 %

1

—

—

1

0,7 %

21

Development and Cooperation

5  469

5  195

1

157

5  353

97,9 %

107

7

114

2,1 %

2

—

—

2

0,0 %

22

Enlargement

1  488

1  434

—

6

1  440

96,8 %

6

40

46

3,1 %

1

—

0

1

0,1 %

23

Humanitarian aid and Civil protection

1  240

1  163

—

24

1  187

95,8 %

52

—

52

4,2 %

1

—

—

1

0,1 %

24

Fight against fraud

77

77

—

—

77

98,9 %

1

—

1

1,0 %

0

—

—

0

0,1 %

25

Commission’s policy coordination & legal advice

205

192

—

6

198

96,6 %

5

—

5

2,5 %

2

—

—

2

0,8 %

26

Commission’s administration

1  124

960

0

110

1  070

95,3 %

52

—

52

4,6 %

1

—

—

1

0,1 %

27

Budget

92

84

—

4

89

96,6 %

3

—

3

3,4 %

—

—

—

—

0,1 %

28

Audit

12

12

—

0

12

96,6 %

0

—

0

3,2 %

0

—

—

0

0,2 %

29

Statistics

146

131

—

8

140

95,7 %

5

—

5

3,7 %

1

—

—

1

0,6 %

30

Pensions and related expenditure

1  495

1  493

—

—

1  493

99,8 %

2

—

2

0,1 %

1

—

—

1

0,0 %

31

Language Services

478

391

—

53

444

92,9 %

34

—

34

7,1 %

0

—

—

0

0,0 %

32

Energy

1  086

955

—

34

990

91,1 %

94

—

94

8,6 %

3

—

0

3

0,3 %

33

Justice

216

205

—

4

209

96,5 %

7

—

7

3,2 %

1

—

—

1

0,4 %

34

Climate action

122

121

—

0

122

99,4 %

0

—

0

0,4 %

0

—

—

0

0,2 %

40

Reserves

277

—

—

—

—

0,0 %

—

199

199

71,8 %

78

—

—

78

28,2 %

90

Other Institutions

3  931

3  445

1

343

3  789

96,4 %

56

4

60

1,5 %

82

—

—

82

2,1 %

Total

Total

1 49  939

1 49  939

1 09  256

1 09  256

179

179

3  772

3  772

1 13  208

1 13  208

75,5 %

75,5 %

3  297

3  297

12  101

12  101

15  399

15  399

10,3 %

10,3 %

21  333

21  333

—

0

0

21  333

21  333

14,2 %

14,2 %

5.7.1.   
  Policy area: comparison of budget and actual payments

Policy area: comparison of budget and actual payments

| (EUR millions) |
| --- |
| Policy Area | Initial adopted budget | Amending budgets & transfers | Final adopted budget | Additional appropriations (24) | Total appropriations available | Payments made |
| 01 | Economic and financial affairs | 297 | 2 | 300 | 129 | 429 | 306 |
| 02 | Enterprise and Industry | 2  105 | 60 | 2  165 | 322 | 2  486 | 2  237 |
| 03 | Competition | 94 | (1) | 93 | 14 | 107 | 96 |
| 04 | Employment, social affairs and inclusion | 11  622 | (341) | 11  280 | 242 | 11  522 | 11  403 |
| 05 | Agriculture and rural development | 55  635 | (518) | 55  117 | 2  003 | 57  120 | 55  766 |
| 06 | Mobility and transport | 1  003 | 1 | 1  004 | 85 | 1  089 | 1  037 |
| 07 | Environment | 346 | 1 | 347 | 37 | 384 | 362 |
| 08 | Research and Innovation | 4  107 | (11) | 4  096 | 1  525 | 5  621 | 4  918 |
| 09 | Communications networks, content and technology | 961 | 107 | 1  068 | 275 | 1  343 | 1  184 |
| 10 | Direct research | 420 | (23) | 397 | 552 | 949 | 508 |
| 11 | Maritime affairs and Fisheries | 780 | 8 | 788 | 35 | 823 | 805 |
| 12 | Internal market and services | 117 | (3) | 114 | 21 | 134 | 119 |
| 13 | Regional and urban policy | 40  223 | 3  244 | 43  467 | 528 | 43  995 | 43  979 |
| 14 | Taxation and customs union | 122 | 10 | 133 | 13 | 146 | 138 |
| 15 | Education and culture | 2  242 | 178 | 2  420 | 549 | 2  969 | 2  673 |
| 16 | Communication | 245 | 6 | 251 | 25 | 276 | 257 |
| 17 | Health and consumer protection | 567 | (13) | 553 | 37 | 590 | 571 |
| 18 | Home affairs | 763 | 5 | 768 | 35 | 803 | 789 |
| 19 | Foreign policy instruments | 463 | 74 | 537 | 55 | 593 | 552 |
| 20 | Trade | 115 | 1 | 116 | 7 | 123 | 118 |
| 21 | Development and Cooperation | 3  658 | 286 | 3  944 | 248 | 4  192 | 4  133 |
| 22 | Enlargement | 904 | (12) | 892 | 17 | 908 | 898 |
| 23 | Humanitarian aid and Civil protection | 851 | 564 | 1  415 | 83 | 1  498 | 1  430 |
| 24 | Fight against fraud | 75 | 0 | 75 | 9 | 84 | 75 |
| 25 | Commission’s policy coordination & legal advice | 195 | (0) | 195 | 26 | 221 | 199 |
| 26 | Commission’s administration | 991 | (30) | 961 | 324 | 1  285 | 1  060 |
| 27 | Budget | 96 | (11) | 84 | 14 | 99 | 88 |
| 28 | Audit | 12 | (0) | 12 | 1 | 13 | 12 |
| 29 | Statistics | 152 | (21) | 131 | 28 | 160 | 139 |
| 30 | Pensions and related expenditure | 1  450 | 44 | 1  494 | 2 | 1  495 | 1  493 |
| 31 | Language Services | 388 | 3 | 391 | 107 | 498 | 445 |
| 32 | Energy | 588 | 68 | 656 | 149 | 805 | 733 |
| 33 | Justice | 193 | (6) | 187 | 16 | 202 | 193 |
| 34 | Climate action | 43 | 9 | 52 | 4 | 55 | 50 |
| 40 | Reserves | 150 | (150) | — | — | — | — |
| 90 | Other Institutions | 3  532 | (0) | 3  531 | 944 | 4  475 | 3  729 |
| Total | 1 35  505 | 3  530 | 1 39  034 | 8  460 | 1 47  495 | 1 42  497 |

(EUR millions)

Policy Area

Initial adopted budget

Amending budgets & transfers

Final adopted budget

Additional appropriations (24)

24

Total appropriations available

Payments made

01

Economic and financial affairs

297

2

300

129

429

306

02

Enterprise and Industry

2  105

60

2  165

322

2  486

2  237

03

Competition

94

(1)

93

14

107

96

04

Employment, social affairs and inclusion

11  622

(341)

11  280

242

11  522

11  403

05

Agriculture and rural development

55  635

(518)

55  117

2  003

57  120

55  766

06

Mobility and transport

1  003

1

1  004

85

1  089

1  037

07

Environment

346

1

347

37

384

362

08

Research and Innovation

4  107

(11)

4  096

1  525

5  621

4  918

09

Communications networks, content and technology

961

107

1  068

275

1  343

1  184

10

Direct research

420

(23)

397

552

949

508

11

Maritime affairs and Fisheries

780

8

788

35

823

805

12

Internal market and services

117

(3)

114

21

134

119

13

Regional and urban policy

40  223

3  244

43  467

528

43  995

43  979

14

Taxation and customs union

122

10

133

13

146

138

15

Education and culture

2  242

178

2  420

549

2  969

2  673

16

Communication

245

6

251

25

276

257

17

Health and consumer protection

567

(13)

553

37

590

571

18

Home affairs

763

5

768

35

803

789

19

Foreign policy instruments

463

74

537

55

593

552

20

Trade

115

1

116

7

123

118

21

Development and Cooperation

3  658

286

3  944

248

4  192

4  133

22

Enlargement

904

(12)

892

17

908

898

23

Humanitarian aid and Civil protection

851

564

1  415

83

1  498

1  430

24

Fight against fraud

75

0

75

9

84

75

25

Commission’s policy coordination & legal advice

195

(0)

195

26

221

199

26

Commission’s administration

991

(30)

961

324

1  285

1  060

27

Budget

96

(11)

84

14

99

88

28

Audit

12

(0)

12

1

13

12

29

Statistics

152

(21)

131

28

160

139

30

Pensions and related expenditure

1  450

44

1  494

2

1  495

1  493

31

Language Services

388

3

391

107

498

445

32

Energy

588

68

656

149

805

733

33

Justice

193

(6)

187

16

202

193

34

Climate action

43

9

52

4

55

50

40

Reserves

150

(150)

—

—

—

—

90

Other Institutions

3  532

(0)

3  531

944

4  475

3  729

Total

Total

1 35  505

1 35  505

3  530

3  530

1 39  034

1 39  034

8  460

8  460

1 47  495

1 47  495

1 42  497

1 42  497

5.8.   POLICY AREA: IMPLEMENTATION OF PAYMENT APPROPRIATIONS

POLICY AREA: IMPLEMENTATION OF PAYMENT APPROPRIATIONS

| (EUR millions) |
| --- |
| Policy Area | | Payments made | Appropriations carried over | Appropriations lapsing |
| Total appropriations available | From final adopted budget | From carry-overs | From assigned revenue | Total | % | Automatic carry-overs | Carry-overs by decision | Assigned revenue | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9 | 10=7+8+9 | 11=10/1 | 12 | 13 | 14 | 15=12+13+14 | 16=15/1 |
| 01 | Economic and financial affairs | 429 | 293 | 7 | 5 | 306 | 71,2 % | 7 | — | 116 | 122 | 28,5 % | 0 | 1 | — | 1 | 0,3 % |
| 02 | Enterprise and Industry | 2  486 | 2  144 | 12 | 81 | 2  237 | 90,0 % | 18 | — | 227 | 245 | 9,9 % | 3 | 2 | — | 4 | 0,2 % |
| 03 | Competition | 107 | 87 | 7 | 3 | 96 | 90,0 % | 7 | — | 3 | 10 | 9,5 % | 0 | 0 | — | 1 | 0,5 % |
| 04 | Employment, social affairs and inclusion | 11  522 | 11  226 | 48 | 129 | 11  403 | 99,0 % | 15 | 36 | 62 | 112 | 1,0 % | 4 | 2 | — | 6 | 0,1 % |
| 05 | Agriculture and rural development | 57  120 | 54  224 | 20 | 1  522 | 55  766 | 97,6 % | 23 | 868 | 459 | 1  350 | 2,4 % | 2 | 2 | — | 4 | 0,0 % |
| 06 | Mobility and transport | 1  089 | 997 | 5 | 35 | 1  037 | 95,2 % | 5 | — | 44 | 49 | 4,5 % | 2 | 1 | 0 | 2 | 0,2 % |
| 07 | Environment | 384 | 330 | 18 | 15 | 362 | 94,5 % | 16 | — | 4 | 20 | 5,2 % | 1 | 0 | — | 1 | 0,3 % |
| 08 | Research and Innovation | 5  621 | 4  080 | 28 | 810 | 4  918 | 87,5 % | 16 | — | 680 | 696 | 12,4 % | — | 8 | — | 8 | 0,1 % |
| 09 | Communications networks, content and technology | 1  343 | 1  052 | 15 | 117 | 1  184 | 88,2 % | 16 | — | 142 | 158 | 11,7 % | 0 | 1 | 0 | 1 | 0,1 % |
| 10 | Direct research | 949 | 353 | 47 | 108 | 508 | 53,6 % | 43 | — | 389 | 433 | 45,6 % | — | 8 | — | 8 | 0,8 % |
| 11 | Maritime affairs and Fisheries | 823 | 782 | 4 | 19 | 805 | 97,8 % | 3 | — | 11 | 14 | 1,7 % | 3 | 1 | — | 4 | 0,5 % |
| 12 | Internal market and services | 134 | 109 | 5 | 5 | 119 | 88,6 % | 4 | — | 10 | 14 | 10,1 % | 1 | 0 | — | 2 | 1,3 % |
| 13 | Regional and urban policy | 43  995 | 43  456 | 390 | 133 | 43  979 | 100,0 % | 11 | — | 3 | 14 | 0,0 % | 0 | 1 | — | 2 | 0,0 % |
| 14 | Taxation and customs union | 146 | 128 | 6 | 3 | 138 | 94,7 % | 4 | — | 3 | 7 | 5,1 % | 0 | — | — | 0 | 0,2 % |
| 15 | Education and culture | 2  969 | 2  405 | 11 | 257 | 2  673 | 90,1 % | 13 | — | 280 | 293 | 9,9 % | 1 | 1 | — | 2 | 0,1 % |
| 16 | Communication | 276 | 241 | 13 | 4 | 257 | 93,3 % | 10 | 0 | 7 | 17 | 6,2 % | 0 | 1 | — | 1 | 0,5 % |
| 17 | Health and consumer protection | 590 | 543 | 11 | 17 | 571 | 96,7 % | 10 | — | 8 | 18 | 3,0 % | 0 | 2 | 0 | 2 | 0,3 % |
| 18 | Home affairs | 803 | 762 | 4 | 22 | 789 | 98,2 % | 3 | — | 8 | 12 | 1,5 % | 2 | 0 | — | 3 | 0,4 % |
| 19 | Foreign policy instruments | 593 | 527 | 2 | 24 | 552 | 93,2 % | 4 | 6 | 29 | 39 | 6,6 % | 0 | 1 | — | 1 | 0,2 % |
| 20 | Trade | 123 | 113 | 3 | 2 | 118 | 95,9 % | 3 | — | 2 | 5 | 3,9 % | 0 | — | — | 0 | 0,3 % |
| 21 | Development and Cooperation | 4  192 | 3  917 | 23 | 193 | 4  133 | 98,6 % | 25 | — | 29 | 54 | 1,3 % | 1 | 3 | — | 5 | 0,1 % |
| 22 | Enlargement | 908 | 885 | 4 | 9 | 898 | 98,8 % | 6 | — | 3 | 9 | 1,0 % | 1 | 1 | 0 | 2 | 0,2 % |
| 23 | Humanitarian aid and Civil protection | 1  498 | 1  405 | 8 | 17 | 1  430 | 95,4 % | 7 | 3 | 58 | 68 | 4,5 % | 1 | 0 | 0 | 1 | 0,1 % |
| 24 | Fight against fraud | 84 | 68 | 6 | 0 | 75 | 88,6 % | 7 | 0 | 1 | 7 | 8,8 % | 0 | 2 | — | 2 | 2,7 % |
| 25 | Commission’s policy coordination & legal advice | 221 | 180 | 13 | 5 | 199 | 90,1 % | 13 | — | 6 | 19 | 8,5 % | 2 | 1 | — | 3 | 1,4 % |
| 26 | Commission’s administration | 1  285 | 833 | 150 | 77 | 1  060 | 82,5 % | 128 | — | 87 | 215 | 16,7 % | 1 | 10 | — | 11 | 0,8 % |
| 27 | Budget | 99 | 79 | 6 | 3 | 88 | 89,2 % | 6 | — | 4 | 10 | 10,3 % | 0 | 0 | — | 1 | 0,5 % |
| 28 | Audit | 13 | 11 | 0 | 0 | 12 | 92,6 % | 0 | — | 0 | 1 | 6,7 % | 0 | 0 | — | 0 | 0,8 % |
| 29 | Statistics | 160 | 126 | 5 | 8 | 139 | 86,9 % | 5 | — | 15 | 20 | 12,2 % | — | 1 | — | 1 | 0,8 % |
| 30 | Pensions and related expenditure | 1  495 | 1  493 | — | — | 1  493 | 99,8 % | 0 | — | 2 | 2 | 0,1 % | 1 | — | — | 1 | 0,0 % |
| 31 | Language Services | 498 | 377 | 19 | 49 | 445 | 89,5 % | 14 | — | 38 | 52 | 10,4 % | 0 | 1 | — | 1 | 0,2 % |
| 32 | Energy | 805 | 650 | 4 | 79 | 733 | 91,0 % | 5 | — | 63 | 69 | 8,5 % | 1 | 1 | 2 | 4 | 0,4 % |
| 33 | Justice | 202 | 183 | 3 | 7 | 193 | 95,1 % | 3 | — | 5 | 8 | 4,1 % | 1 | 1 | — | 2 | 0,8 % |
| 34 | Climate action | 55 | 48 | 2 | 0 | 50 | 91,1 % | 3 | — | 1 | 4 | 6,4 % | 1 | 1 | — | 1 | 2,4 % |
| 40 | Reserves | — | — | — | — | — | 0,0 % | — | — | — | — | 0,0 % | — | — | — | — | 0,0 % |
| 90 | Other Institutions | 4  475 | 3  027 | 402 | 300 | 3  729 | 83,3 % | 418 | 4 | 192 | 614 | 13,7 % | 82 | 50 | — | 132 | 2,9 % |
| Total | 1 47  495 | 1 37  136 | 1  304 | 4  057 | 1 42  497 | 96,6 % | 870 | 917 | 2  991 | 4  778 | 3,2 % | 112 | 106 | 2 | 220 | 0,1 % |

(EUR millions)

Policy Area

Payments made

Appropriations carried over

Appropriations lapsing

Appropriations lapsing

Total appropriations available

From final adopted budget

From carry-overs

From assigned revenue

Total

%

Automatic carry-overs

Carry-overs by decision

Assigned revenue

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9

10=7+8+9

11=10/1

12

13

14

15=12+13+14

16=15/1

01

Economic and financial affairs

429

293

7

5

306

71,2 %

7

—

116

122

28,5 %

0

1

—

1

0,3 %

02

Enterprise and Industry

2  486

2  144

12

81

2  237

90,0 %

18

—

227

245

9,9 %

3

2

—

4

0,2 %

03

Competition

107

87

7

3

96

90,0 %

7

—

3

10

9,5 %

0

0

—

1

0,5 %

04

Employment, social affairs and inclusion

11  522

11  226

48

129

11  403

99,0 %

15

36

62

112

1,0 %

4

2

—

6

0,1 %

05

Agriculture and rural development

57  120

54  224

20

1  522

55  766

97,6 %

23

868

459

1  350

2,4 %

2

2

—

4

0,0 %

06

Mobility and transport

1  089

997

5

35

1  037

95,2 %

5

—

44

49

4,5 %

2

1

0

2

0,2 %

07

Environment

384

330

18

15

362

94,5 %

16

—

4

20

5,2 %

1

0

—

1

0,3 %

08

Research and Innovation

5  621

4  080

28

810

4  918

87,5 %

16

—

680

696

12,4 %

—

8

—

8

0,1 %

09

Communications networks, content and technology

1  343

1  052

15

117

1  184

88,2 %

16

—

142

158

11,7 %

0

1

0

1

0,1 %

10

Direct research

949

353

47

108

508

53,6 %

43

—

389

433

45,6 %

—

8

—

8

0,8 %

11

Maritime affairs and Fisheries

823

782

4

19

805

97,8 %

3

—

11

14

1,7 %

3

1

—

4

0,5 %

12

Internal market and services

134

109

5

5

119

88,6 %

4

—

10

14

10,1 %

1

0

—

2

1,3 %

13

Regional and urban policy

43  995

43  456

390

133

43  979

100,0 %

11

—

3

14

0,0 %

0

1

—

2

0,0 %

14

Taxation and customs union

146

128

6

3

138

94,7 %

4

—

3

7

5,1 %

0

—

—

0

0,2 %

15

Education and culture

2  969

2  405

11

257

2  673

90,1 %

13

—

280

293

9,9 %

1

1

—

2

0,1 %

16

Communication

276

241

13

4

257

93,3 %

10

0

7

17

6,2 %

0

1

—

1

0,5 %

17

Health and consumer protection

590

543

11

17

571

96,7 %

10

—

8

18

3,0 %

0

2

0

2

0,3 %

18

Home affairs

803

762

4

22

789

98,2 %

3

—

8

12

1,5 %

2

0

—

3

0,4 %

19

Foreign policy instruments

593

527

2

24

552

93,2 %

4

6

29

39

6,6 %

0

1

—

1

0,2 %

20

Trade

123

113

3

2

118

95,9 %

3

—

2

5

3,9 %

0

—

—

0

0,3 %

21

Development and Cooperation

4  192

3  917

23

193

4  133

98,6 %

25

—

29

54

1,3 %

1

3

—

5

0,1 %

22

Enlargement

908

885

4

9

898

98,8 %

6

—

3

9

1,0 %

1

1

0

2

0,2 %

23

Humanitarian aid and Civil protection

1  498

1  405

8

17

1  430

95,4 %

7

3

58

68

4,5 %

1

0

0

1

0,1 %

24

Fight against fraud

84

68

6

0

75

88,6 %

7

0

1

7

8,8 %

0

2

—

2

2,7 %

25

Commission’s policy coordination & legal advice

221

180

13

5

199

90,1 %

13

—

6

19

8,5 %

2

1

—

3

1,4 %

26

Commission’s administration

1  285

833

150

77

1  060

82,5 %

128

—

87

215

16,7 %

1

10

—

11

0,8 %

27

Budget

99

79

6

3

88

89,2 %

6

—

4

10

10,3 %

0

0

—

1

0,5 %

28

Audit

13

11

0

0

12

92,6 %

0

—

0

1

6,7 %

0

0

—

0

0,8 %

29

Statistics

160

126

5

8

139

86,9 %

5

—

15

20

12,2 %

—

1

—

1

0,8 %

30

Pensions and related expenditure

1  495

1  493

—

—

1  493

99,8 %

0

—

2

2

0,1 %

1

—

—

1

0,0 %

31

Language Services

498

377

19

49

445

89,5 %

14

—

38

52

10,4 %

0

1

—

1

0,2 %

32

Energy

805

650

4

79

733

91,0 %

5

—

63

69

8,5 %

1

1

2

4

0,4 %

33

Justice

202

183

3

7

193

95,1 %

3

—

5

8

4,1 %

1

1

—

2

0,8 %

34

Climate action

55

48

2

0

50

91,1 %

3

—

1

4

6,4 %

1

1

—

1

2,4 %

40

Reserves

—

—

—

—

—

0,0 %

—

—

—

—

0,0 %

—

—

—

—

0,0 %

90

Other Institutions

4  475

3  027

402

300

3  729

83,3 %

418

4

192

614

13,7 %

82

50

—

132

2,9 %

Total

Total

1 47  495

1 47  495

1 37  136

1 37  136

1  304

1  304

4  057

4  057

1 42  497

1 42  497

96,6 %

96,6 %

870

870

917

917

2  991

2  991

4  778

4  778

3,2 %

3,2 %

112

112

106

106

2

2

220

220

0,1 %

0,1 %

5.9.   POLICY AREA: MOVEMENTS IN COMMITMENTS OUTSTANDING

POLICY AREA: MOVEMENTS IN COMMITMENTS OUTSTANDING

| (EUR millions) |
| --- |
| Policy Area | Commitments outstanding at end of the previous year | Commitments of the year | |
| Commitments carried forward from previous year | Decommitments/Revaluations/Cancellations | Payments | Commitments outstanding at year-end | Commitments made during the year | Payments | Cancellation commitments which cannot be carried over | Commitments outstanding at year-end | Total commitments outstanding at year-end |
| 01 | Economic and financial affairs | 739 | (3) | (122) | 615 | 236 | (184) | — | 52 | 667 |
| 02 | Enterprise and Industry | 1  855 | (23) | (724) | 1  109 | 2  608 | (1  513) | (0) | 1  095 | 2  204 |
| 03 | Competition | 8 | (0) | (7) | — | 97 | (89) | — | 7 | 7 |
| 04 | Employment, social affairs and inclusion | 27  559 | (344) | (10  165) | 17  049 | 10  312 | (1  238) | (0) | 9  074 | 26  124 |
| 05 | Agriculture and rural development | 25  354 | (70) | (11  148) | 14  136 | 47  789 | (44  618) | (0) | 3  171 | 17  308 |
| 06 | Mobility and transport | 3  994 | (188) | (867) | 2  939 | 2  879 | (170) | (0) | 2  708 | 5  647 |
| 07 | Environment | 1  055 | (22) | (245) | 788 | 423 | (117) | — | 306 | 1  093 |
| 08 | Research and Innovation | 12  907 | (161) | (3  551) | 9  194 | 7  002 | (1  367) | (3) | 5  631 | 14  826 |
| 09 | Communications networks, content and technology | 2  823 | (42) | (1  000) | 1  781 | 1  708 | (184) | (0) | 1  524 | 3  305 |
| 10 | Direct research | 202 | (21) | (122) | 59 | 535 | (386) | (0) | 149 | 208 |
| 11 | Maritime affairs and Fisheries | 2  360 | (202) | (683) | 1  475 | 218 | (122) | (0) | 96 | 1  571 |
| 12 | Internal market and services | 21 | (3) | (14) | 3 | 123 | (105) | — | 19 | 22 |
| 13 | Regional and urban policy | 1 12  172 | (1  033) | (43  087) | 68  052 | 17  078 | (892) | (0) | 16  185 | 84  237 |
| 14 | Taxation and customs union | 106 | (5) | (65) | 36 | 160 | (73) | — | 86 | 122 |
| 15 | Education and culture | 2  387 | (58) | (989) | 1  341 | 3  223 | (1  684) | (0) | 1  539 | 2  879 |
| 16 | Communication | 125 | (9) | (92) | 24 | 252 | (165) | (0) | 86 | 110 |
| 17 | Health and consumer protection | 616 | (134) | (271) | 211 | 624 | (300) | — | 324 | 535 |
| 18 | Home affairs | 1  992 | (141) | (431) | 1  421 | 523 | (358) | — | 165 | 1  586 |
| 19 | Foreign policy instruments | 770 | (42) | (367) | 360 | 687 | (185) | (1) | 501 | 862 |
| 20 | Trade | 21 | (1) | (13) | 7 | 120 | (105) | — | 15 | 22 |
| 21 | Development and Cooperation | 15  617 | (457) | (3  266) | 11  894 | 5  353 | (867) | (0) | 4  486 | 16  379 |
| 22 | Enlargement | 3  206 | (79) | (804) | 2  323 | 1  440 | (94) | (1) | 1  346 | 3  669 |
| 23 | Humanitarian aid and Civil protection | 918 | (5) | (654) | 259 | 1  187 | (775) | (0) | 412 | 671 |
| 24 | Fight against fraud | 38 | (9) | (21) | 8 | 77 | (54) | — | 23 | 31 |
| 25 | Commission’s policy coordination & legal advice | 15 | (1) | (14) | — | 198 | (185) | — | 14 | 14 |
| 26 | Commission’s administration | 201 | (11) | (177) | 13 | 1  070 | (883) | (0) | 187 | 201 |
| 27 | Budget | 7 | (0) | (6) | — | 89 | (82) | — | 7 | 7 |
| 28 | Audit | 1 | (0) | (0) | — | 12 | (12) | — | 0 | 0 |
| 29 | Statistics | 113 | (9) | (58) | 46 | 140 | (81) | — | 59 | 105 |
| 30 | Pensions and related expenditure | — | — | — | — | 1  493 | (1  493) | (0) | — | — |
| 31 | Language Services | 20 | (1) | (19) | — | 444 | (426) | (0) | 18 | 18 |
| 32 | Energy | 4  434 | (274) | (648) | 3  512 | 990 | (85) | (0) | 904 | 4  416 |
| 33 | Justice | 183 | (18) | (81) | 84 | 209 | (112) | — | 97 | 181 |
| 34 | Climate action | 36 | (1) | (20) | 14 | 122 | (30) | — | 91 | 105 |
| 40 | Reserves | — | — | — | — | — | — | — | — | — |
| 90 | Other Institutions | 557 | (156) | (402) | — | 3  789 | (3  328) | (8) | 453 | 453 |
| Total | 2 22  410 | (3  522) | (80  136) | 1 38  753 | 1 13  208 | (62  361) | (14) | 50  832 | 1 89  585 |

(EUR millions)

Policy Area

Commitments outstanding at end of the previous year

Commitments of the year

Commitments carried forward from previous year

Decommitments/Revaluations/Cancellations

Payments

Commitments outstanding at year-end

Commitments made during the year

Payments

Cancellation commitments which cannot be carried over

Commitments outstanding at year-end

Total commitments outstanding at year-end

01

Economic and financial affairs

739

(3)

(122)

615

236

(184)

—

52

667

02

Enterprise and Industry

1  855

(23)

(724)

1  109

2  608

(1  513)

(0)

1  095

2  204

03

Competition

8

(0)

(7)

—

97

(89)

—

7

7

04

Employment, social affairs and inclusion

27  559

(344)

(10  165)

17  049

10  312

(1  238)

(0)

9  074

26  124

05

Agriculture and rural development

25  354

(70)

(11  148)

14  136

47  789

(44  618)

(0)

3  171

17  308

06

Mobility and transport

3  994

(188)

(867)

2  939

2  879

(170)

(0)

2  708

5  647

07

Environment

1  055

(22)

(245)

788

423

(117)

—

306

1  093

08

Research and Innovation

12  907

(161)

(3  551)

9  194

7  002

(1  367)

(3)

5  631

14  826

09

Communications networks, content and technology

2  823

(42)

(1  000)

1  781

1  708

(184)

(0)

1  524

3  305

10

Direct research

202

(21)

(122)

59

535

(386)

(0)

149

208

11

Maritime affairs and Fisheries

2  360

(202)

(683)

1  475

218

(122)

(0)

96

1  571

12

Internal market and services

21

(3)

(14)

3

123

(105)

—

19

22

13

Regional and urban policy

1 12  172

(1  033)

(43  087)

68  052

17  078

(892)

(0)

16  185

84  237

14

Taxation and customs union

106

(5)

(65)

36

160

(73)

—

86

122

15

Education and culture

2  387

(58)

(989)

1  341

3  223

(1  684)

(0)

1  539

2  879

16

Communication

125

(9)

(92)

24

252

(165)

(0)

86

110

17

Health and consumer protection

616

(134)

(271)

211

624

(300)

—

324

535

18

Home affairs

1  992

(141)

(431)

1  421

523

(358)

—

165

1  586

19

Foreign policy instruments

770

(42)

(367)

360

687

(185)

(1)

501

862

20

Trade

21

(1)

(13)

7

120

(105)

—

15

22

21

Development and Cooperation

15  617

(457)

(3  266)

11  894

5  353

(867)

(0)

4  486

16  379

22

Enlargement

3  206

(79)

(804)

2  323

1  440

(94)

(1)

1  346

3  669

23

Humanitarian aid and Civil protection

918

(5)

(654)

259

1  187

(775)

(0)

412

671

24

Fight against fraud

38

(9)

(21)

8

77

(54)

—

23

31

25

Commission’s policy coordination & legal advice

15

(1)

(14)

—

198

(185)

—

14

14

26

Commission’s administration

201

(11)

(177)

13

1  070

(883)

(0)

187

201

27

Budget

7

(0)

(6)

—

89

(82)

—

7

7

28

Audit

1

(0)

(0)

—

12

(12)

—

0

0

29

Statistics

113

(9)

(58)

46

140

(81)

—

59

105

30

Pensions and related expenditure

—

—

—

—

1  493

(1  493)

(0)

—

—

31

Language Services

20

(1)

(19)

—

444

(426)

(0)

18

18

32

Energy

4  434

(274)

(648)

3  512

990

(85)

(0)

904

4  416

33

Justice

183

(18)

(81)

84

209

(112)

—

97

181

34

Climate action

36

(1)

(20)

14

122

(30)

—

91

105

40

Reserves

—

—

—

—

—

—

—

—

—

90

Other Institutions

557

(156)

(402)

—

3  789

(3  328)

(8)

453

453

Total

Total

2 22  410

2 22  410

(3  522)

(3  522)

(80  136)

(80  136)

1 38  753

1 38  753

1 13  208

1 13  208

(62  361)

(62  361)

(14)

(14)

50  832

50  832

1 89  585

1 89  585

5.10.   POLICY AREA: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN

POLICY AREA: BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN

| (EUR millions) |
| --- |
| Policy Area | <2008 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Total |
| 01 | Economic and financial affairs | 30 | — | 0 | 0 | 160 | 178 | 246 | 52 | 667 |
| 02 | Enterprise and Industry | 14 | 13 | 34 | 54 | 192 | 349 | 452 | 1  095 | 2  204 |
| 03 | Competition | — | — | — | — | — | — | 0 | 7 | 7 |
| 04 | Employment, social affairs and inclusion | 538 | 6 | 70 | 189 | 1  603 | 4  687 | 9  956 | 9  074 | 26  124 |
| 05 | Agriculture and rural development | 150 | — | 0 | 0 | 183 | 3  061 | 10  742 | 3  171 | 17  308 |
| 06 | Mobility and transport | 84 | 23 | 128 | 238 | 588 | 746 | 1  132 | 2  708 | 5  647 |
| 07 | Environment | 28 | 49 | 84 | 105 | 146 | 174 | 201 | 306 | 1  093 |
| 08 | Research and Innovation | 62 | 86 | 226 | 477 | 1  288 | 2  840 | 4  216 | 5  631 | 14  826 |
| 09 | Communications networks, content and technology | 16 | 13 | 54 | 82 | 183 | 516 | 917 | 1  524 | 3  305 |
| 10 | Direct research | 5 | 5 | 2 | 4 | 4 | 11 | 29 | 149 | 208 |
| 11 | Maritime affairs and Fisheries | 160 | 1 | 7 | 10 | 43 | 514 | 739 | 96 | 1  571 |
| 12 | Internal market and services | — | 0 | 0 | 1 | 0 | 0 | 2 | 19 | 22 |
| 13 | Regional and urban policy | 2  439 | 197 | 249 | 1  871 | 6  732 | 18  311 | 38  253 | 16  185 | 84  237 |
| 14 | Taxation and customs union | — | — | — | 0 | 2 | 9 | 25 | 86 | 122 |
| 15 | Education and culture | 27 | 34 | 44 | 66 | 164 | 391 | 615 | 1  539 | 2  879 |
| 16 | Communication | — | 0 | 0 | 1 | 1 | 2 | 20 | 86 | 110 |
| 17 | Health and consumer protection | 1 | 6 | 18 | 30 | 23 | 30 | 103 | 324 | 535 |
| 18 | Home affairs | 12 | 23 | 53 | 120 | 217 | 425 | 571 | 165 | 1  586 |
| 19 | Foreign policy instruments | 4 | 6 | 13 | 23 | 44 | 108 | 162 | 501 | 862 |
| 20 | Trade | — | — | — | 0 | 0 | 2 | 4 | 15 | 22 |
| 21 | Development and Cooperation | 500 | 450 | 708 | 1  061 | 1  825 | 3  245 | 4  106 | 4  486 | 16  379 |
| 22 | Enlargement | 111 | 76 | 109 | 227 | 410 | 606 | 784 | 1  346 | 3  669 |
| 23 | Humanitarian aid and Civil protection | 2 | 8 | 13 | 25 | 26 | 33 | 151 | 412 | 671 |
| 24 | Fight against fraud | 0 | 1 | 1 | 0 | 0 | 2 | 4 | 23 | 31 |
| 25 | Commission’s policy coordination & legal advice | — | — | — | — | — | — | (0) | 14 | 14 |
| 26 | Commission’s administration | — | — | — | 0 | 0 | 1 | 12 | 187 | 201 |
| 27 | Budget | — | — | — | — | — | — | (0) | 7 | 7 |
| 28 | Audit | — | — | — | — | — | — | (0) | 0 | 0 |
| 29 | Statistics | 1 | 0 | 0 | 1 | 4 | 12 | 28 | 59 | 105 |
| 30 | Pensions and related expenditure | — | — | — | — | — | — | 0 | (0) | — |
| 31 | Language Services | — | — | — | — | — | — | (0) | 18 | 18 |
| 32 | Energy | 25 | 36 | 770 | 1  349 | 411 | 386 | 534 | 904 | 4  416 |
| 33 | Justice | — | 0 | 1 | 2 | 11 | 18 | 52 | 97 | 181 |
| 34 | Climate action | — | — | — | 0 | 1 | 3 | 11 | 91 | 105 |
| 40 | Reserves | — | — | — | — | — | — | — | — | — |
| 90 | Other Institutions | — | — | — | — | — | — | — | 453 | 453 |
| Total | 4  211 | 1  034 | 2  586 | 5  937 | 14  261 | 36  658 | 74  066 | 50  832 | 1 89  585 |

(EUR millions)

Policy Area

<2008

2008

2009

2010

2011

2012

2013

2014

Total

01

Economic and financial affairs

30

—

0

0

160

178

246

52

667

02

Enterprise and Industry

14

13

34

54

192

349

452

1  095

2  204

03

Competition

—

—

—

—

—

—

0

7

7

04

Employment, social affairs and inclusion

538

6

70

189

1  603

4  687

9  956

9  074

26  124

05

Agriculture and rural development

150

—

0

0

183

3  061

10  742

3  171

17  308

06

Mobility and transport

84

23

128

238

588

746

1  132

2  708

5  647

07

Environment

28

49

84

105

146

174

201

306

1  093

08

Research and Innovation

62

86

226

477

1  288

2  840

4  216

5  631

14  826

09

Communications networks, content and technology

16

13

54

82

183

516

917

1  524

3  305

10

Direct research

5

5

2

4

4

11

29

149

208

11

Maritime affairs and Fisheries

160

1

7

10

43

514

739

96

1  571

12

Internal market and services

—

0

0

1

0

0

2

19

22

13

Regional and urban policy

2  439

197

249

1  871

6  732

18  311

38  253

16  185

84  237

14

Taxation and customs union

—

—

—

0

2

9

25

86

122

15

Education and culture

27

34

44

66

164

391

615

1  539

2  879

16

Communication

—

0

0

1

1

2

20

86

110

17

Health and consumer protection

1

6

18

30

23

30

103

324

535

18

Home affairs

12

23

53

120

217

425

571

165

1  586

19

Foreign policy instruments

4

6

13

23

44

108

162

501

862

20

Trade

—

—

—

0

0

2

4

15

22

21

Development and Cooperation

500

450

708

1  061

1  825

3  245

4  106

4  486

16  379

22

Enlargement

111

76

109

227

410

606

784

1  346

3  669

23

Humanitarian aid and Civil protection

2

8

13

25

26

33

151

412

671

24

Fight against fraud

0

1

1

0

0

2

4

23

31

25

Commission’s policy coordination & legal advice

—

—

—

—

—

—

(0)

14

14

26

Commission’s administration

—

—

—

0

0

1

12

187

201

27

Budget

—

—

—

—

—

—

(0)

7

7

28

Audit

—

—

—

—

—

—

(0)

0

0

29

Statistics

1

0

0

1

4

12

28

59

105

30

Pensions and related expenditure

—

—

—

—

—

—

0

(0)

—

31

Language Services

—

—

—

—

—

—

(0)

18

18

32

Energy

25

36

770

1  349

411

386

534

904

4  416

33

Justice

—

0

1

2

11

18

52

97

181

34

Climate action

—

—

—

0

1

3

11

91

105

40

Reserves

—

—

—

—

—

—

—

—

—

90

Other Institutions

—

—

—

—

—

—

—

453

453

Total

Total

4  211

4  211

1  034

1  034

2  586

2  586

5  937

5  937

14  261

14  261

36  658

36  658

74  066

74  066

50  832

50  832

1 89  585

1 89  585

5.11.   IMPLEMENTATION OF 2014 EXPENDITURE

IMPLEMENTATION OF 2014 EXPENDITURE

The year 2014 was the first year of the new programming period 2014-2020.

Commitments:

Commitments:

The initial adopted budget for all institutions, excluding Special Instruments, set commitment appropriations at EUR 1 42  184 million. This represented a decrease of 6 % compared to the final 2013 budget and left a margin of EUR 445 million below the ceiling of the MFF.

The final adopted budget for commitments was implemented at a 76 % level in the first year of the new programming period mostly because of the delay in the adoption of the operational programmes for the funds under shared management. Modifications via amending budgets were negligible apart from the mobilisation of the European Union Solidarity Fund for EUR 127 million. The total implementation of EUR 1 09  256 million left EUR 33  434 million unused. This will be fully compensated by the reprogramming of commitments in various Funds under shared management and by the carry over to 2015.

The reprogramming of unused 2014 commitment appropriations to 2015 and 2016 (according to MFF Article 19) was agreed in April 2015 with a revision of the MFF ceilings and a related amending budget for 2015. The main impacts in 2015 were under Heading 1(b) (EUR 11,2 billion) and Heading 2 (EUR 5 billion), while for 2016 the main change is to Heading 2 (EUR 4,4 billion).

In 2014, the low implementation of commitments at the start of new programmes led to a decrease of RAL of EUR 32,8 billion or 15 %, which is only temporary due to the magnitude of amounts re-programmed or carried forward.

Payments:

Payments:

Payment appropriations were, after a cut of EUR 556 million to the Draft Budget 2014 (including Amending Letters 1 and 2), initially set at EUR 1 35  505 million (including Special Instruments), corresponding to 1 % of the EU’s GNI. This meant a decrease of 6 % (EUR 9 billion) compared to the final adopted budget for 2013. This initial level of appropriations left a margin of only EUR 711 million below the MFF ceiling. The ceiling of payments for this first year of the new programming period was set exceptionally low, i.e. more than EUR 8 billion below 2013 and EUR 6 billion below 2015 level. It was clear from the outset that in view of the amount of outstanding commitments, the heavy pressure on payments would continue throughout 2014 with a need to revise the amount of appropriations required and very active management of the budget.

The net reinforcement of payment appropriations of operational budget lines via amending budgets amounted to EUR 3  599 million. This brought at year-end the level of payment appropriations above the ceiling of the MFF through recourse to the Contingency Margin, and the new and last-resort Special Instrument to react to unforeseen circumstances. The Council and the Parliament rejected Commission’s Global transfer proposal and used the proposed reinforcements for redeployments in the amending budgets.

The total implementation of payment appropriations was EUR 1 37  136 million (EUR 1 42  883 million in 2013) with a rate of 99 %. Once account is taken of the carry-over of payment appropriations to 2015, a total of EUR 112 million lapses. From payment appropriations carried forward from 2013 an amount of EUR 106 million was cancelled.

A more detailed analysis of budgetary adjustments, their relevant context, their justification and their impact is presented in Commission’s Report on Budgetary and Financial Management 2014, Part A ‘Overview at budget level’ and Part B dealing with each heading of the multiannual financial framework.

6.   IMPLEMENTATION OF THE INSTITUTIONS AND AGENCIES BUDGET

6.1.   INSTITUTIONS: SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE

INSTITUTIONS: SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE

| (EUR millions) |
| --- |
| Institution | Income appropriations | Entitlements established | Revenue | Receipts as
  % of budget | Outstanding |
| Initial adopted budget | Final adopted budget | Current year | Carried over | Total | On entitlements of current year | On entitlements Carried over | Total |
| European Parliament | 156 | 156 | 173 | 24 | 197 | 170 | 4 | 174 | 111,97 % | 22 |
| European Council and Council | 56 | 56 | 74 | 7 | 80 | 70 | 6 | 76 | 136,61 % | 4 |
| Commission | 1 35  167 | 1 38  697 | 1 46  066 | 10  957 | 1 57  023 | 1 39  403 | 3  878 | 1 43  280 | 103,30 % | 13  743 |
| Court of Justice | 47 | 47 | 50 | — | 50 | 50 | — | 50 | 105,10 % | 0 |
| Court of Auditors | 20 | 20 | 20 | — | 20 | 19 | — | 19 | 98,42 % | — |
| Economic and Social Committee | 11 | 11 | 15 | — | 15 | 15 | — | 15 | 137,08 % | — |
| Committee of the Regions | 8 | 8 | 10 | — | 10 | 10 | — | 10 | 121,66 % | — |
| Ombudsman | 1 | 1 | 1 | — | 1 | 1 | — | 1 | 104,28 % | — |
| European Data Protection Supervisor | 1 | 1 | 1 | — | 1 | 1 | — | 1 | 78,02 % | — |
| European External Action Service | 37 | 37 | 313 | — | 313 | 313 | — | 313 | 835,12 % | — |
| Total | 1 35  505 | 1 39  034 | 1 46  721 | 10  988 | 1 57  709 | 1 40  052 | 3  888 | 1 43  940 | 103,53 % | 13  769 |

(EUR millions)

Institution

Income appropriations

Entitlements established

Revenue

Receipts as

% of budget

Outstanding

Initial adopted budget

Final adopted budget

Current year

Carried over

Total

On entitlements of current year

On entitlements Carried over

Total

European Parliament

156

156

173

24

197

170

4

174

111,97 %

22

European Council and Council

56

56

74

7

80

70

6

76

136,61 %

4

Commission

1 35  167

1 38  697

1 46  066

10  957

1 57  023

1 39  403

3  878

1 43  280

103,30 %

13  743

Court of Justice

47

47

50

—

50

50

—

50

105,10 %

0

Court of Auditors

20

20

20

—

20

19

—

19

98,42 %

—

Economic and Social Committee

11

11

15

—

15

15

—

15

137,08 %

—

Committee of the Regions

8

8

10

—

10

10

—

10

121,66 %

—

Ombudsman

1

1

1

—

1

1

—

1

104,28 %

—

European Data Protection Supervisor

1

1

1

—

1

1

—

1

78,02 %

—

European External Action Service

37

37

313

—

313

313

—

313

835,12 %

—

Total

Total

1 35  505

1 35  505

1 39  034

1 39  034

1 46  721

1 46  721

10  988

10  988

1 57  709

1 57  709

1 40  052

1 40  052

3  888

3  888

1 43  940

1 43  940

103,53 %

103,53 %

13  769

13  769

The consolidated reports on the implementation of the general budget of the EU include, as in previous years, the budget implementation of all institutions since within the EU budget a separate budget for each Institution is established. Agencies do not have a separate budget inside the EU budget and they are partially financed by a Commission budget subsidy.

Concerning the EEAS, it should be noted that, in addition to its own budget, it also receives contributions from the Commission of EUR 208 million (2013: EUR 210 million) and the EDF of EUR 56 million (2013: EUR 59 million). These budget credits are put at the disposal of the EEAS (as assigned revenue) so as to cover primarily the costs of Commission staff working in the EU delegations, these delegations being administratively managed by the EEAS.

6.2.   INSTITUTIONS: IMPLEMENTATION OF COMMITMENT AND PAYMENT APPROPRIATIONS

INSTITUTIONS: IMPLEMENTATION OF COMMITMENT AND PAYMENT APPROPRIATIONS

Commitment appropriations

Commitment appropriations

| (EUR millions) |
| --- |
| Institution | Total appropriations available | Commitments made | Appropriations carried over | Appropriations lapsing |
| From final adopted budget | From carry-overs | From assigned revenue | Total | % | From assigned revenue | Carry-overs by decision | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9=7+8 | 10=9/1 | 11 | 12 | 13 | 14=11+12+13 | 15=14/1 |
| European Parliament | 1  804 | 1  738 | 1 | 37 | 1  775 | 98,4 % | 12 | — | 12 | 0,6 % | 18 | — | — | 18 | 0,0 % |
| European Council and Council | 587 | 485 | — | 29 | 513 | 87,4 % | 24 | — | 24 | 4,1 % | 50 | — | — | 50 | 0,0 % |
| Commission | 1 46  008 | 1 05  811 | 178 | 3  429 | 1 09  418 | 74,9 % | 3  242 | 12  097 | 15  339 | 10,5 % | 21  251 | — | — | 21  251 | 0,0 % |
| Court of Justice | 358 | 352 | — | 1 | 352 | 98,6 % | 1 | — | 1 | 0,4 % | 4 | — | — | 4 | 0,0 % |
| Court of Auditors | 134 | 132 | — | — | 132 | 98,7 % | — | — | — | 0,1 % | 2 | — | — | 2 | 0,0 % |
| Economic and Social Committee | 133 | 123 | — | 4 | 127 | 95,4 % | 1 | — | 1 | 0,4 % | 6 | — | — | 6 | 0,0 % |
| Committee of the Regions | 89 | 86 | — | 2 | 88 | 98,5 % | — | — | — | 0,1 % | 1 | — | — | 1 | 0,0 % |
| Ombudsman | 10 | 10 | — | — | 10 | 97,9 % | — | — | — | 0,0 % | — | — | — | — | 0,0 % |
| European Data Protection Supervisor | 8 | 8 | — | — | 8 | 96,9 % | — | — | — | 0,0 % | — | — | — | — | 0,0 % |
| European External Action Service | 808 | 513 | — | 272 | 784 | 97,1 % | 18 | 4 | 22 | 2,7 % | 2 | — | — | 2 | 0,0 % |
| Total | 1 49  939 | 1 09  256 | 179 | 3  772 | 1 13  208 | 75,5 % | 3  297 | 12  101 | 15  399 | 10,3 % | 21  333 | — | — | 21  333 | 0,0 % |

(EUR millions)

Institution

Total appropriations available

Commitments made

Appropriations carried over

Appropriations lapsing

From final adopted budget

From carry-overs

From assigned revenue

Total

%

From assigned revenue

Carry-overs by decision

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9=7+8

10=9/1

11

12

13

14=11+12+13

15=14/1

European Parliament

1  804

1  738

1

37

1  775

98,4 %

12

—

12

0,6 %

18

—

—

18

0,0 %

European Council and Council

587

485

—

29

513

87,4 %

24

—

24

4,1 %

50

—

—

50

0,0 %

Commission

1 46  008

1 05  811

178

3  429

1 09  418

74,9 %

3  242

12  097

15  339

10,5 %

21  251

—

—

21  251

0,0 %

Court of Justice

358

352

—

1

352

98,6 %

1

—

1

0,4 %

4

—

—

4

0,0 %

Court of Auditors

134

132

—

—

132

98,7 %

—

—

—

0,1 %

2

—

—

2

0,0 %

Economic and Social Committee

133

123

—

4

127

95,4 %

1

—

1

0,4 %

6

—

—

6

0,0 %

Committee of the Regions

89

86

—

2

88

98,5 %

—

—

—

0,1 %

1

—

—

1

0,0 %

Ombudsman

10

10

—

—

10

97,9 %

—

—

—

0,0 %

—

—

—

—

0,0 %

European Data Protection Supervisor

8

8

—

—

8

96,9 %

—

—

—

0,0 %

—

—

—

—

0,0 %

European External Action Service

808

513

—

272

784

97,1 %

18

4

22

2,7 %

2

—

—

2

0,0 %

Total

Total

1 49  939

1 49  939

1 09  256

1 09  256

179

179

3  772

3  772

1 13  208

1 13  208

75,5 %

75,5 %

3  297

3  297

12  101

12  101

15  399

15  399

10,3 %

10,3 %

21  333

21  333

—

—

21  333

21  333

0,0 %

0,0 %

Payment appropriations

Payment appropriations

| (EUR millions) |
| --- |
| Institution | | Payments made | Appropriations carried over | | Appropriations lapsing |
| Total appropriations available | From final adopted budget | From carry-overs | From assigned revenue | Total | % | Automatic carry-overs | Carry-overs by decision | From assigned revenue | Total | % | From final adopted budget | From carry-overs | Assigned revenue (EFTA) | Total | % |
| 1 | 2 | 3 | 4 | 5=2+3+4 | 6=5/1 | 7 | 8 | 9 | 10=7+8+9 | 11=10/1 | 12 | 13 | 14 | 15=12+13+14 | 16=15/1 |
| European Parliament | 2  168 | 1  460 | 256 | 26 | 1  742 | 80,4 % | 278 | — | 108 | 386 | 17,8 % | 18 | 22 | — | 40 | 1,8 % |
| European Council and Council | 635 | 435 | 39 | 29 | 503 | 79,2 % | 50 | — | 24 | 74 | 11,7 % | 50 | 8 | — | 58 | 9,2 % |
| Commission | 1 43  020 | 1 34  108 | 902 | 3  758 | 1 38  768 | 97,0 % | 452 | 913 | 2  799 | 4  164 | 2,9 % | 29 | 56 | 2 | 88 | 0,1 % |
| Court of Justice | 374 | 335 | 14 | 1 | 349 | 93,5 % | 17 | — | 1 | 18 | 4,9 % | 4 | 2 | — | 6 | 1,6 % |
| Court of Auditors | 145 | 124 | 9 | — | 134 | 92,4 % | 8 | — | — | 8 | 5,4 % | 2 | 2 | — | 3 | 2,2 % |
| Economic and Social Committee | 141 | 115 | 6 | 3 | 125 | 88,2 % | 8 | — | 1 | 9 | 6,3 % | 6 | 2 | — | 8 | 5,5 % |
| Committee of the Regions | 96 | 79 | 6 | 2 | 86 | 89,4 % | 8 | — | — | 8 | 8,2 % | 1 | 1 | — | 2 | 2,5 % |
| Ombudsman | 10 | 9 | 1 | — | 10 | 93,7 % | 0 | — | — | 0 | 3,7 % | — | — | — | — | 2,6 % |
| European Data protection Supervisor | 9 | 7 | — | — | 7 | 82,2 % | 1 | — | — | 1 | 10,1 % | — | — | — | 1 | 7,7 % |
| European External Action Service | 897 | 464 | 70 | 239 | 773 | 86,2 % | 49 | 4 | 57 | 110 | 12,3 % | 2 | 11 | — | 13 | 1,5 % |
| Total | 1 47  495 | 1 37  136 | 1  304 | 4  057 | 1 42  497 | 96,6 % | 870 | 917 | 2  991 | 4  778 | 3,2 % | 112 | 106 | 2 | 220 | 0,1 % |

(EUR millions)

Institution

Payments made

Appropriations carried over

Appropriations lapsing

Total appropriations available

From final adopted budget

From carry-overs

From assigned revenue

Total

%

Automatic carry-overs

Carry-overs by decision

From assigned revenue

Total

%

From final adopted budget

From carry-overs

Assigned revenue (EFTA)

Total

%

1

2

3

4

5=2+3+4

6=5/1

7

8

9

10=7+8+9

11=10/1

12

13

14

15=12+13+14

16=15/1

European Parliament

2  168

1  460

256

26

1  742

80,4 %

278

—

108

386

17,8 %

18

22

—

40

1,8 %

European Council and Council

635

435

39

29

503

79,2 %

50

—

24

74

11,7 %

50

8

—

58

9,2 %

Commission

1 43  020

1 34  108

902

3  758

1 38  768

97,0 %

452

913

2  799

4  164

2,9 %

29

56

2

88

0,1 %

Court of Justice

374

335

14

1

349

93,5 %

17

—

1

18

4,9 %

4

2

—

6

1,6 %

Court of Auditors

145

124

9

—

134

92,4 %

8

—

—

8

5,4 %

2

2

—

3

2,2 %

Economic and Social Committee

141

115

6

3

125

88,2 %

8

—

1

9

6,3 %

6

2

—

8

5,5 %

Committee of the Regions

96

79

6

2

86

89,4 %

8

—

—

8

8,2 %

1

1

—

2

2,5 %

Ombudsman

10

9

1

—

10

93,7 %

0

—

—

0

3,7 %

—

—

—

—

2,6 %

European Data protection Supervisor

9

7

—

—

7

82,2 %

1

—

—

1

10,1 %

—

—

—

1

7,7 %

European External Action Service

897

464

70

239

773

86,2 %

49

4

57

110

12,3 %

2

11

—

13

1,5 %

Total

Total

1 47  495

1 47  495

1 37  136

1 37  136

1  304

1  304

4  057

4  057

1 42  497

1 42  497

96,6 %

96,6 %

870

870

917

917

2  991

2  991

4  778

4  778

3,2 %

3,2 %

112

112

106

106

2

2

220

220

0,1 %

0,1 %

6.3.   AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS AND AMOUNTS RECEIVED

AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS AND AMOUNTS RECEIVED

| (EUR millions) |
| --- |
| Agency | Final adopted budget | Entitlements established | Amounts received | Outstanding | Funding Commission Policy Area |
| Agency for the Cooperation of Energy Regulators | 11 | 11 | 11 | — | 06 |
| European Asylum Support Office | 16 | 13 | 13 | 0 | 18 |
| European Aviation Safety Agency | 162 | 145 | 137 | 8 | 06 |
| Frontex | 98 | 87 | 87 | (0) | 18 |
| European Centre for the Development of Vocational Training | 18 | 17 | 17 | 0 | 15 |
| European Police College | 9 | 9 | 9 | 0 | 18 |
| European Chemicals Agency | 33 | 37 | 37 | 0 | 02 |
| European Centre for Disease Prevention and Control | 60 | 59 | 59 | 0 | 17 |
| European Monitoring Centre for Drugs and Drug Addiction | 15 | 16 | 16 | — | 18 |
| European Banking Authority | 34 | 34 | 34 | 0 | 12 |
| European Insurance and Occupational Pensions Authority | 22 | 22 | 22 | 0 | 12 |
| European Environment Agency | 43 | 53 | 52 | 1 | 07 |
| European Police Office | 84 | 85 | 85 | 0 | 18 |
| European Securities and Markets Authority | 33 | 32 | 32 | — | 12 |
| European Fisheries Control Agency | 9 | 9 | 9 | — | 11 |
| European Food Safety Authority | 80 | 80 | 80 | 0 | 17 |
| European Institute for Gender Equality | 7 | 7 | 7 | — | 04 |
| Galileo Supervisory Authority | 25 | 358 | 358 | — | 06 |
| Fusion for Energy Joint Undertaking | 551 | 551 | 551 | 0 | 08 |
| The European Union’s Judicial Cooperation Unit (Eurojust) | 34 | 34 | 34 | 0 | 33 |
| eu-LISA | 65 | 57 | 57 | — | 18 |
| European Maritime Safety Agency | 58 | 58 | 58 | 0 | 06 |
| Office for Harmonization in the Internal Market | 194 | 196 | 196 | 0 | 12 |
| European Medicines Agency | 282 | 311 | 272 | 39 | 02 |
| European Union Agency for Network and Information Security | 10 | 10 | 10 | — | 09 |
| Office of the Body of European Regulators for Electronic Communications (BEREC Office) | 4 | 4 | 4 | — | 09 |
| European Union Agency for Fundamental Rights | 21 | 21 | 21 | — | 18 |
| European Railway Safety Agency | 26 | 26 | 26 | 0 | 06 |
| European Agency for Safety and Health at Work | 15 | 15 | 15 | — | 04 |
| European Institute of Innovation and Technology | 175 | 167 | 167 | — | 15 |
| Translation Centre for the Bodies of the European Union | 56 | 48 | 47 | 1 | 15 |
| European Training Foundation | 20 | 21 | 21 | 0 | 15 |
| Community Plant Variety Office | 15 | 13 | 13 | — | 17 |
| European Foundation for the Improvement of Living and Working Conditions | 21 | 21 | 21 | 0 | 04 |
| Education, Audiovisual and Culture Executive Agency | 47 | 47 | 47 | — | 15 |
| Executive Agency for Competitiveness and Innovation | 24 | 25 | 25 | — | 06 |
| European Research Council Executive Agency | 36 | 36 | 36 | 0 | 08 |
| Research Executive Agency | 52 | 52 | 52 | 0 | 08 |
| Executive Agency for Health and Consumers | 7 | 7 | 7 | — | 17 |
| Innovation and Networks Executive Agency | 13 | 14 | 14 | 0 | 06 |
| Total | 2  486 | 2  809 | 2  759 | 50 | |

(EUR millions)

Agency

Final adopted budget

Entitlements established

Amounts received

Outstanding

Funding Commission Policy Area

Agency for the Cooperation of Energy Regulators

11

11

11

—

06

European Asylum Support Office

16

13

13

0

18

European Aviation Safety Agency

162

145

137

8

06

Frontex

98

87

87

(0)

18

European Centre for the Development of Vocational Training

18

17

17

0

15

European Police College

9

9

9

0

18

European Chemicals Agency

33

37

37

0

02

European Centre for Disease Prevention and Control

60

59

59

0

17

European Monitoring Centre for Drugs and Drug Addiction

15

16

16

—

18

European Banking Authority

34

34

34

0

12

European Insurance and Occupational Pensions Authority

22

22

22

0

12

European Environment Agency

43

53

52

1

07

European Police Office

84

85

85

0

18

European Securities and Markets Authority

33

32

32

—

12

European Fisheries Control Agency

9

9

9

—

11

European Food Safety Authority

80

80

80

0

17

European Institute for Gender Equality

7

7

7

—

04

Galileo Supervisory Authority

25

358

358

—

06

Fusion for Energy Joint Undertaking

551

551

551

0

08

The European Union’s Judicial Cooperation Unit (Eurojust)

34

34

34

0

33

eu-LISA

65

57

57

—

18

European Maritime Safety Agency

58

58

58

0

06

Office for Harmonization in the Internal Market

194

196

196

0

12

European Medicines Agency

282

311

272

39

02

European Union Agency for Network and Information Security

10

10

10

—

09

Office of the Body of European Regulators for Electronic Communications (BEREC Office)

4

4

4

—

09

European Union Agency for Fundamental Rights

21

21

21

—

18

European Railway Safety Agency

26

26

26

0

06

European Agency for Safety and Health at Work

15

15

15

—

04

European Institute of Innovation and Technology

175

167

167

—

15

Translation Centre for the Bodies of the European Union

56

48

47

1

15

European Training Foundation

20

21

21

0

15

Community Plant Variety Office

15

13

13

—

17

European Foundation for the Improvement of Living and Working Conditions

21

21

21

0

04

Education, Audiovisual and Culture Executive Agency

47

47

47

—

15

Executive Agency for Competitiveness and Innovation

24

25

25

—

06

European Research Council Executive Agency

36

36

36

0

08

Research Executive Agency

52

52

52

0

08

Executive Agency for Health and Consumers

7

7

7

—

17

Innovation and Networks Executive Agency

13

14

14

0

06

Total

Total

2  486

2  486

2  809

2  809

2  759

2  759

50

50

| (EUR millions) |
| --- |
| Type of revenue | Final adopted budget | Entitlements established | Amounts received | Outstanding |
| Commission subsidy | 1  593 | 1  566 | 1  565 | 0 |
| Fee income | 557 | 603 | 558 | 45 |
| Other income | 335 | 640 | 635 | 5 |
| Total | 2  486 | 2  809 | 2  759 | 50 |

(EUR millions)

Type of revenue

Final adopted budget

Entitlements established

Amounts received

Outstanding

Commission subsidy

1  593

1  566

1  565

0

Fee income

557

603

558

45

Other income

335

640

635

5

Total

Total

2  486

2  486

2  809

2  809

2  759

2  759

50

50

6.4.   COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY

COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY

| (EUR millions) |
| --- |
| Agency | Commitment appropriations | Payment appropriations |
| Total appropriations available | Commitments made | Carried to 2015 | Total appropriations available | Payments made | Carried to 2015 |
| Agency for the Cooperation of Energy Regulators | 11 | 10 | 0 | 16 | 13 | 3 |
| European Asylum Support Office | 16 | 13 | 0 | 16 | 11 | 2 |
| European Aviation Safety Agency | 184 | 136 | 45 | 191 | 125 | 63 |
| Frontex | 99 | 97 | 2 | 130 | 94 | 33 |
| European Centre for the Development of Vocational Training | 19 | 18 | 0 | 20 | 17 | 2 |
| European Police College | 9 | 8 | 0 | 10 | 8 | 2 |
| European Chemicals Agency | 115 | 111 | 0 | 127 | 112 | 11 |
| European Centre for Disease Prevention and Control | 61 | 61 | 0 | 72 | 59 | 12 |
| European Monitoring Centre for Drugs and Drug Addiction | 16 | 16 | 0 | 16 | 15 | 1 |
| European Banking Authority | 34 | 34 | — | 38 | 32 | 5 |
| European Insurance and Occupational Pensions Authority | 22 | 22 | 0 | 27 | 21 | 6 |
| European Environment Agency | 66 | 59 | 7 | 70 | 48 | 22 |
| European Police Office | 86 | 85 | 0 | 95 | 86 | 6 |
| European Securities and Markets Authority | 33 | 33 | — | 39 | 32 | 6 |
| European Fisheries Control Agency | 9 | 9 | — | 11 | 9 | 1 |
| European Food Safety Authority | 80 | 80 | 0 | 87 | 78 | 8 |
| European Institute for Gender Equality | 7 | 7 | 0 | 10 | 8 | 2 |
| Galileo Supervisory Authority | 2  095 | 693 | 1  402 | 407 | 150 | 257 |
| Fusion for Energy Joint Undertaking | 1  169 | 1  169 | — | 573 | 507 | 38 |
| The European Union’s Judicial Cooperation Unit (Eurojust) | 34 | 34 | 0 | 39 | 34 | 4 |
| eu-LISA | 59 | 49 | 10 | 72 | 54 | 15 |
| European Maritime Safety Agency | 60 | 56 | 2 | 61 | 53 | 5 |
| Office for Harmonization in the Internal Market | 420 | 246 | — | 458 | 239 | 40 |
| European Medicines Agency | 282 | 266 | 0 | 316 | 251 | 47 |
| European Union Agency for Network and Information Security | 10 | 10 | 0 | 11 | 10 | 1 |
| Office of the Body of European Regulators for Electronic Communications (BEREC) | 4 | 4 | — | 5 | 4 | 1 |
| European Union Agency for Fundamental Rights | 22 | 22 | 0 | 28 | 21 | 7 |
| European Railway Safety Agency | 26 | 25 | 0 | 28 | 24 | 3 |
| European Agency for Safety and Health at Work | 17 | 16 | 2 | 22 | 16 | 5 |
| European Institute of Innovation and Technology | 236 | 223 | 8 | 179 | 165 | 2 |
| Translation Centre for the Bodies of the European Union | 56 | 45 | — | 59 | 43 | 4 |
| European Training Foundation | 23 | 22 | 0 | 23 | 21 | 2 |
| Community Plant Variety Office | 17 | 16 | — | 15 | 13 | 0 |
| European Foundation for the Improvement of Living and Working Conditions | 22 | 21 | 1 | 26 | 21 | 5 |
| Education, Audiovisual and Culture Executive Agency | 47 | 46 | — | 52 | 46 | 6 |
| Executive Agency for Competitiveness and Innovation | 24 | 22 | — | 26 | 20 | 4 |
| European Research Council Executive Agency | 36 | 36 | — | 38 | 36 | 2 |
| Research Executive Agency | 52 | 51 | — | 54 | 50 | 4 |
| Executive Agency for Health and Consumers | 7 | 7 | — | 8 | 7 | 1 |
| Innovation and Networks Executive Agency | 13 | 13 | — | 14 | 12 | 1 |
| Total | 5  600 | 3  890 | 1  481 | 3  488 | 2  563 | 638 |

(EUR millions)

Agency

Commitment appropriations

Payment appropriations

Total appropriations available

Commitments made

Carried to 2015

Total appropriations available

Payments made

Carried to 2015

Agency for the Cooperation of Energy Regulators

11

10

0

16

13

3

European Asylum Support Office

16

13

0

16

11

2

European Aviation Safety Agency

184

136

45

191

125

63

Frontex

99

97

2

130

94

33

European Centre for the Development of Vocational Training

19

18

0

20

17

2

European Police College

9

8

0

10

8

2

European Chemicals Agency

115

111

0

127

112

11

European Centre for Disease Prevention and Control

61

61

0

72

59

12

European Monitoring Centre for Drugs and Drug Addiction

16

16

0

16

15

1

European Banking Authority

34

34

—

38

32

5

European Insurance and Occupational Pensions Authority

22

22

0

27

21

6

European Environment Agency

66

59

7

70

48

22

European Police Office

86

85

0

95

86

6

European Securities and Markets Authority

33

33

—

39

32

6

European Fisheries Control Agency

9

9

—

11

9

1

European Food Safety Authority

80

80

0

87

78

8

European Institute for Gender Equality

7

7

0

10

8

2

Galileo Supervisory Authority

2  095

693

1  402

407

150

257

Fusion for Energy Joint Undertaking

1  169

1  169

—

573

507

38

The European Union’s Judicial Cooperation Unit (Eurojust)

34

34

0

39

34

4

eu-LISA

59

49

10

72

54

15

European Maritime Safety Agency

60

56

2

61

53

5

Office for Harmonization in the Internal Market

420

246

—

458

239

40

European Medicines Agency

282

266

0

316

251

47

European Union Agency for Network and Information Security

10

10

0

11

10

1

Office of the Body of European Regulators for Electronic Communications (BEREC)

4

4

—

5

4

1

European Union Agency for Fundamental Rights

22

22

0

28

21

7

European Railway Safety Agency

26

25

0

28

24

3

European Agency for Safety and Health at Work

17

16

2

22

16

5

European Institute of Innovation and Technology

236

223

8

179

165

2

Translation Centre for the Bodies of the European Union

56

45

—

59

43

4

European Training Foundation

23

22

0

23

21

2

Community Plant Variety Office

17

16

—

15

13

0

European Foundation for the Improvement of Living and Working Conditions

22

21

1

26

21

5

Education, Audiovisual and Culture Executive Agency

47

46

—

52

46

6

Executive Agency for Competitiveness and Innovation

24

22

—

26

20

4

European Research Council Executive Agency

36

36

—

38

36

2

Research Executive Agency

52

51

—

54

50

4

Executive Agency for Health and Consumers

7

7

—

8

7

1

Innovation and Networks Executive Agency

13

13

—

14

12

1

Total

Total

5  600

5  600

3  890

3  890

1  481

1  481

3  488

3  488

2  563

2  563

638

638

| (EUR millions) |
| --- |
| Type of expenditure | Commitment appropriations | Payment appropriations |
| Total appropriations available | Commitments made | Carried to 2015 | Total appropriations available | Payments made | Carried to 2015 |
| Staff | 941 | 914 | 1 | 955 | 909 | 17 |
| Administrative expenses | 387 | 363 | 11 | 465 | 346 | 99 |
| Operational expenses | 4  272 | 2  613 | 1  469 | 2  067 | 1  309 | 522 |
| Total | 5  600 | 3  890 | 1  481 | 3  488 | 2  563 | 638 |

(EUR millions)

Type of expenditure

Commitment appropriations

Payment appropriations

Total appropriations available

Commitments made

Carried to 2015

Total appropriations available

Payments made

Carried to 2015

Staff

941

914

1

955

909

17

Administrative expenses

387

363

11

465

346

99

Operational expenses

4  272

2  613

1  469

2  067

1  309

522

Total

Total

5  600

5  600

3  890

3  890

1  481

1  481

3  488

3  488

2  563

2  563

638

638

6.5.   BUDGET RESULT INCLUDING AGENCIES

BUDGET RESULT INCLUDING AGENCIES

| (EUR millions) |
| --- |
| | European Union | Agencies | Elimination of subsidies to agencies | TOTAL |
| Revenue for the financial year | 1 43  940 | 2  759 | (1  565) | 1 45  134 |
| Payments against current year’s budget appropriations | (1 37  136) | (2  049) | 1  565 | (1 37  620) |
| Payments against assigned revenue appropriations | (4  057) | (300) | — | (4  357) |
| Payment appropriations carried over to year N+1 | (1  787) | (402) | — | (2  189) |
| Cancellation of unused appropriations carried over from year N-1 | 25 | 157 | — | 182 |
| Evolution of assigned revenue | 336 | (235) | — | 101 |
| Exchange differences for the year | 110 | (2) | — | 108 |
| Total | 1  432 | (73) | — | 1  358 |

(EUR millions)

European Union

Agencies

Elimination of subsidies to agencies

TOTAL

Revenue for the financial year

1 43  940

2  759

(1  565)

1 45  134

Payments against current year’s budget appropriations

(1 37  136)

(2  049)

1  565

(1 37  620)

Payments against assigned revenue appropriations

(4  057)

(300)

—

(4  357)

Payment appropriations carried over to year N+1

(1  787)

(402)

—

(2  189)

Cancellation of unused appropriations carried over from year N-1

25

157

—

182

Evolution of assigned revenue

336

(235)

—

101

Exchange differences for the year

110

(2)

—

108

Total

Total

1  432

1  432

(73)

(73)

—

1  358

1  358

In order to provide all relevant budgetary data for the Agencies, the consolidated annual accounts include separate reports on the implementation of the individual budgets of the traditional agencies consolidated.

---

(1)  It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables below may appear not to add up.

1

(2)  The European Parliament adopted a budget on 17 December 2014 which provides for the payment of the Union’s short-term liabilities from own resources to be collected by, or called up from, the Member States in 2015. Additionally, under Article 83 of the Staff Regulations (Council Regulation 259/68 of 29 February 1968 as amended), the Member States shall jointly guarantee the liability for pensions.

2

(3)  Further information is given in note 3.18.

3

3.18

(4)  Implemented by Member States: Shared management

4

Implemented by the Commission and executive agencies: Direct Management

Implemented by other EU agencies and bodies, third countries, international organisations and other entities: Indirect management.

(5)  For a detailed explanation of unrecognised losses see note 1.5.4.

5

1.5.4.

(6)  The Guarantee Fund for external actions holds EFSM bonds (EUR 20 million) issued by the Commission, so these have been eliminated. As it is a long-term instrument there is a significant non-current part of the available for sale financial assets, being EUR 1  489 million.

6

(7)  Gross actuarial losses before taxes and correction coefficients.

7

(8)  The Guarantee Fund for external actions holds EFSM bonds issued by the Commission, so these need to be eliminated.

8

(9)  Estimated non-eligible amounts and pending prepayments.

9

(10)  ‘Not assigned to MFF heading’ includes consolidated entities' budget execution and consolidation eliminations, off-budget operations and unallocated immaterial programmes.

10

(11)  The figures reported for ERDF include amounts not split between ERDF and the Cohesion Fund for the programming period 2007-2013 due to the multi-funds character of the programmes (EUR 354 million for financial corrections confirmed/decided and EUR 15 million for financial corrections implemented).

11

(12)  The figures reported for ERDF include amounts not split between ERDF and the Cohesion Fund for the programming period 2007-2013 due to the multi-funds character of the programmes (EUR 354 million for financial corrections confirmed/decided and EUR 15 million for financial corrections implemented).

12

(13)  For EAFRD the system of interruptions was aligned with the Cohesion Funds in 2014. For EAGF, the interruption mechanism does not apply; suspension and reduction mechanisms apply from 2014 onwards.

13

(14)  Excluding back-to-back loans.

14

(15)  With correction coefficient (‘CC’) applied.

15

(16)  Paid for the first 3 years following departure.

16

(17)  10,9 % for the first half of 2014 and 10,1 % for the second half of 2014.

17

(18)  The ECSEL joint undertaking is the result of an amalgamation of the Artemis and ENIAC Joint Undertakings that occurred during the financial year 2014.

18

(19)  It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables below may appear not to add-up.

19

(20)  Of which EFTA result is EUR (3) million in 2014 and EUR (4) million in 2013.

20

(21)  Additional appropriations include appropriations carried over from last year, assigned revenue and appropriations becoming available as a result of decommitments.

21

(22)  Additional appropriations include appropriations carried over from last year, assigned revenue and appropriations becoming available as a result of decommitments.

22

(23)  Additional appropriations include appropriations carried over from previous year, assigned revenue and appropriations made available again following decommitments.

23

(24)  Additional appropriations include appropriations carried over from previous year, assigned revenue and appropriations made available again following decommitments.

24

---