The Commission ensures that the EU budget serves citizens. Thanks to the strong tools in place and to proactive management of the EU budget, the Commission has been able to deliver on its policy objectives and respond to the crisis. The Commission has provided its beneficiaries, implementing partners and the Member States with the necessary degree of flexibility, while ensuring sound financial management and maintaining an appropriate level of assurance on the management of the EU budget.

The Commission will complement the Member States’ controls. In order to build its assurance, the Commission will rely on the Member States’ controls and supplement them with its own controls as necessary. These will be applied at three stages: during the assessment of the Member States’ recovery and resilience plans; during the assessment of the Member States’ payment requests; and after disbursements. In addition to controls on the fulfilment of milestones and targets, the Commission may perform risk-based controls to verify the absence of serious irregularities (i.e. fraud, corruption or conflicts of interest) or serious breaches of obligations. If necessary, the Commission will recover proportionate amounts, if Member States themselves have failed to do so, or require early repayment of the loans.

In 2021, the Commission will make the first disbursements under the Recovery and Resilience Facility. In 2020, the Commission took unprecedented measures to set up the facility in record time. This included putting in place a dedicated governance structure and the relevant internal processes and control strategies. These are tailored to the fact that disbursements to Member States are based on the fulfilment of predefined milestones and targets. Payments will therefore not be subject to controls on the costs actually incurred by the Member State. Unlike in shared management, the Member States are the beneficiaries of the EU funds, which, once paid, become fungible in the national budgets. Member States bear the responsibility for ensuring that the facility is implemented in compliance with EU and national rules and with the principles of sound financial management.

·Enhanced procedures for the assessment of implementing partners’ control systems, prior to entrusting them with EU funds, to obtain the certainty that they offer the same level of assurance as the Commission’s own control systems.

·The single data-mining tool the Commission makes available to Member States, for control and audit purposes under the European Structural and Investment funds will be extended to the common agricultural policy and the Recovery and Resilience Facility. This tool will allow for the identification of irregularities and fraud across all funds.

·The new guidance on the avoidance of conflicts of interest (17F ) to help managers of EU funds avoid conflicts of interest and to maintain a uniform interpretation and application of the rules among all stakeholders, along with the implementation of the regulation on a general regime of conditionality for the protection of the EU budget (18F ) whereby, for the first time, the EU has a specific tool to protect its budget from breaches of the principles of the rule of law.

New elements for the protection of EU funds will be rolled out in 2021 (see Annex 2, Section 2.4), such as the following.

The new multiannual financial framework for 2021-2027 takes into account lessons learned. The new programmes will benefit from many simplification measures that were introduced following the lessons learned from previous programmes (in 2014-2020 and 2007-2013).

The Commission is committed to continuing to improve its management and control systems. For 2021, the Commission will pursue its efforts to address the weaknesses leading to the issuance of reservations and to higher levels of risk, especially for cohesion funds and the research programme for the 2014-2020 period. As the pandemic is still ongoing, the related risks and mitigating measures remain under constant monitoring and this will continue for as long as the crisis lasts.

In addition to applying financial corrections and recoveries, the Commission is taking action to address weaknesses leading to medium and higher risks. This includes targeted remedial actions, such as raising awareness of applicable EU rules among beneficiaries and implementing partners that are more error prone. It also means better use of controls and audit results to adjust the control strategies and focus them on expenditure, increasing the capacity of national authorities that have deficiencies in their management and control systems along with applying the lessons learned to the future programmes.

In particular, the following involve higher-risk expenditure: some operational programmes for cohesion policy funds that show serious deficiencies and/or have error rates above 2.5%; the grants for the research programme Horizon 2020; the paying agencies for the agriculture-related direct payments and market measures and rural development that have error rates above 2.5%; and other complex grants (15F). Where the level of risk remains high, this is reported transparently through the issuance of reservations (16F). For 2020, there are 19 reservations with a total financial impact of EUR 1 219 million, which is less than 1% of the total expenditure. They correspond to the expenditure identified as high risk.

The Commission’s categorisation of expenditure into higher-, medium- and lower-risk segments, as percentages of the total amount of relevant expenditure for 2020.

The Commission identifies which programmes are higher risk, allowing it to focus its action where it matters most. Thanks to its in-depth empirical approach, the Commission has robust evidence that demonstrates the differentiated situation for the funds managed. Based on the risk at payment, the Commission can precisely divide the annual expenditure into lower risk at payment (where the risk is below 1.9%), medium risk at payment (between 1.9% and 2.5%) and higher risk at payment (above 2.5%) (see Annex 2, Section 2.2.3). For natural resources and cohesion, this analysis is also done at the level of individual paying agencies and operational programmes in the Member States. This allows the Commission to focus its efforts appropriately, to provide its support efficiently and to address specific weaknesses even for policies which, taken globally, are low risk, such as the common agricultural policy.

For 2020, the risk at closure is estimated at 0.9%. As this is below the threshold of 2% – also used by the Court of Auditors – the Commission considers that the budget as a whole is effectively protected. This is confirmed by the internal auditor’s opinion (14F).

The Commission’s future corrections forecast is based on the historical average level of corrections. This average is adjusted to take out elements that are no longer relevant for the future, in order to make the best and most conservative estimate.

Overall, the level of risk at payment is below the materiality threshold of 2%. The Commission estimates that, after its preventive controls, the remaining level of error – i.e. its risk at the time of payment – is 1.9%, representing a decrease compared to 2019. Given the multiannual character of the funding programmes, the Commission deploys substantial efforts to perform controls after the payments and to continue to make corrections until the closure of the programmes. These efforts are reflected in the estimated risk at the closure of the programmes. This corresponds to the risk at payment minus the Commission’s forecast future corrections, which are estimated at 1% in 2020 (see Annex 2, Section 2.2.2).

Preventive and corrective actions are implemented. As a result of its controls, the Commission applies financial corrections and recoveries. In 2020, the controls carried out before the payments along with other preventive measures have allowed EUR 301 million to be saved. For the controls carried out after the payments, the corrections and recoveries applied amounted to EUR 596 million and EUR 5.2 billion cumulatively since 2017.

The root causes of errors are identified and addressed. The detailed level of information allows the Commission, as the manager of the EU funds, to find system weaknesses, to identify their root causes (e.g. complexity of rules) and to take targeted corrective actions. It also enhances preventive actions and ensures that any lessons learned are factored into the design of future financial programmes.

Number of checks and audits by the European Commission in 2020, in agriculture and cohesion.

more than 900 000 on-the-spot checks were carried out by the Member States

Hundreds of thousands of payments were checked and system audits performed. The Commission builds its assurance from the bottom up and at a detailed level. This means that hundreds of thousands of payments are checked every year by the Commission and the Member States, who share the management of 70% of the funds with the Commission.

The Commission’s control framework withstood the test. The Commission relies on its multiannual control strategies to prevent, detect and correct errors and weaknesses. These strategies are also risk differentiated, i.e. adjusted to the different management modes, actors involved, policy areas and/or funding arrangements and their respective associated risks. This differentiation of the control strategies is necessary to ensure that the controls remain cost-effective, i.e. that they strike the right balance between a low level of errors (effectiveness), fast payments (efficiency) and reasonable costs (economy).

The measures allowed for the effective implementation of the budget despite the difficult situation created by COVID-19. As a result of the abovementioned initiatives, the level of assurance was maintained, and the time needed to pay beneficiaries remained similar to previous years. Moreover, the level of implementation of the budget increased to 99% (compared to 98% in 2019).

The Commission helped beneficiaries and Member States to implement the budget under the difficult circumstances. It extended the deadlines for the implementation of projects or recoveries and supported Member States by providing some flexibility in the way they implement and control EU funds, without reducing the level of assurance. The European Anti-fraud Office issued targeted guidance to the services to help them identify and address new emerging threats from fraudsters abusing the opportunities provided the COVID-19 pandemic.

An early risk assessment ensured the checks for the effective and efficient use of the EU budget. Before summer 2020, the Commission analysed the risks arising from the COVID-19 pandemic and made sure that appropriate mitigating measures were in place. For instance, on-the-spot audits were replaced by desk reviews and remote audits, which proved to be effective. During the year, all services monitored these risks closely and in real time, with support and oversight from the Commission’s corporate governance bodies (Annex 2, Section 2.1.2).

Strong organ0Tisa0Ttion allowed for a swift and efficient reaction – despite the circumstances of the COVID-19 pandemic. Thanks to good crisis preparedness, the Commission remained fully operational, with almost 30 000 people switching to teleworking within a few days. This allowed the Commission to play a leading role in all aspects of the crisis response, from public health to the economic recovery plan.

Even under unprecedented and challenging conditions, the solid chain of assurance and accountability worked. Under the governance system used by the Commission, the College of Commissioners delegates the day-to-day operational management to the 51 Directors-General and Heads of Service. This safeguards a clear division of responsibilities, well-defined management responsibilities and solid reporting (see details in Annex 2, Section 2.1.3).

The Commission attaches great importance to the sound financial management of EU taxpayers’ money. It is fully committed to ensuring the highest standards of management.

EU funds are well managed and protected in the context of a crisis

The Commission has adopted a communication on the performance framework of the EU budget (13F). The communication explains the framework’s guiding principles, describes recent improvements and outlines plans for its further development during the implementation of the 2021-2027 multiannual financial framework and beyond.

The Commission is aware of the responsibility that comes with the increased budget. The multiannual financial framework plays a critical role in supporting the economic recovery and transformation. The Commission expects and welcomes the associated increase in scrutiny by stakeholders of the effectiveness of EU spending. This effectiveness is at the heart of the work that the Commission has already done to build a robust performance framework for the EU budget. Such a framework is key in order to monitor budgetary implementation, to steer the budget towards its objectives, to respond rapidly and effectively to unforeseen events and to generate data and information showcasing how the EU budget provides concrete value to EU citizens.

More broadly, the EU is committed to the United Nations sustainable development goals. They are already widely and deeply integrated into the EU budget. In 2020, 46 EU spending programmes, or 75% of the total, contributed to at least one of the 17 sustainable development goals. Those 46 programmes represented 96% of the entire EU budget.

The EU budget helps to foster EU values, both in the EU and more widely. For Erasmus+, 2020 was a year of formidable challenges caused by the COVID-19 pandemic, which resulted in almost 30% fewer people going abroad. Nonetheless, Erasmus+ still provided almost 700 000 people with the opportunity to experience life differently, in higher education, in vocational training and through various other exchange possibilities.

Excellence in research and innovation contributes to an economy that works for people. Horizon 2020 is part of this EU success story. The 2020 Nobel Prize in Chemistry was awarded to Horizon 2020 alumna Dr Emmanuelle Charpentier together with Jennifer A. Doudna for the development of a method for genome editing. Dr Charpentier is the 10th Horizon 2020-funded researcher to be honoured with a Nobel Prize to date.

Investing in the future requires not only a green but also a digital transition. The COVID‑19 crisis has further accelerated the trend towards digitalisation. More important than ever in times of lockdown, the EU budget has supported investments in high-speed internet connections through, for example, the cohesion funds and the European Fund for Strategic Investments, connecting almost 25 million households to the internet through those two programmes. Digitalisation is also a key driver of innovation. To strengthen the EU’s industrial base, the EU budget is financing key projects such as satellite‑based services (such as Galileo’s space-based location service or the innovative climate change service provided by Copernicus) or artificial intelligence (funded by Horizon 2020).

·The EU budget has supported major investments in energy generation and usage – both key factors for the transition to a more sustainable economy. In particular, through cohesion funds, it has financed more than 2 000 megawatts of new renewable energy installation, along with energy efficiency measures leading to energy savings of 1 200 gigawatt hours per year. The EU budget also funds the experimental fusion project ITER, which could provide access to a potentially limitless source of clean energy.

·The EU has spent 8% of its 2014-2020 budget, or EUR 85 billion, on initiatives supporting or protecting biodiversity. This is well in line with the EU’s strong commitment to halting and reversing biodiversity enshrined in the European Green Deal. The EU biodiversity strategy (12F) outlines the scope of the major investments required, to which the EU budget can make a major contribution.

·The EU spent 20.1% of its 2014-2020 budget, or EUR 216 billion, on combating climate change, delivering on its objective of investing at least 20% of the 2014-2020 budget in this area.

The EU’s goal to become climate neutral by 2050 as part of the European Green Deal (11F ) is a prime example. Hitting this target will require leveraging all available means, both legislative and financial, cutting across different policy areas and programmes, as follows.

The EU budget is much more than the sum of its parts. Every spending programme is designed to tackle a particular set of challenges. However, the EU budget is at its most powerful when programmes work together to unlock synergies, catalyse private and public funding, and coherently promote the overarching political priorities which are central to the headline ambitions of the von der Leyen Commission (10F).

The Commission ensures that all programmes deliver results until closure. Major programmes such as the European Structural and Investment Funds and the Connecting Europe Facility will continue to be a source of financing for a number of years. Together, these programmes represent roughly 50% of the budget. And while the 2020 budget was spent in full, almost 28% of overall payments under the 2014-2020 framework are still outstanding. That means that these programmes will continue to deliver results over the next few years. The Commission will work with all involved in budget implementation to ensure that these programmes continue to make a strong contribution to EU priorities (more details are provided in Annex 2). A full assessment of the 2014-2020 programmes will only be possible after this period – on the basis of final evaluations.

Progress with EU budget implementation is monitored through state-of-the-art control and performance frameworks. The programme performance overview in Annex 3 provides detailed reporting on the progress made and on the steps that have been taken to overcome challenges in the implementation. The information available at the end of 2020 presented in the programme performance overview shows that overall, the large majority of programmes – 40 out of 61 – are making very good progress towards achieving their objectives. These programmes correspond to 92% of the budget in terms of amounts in euro.

While fighting the pandemic, the EU continued to deliver on its political priorities. In 2020, the final year of the 2014-2020 multiannual financial framework, strong progress was made towards the programme objectives for the 2014-2020 period as a whole. Despite the delays in the launch of some programmes, progress is now accelerating across the board.

The EU crisis response turns a challenge into an opportunity. In 2020, the EU not only used its 2020 budget effectively but also agreed its new long-term budget for 2021-2027, amounting to EUR 1 074 billion in 2018 prices, reinforced by the temporary recovery instrument, NextGenerationEU, worth an additional EUR 750 billion in 2018 prices. This stimulus package of EUR 1.8 trillion, the largest ever financed by the EU budget, will provide the necessary scale and ambition to help repair the economic and social damage caused by the COVID‑19 pandemic and lay the foundations for a greener, more digital and more resilient EU.

·Through Team Europe, the EU adopted a broader outlook, providing support beyond its borders. Team Europe secured financial support for partner countries amounting to more than EUR 40 billion in total, including EUR 15 billion from the EU budget. Team Europe’s focus is on addressing the immediate health crisis and humanitarian needs, strengthening partner countries’ health, water and sanitation systems and their research and preparedness capacities, along with mitigating the socioeconomic impact.

·SURE provided financing to Member States at advantageous rates to alleviate the pressure on the economy and support employment. The budget is up to EUR 100 billion and by the end of 2020, more than EUR 90 billion in loan support had been requested and allocated to Member States. EUR 40 billion had already been paid out, mostly supporting short-term employment schemes in beneficiary Member States. By early 2021, between 25 and 30 million employees had benefited from support under SURE – a significant portion of the job market in beneficiary Member States, which saved an estimated EUR 5.8 billion in interest payments.

·The Coronavirus Response Investment Initiatives gave Member States the flexibility to reallocate EUR 23.3 billion () to the most urgent needs, using all available money from the European Structural and Investment Funds. Through this measure, by June 2021, EUR 8.4 billion was reallocated to health-related measures, such as the purchase of medical supplies, testing and hiring of additional health personnel. To contain the spread of the crisis and the damage caused, EUR 12.8 billion was made available in direct support for businesses and EUR 3.9 billion for people, including workers and vulnerable groups ().

The Commission’s swift and ambitious reaction ensured that every available euro addressed the most pressing needs, as follows.

For the EU, solidarity does not end at its borders. The Commission stood firm in its intention of making vaccines available globally. The EU took the lead in global efforts to fund a viable vaccine and make it available worldwide when the Commission organised a global pledging conference on 4 May 2020, collecting almost EUR 15.9 billion by the end of December 2020, including a contribution of EUR 1.4 billion from the EU budget as part of the wider Team Europe (9F) efforts. With over EUR 2.2 billion, Team Europe is one of the leading contributors to COVAX, a platform that is leading efforts to secure fair and equitable access to COVID-19 vaccines in low- and middle-income countries.

·The Commission secured 2.6 billion doses of COVID-19 vaccines for all Member States (8F ), using EUR 2.3 billion from the Emergency Support Instrument. As a result, the first EU citizens had already been vaccinated before the end of 2020, after the European Medicines Agency had confirmed the safety and effectiveness of the vaccine used. By the end of the year, Member States had made additional contributions of EUR 750 million in external assigned revenue available for the purchase of further vaccines.

·By 18 June, the Commission and the Member States had agreed that the Commission would procure vaccines on behalf of all Member States. This first‑of‑a‑kind agreement demonstrated the strength of solidarity among the Member States and their confidence in the agility of the EU budget and in the Commission as its manager. The coordinated approach ensured that Member States could share the inherent risk of investing in as-yet unproven vaccine development, giving access to a broad portfolio of potential vaccine technologies and companies.

·As early as 31 January 2020, Horizon 2020 published an emergency call to support research related to the new disease.

Securing a safe and effective vaccine was the cornerstone of the Commission’s strategy to contain the health crisis and enable a strong economic recovery.

·200 disinfection robots that use ultraviolet light to disinfect patient rooms in hospitals in just 15 minutes are being sent to hospitals throughout the EU.

·1 500 cargo operations by air, road, rail and sea were carried out, bringing essential medical supplies into the EU at a time when cargo transport availability was seriously limited;

The early response through the EU budget focused on immediate d0Tisa0Tster relief. The EU provided support in particular for logistical needs, such as the repatriation of EU citizens, delivery of medical goods from abroad, and the distribution across EU borders of medical goods and training of medical staff in areas such as intensive care.

Proactive budgetary management ensured the speedy and effective implementation of the 2020 budget. Nine amending budgets were adopted as proposed by the Commission, more than in any other year in the 2014-2020 period and often in record time. Moreover, 28 budgetary authority transfers and hundreds of autonomous Commission transfers were made. As a result, the 2020 EU budget was spent almost entirely, in both commitments and payments – the best outcome since 2014, and achieved despite the challenging environment.

Financing these measures required the mobil0Tisa0Ttion of all means and flexibilities. In total, the 2020 budget was increased by EUR 10.2 billion in payments, activating all remaining resources under the 2014-2020 multiannual financial framework and redirecting EUR 70 billion overall towards addressing the COVID-19 crisis. In particular, the Coronavirus Response Investment Initiatives made it easier for Member States to tap liquidity and redirect cohesion funding quickly, while the Emergency Support Instrument allowed the Commission to coordinate and assist procurement efforts necessary to combat the crisis.

The European Parliament, the Council of the European Union and the Commission worked together seamlessly and rapidly to adopt these measures in record time and they had entered into force by the end of April 2020. The highly innovative SURE programme came into force on 19 May 2020.

·a novel financial assistance instrument – the support to mitigate unemployment risks in an emergency programme (SURE) – with a budget of up to EUR 100 billion.

·the extension of the EU Solidarity Fund to cover major health crises in addition to natural disasters; and

·EUR 415 million in additional financing for the Union Civil Protection Mechanism / rescEU to provide immediate disaster relief to the most affected areas;

·the reactivation of the Emergency Support Instrument, with a budget of EUR 2.7 billion to fight the cross-border health emergency;

·the Coronavirus Response Investment Initiatives (CRII) under cohesion policy facilitating flexibility arrangements and mobilising some EUR 23 billion in liquidity to Member States. The initiatives help fighting the COVID-19 pandemic by supporting healthcare, small businesses and workers;

The EU budget was at the heart of this response. It took the Commission only 3 weeks from the designation of the COVID-19 outbreak as a pandemic by the World Health Organisation on 11 March 2020 to put forward proposals for a coordinated and comprehensive response through the EU budget. This involved mobilising financing quickly and flexibly to address the most pressing needs, without making any compromises on applying the highest standards of financial management. That response included the following measures (see Annex 1 for more details):

Facing unprecedented challenges due to the COVID-19 pandemic, the EU relied on its strength of solidarity. It reacted swiftly and decisively to protect lives and livelihoods.

This report is part of the broader integrated financial and accountability reporting package (3F), which also includes the annual accounts (4F), a long-term forecast of future inflows and outflows covering the next 5 years (5F), the report on internal audits (6F) and the report on the follow-up to the discharge (7F).

·Volume II presents a more comprehensive picture of the implementation of the EU budget. Annex 1 provides a high-level overview of the performance of the EU budget in 2020. Annex 2 provides a high-level overview of internal control and financial management.

Implementing the EU budget is a shared responsibility. The Commission works hand in hand with the Member States and with other partners and organisations.

The Annual Management and Performance Report for the EU Budget – Financial year 2020 together with its annexes is the Commission’s main contribution to the annual discharge procedure (0F) by which the European Parliament and the Council scrutinise the implementation of the EU budget. It fulfils the Commission’s obligations under the Treaty on the Functioning of the EU (1F) and the financial regulation (2F).

TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Annual Management and Performance Report for the EU Budget - Financial Year 2020

The European Regional Development Fund has provided EUR 573 000 to support the ‘Gendered landscape – gender + equal + cities’ project, which creates awareness among urban planners and decision-makers in seven EU cities about how gendered power structures are perpetuated in cities and how to use this knowledge to make their policies and services gender equal.

With the support of the Development Cooperation Instrument, and in the light of the upsurge in domestic violence against women and children triggered by the COVID-19 crisis, in 2020 the EU–United Nations Spotlight initiative redirected over EUR 20 million to boost prevention and to increase support for victims and for women’s grassroots organisations that provide essential services.

In 2019 and 2020, the Commission allocated approximately EUR 56 million to preventing and responding to sexual and gender-based violence and approximately EUR 45 million to reproductive health from its humanitarian health programmes.

The ‘Police’ strand of the Internal Security Fund supported the activities of the European Multidisciplinary Platform Against Criminal Threats, the results from which in 2019 in the field of trafficking in human beings included 825 arrests and 1 307 potential victims.

Under the Horizon 2020 ‘science with and for society’ work programme, over EUR 83 million has been allocated to more than 40 collaborative projects and other actions on gender equality in research and innovation, benefiting around 300 organisations.

The ‘nidi gratis’ (‘free kindergarten’) initiative in the Lombardy region of Italy, with a total budget of about EUR 70 million, was supported by the European Social Fund with the aim of reducing gender gaps in employment. So far, it has provided 30 000 low-income families with free access to kindergartens for their 0-3-year-old children.

The programme for the competitiveness of enterprises and small and medium-sized enterprises supports the WeGate platform, with more than 2 000 members, which creates a network where women entrepreneurs and would-be entrepreneurs can do business together and can benefit from services that can help their businesses grow, such as access to finance, mentoring and coaching, including on financial literacy.

Under priority 6 of the rural development policy, the European Agricultural Fund for Rural Development supports the development of basic services in rural areas and for local initiatives. This helps to address the particular challenges that women may face in some rural areas and in the agricultural sector, such as the lack of good-quality basic services (e.g. childcare, broadband and transport).

The following infographic presents examples of the EU budget’s multifaceted contribution to the promotion of gender equality in the 2014-2020 programming period.

On 25 November 2020, the College of Commissioners adopted the joint communication on the gender action plan III (2021-2025) () to contribute to achieving a world of equality. In line with its commitment under the gender equality strategy, and as reaffirmed in the interinstitutional agreement accompanying the 2021-2027 multiannual financial framework, the Commission is working on developing a methodology to measure expenditure relating to gender equality in the 2021-2027 long-term budget, with a view to further reinforcing gender mainstreaming in the post-2020 programming period.

The Commission’s long-standing commitment to gender equality has been reaffirmed with the adoption of the 2020-2025 gender equality strategy (), which states the Commission’s strengthened commitment to achieving a Union of equality. The Commission has embedded gender mainstreaming into the strategy and has established gender equality and equal opportunities for all as cross-cutting objectives for all policy areas. The strategy sets out policy objectives and actions to achieve significant progress towards a gender-equal Europe by 2025.

Galileo’s search-and-rescue service allows the time required to detect emergency distress beacons to be reduced to less than 10 minutes. As from 2020, a response is sent to the distress beacon in less than 15 minutes, acknowledging that the request has been received and that help is on the way, a unique new feature offered only by Galileo.

The European Regional Development Fund contributed EUR 1.2 million to the ‘house of digitalisation’ project in Lower Austria. The project supported regional companies in strengthening their online trading opportunities in the midst of the COVID-19 crisis through the development of a mobile application allowing small enterprises to quickly and easily become involved in online retailing.

At the end of 2020, actions worth EUR 501 million to counter terrorism and prevent and counter violent extremism outside of the EU were ongoing. This represents an 8% increase compared to the previous year.

The European Fund for Strategic Investments helped provide renewable energy to approximately 14.5 million households and save over 7 150 gigawatt hours of energy per year.

In the 2014-2020 period, the common agricultural policy’s rural development support planned for organic farming amounted to EUR 11.2 billion. Furthermore, the share of the EU’s agricultural area used for organic farming increased from 5.9% in 2012 to 8.5% in 2019, corresponding to an increase from 9.46 to 13.79 million hectares.

In 2020, the Copernicus Land Monitoring Service systematically provided near-real-time information on global inland water bodies and their seasonal replenishment, lake and river water levels, temperature, turbidity and trophic state, including potential water availability from snow and ice cover.

To date, the European Maritime and Fisheries Fund has funded nearly 15 000 projects on preserving the marine environment and ensuring better resource efficiency.

The Erasmus Mundus master’s degree in women’s and gender studies was funded in 2019 with a total budget of EUR 4.5 million for the following 5 years. Its mission is to produce gender experts able to contribute to greater equality between men and women, and the consortium consists of six universities in four Member States and the United Kingdom.

Under the Connecting Europe Facility action, a maximum contribution of approximately EUR 14 million was allocated to the ‘AMBRA-Electrify Europe’ action to support the deployment between 2018 and 2022 of 6 458 electrical supply points at 3 169 electric charging stations for electric vehicles on six trans-European transport network core network corridors in Spain, Italy and Romania.

In Belgium, thanks to European Social Fund support in the amount of approximately EUR 3.6 million, since 2015 the TechnocITé Competence Centre has helped more than 9 000 people develop new skills in the fields of information and communications technology through qualifying and continuous training in one of the 20 courses organised in these fields. The project will run until the end of 2021.

The LIFE material match making platform enabled waste reduction amounting to about 60 000 tonnes (a 10% reduction within the context of the project) from October 2016 to December 2019, through the systematic application of eco-design techniques to facilitate the recovery and reuse of parts that would previously have become waste.

EU interventions for improved diets and breastfeeding, household resilience, food security, healthcare and the reduction of stunting reached almost 20 million women, adolescent girls and children in 2013-2019 under the Development Cooperation Instrument.

The LIFE programme has contributed EUR 10 million to the Polish integrated project Małopolska, which was launched in 2013 and aims to reduce fine particle pollution ().

The Cohesion Fund contributed approximately EUR 39 million to Poland’s largest project for developing smart electricity distribution networks in seven Polish provinces. The project offers fewer network failures, increased security of supply and better quality of life for nearly 3 million inhabitants, and it is expected to reduce primary energy consumption by 1 054 gigajoules/year, resulting in savings of 98 megawatt hours/year.

Approximately EUR 4.9 million was invested between 2014 and 2020 to support the testing and eradication of animal diseases such as brucellosis in local sheep, goat and cattle herds and the training of local veterinaries through the Instrument of Financial Support for Encouraging the Economic Development of the Turkish Cypriot Community.

Under the implementation of the European Globalisation Adjustment Fund’s ‘Microsoft 2’ case in Finland between 2017 and 2019, EUR 3.5 million in funding from the European Globalisation Adjustment Fund was mobilised to finance measures offered to 883 dismissed workers in support of labour mobility and in cooperation with the European Job Mobility Portal services (i.e. foreign job advertisements and the exchange of experience in online meetings).

The EU and its 27 Member States significantly increased their official development assistance for partner countries to almost EUR 67 billion () in 2020. The EU and its Member States thereby consolidate their position as the world's leading donor, and have taken a major leap forward towards meeting the target they have committed to for 2030.

The Asylum, Migration and Integration Fund contributed EUR 7.5 million in 2020 to a call under Greece’s national programme to subsidise the operation of semi-independent-living apartments for unaccompanied minors above 16 years old. The current call covers 500 accommodation places.

Examples of the EU budget’s contribution to the agenda for sustainable development can be found below.

In the light of the interlinked nature of these goals, most of the EU’s budgetary programmes are designed to address multiple sustainable development goals. Currently, almost 75% of the EU budget programmes (46 out of 61) contribute towards these goals. Those 46 programmes represented 96% of the entire EU budget. The following infographic illustrates, in a non-exhaustive manner, some of the many examples of how EU programmes contribute to the sustainable development goals. The EU’s coherent approach supports a variety of initiatives in a wide range of policy fields in the EU and across the globe, with the aim of promoting sustainable development for all.

The EU has embarked on a transition towards a low-carbon, climate-neutral, resource-efficient and circular economy that goes hand in hand with increased security, prosperity, equality and inclusion. In this light, the design and implementation of EU spending programmes aim at delivering on the objectives in each policy field while promoting sustainability through the actions and interventions of the relevant programmes. Through the European consensus on development, the EU has also aligned its approach to international cooperation and development policy with the 2030 agenda, placing the sustainable development goals and the Paris Agreement at the heart of its external action.

The EU, together with its Member States, is fully committed to being at the forefront of implementing the 2030 agenda for sustainable development and achieving a transformative shift by 2030 that leaves no one behind. The 2030 agenda is the shared roadmap adopted under the auspices of the United Nations for a peaceful and prosperous world, and is of paramount importance to the values of the EU and the future of Europe. The EU has committed to implementing the sustainable development goals () in both internal and external policies. Since the adoption of the agenda in 2015, the EU has made significant progress in delivering on the sustainable development goals, and is continuing to strengthen its efforts. The COVID-19 pandemic has shown that the full implementation of the 2030 agenda is crucial in order to build back better after the crisis. The sustainable development goals provide the universal blueprint for a sustainable recovery.

In line with the European Green Deal, the Parliament, the Council and the Commission have agreed () that biodiversity will also be mainstreamed in the EU budget, with a 7.5% annual target for 2024 ensuring that the contribution will not backslide, and with a 10% annual target for 2026 and 2027. Cumulatively, for the next long-term budget, this will translate into a higher level of ambition than was the case in the previous period. This is in line with the statement in the biodiversity strategy for 2030 that biodiversity action requirements are at least EUR 20 billion per year from ‘private and public funding at national and EU level’, of which the EU budget will be a key enabler.

In the 2014-2020 period, the EU dedicated EUR 85 billion to the fight against biodiversity loss, or cumulatively an average of 8% of the multiannual financial framework. Annex 4 contains several examples of concrete achievements funded from the EU budget that contributed to protecting biodiversity.

Halting and reversing the decline of biodiversity is a major objective for the EU, as also provided for in the political guidelines () of President von der Leyen and the European Green Deal. The EU biodiversity strategy provides orientations regarding biodiversity financing and resource mobilisation. The EU finances the protection of biodiversity by including the objectives of the EU biodiversity strategy for 2030 in the main funding instruments.

·changing how climate-relevant financing is identified in the EU budget from the intent-based Rio markers of the Organisation for Economic Co-operation and Development to EU climate markers that put a greater emphasis on results.

·enhancing the climate responsiveness of the budget for programmes that do not directly tackle the climate challenge, through reinforced climate proofing and the application of the ‘do no significant harm’ principle;

·embedding EU budget actions into the European Green Deal policy framework, including through the adoption of the biodiversity strategy and the farm-to-fork strategy;

·translating the increase in the overall target from 20% to 30% into specific sectoral targets in the relevant legislation;

For the 2021–2027 long-term budget, the EU has further increased its ambition with respect to fighting climate change. The budget will contribute at least 30% of the funds from the multiannual financial framework and NextGenerationEU to achieving the EU’s climate objectives. To ensure the success of the EU budget in delivering on this objective, several improvements have been made through the agreed package and during the political negotiations:

Left: 2014-2020 contribution of climate-related expenditure by budget heading (in million EUR). Right: Climate-relevant share of the main contributing programmes in 2014-2020.

To fight climate change () and environmental degradation and to become the world’s first climate-neutral economy by 2050, the EU needs to move to a more sustainable economy. In the 2014-2020 period, the EU integrated EUR 216 billion in spending on climate action across all of its programmes, in particular cohesion policy, energy, transport, research and innovation and the common agricultural policy, along with the EU’s development policy, making the EU budget a key driver of sustainability. In 2021, the Commission continued to revise and update all available information, including further consolidating existing data and applying a more granular methodology where possible. Overall, 20.1% of the EU budget was allocated to measures to address climate change, achieving the political ambition of dedicating 20% of the 2014-2020 long-term budget to fighting climate change.

Mainstreaming is the inclusion of horizontal priorities and cross-cutting policy areas in the design, preparation, implementation and evaluation phases of programmes for both internal and external actions. Since the same action can pursue different objectives at the same time, mainstreaming in the EU budget promotes synergies in the use of funds for a limited number of cross-cutting priorities, resulting in increased consistency and cost-efficiency in spending. This section explains how the EU budget is pursuing cross-cutting policies to fight climate change, protect biodiversity, pursue the United Nations sustainable development goals and promote gender equality.

Through the new spending programmes, the Commission is introducing a more comprehensive and coherent performance framework for the EU budget (). This will be based on (1) integrating performance into policy design through programme evaluations; (2) robust monitoring and reporting on the performance of individual programmes and the progress towards their objectives in the annual budgetary cycle; and (3) ensuring the contribution of the EU budget towards overarching horizontal policy objectives such as the climate, the digital sphere and economic recovery. A streamlined set of high-quality indicators will be used to monitor performance during all stages of programme implementation, with a clear methodology to estimate baselines and targets. A robust monitoring and evaluation framework will provide the evidence base for the design of future financial programmes.

The transition to the 2021-2027 long-term budget will also represent another major step forward for the EU budget performance framework. The Commission has taken very seriously the lessons learnt from the 2014-2020 period and the recommendations from the Parliament, the Council and the Court of Auditors.

Financed by NextGenerationEU, in 2021 and 2022, the recovery assistance for cohesion and the territories of Europe (REACT EU) will help bridge the gap between the initial response to the crisis and the longer-term recovery. An additional EUR 50.6 billion for the ongoing 2014-2020 cohesion policy programmes will provide vital rapid and additional support to Member States and regions. The recovery assistance continues emergency support for the health sector, small and medium-sized enterprises and short-term employment schemes, while introducing the possibility to step up digital and green investments as part of crisis repair.

The majority of funds from NextGenerationEU (up to EUR 672.5 billion) will be invested through the Recovery and Resilience Facility. This facility will provide large-scale financial support for public investment and reforms in key areas such as the green and digital transition. In order to receive support from the Recovery and Resilience Facility, EU Member States will submit recovery and resilience plans to the Commission, in which they explain how the money will be used to support recovery and build resilience. These plans need to take into account the challenges identified in the European semester, along with those relating to the green and digital transitions. The Commission will assess these plans, and that assessment will then be approved by the Council. Funding will be disbursed in several instalments upon the achievement of milestones and targets to which Member States have committed themselves.

NextGenerationEU is a EUR 750 billion temporary recovery instrument consisting of non-repayable and loan support in addition to the EU’s long-term budget, with a focus on the crucial first years of recovery. Funding from NextGenerationEU will be invested across several programmes contributing to economic recovery.

·In order to contribute to the digital transformation, the EU will work to invest 20% of the Recovery and Resilience Facility funds in this area.

·The EU will work towards the goal of spending 10% of the long-term budget in 2026 and 2027 on halting and reversing the decline in biodiversity.

·The EU has set a target of spending at least 30% of the long term budget and NextGenerationEU on combating climate change.

·32% of the long-term budget will be used to accelerate the achievement of the new and reinforced priorities, the highest share ever.

·The EU has set a target of 50% or more of the total amount of the long-term budget, including NextGenerationEU, to be used to support the modernisation of the European Union through research and innovation; fair climate and digital transitions; preparedness, recovery and resilience.

This will be the largest stimulus package ever financed by the EU budget. A total of EUR 1.8 trillion will help rebuild a post-COVID-19 Europe. This unprecedented response will help repair the economic and social damage caused by the COVID-19 pandemic and lay the foundations for a modern and more sustainable future for a greener, more digital and more resilient Europe.

The Commission put forward revamped proposals in May 2020 for the EU’s long-term budget for 2021-2027 (amounting to EUR 1 074 billion), to be coupled with a temporary recovery instrument, NextGenerationEU (worth EUR 750 billion). These proposals were formally adopted by the European Parliament and the Council in December 2020.

·Supporting farmers. Financial instruments under the European Agricultural Fund for Rural Development may provide stand-alone working capital financing of up to EUR 200 000 to agricultural and rural small and medium-sized enterprises affected by COVID-19, under favourable conditions, including very low interest rates, fewer collateral requirements, favourable payment schedules, etc.

·Supporting fishers and the seafood sector. The Commission provided for specific measures to mitigate the impact of the coronavirus outbreak, such as support for fishers relating to the temporary cessation of fishing activities, support for aquaculture farmers relating to the temporary suspension of production and support for producer organisations relating to the storage of fishery and aquaculture products, along with budgetary flexibility for Member States to allocate resources at short notice.

The Commission also provided guidance to the Member States on how to make use of the European Globalisation Adjustment Fund under the circumstances of the COVID-19 crisis to support workers who had lost their jobs as a consequence of the pandemic. Four COVID-19-related applications had been received from Member States by the end of 2020.

The COVID-19 pandemic caused a major shock to the global and EU economies, with severe socioeconomic consequences. It led to a drop of 7.4 percentage points in the EU’s gross domestic product, with a subsequent gain of 4.1 percentage points expected in 2021 (). Cohesion policy programmes were also adapted and mobilised to support the crisis response through the Coronavirus Response Investment Initiatives ( ). The Commission focused on increasing the flexibility of these instruments to the maximum extent to allow for the swift treatment of all requests under lighter and faster procedures. This included increasing the maximum co-financing rate to 100%, facilitating transfers between funds and regions and increasing the financing envelopes through financial instruments. Overall, this flexibility allowed the initiative to mobilise EUR 23.3 billion to date () from the European Structural and Investment Funds. These initiatives helped meet the most pressing needs for medical supplies and equipment and helped address the effects of the economic crisis through short-term work schemes aiming to keep people in employment during the pandemic, financial support for small and medium-sized enterprises and an immediate liquidity injection.

COVID-19 Vaccines Global Access (COVAX) is leading efforts to secure fair and equitable access to COVID-19 vaccines in low- and middle-income countries. Team Europe is one of the leading contributors to COVAX, with over EUR 2.2 billion. The Commission is participating in the COVAX Facility for equitable access to affordable COVID-19 vaccines and is contributing EUR 1 billion in EU grants and guarantees.

In addition, the EU is promoting a coronavirus global response with multilateral partners, launched by President Ursula von der Leyen. The international pledging conference collected pledges of more than EUR 15.9 billion () to ensure the collaborative development and universal deployment of diagnostics, treatments and vaccines against the coronavirus.

The EU, as a global actor and in collective action as Team Europe, secured financial support for partner countries and fragile populations amounting to more than EUR 40 billion (). The main contributions from Team Europe were EUR 7 billion from the European Investment Bank, EUR 4 billion from the European Bank for Reconstruction and Development, EUR 15 billion from the EU budget and EUR 14 billion from the Member States. Team Europe efforts focus on addressing the immediate health crisis and the resulting humanitarian needs; strengthening partner countries’ health, water and sanitation systems and their research and preparedness capacities to deal with the pandemic; and mitigating the socioeconomic impact.

The development of a new generation of vaccines – mRNA () vaccines – is supported through several Horizon 2020 grants. In the European AIDS Vaccine Initiative 2020, BioNTech made use of its mRNA technology to develop and manufacture HIV vaccine candidates. Financial support provided by the European Fund for Strategic Investments helped BioNTech to use this mRNA technology for the development of a COVID-19 vaccine. The advance purchase agreement mediated by the Commission further enabled the manufacturing of the BioNTech–Pfizer vaccine, which was the first to receive marketing authorisation in the EU.

Public and private investment was mobilised to develop safe and effective vaccines for everyone across the world. The Commission has mobilised more than EUR 781 million under Horizon 2020 since January 2020 to develop vaccines, new treatments, diagnostic tests and medical systems to prevent the spread of COVID-19 and save lives. This includes mobilising the special fund for emergency research, the IMI 2 Joint Undertaking and EUR 164 million through a call launched by the European Innovation Council pilot project.

In addition, the scope of the EU Solidarity Fund was extended as of 1 April 2020 to encompass major public-health emergencies. A total of almost EUR 530 million will be made available to Member States in 2021 and candidate countries seriously affected by the COVID-19 crisis to finance assistance to the population (medical, health-sector and civil-protection measures) and measures taken to contain the spread of the virus.

·The Commission set up the Clearing House for medical equipment ( ), the main role of which was to get an overview of the essential medical-equipment needs in Member States so as to match supply and demand at the EU level. It also provided help to industry and stakeholders faced with technical and regulatory obstacles. For example, the EU Civil Protection Mechanism sent ventilators, protective clothing and disinfectant to countries in need and deployed emergency medical teams. National medical emergency teams were deployed under the EU Civil Protection Mechanism to support Italy and Lithuania in the first wave of the COVID-19 crisis. Similarly, medical teams from the EU also supported partner countries, such as Armenia and Azerbaijan. Under the Emergency Support Instrument, the Commission also implemented a mobility package to help finance the transport of patients, medical teams and essential medical supplies.

·Hosted in EU Member States, rescEU delivered over 3 million items of personal protective equipment (masks, gloves, etc.) for first responders, including medical and civil protection workers.

The budget of the EU Civil Protection Mechanism was increased by EUR 415 million in 2020 and supported hospitals across the EU, many of which were treating patients from other countries. Mobile health teams were dispatched to respond to the most urgent needs.

As many Member States faced a third wave of infections and new variants in the first quarter of 2021, the Emergency Support Instrument has been reinforced in 2021 with an additional EUR 232 million () in commitment appropriations. This will support new actions such as the interoperability of digital green certificates, an EU waste-water monitoring system, the further development of the passenger locator form exchange platform and the purchase for donation to Member States of specialised tests for identifying variants.

·Under the instrument the Commission has procured for distribution to Member States more than 10 million masks for medical staff; some 200 million rapid antigen tests; and 34 000 courses of the therapeutic Remdesivir, which was in high demand in all Member States as the only EU-approved medicine to treat COVID-19, but national contracts were unavailable.

The instrument also financed the establishment of an IT platform for interoperability between national tracing apps, to which 17 national apps () are now connected, along with a pilot system for the exchange of passenger locator forms.

·The Emergency Support Instrument was used to organise 1 500 cargo operations involving over 1 000 flights and 500 journeys by road, rail and sea between April and September 2020, to bring essential medical supplies into the EU when cargo transport availability was seriously limited; the transport of over 300 medical staff and patients for care across borders; the training of 3 500 medical staff in testing techniques; 75 mobile testing teams; increased capacity in 150 local blood or plasma collection centres; and intensive-care training for 15 000 medical professionals across 750 hospitals.

·Funding was provided for training in testing and intensive care. Additionally, a contract was signed for the purchase of disinfection robots, which are donated to hospitals. These robots use ultraviolet light and disinfect standard patient rooms in hospitals in just 15 minutes, thus helping to prevent and reduce the spread of COVID-19. The European Commission distributed approximately 200 such robots to hospitals around the EU through the Emergency Support Instrument.

· The major priority in 2020 was securing 2.6 billion doses () of COVID-19 vaccines, once proven to be safe and effective, under the advance purchase agreements with vaccine developers. Through these agreements, the Emergency Support Instrument acquired purchase rights for EU Member States to up to 2.6 billion vaccine doses from six vaccine manufacturers (AstraZeneca, BioNTech–Pfizer, CureVac, Johnson & Johnson, Moderna and Sanofi–GlaxoSmithKline) as part of the EU’s vaccine strategy. By diversifying the portfolio, the Commission maximised the chances of EU citizens having access to any successful vaccine candidate at the earliest possible opportunity, and at the scale required. As a result, the first vaccine was deployed in the EU before the end of 2020 ( ). 86% of the available funding from the EU budget was allocated to this, and at the end of the year Member States also made contributions available for this action totalling EUR 750 million in externally assigned revenue. The coordinated EU approach ensured that Member States could share the inherent risk of investing in what was at that point unproven vaccine development, and had access to a broad portfolio of potential vaccine technologies and companies.

In setting priorities for the actions to be funded, the Commission engaged with Member States regularly to understand their needs. Based on this, the Commission decided early on that the instrument could add the most value by supporting the EU vaccines initiative, in which all 27 Member States are taking part.

The Emergency Support Instrument was reactivated in April 2020 with a budget of EUR 2.7 billion to provide needs-based emergency support complementing Member States’ efforts and the contributions of other EU instruments in tackling the COVID-19 pandemic and helping save lives. The reactivation allowed for the very broad use of this instrument through targeted measures deployed strategically where the scale, speed or cross-border nature of the solutions needed are best addressed through coordinated EU intervention and for novel, fast procurement mechanisms. The Emergency Support Instrument is centrally managed by the Commission and implemented largely through direct management. The instrument was also used in the procurement of healthcare-related material, assistance for medical personnel and operational support for mobile medical-response capacities. This makes medical personnel and teams available where they are most needed in Europe, and assists with transporting cargo.

·By early 2021, between 25 and 30 million employees had benefited from support under the support to mitigate unemployment risks emergency programme SURE – a significant portion of the job market in participating Member States, which saved an estimated EUR 5.8 billion in interest payments.

The Commission is also mobilising EU resources outside the long-term budget, for example through the European Investment Bank and other instruments. The European Union’s temporary support to mitigate unemployment risks in an emergency programme (SURE) was created to help Member States protect jobs and workers’ incomes in the context of the COVID-19 pandemic. It provides financial assistance in the form of loans from the EU to support short-term work schemes and similar measures, to help Member States protect employees and the self-employed against the risk of unemployment and loss of income. The programme is a strong expression of solidarity. To reflect this social motivation, financing is issued in the form of social bonds. Its budget is up to EUR 100 billion and by the end of 2020, EUR 40 billion () in support had already been provided to Member States.

The sections below summarise the main pillars of the EU’s response to the pandemic and how the EU budget has contributed.

Proactive budgetary management ensured the speedy and effective implementation of the 2020 budget. Nine amending budgets were adopted as proposed by the Commission, more than in any other year of the 2014-2020 period and often in record time. Moreover, 28 budgetary authority transfers and hundreds of autonomous Commission transfers were made. As a result, the 2020 EU budget was spent almost entirely, in both commitments and payments.

EUR 70 billion was mobilised quickly and flexibly through the EU budget as part of a coordinated European response to the COVID-19 pandemic through a variety of measures. For that purpose, the budget for 2020 was increased by EUR 10.2 billion (). The European Parliament, the Council of the European Union and the Commission changed the 2014-2020 multiannual financial framework regulation as quickly as possible to provide maximum flexibility for the implementation of the 2020 budget. Moreover,he Emergency Support Instrument allowed the Commission to coordinate and assist procurement efforts necessary to combat the crisis.

The onset of the COVID-19 pandemic in Europe led to human tragedy, lockdowns and an unprecedented economic slowdown (). The EU moved decisively to prove its solidarity in the face of this crisis, protecting lives and livelihoods by focusing on actions that delivered an immediate and effective response. Throughout 2020, the Commission adopted over 1 350 measures to mitigate the crisis, including 598 state-aid decisions giving European companies a lifeline and thereby preserving the continuity of economic activity during and after the outbreak. By the end of 2020, around EUR 3.1 trillion (), or more than 30% of the EU’s gross domestic product, had been mobilised by Member States to mitigate the effects of the crisis.

1.1.2. The EU budget was mobilised quickly and flexibly in response to the COVID-19 pandemic

These savings have been made at a time when there are ever-increasing expectations on the Commission to deliver in areas such as the green and digital transitions, industrial policy, economic and social recovery, migration, the rule of law and defence cooperation. These pressures have been heightened by the workload involved in developing and deploying a comprehensive EU response to the COVID-19 pandemic and its aftermath. Despite this, the Commission has redeployed a significant number of staff to support the delivery of its flagship initiatives and a swift response to the pandemic. Budgetary constraints under the new financial framework will require even stronger prioritisation and further efficiency improvements to ensure that the EU is able to continue to deliver on its priorities.

The EU’s administrative budget, which supports both budgetary management and the full spectrum of activities of the European Union institutions, accounted for a small share of the total budget in 2020. Together with the other institutions, the Commission has taken steps to improve the efficiency of all of its operations, and delivered significant savings under the 2014-2020 financial framework, including by implementing a 5% staff reduction between 2013 and 2017 (). The European Court of Auditors has confirmed these savings, while noting the negative consequences they have had for staff ().

Primarily as a result of COVID-19-related measures, the budget for 2020 evolved significantly compared to the budget initially adopted by the budgetary authority. Amendments adopted by the European Parliament and the Council increased the EU budget for 2020 by EUR 10.2 billion () in payment appropriations and EUR 5.2 billion in commitment appropriations to address the COVID-19 crisis, in particular to cover the additional needs for payment appropriations for the Emergency Support Instrument to finance the COVID-19 vaccines strategy and the additional payment needs for cohesion following the adoption of the Coronavirus Response Investment Initiatives. Significant funding has also been reprioritised and redirected towards objectives relating to the COVID-19 crisis.

The 2020 EU budget: commitment appropriations per budget heading. Administrative expenditure only reflects the Commission section, and excludes administrative expenditure in other institutions. All amounts in million EUR.

Sustainable growth: natural resourcesEUR 59 956Economic, social, and territorial cohesionEUR 58 646Competitiveness for growth and jobsEUR 25 273Global EuropeEUR 11 350Security and citizenshipEUR 7 152AdministrationEUR 6 046TotalEUR 169 659Sustainable growth: natural resourcesEUR 59 956Economic, social, and territorial cohesionEUR 58 646Competitiveness for growth and jobsEUR 25 273Global EuropeEUR 11 350Security and citizenshipEUR 7 152AdministrationEUR 6 046TotalEUR 169 659

In the new long-term budget, the structure of the budgetary headings has been reviewed to provide greater transparency and to ensure close alignment with the key political priorities. The performance analysis presented in sections 1.2 to 1.7 of this annex is structured around the new 2021-2027 budget headings.

Finally, 2020 was the last year of the 2014-2020 multiannual financial framework. The new and ambitious 2021-2027 multiannual financial framework, together with the temporary recovery instrument NextGenerationEU, was adopted in December, putting the EU budget at the heart of the recovery and the transition towards a more sustainable and digital future (see section 1.3 below).

2020 was a pivotal year for the EU budget in many ways. It was the first full year of the von der Leyen Commission. The 2020 EU budget played an important role in supporting the von der Leyen Commission’s ambitious headline goals. It helped, for example, with preparing the green and digital transitions and with promoting solidarity and security, not only within the EU, but also in cooperation with our international partners. 2020 was also the year of the COVID-19 outbreak, which made swift and significant modifications necessary for crisis repair and recovery (see section 1.1.2 below).

While monitoring information provides useful insights into progress, definitive conclusions on programme performance will only be possible on the basis of detailed evaluations after the closure of the current programmes. The impact of the COVID-19 pandemic and the steps taken to redirect and reprioritise EU funding to support crisis repair and recovery will need to be given due consideration in this assessment.

Due to the multiannual nature of the EU programmes, achievements in the field can only be assessed in a multiannual context. This report draws on the latest-known performance results. The reporting information available at the end of 2020, as presented in the ‘Programme performance overview’ in Annex 3, shows that most programmes are progressing well towards the targets set at the beginning of the programming period. For example, progress under the cohesion policy programme is accelerating quickly despite delays earlier in the period. Where there were specific issues in relation to the implementation of particular programmes, the ‘Programme performance overview’ provides further explanation on how this has affected performance and the mitigating measures that have been taken.

In November 2020, the European Court of Auditors published a new report on the performance of the EU budget. The Court looked in detail at the Commission’s high-level performance reports and at nine spending programmes across the budget. The report concluded that the Commission has solid procedures in place to produce performance reports and noted the many improvements that have been made, while identifying targeted areas for further improvement.

As it did last year, the Commission has annexed the ‘Programme performance overview’ to the annual management and performance report to highlight this priority. It has further strengthened the systematic assessment of the performance of the programmes in both the programme statements accompanying the draft budget and the ‘Programme performance overview’.

The Commission continues to give the highest priority to the performance of EU spending. It is fully committed to ensuring that the EU budget is implemented in accordance with the strongest financial management standards and is as effective as possible in achieving its objectives.

TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Annual Management and Performance Report for the EU Budget - Financial Year 2020

In 2020, the Commission also mobilised EUR 70 million to support Venezuelan migrants and refugees as well as their host communities in Columbia, Costa Rica, Ecuador, Peru and Venezuela.

In 2020, the EU continued to play a pivotal role in supporting the most vulnerable refugees with partner countries in the southern neighbourhood. By December 2020, the EU Regional Trust Fund in Response to the Syrian Crisis had directly reached more than 7.8 million people through education, livelihood and social assistance, and measures for health, water and sanitation, as well as protection, most importantly in Iraq, Jordan, Lebanon and Turkey.

·In response to the COVID-19 crisis in Turkey, close to EUR 105 million in support has been mobilised, in particular for the most vulnerable refugees.

·Over 3 400 healthcare service staff in Turkey are employed in 177 migrant health centres. Over 14 million healthcare consultations have been delivered, and over 4 million vaccination doses have been provided to migrant infants and pregnant women.

·Through the Facility, some 1 800 000 refugees received basic needs support, 668 900 refugee children receive educational support, and healthcare and protection services are being delivered to millions of refugees and host communities in Turkey.Up to 365 schools will be built in Turkey.

The 2016 EU–Turkey statement has also provided safe and legal pathways to the EU for 28 621 people in need of international protection through resettlement.

In 2020, the European Commission continued to be fully committed to assisting the most vulnerable refugees in Turkey and to providing support to their host communities. In 2020, areas of assistance covered support for basic needs, healthcare, protection and municipal infrastructure, along with training, employment and business development for refugees and vulnerable local populations alike. In the same year, the Commission completed the allocation and contracting of EUR 6 billion in operational budget for the Facility for Refugees in Turkey, in order to ensure that the needs of refugees and host communities in Turkey are addressed in a comprehensive and coordinated manner.

The EU budget put a clear focus on development cooperation, and particularly on improving the conditions of refugees hosted by non-EU countries and investing in their health, education and skills and in infrastructure, sustainable growth and security. It also helps countries hosting refugees to provide them with humanitarian conditions that uphold their dignity.

1.7.4. The EU budget helps address the refugee crisis by offering dignity and assistance to refugees to meet their basic needs

·Of that group, 1.8 million children living in crises and conflict had received education by 2020, with the EU standing by its earlier commitment to devote 10% of its initial humanitarian budget to education in emergencies.

As part of Team Europe, the Commission allocated EUR 450 million in humanitarian assistance for the urgent short-term emergency response to the health crisis and the resulting humanitarian needs, strengthening health and water systems.

Sixty-seven flights were organised by the EU Humanitarian Air Bridge, reaching 20 countries on four continents to deliver more than 1.2 tonnes of medical and humanitarian equipment and to transport more than 1 700 medical and humanitarian staff and other passengers.

A key asset for EU humanitarian action is a very strong field presence and the technical and operational expertise of its network of humanitarian field offices spread over almost 40 countries. The EU channels its aid through its network of around 200 organisations, including United Nations agencies, the International Red Cross and Red Crescent Movement and non-governmental organisations through which people in need can receive assistance even in hard-to-reach areas.

In parallel to the humanitarian response, EU funding also contributed to disaster preparedness, with the objective of building the capacity and resilience of vulnerable or disaster-affected communities. In 2020, approximately 35 million people worldwide benefited from disaster-preparedness actions in disaster-prone regions. In addition, the EU furthered its commitment to strengthening preparedness capacities for response and early action in relation to vulnerable or disaster-affected communities (e.g. in Mozambique, Nepal and the Philippines) through dedicated funding.

In 2020, EU humanitarian aid funded more than 170 million interventions, providing assistance in 97% of the countries for which the United Nations launched an appeal. 68% of the humanitarian aid budget was spent in countries ranked as being at very high risk of disaster, and more than 28% of the initial budget was spent on forgotten crises. The initial budget was topped up to respond to sudden-onset crises in 2020: for instance, in Lebanon, the EU mobilised more than EUR 30 million to tackle emergency humanitarian needs in the immediate aftermath of the devastating explosion that took place on 4 August in Beirut.

In 2020, most ongoing humanitarian crises were further compounded by the short- and medium-term impact of COVID-19, which received special focus in 2020. In parallel, the EU has continued addressing other new or pre-existing humanitarian needs, including for example the fight against the desert locust outbreak in East Africa, the humanitarian emergency in seven countries of the wider Sahel region, or the need for support for the most vulnerable impacted by the Syrian crisis.

Firmly rooted in the core humanitarian principles of humanity, neutrality, impartiality and independence, the EU’s humanitarian aid has contributed to saving lives and alleviating suffering wherever it can worldwide. From protracted conflicts in Africa and the Middle East to severe food crises, humanitarian needs are increasing faster than available resources, putting aid delivery to those most in need at risk. The EU continued its humanitarian mission by distributing more than EUR 2 billion in humanitarian aid in 2020 to countries hit by natural and human-made disasters. The EU and its Member States thereby remain, together, the world’s largest humanitarian aid donor, contributing more than 36% of the global share of humanitarian aid contributions.

·14 electoral processes and democratic cycles were supported, observed and monitored in 2020 (European Instrument for Democracy and Human Rights).

·80 pairings were established between cities of EU and non-EU countries in Asia and the Americas in the context of the new urban agenda under the international urban cooperation programme in 2020 (Partnership Instrument).

·19 fact-finding missions of the Organisation for the Prohibition of Chemical Weapons relating to the alleged use of chemicals as weapons were deployed to Syria in 2016-2017 (common foreign and security policy).

·500 000 small arms and light weapons and pieces of ammunition were destroyed in the western Balkans in 2017-2019 (Instrument contributing to Stability and Peace).

·1 035 staff of the Palestinian Authority were trained by the EU border assistance mission in Rafah from 2015 to 2020.

The EU’s support for its core values is further strengthened by the European Instrument for Democracy and Human Rights. Despite increasing attacks against the international human rights system and the international justice system, the Commission has continued to support the key institutions, including the International Criminal Court and the United Nations Office of the High Commissioner for Human Rights. The Human Rights Crises Facility of the European Instrument for Democracy and Human Rights provides a flexible funding method to respond to situations where there is a serious lack of fundamental freedoms, where human security is most at risk, where human rights organisations and defenders work in exceptionally difficult conditions or where the publication of a call for proposals would be inappropriate. For instance, in 2020, the implementation of the EU election observation missions required flexibility and adaptability to travel restrictions and to challenging sanitary conditions due to the COVID-19 pandemic.

In 2020, the EU Trust Fund for Colombia, partially funded from the Development Cooperation Instrument, continued to support the implementation of the peace agreement between the Colombian government and FARC (the Revolutionary Armed Forces of Colombia). It translated the EU’s political support into the peace agreement, in particular on the elements relating to rural reform, land reform and the social and economic reincorporation of former FARC combatants. In 2020, the fund also provided 39 partner countries with support to make their national social protection systems more inclusive, financially sustainable and responsive to shocks like the COVID-19 crisis.

The Partnership Instrument continued to contribute to the EU external action by supporting its foreign policy, covering challenges of global concern such as climate change and environmental protection; the international dimension of the Europe 2020 strategy for smart, sustainable and inclusive jobs and growth; and improving access to markets and boosting trade, investment and public diplomacy.

The non-proliferation and disarmament actions funded from the common foreign and security policy budget contributed to international peace and security by strengthening the norms against the proliferation of weapons of mass destruction. This was achieved through advancements in universalisation, institutional strength and the effective implementation of the relevant treaties and mechanisms (e.g. the Comprehensive Nuclear-Test-Ban Treaty), and by preventing and combating the illicit accumulation and trafficking of small arms and light weapons and their ammunition. It also supported the implementation of the Arms Trade Treaty and the adoption of policies on exports of military technology and equipment. Substantial common security and defence policy missions and the mandates of EU special representatives also ensured the preservation of stability.

Under the Instrument contributing to Stability and Peace, 56 actions responding to crisis situations in 2020 were adopted, 16 of which related to the COVID-19 crisis. The instrument played a pioneering role in responses to global, trans-regional and emerging threats, engaging in areas not previously covered by EU cooperation instruments through pilot actions that in some cases were later scaled up under more traditional development cooperation instruments such as the European Development Fund. Pertinent examples include those in the Sahel (on police cooperation and counterterrorism), the Horn of Africa (on the prevention and financing of terrorism) and Latin America (on police cooperation).

Human rights and democracy are under severe stress in many countries, a situation that has deteriorated further with the COVID-19 crisis. In 2020, the EU collaborated with consortia of civil society organisations to support journalists in Latin America and Africa and funded the creation of the global monitor of COVID-19’s impact on democracy and human rights ( ).

The COVID-19 pandemic has forced global leaders to re-think education systems and highlighted the importance of investing in connectivity and digitalisation. Digital and data technologies have been a key driver of the EU’s response; about EUR 60 million were mobilised in a Team Europe approach and redirected to immediate response interventions to provide relief in partner countries’ socio-economic systems, giving means to people to be able to continue with their education and to get access to health information and services.

Concerning actions on climate change, in 2020 the EU remained the leading global provider of climate finance and the most progressive actor in the international climate negotiation process. The Commission contributed to fulfilling the EU’s commitments under the Paris Agreement on climate change by supporting the upgrading and implementation of partner countries’ Nationally Determined Contributions and by assisting them in building their capacities to adapt to climate change through the establishment of a new EUR 100 million programme on disaster risk reduction.

The Team Europe approach was launched as a joint response to COVID-19 by the EU, its Member States and European Financial institutions and it mobilised successfully EUR 40 billion. As part of the programming process launched in 2020, around 150 ideas for Team Europe Initiatives have been identified. These are flagship transformational projects that will be designed, funded and implemented jointly, in a Team Europe approach.

2020 also brought us closer towards a new Partnership Agreement with the 79 members of the Organisation of African, Caribbean and Pacific States. The new ambitious agreement, also known as “post-Cotonou”, is not only set to redesign partners’ relations with a specific focus on the regions, but will also better address global challenges in the next two decades.

The EU’s relationship with Africa remained a key priority over the course of 2020. In March, the Communication detailing the EU’s partnership with Africa and the EU’s vision towards strengthening the EU’s alliance with Africa was launched in a Joint Communication together with the EEAS - “Towards a Comprehensive Strategy with Africa”.

When world leaders adopted the UN 2030 Agenda, they had anticipated the need for a shared framework to address multiple global challenges simultaneously. With the pandemic and its repercussions, progressing on sustainable development became acutely urgent. In 2020, COVID-19 deepened existing inequalities and reversed years of progress. Taking forward a transformative agenda, the EU together with its partners, started to deliver a Global Recovery Initiative that seeks to reduce inequalities and to promote human development and just, green transition at global level.

As a global force for peace, the rule of law, democracy and sustainable development, the EU seeks to establish these objectives and values worldwide. It does so through various instruments and trust funds that aim to reduce poverty and conflict potential, increase economic development and promote human rights and gender equality.

In Tunisia and Morocco, the joint EU–Council of Europe programme ‘Ensuring sustainable democratic governance and human rights in the southern Mediterranean’ has actively worked to address gender-based violence as a human rights violation. Tunisia requested accession to the Istanbul Convention in November 2019.

·access to services in the water, sanitation and hygiene sector has been improved for 483 704 individuals, notably in terms of drinking-water sources and hygiene promotion, and 265 municipal/regional water and waste-water facilities have been constructed or restored.

·more than 4.3 million individuals have been reached by primary healthcare consultations and health education activities, 7 380 professional staff have been trained in healthcare services and 204 pieces of health infrastructure have been upgraded, refurbished or equipped;

·504 225 children have gained access to basic formal and non-formal education, while 19 362 teachers have been trained and 324 education facilities have been constructed or refurbished;

·43 155 people have been trained and 6 229 local facilities have been supported as part of the programme to strengthen local infrastructure;

Via the EU Regional Trust Fund in Response to the Syrian crisis, since 2015:

For example, the EU’s support for Palestine () reached 55 000 beneficiaries in the West Bank, providing salaries and pensions to the Palestinian Authority’s civilian workers. It also provided 22 000 poor and vulnerable families in the West Bank and 65 000 such families in the Gaza Strip with cash assistance. Moreover, the Commission contributed to the payment of medical referrals to hospitals in eastern Jerusalem, maintaining the availability, access and sustainability of essential tertiary healthcare services to the Palestinian population, most of which are not available elsewhere in Palestine. In Syria, support was also addressed to the healthcare sector, with results including 1.8 million primary healthcare consultations, 15 085 referrals, 6 751 deliveries, the restoration of eight primary healthcare clinics, support for 320 primary health staff and robust capacity building to increase the competency of health staff across several needs-based areas.

In the southern neighbourhood, EU relations with the Middle East and North Africa are shaped through the Union for the Mediterranean and the European neighbourhood policy. The former focuses on regional cooperation, complementing the latter, which encourages political and economic reform coupled with financial or technical assistance at country level.

·9 800 prosecutors at the regional and local levels are undergoing a rigid vetting procedure, including professionalism and integrity checks and adaptive ability testing. 8 400 of them have already completed the procedure, with 6 500 successfully passing.

·197 judges of the Supreme Court, which was reformed in 2016, were selected following a transparent and merit-based process, including an integrity check and advanced psychological testing.

·300 high-level corruption cases against senior officials, politicians and businessmen have already been handled by the High Anti-Corruption Court, which was established with EU support.

Among other successes, through EU support in Ukraine, the following successes have been achieved.

In the eastern neighbourhood, Ukraine remains a key focus for support as it faces continued internal and external aggression. The EU supported Ukraine in increasing its resilience in order to reduce the damaging influence. EU assistance contributed to Ukraine’s comprehensive reform programme and to the stabilisation of its economy with unprecedented assistance packages (around EUR 1.6 billion of bilateral assistance between 2014 and 2020). Assistance was provided through programmes on, among other topics, decentralisation (Ukraine – local empowerment, accountability and development programme), anti-corruption (European Union anti-corruption initiative), rule-of-law (Pravo-Justice) and public administration reform (support to comprehensive reform of public administration in Ukraine).

The Eastern Partnership was launched in 2009, with the intention of promoting more thorough democratic and economic development and anti-corruption measures in former countries of the Soviet Union. No current prospects for EU membership are evident, and progress towards implementing measures to support EU principles has been slow at times in several partnership countries. This is particularly the case with regard to democracy, freedom of speech and anti-corruption measures. Nevertheless, the EU has supported more than 125 000 enterprises, backed EUR 2 billion worth of loans, sustained over 250 000 jobs and helped create around 34 000 new jobs since the partnership began.

·75 000 citizens were connected to cleaner and more efficient district heating in Pristina and Gjakova between 2014 and 2020.

·100 000 people, including students, researchers and staff, participated in the Erasmus+ activities involving partners in the western Balkans between 2014 and 2020.

The Instrument for Pre-accession Assistance is the means by which the EU supports reforms in the enlargement countries with financial and technical help. The funds build up the capacities of the countries throughout the accession process, resulting in progressive, positive developments in the region. During the 2014-2020 period, significant milestones were reached. The Commission adopted its opinion on Bosnia and Herzegovina’s application in May 2019, identifying 14 key priorities for the country to fulfil with a view to opening EU accession negotiations. In July 2018, the Commission confirmed that Kosovo () had fulfilled all outstanding visa liberalisation benchmarks. In March 2020, the European Council endorsed the decision to open accession negotiations with Albania and North Macedonia. Since January 2014, negotiations on 18 chapters have been opened with Serbia, while two have been provisionally closed. As of 2020, 33 chapters were open with Montenegro. To further support long-term economic recovery and to speed up the convergence with the EU in the region, in October 2020 the Commission put forward an economic and investment plan for the western Balkans, mobilising up to EUR 9 billion in grants, while a new Western Balkans Guarantee Facility will boost investments of up to EUR 20 billion. The plan also promotes strong regional integration through a common regional market, which the leaders of the western Balkans endorsed in November 2020 (). In 2020, the Commission continued to support the social and economic reforms in the region through the economic reform programmes and also through (1) incentivising the application of the principles of the European Pillar of Social Rights in these countries, (2) strengthening the regional cooperation in partnership with the International Labour Organization and the Regional Cooperation Council, and (3) the roll-out of the EU acquis.

The EUR 5.1 billion European external investment plan is set to generate investment of over EUR 50 billion in countries neighbouring the EU and in Africa. It is already benefiting individuals, communities and small businesses. In 2020, the plan was refocused to help respond to the COVID-19 pandemic, including EUR 400 million in financing for COVAX.

The EU provides assistance to neighbourhood countries and accession candidates not only through institutional support, but also through economic support and infrastructure development, which act as key building blocks in ensuring stability, prosperity and sustainability. The main budgetary vehicles to support the neighbourhood policy and enlargement countries in 2020 were the European Neighbourhood Instrument and the Instrument for Pre-accession Assistance II.

The European neighbourhood policy seeks to establish special relations with 16 of the EU’s neighbours in the southern Mediterranean and the Eastern Partnership, and focuses on four priority areas (good governance, democracy, the rule of law and human rights; economic development; security; and migration and mobility) with the objective of enhancing the resilience of the EU’s neighbouring states and societies. The enlargement policy guides, supports and monitors reforms in countries wishing to join the EU, in line with EU values, laws and standards. Itfosters peace and stability and helps to improve the quality of people’s lives.

COVAX is leading the effort to secure fair and equitable access to COVID-19 vaccines in low- and middle-income countries. Team Europe is one of the lead contributors to COVAX, having provided close to EUR 2.5 billion. The Commission participates in the COVAX Facility for equitable access to affordable COVID-19 vaccines and had contributed EUR 1 billion in guarantees by January 2021. The COVAX Facility aims to procure at least 2 billion doses of COVID-19 vaccines – enough so that at least 20% of the population can be immunised in every country.

Through its external action programmes, the EU promotes its core values across the globe, financing action to help promote democracy, peace, solidarity, stability, poverty eradication, prosperity and the preservation of natural resources in the EU’s neighbourhood and around the world. Moreover, the EU’s engagement in connectivity is part of its international promotion of the twin green and digital transitions. The EU budget helps foster a sustainable economy; social and digital development; and the protection of human rights, good governance and the rule of law. Both the strategic intent and the practical implementation of EU connectivity will remain at the heart of the EU’s geopolitical agenda. In the 2021-2027 long-term budget, the initiatives in this domain are grouped together under the heading ‘Neighbourhood and the world’.

As challenges become ever more global, the EU needs to have a more active role and a stronger voice in the world by enhancing its standing as a champion of democracy and promoting open and fair trade, partnership, multilateralism and a rules-based global order. The aim is to enhance relations with partner countries, promote sustainable development and build up the EU’s crisis management capabilities.

·406 tools have been put in place or further upgraded to facilitate the protection of critical infrastructure by Member States in all sectors of the economy.

·287 joint investigation teams and European Multidisciplinary Platform against Criminal Threats operational projects were supported by the Internal Security Fund in 2014-2020.

The efforts made throughout the years in this area have had tangible results. According to the European Union Agency for Law Enforcement Cooperation’s European Union Terrorism Situation and Trend Report 2020, cases of terrorist attacks fell to 119 in 2019, compared to 129 in 2018. As terrorism cannot be dealt with by Member States acting alone, the EU budget supports increased cooperation between Member States in this field, as well as training and capacity building.

The ‘Police’ strand of the Internal Security Fund () contributes to the fight against criminal threats, terrorism and security threats. A total of 21 EU networks have been put in place to strengthen mutual trust and information sharing between national authorities, and this strand finances the setting-up of national passenger name record systems, allowing national law enforcement authorities to exchange information on suspect air passengers. Moreover, the EU is fighting to protect freedom of religion and worship. Hence, EUR 23 million was provided in 2020 for Member States and religious communities to protect places of worship and public spaces. The new counterterrorism agenda () sets out the way forward for actions at EU level to better anticipate, prevent, protect against and respond to terrorist threats.

The EU institutions aim to strengthen security in the European Union, facilitating cross-border cooperation and the exchange of information between Member States’ competent authorities, enabling the interoperability of the relevant EU security information systems. This is done through the Internal Security Fund, which also facilitates joint operations and enables the upgrading of security-relevant constructions, promoting the implementation of the internal security strategy and law enforcement cooperation.

In order to support the defence industry during the COVID-19 crisis, both the preparatory action on defence research and the European defence industrial development programme were fully implemented through the signing of grant agreements and the pre-financing of all projects retained for funding. However, and to accommodate the effects of the crisis in the procedures and working arrangements, it was decided to extend the submission deadline for the 2020 call for proposals until December 2020, with no impact on the financial implementation of the programme in 2020.

To address the fragmentation of the defence industry in the EU, and with the aim of building the next generation of critical defence capabilities, the European defence industrial development programme was adopted in July 2018 for a duration of 2 years until 31 December 2020, with a budget of EUR 500 million. It enhanced the competitiveness and the innovative capacity of the defence industry in the EU, and collaboration between Member States, in the development phase of defence products and technologies, thus facilitating better exploitation of economies of scale. By supporting the development phase, the programme contributes to the better exploitation of the results of defence research and helps to cover the gap between research and production. Given that the aim of the programme is, in particular, to enhance cooperation between undertakings across Member States, the only activities that are eligible for funding under the programme are those carried out by a consortium of at least three undertakings based in at least three different Member States. The programme fosters a collaborative approach between defence industry players in the Member States, with the EU’s financial contribution unlocking defence development projects that otherwise would not have started due to their financing needs or the technological risks involved. Almost 40% of the beneficiaries receiving funding following the 2019 European defence industrial development programme calls are small and medium-sized enterprises, a critical part of the European defence industry. Another pilot programme is the preparatory action on defence research. In 2020, it provided EUR 23 million in funding to 10 defence research projects. The programmes pave the way for a fully fledged European Defence Fund, which, from 2021, will help create an integrated defence industrial base across the EU.

A strong defence industry lies at the core of a more autonomous EU in the field of security