COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Consolidated annual accounts of the European Union 2013
Date: 2014-07-30
Institutions: European Commission
Subjects: balance sheet, consolidated account, financial situation, general budget (EU), implementation of the budget













EUR-Lex - 52014DC0510 - EN











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52014DC0510

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Consolidated annual accounts of the European Union 2013 /* COM/2014/0510 final */









                              
Consolidated annual accounts of the
European Union 2013
CONTENTS
NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS. 5
EU BUDGET: FROM
PREPARATION TO DISCHARGE. 7
CONSOLIDATED
FINANCIAL STATEMENTS AND EXPLANATORY NOTES. 13
BALANCE SHEET. 16
STATEMENT OF
FINANCIAL PERFORMANCE. 17
CASHFLOW STATEMENT. 18
STATEMENT OF CHANGES
IN NET ASSETS. 19
NOTES TO THE
FINANCIAL STATEMENTS. 20
AGGREGATED REPORTS
ON THE IMPLEMENTATION OF THE BUDGET AND EXPLANATORY NOTES. 96
NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS
The consolidated annual accounts of
the European Union for the year 2013 have been prepared on the basis of the
information presented by the institutions and bodies under Article 148(2) of
the Financial Regulation applicable to the general budget of the European
Union. I hereby declare that they were prepared in accordance with Title IX of
this Financial Regulation and with the accounting principles, rules and methods
set out in the notes to the financial statements.
I have obtained from the accounting
officers of these institutions and bodies, who certified its reliability, all
the information necessary for the production of the accounts that show the
European Union's assets and liabilities and the budgetary implementation.
I hereby certify that based on this
information, and on such checks as I deemed necessary to sign off the accounts
of the European Commission, I have a reasonable assurance that the accounts
present fairly, in all material aspects, the financial position, the results of
the operations and the cashflows of the European Union.
[signed]
Manfred Kraff
Accounting Officer of the Commission
24 July 2014
EU BUDGET: FROM PREPARATION TO DISCHARGE
The consolidated annual accounts of
the European Union (EU) provide information on the activities of the
institutions, agencies and other bodies of the EU from a budgetary and accrual
accounting perspective. These accounts do not comprise the annual accounts of
Member States.
 
1.              
ANNUAL BUDGET
The EU Budget finances a wide range
of policies and programmes throughout the EU. In accordance with the priorities
set by the European Parliament and the Council in the multi-annual financial
framework (MFF), the European Commission (hereinafter referred to as
“Commission”) carries out specific programmes, activities and projects in the
field. These could range from supporting education projects for the mobility of
students and teachers, to support for farmers, to productive investments
creating or maintaining jobs, to development aid, to projects aimed at
supporting better work environment for workers in the EU, to enhance the
control of the external borders.
Over 90 % of the EU budget goes to
funding such EU policies and activities. The direct link between the annual
budget and the EU policies is ensured through activity-based budgeting (ABB).
The activity-based budget nomenclature allows for clear identification of the
policy areas of the EU and the total amount of resources allocated to each of
these areas.
The policy areas are subdivided
into some 200 activities of which over 110 include operating budget headings
and are thus reflected in the budget nomenclature as budget chapters. These
policy areas are predominantly operational, since their core activities are
aimed at benefiting a third-party, each within their respective domains of
activity. Other policy areas, however, are non-operational and assure the
proper functioning of the Commission, such as ‘Coordination and legal advice’‚
and ‘Budget’. The activity structure provides the common conceptual framework
for priority setting, planning, budgeting, monitoring and reporting, with the
principal aim of enhancing the economic, efficient and effective use of
resources.
The budget is prepared by the
Commission and agreed normally in mid-December by the Parliament and the
Council in accordance with the procedure of Article 314 of the Treaty on the
Functioning of the EU (TFEU).
 
2.              
HOW IS THE EU FUNDED?
The EU has two main categories of
funding: Own resources revenues and sundry revenues.
 
2.1          
Own resource revenues
Own resource revenue accrues
automatically to the EU to enable it to finance its budget without the need for
a subsequent decision by national authorities. The overall amount of own
resources needed to finance the budget is determined by total expenditure less sundry
revenue. The total amount of own resources cannot exceed 1.23 % of the gross
national income (GNI) of the EU. Own resources can be divided into traditional
own resources, the own resource based on value added tax (VAT) and the resource
based on gross national income (GNI).
 
2.2          
Sundry revenues
Sundry revenues arising from the
activities of the EU normally represent less than 10 % of total revenue.
These are, for instance, competition fines received and recovery orders issued to
private and public debtors with regard to the management of EU projects.
Penalty payments imposed by the Court of Justice on Member States that fail to
comply with a given judgment also fall into this category. Any debt not paid at
the due date is subject to default interest. Where debts of third parties other
than Member States remain unpaid, the Council and the Commission can adopt
decisions imposing the obligation to pay which are directly enforceable in
accordance with the rules of civil procedure in force in the territory where
enforcement is to be carried out. Defaulting debtors are subject to debt
collecting procedures launched by the Legal Service of the Commission with the
help of external law firms.
 
3.              
HOW THE EU BUDGET IS MANAGED AND SPENT
3.1          
Primary operational expenditure
The EU's operational expenditure
covers the various headings of the financial framework and takes different
forms, depending on how the money is paid out and managed. For the 2013
accounts, the Commission classifies its expenditure as follows:
Direct centralised management: this
is where the budget is implemented directly by the Commission services.
Indirect centralised management: this
refers to cases where the Commission confers tasks of implementation of the
budget to bodies of EU law or national law, such as the EU agencies.
Decentralised management: these are
the cases where the Commission delegates certain tasks for implementation of
the budget to third countries.
Shared management: under this method
of management budget implementation tasks are delegated to Member States. The
majority of the expenditure falls under this mode covering such areas as
agricultural spending and structural actions.
Joint management: under this method,
the Commission entrusts certain implementation tasks to an international
organisation.
Article 58 of the new Financial
Regulation which partly revised the methods of implementation of the budget
shall only apply as of 1 January 2014.
 
3.2          
The different financial actors within the
Commission
The College
of Commissioners assumes collective political responsibility but in
practice does not exercise itself the budget implementation powers vested in
it. It delegates these tasks each year to individual civil servants accountable
to the College and subject to the Financial Regulation and the Staff
Regulations. The staff concerned – generally Directors-General and Heads of
Service - are known as “Authorising Officers by delegation”. They in turn may
further delegate budget implementation tasks to “Authorising Officers by
sub-delegation”.
The responsibility of the Authorising Officers covers the entire management
process, from determining what needs to be done to achieve the policy
objectives set by the institution to managing the activities launched from both
an operational and budgetary standpoint, including adopting legal commitments,
monitoring performance, making payments and recovering funds, if necessary.
Sound financial management and proper accountability are assured within each of
the Services by the separation of management control (in the hands of the
Authorising Officers) from internal audit and compliance with clear internal control
standards (based on international standards), ex-ante and ex-post controls,
independent internal auditing on the basis of risk assessments, and regular
reporting on activities to the individual Commissioners. 
Each Authorising Officer is
required to prepare an Annual Activity Report (AAR) on the activities under his
responsibility. In this AAR, he reports on policy results and on the reasonable
assurance he may have that the resources assigned to the activities described
in his report have been used for their intended purpose and in accordance with
the principles of sound financial management, and that the control procedures
put in place give the necessary guarantees concerning the legality and
regularity of the underlying transactions. On the basis of Article 66 of the
Financial Regulation, the Commission adopts a summary report (synthesis report)
on the AAR’s, the overall opinion of the Internal Auditor, by which the
Commission takes overall political responsibility for the management of the EU
budget in line with Article 317 of the TFEU. This report and the AAR’s are
available at:
http://ec.europa.eu/atwork/planning-and-preparing/synthesis-report/index_en.htm.
The Accounting
Officer executes payment and recovery orders drawn up by Authorising
Officers and is responsible for managing the treasury, laying down accounting
rules and methods, validating accounting systems, keeping the accounts and
drawing up the institution's annual accounts. Furthermore, the Accounting
Officer is required to sign the annual accounts declaring that they present
fairly, in all material aspects, the financial position, the results of the
operations and the cashflows.
3.3          
Committing to spend the EU budget
Before a legal commitment (for
example a contract or grant agreement) can be entered into with a third party,
there must be a budget line authorising the activity in question in the annual
budget. There must also be sufficient funds on the budget line to cover the
expenditure. If these conditions are met, the funds required must be reserved
in the budget by means of a budgetary commitment made in the accounting system
and only then a legal commitment can be made. No money can be spent from the EU
budget unless and until the Authorising Officer has adopted a budget
commitment. 
Once approved, the budgetary
commitment is recorded in the budgetary accounting system and the
appropriations are consumed accordingly. This, however, has no effect on the
financial statements (or general ledger) since no expense has yet been
incurred. 
 
3.4          
Making a payment
3.4.1          
General rules
No payment can be made unless a
budgetary commitment has already been approved by the Authorising Officer
dealing with the operation in question. Once a payment is approved in the
accounting system, the next step is for the transfer to be made to the
beneficiary’s account. The Commission makes almost 1.9 million payments a
year. The Commission is a participant in SWIFT (Society for Worldwide Interbank
Financial Telecommunication). 
3.4.2          
Pre-financing, cost statements and eligibility of
expenditure
Pre-financing is a payment intended
to provide the beneficiary with a cash advance, i.e. a float. It may be split
into a number of payments over a period defined in the particular legal
commitment. The float or advance is either used for the purpose for which it
was provided during the period defined in the legal commitment or it is repaid
– if the beneficiary does not incur eligible expenditures he has the obligation
to return the pre-financing advance to the EU. Thus pre-financing paid is not a
definitive expense until the relevant conditions are met and so is recorded as
an asset on the EU balance sheet when the initial payment is made. The amount
of the pre-financing asset is reduced (wholly or partially) by the acceptance
of eligible costs and amounts returned. 
Some time after the payment of the
pre-financing, a cost claim will be received by the relevant EU body so as to
justify how the pre-financing amount was spent by the beneficiary in accordance
with the legal commitment. The rhythm of receipt of these cost claims is
variable depending on the type of action being funded and the conditions, and
they are not necessarily received at year-end.
Eligibility criteria are defined in
the basic act, in the calls for proposal, in other information documents for
grant beneficiaries and/or in the contractual clauses of the grant agreements
or in the grant decision. After analysis, the eligible amounts are taken into
expenses and the beneficiary is informed about any non-eligible amounts. 
4.              
PROTECTION OF THE EU BUDGET:
FINANCIAL CORRECTIONS AND RECOVERIES
The Financial Regulation and other
applicable legislation, particularly concerning agriculture and cohesion
policies, give the right to make checks on expenditure up to many years after
it was incurred. Where errors, irregularities or fraud are detected, recoveries
or financial corrections are applied. The detection of errors, irregularities
or fraud and their corrections are the last stage in the operation of control
systems, and are essential in order to demonstrate sound financial management.
In the case of grants, the
eligibility of expenditure charged to the budget is verified by the relevant EU
services, or in the case of shared management, by the Member States, on the
basis of the supporting documents stipulated in the applicable legislation or
in the conditions of each grant. With the aim of optimising the relationship
between the costs and the benefits of control systems, checks on the supporting
documents for final claims in direct centralised management tend to be more
intense than those on interim claims, and thus may detect errors in interim
payments which are corrected by adjustment of the final payment. Furthermore,
the EU and/or the Member State has the obligation to verify the probity of the
supporting documents by making checks on the claimant's premises, during the
implementation of the action financed and/or afterwards (ex-post). There are
various procedures foreseen in the applicable legislation for the process of
dealing with errors, irregularities or fraud detected by the Commission and by
the Member States – more detailed information is included in note 6 of
the financial statements.
 
5.              
Borrowing and lending activities
The EU is empowered by basic acts
deriving from the EU Treaty to adopt borrowing programmes to mobilise the
financial resources necessary to provide financial assistance to Member States
and non-Member States. The Commission, acting on behalf of the EU, currently
operates three main programmes, the European Financial Stabilisation Mechanism
(EFSM), Balance of payments (BOP) and Macro Financial Assistance (MFA), under
which it may grant loans and fund these by issuing debt instruments in the
capital markets or with financial institutions. Since the funds raised are back-to-back
operations there is no direct impact on the EU budget, however, from a legal
point of view, the debt service of the borrowings remains the obligation of the
EU.
 
6.              
FINANCIAL REPORTING
The annual accounts of the EU
comprise two separate but linked parts:
a)           
Financial statements; and
b)           
Reports on implementation of the budget, which
provide a detailed record of budget implementation.
The annual accounts are adopted by
the Commission and presented to the European Court of Auditors (hereinafter
referred to as the “Court”) for audit and finally to the European Parliament
and Council as part of the discharge process.
In addition to the above annual
reporting, monthly budget implementation reports are also prepared.
6.1          
Financial Statements
It is the responsibility of the
Commission's Accounting Officer to prepare the EU's financial statements and
ensure that they present fairly, in all material aspects, the financial
position, the result of the operations and the cashflows of the EU. These are
drawn up in accordance with EU Accounting Rules that are based on International
Public Sector Accounting Standards (IPSAS). For more information, see note 1
of the financial statements.
 
6.2          
Budgetary accounts
It is the responsibility of the
Commission's Accounting Officer to prepare the reports on implementation of the
budget both on a monthly and annual basis. Only the Commission budget contains
administrative appropriations and operating appropriations. The other
Institutions have only administrative appropriations. Furthermore, the budget
distinguishes between two types of appropriation: non-differentiated
appropriations and differentiated appropriations. Non-differentiated
appropriations are used to finance operations of an annual nature (which comply
with the principle of annuality). Differentiated appropriations were introduced
in order to reconcile the principle of annuality with the need to manage
multi-annual operations. They are intended to cover mainly multi-annual
operations. Differentiated appropriations are split into commitment and payment
appropriations:
–     
commitment
appropriations: cover the total cost of the
legal obligations entered into for the current financial year for operations
extending over a number of years. However, budgetary commitments for actions
extending over more than one financial year may be broken down over several
years into annual instalments.
–     
payment appropriations: cover expenditure arising from commitments entered into in the
current financial year and/or earlier financial years.
With the introduction of
differentiated appropriations, a gap developed between commitments entered into
and payments made: this gap, corresponding to outstanding commitments,
represents the time-lag between when the commitments are entered into and when
the corresponding payments are made. It is known as the RAL ("Reste à
Liquider").
 
7.              
AUDIT AND DISCHARGE
7.1          
Audit
The EU’s annual accounts and
resource management are audited by the Court, its external auditor, which draws
up an annual report for the European Parliament and the Council. The Court's
main task is to conduct an external, independent audit of the EU's annual
accounts. As part of its activities, the Court produces:
(1)         
an annual report on the activities financed from
the general budget, detailing its observations on the annual accounts and
underlying transactions;
(2)         
an opinion, based on its audits and given in the
annual report in the form of a statement of assurance, on (i) the reliability
of the accounts and (ii) the legality and regularity of the underlying
transactions involving both revenue collected from taxable persons and payments
to final beneficiaries;
(3)         
special reports giving the findings of audits
covering specific areas.
7.2          
Discharge
The final step of a budget
lifecycle is the discharge of the budget for a given financial year. The
European Parliament is the discharge authority within the EU. This means that
following the audit and finalisation of the annual accounts it falls to the
Council to recommend and then to the European Parliament to give a discharge to
the Commission and other EU bodies for implementing the EU budget for a given
financial year. This decision is based on an examination of the annual
accounts, the Commission's annual evaluation report and the annual report of
the Court and replies of the Commission, and also following questions and
further information requests to the Commission.
The discharge represents the
political aspect of the external control of budget implementation and is the
decision by which the European Parliament, acting on a Council recommendation,
"releases" the Commission (and other EU bodies) from its
responsibility for management of a given budget by marking the end of that
budget's existence. This discharge procedure may produce one of three outcomes:
the granting, postponement or the refusal of the discharge. Integral to the
annual budgetary discharge procedure in the European Parliament are the
hearings with Commissioners who are questioned by the Members of the European
Parliament's Budgetary Control Committee regarding the policy areas under their
responsibility. The final discharge report including specific request to the
Commission for action is adopted in Plenary. The Council discharge
recommendation is adopted by ECOFIN. Both, the European Parliament's discharge
report as well as the Council discharge recommendations are subject to an
annual follow up report in which the Commission outlines the concrete actions
it has taken to implement the requests made by the European Parliament and the
Council’s recommendations.
 
EUROPEAN UNION
FINANCIAL YEAR 2013
EUROPEAN UNION
fINANIAL YEAR 2013
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES*
* It should be noted
that due to the rounding of figures into millions of euros, some financial data
in the tables below may appear not to add-up.
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS AND
EXPLANATORY NOTES
BALANCE SHEET. 16
STATEMENT OF
FINANCIAL PERFORMANCE. 17
CASHFLOW STATEMENT. 18
STATEMENT OF CHANGES
IN NET ASSETS. 19
NOTES TO THE
FINANCIAL STATEMENTS. 20
1.          SIGNIFICANT
ACCOUNTING POLICIES. 21
2.          NOTES
TO THE BALANCE SHEET. 33
3.          NOTES
TO THE STATEMENT OF FINANCIAL PERFORMANCE. 55
4.          NOTES
TO THE CASHFLOW STATEMENT. 66
5.          CONTINGENT
ASSETS & LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES. 67
6.          PROTECTION
OF THE EU BUDGET. 71
7.          FINANCIAL
SUPPORT MECHANISMS. 78
8.          FINANCIAL
RISK MANAGEMENT. 83
9.          RELATED
PARTY DISCLOSURES. 90
10.        EVENTS
AFTER THE BALANCE SHEET DATE. 92
11.        SCOPE OF
CONSOLIDATION. 93
BALANCE SHEET
   ||   ||   ||  EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 NON-CURRENT ASSETS ||   ||   ||   
 Intangible assets || 2.1 ||  237 ||  188 
 Property, plant and equipment || 2.2 || 6 104 || 5 978 
 Investments accounted for using the equity method || 2.3 ||  349 ||  392 
 Financial assets || 2.4 || 59 844 || 62 311 
 Receivables and recoverables || 2.5 ||  498 ||  564 
 Pre-financing || 2.6 || 38 072 || 44 505 
   ||   || 105 104 || 113 938 
 CURRENT ASSETS ||   ||   ||   
 Inventories || 2.7 ||  128 ||  138 
 Financial assets || 2.8 || 5 571 || 1 981 
 Receivables and recoverables || 2.9 || 13 182 || 14 039 
 Pre-financing || 2.10 || 21 367 || 13 238 
 Cash and cash equivalents || 2.11 || 9 510 || 10 674 
   ||   || 49 758 || 40 070 
 TOTAL ASSETS ||   || 154 862 || 154 008 
   ||   ||   ||   
 NON-CURRENT LIABILITIES ||   ||   ||   
 Pension and other employee benefits || 2.12 || (46 818) || (42 503) 
 Provisions || 2.13 || (1 323) || (1 258) 
 Financial liabilities || 2.14 || (54 153) || (57 232) 
 Other liabilities || 2.15 || (2 216) || (2 527) 
   ||   || (104 510) || (103 520) 
 CURRENT LIABILITIES ||   ||   ||   
 Provisions || 2.16 ||  (545) ||  (806) 
 Financial liabilities || 2.17 || (3 065) ||  (15) 
 Payables || 2.18 || (92 594) || (90 083) 
   ||   || (96 204) || (90 904) 
 TOTAL LIABILITIES ||   || (200 714) || (194 424) 
   ||   ||   ||   
 NET ASSETS ||   || (45 852) || (40 416) 
   ||   ||   ||   
 Reserves || 2.19 || 4 073 || 4 061 
 Amounts to be called from Member States* || 2.20 || (49 925) || (44 477) 
   ||   ||   ||   
 NET ASSETS ||   || (45 852) || (40 416) 
*  The
European Parliament adopted a budget on 20 November 2013 which provides for the
payment of the EU's short-term liabilities from own resources to be collected
by, or called up from, the Member States in 2014. Additionally, under Article
83 of the Staff Regulations (Council Regulation 259/68 of 29 February 1968 as amended),
the Member States shall jointly guarantee the liability for pensions.
 
STATEMENT OF
FINANCIAL PERFORMANCE
   ||   ||   || EUR millions 
   || Note || 2013 || 2012 
 OPERATING REVENUE ||   ||   ||   
 Own resource and contributions revenue || 3.1 || 141 241 || 130 919 
 Other operating revenue || 3.2 || 8 414 || 6 826 
   ||   || 149 655 || 137 745 
 OPERATING EXPENSES ||   ||   ||   
 Administrative expenses || 3.3 || (9 269) || (9 320) 
 Operating expenses || 3.4 || (138 571) || (124 633) 
   ||   || (147 840) || (133 953) 
 SURPLUS FROM OPERATING ACTIVITIES ||   || 1 815 || 3 792 
 Financial revenue || 3.5 || 2 038 || 2 157 
 Financial expenses || 3.6 || (2 045) || (1 942) 
 Movement in pension and other employee benefits liability ||   || (5 565) || (8 846) 
 Share of net deficit of joint ventures and associates || 3.7 ||  (608) ||  (490) 
 ECONOMIC RESULT OF THE YEAR ||   || (4 365) || (5 329) 
CASHFLOW
STATEMENT
   ||   ||   || EUR millions 
   || Note || 2013 || 2012 
 Economic result of the year ||   || (4 365) || (5 329) 
 Operating activities || 4.2 ||   ||   
 Amortisation ||   ||  48 ||  39 
 Depreciation ||   ||  401 ||  405 
 (Increase)/decrease in loans ||   ||  20 || (16 062) 
 (Increase)/decrease in receivables and recoverables ||   ||  923 || (4 837) 
 (Increase)/decrease in pre-financing ||   || (1 695) || (2 013) 
 (Increase)/decrease in inventories ||   ||  10 ||  (44) 
 Increase/(decrease) in provisions ||   ||  (196) ||  299 
 Increase/(decrease) in financial liabilities ||   ||  (29) || 16 017 
 Increase/(decrease) in other liabilities ||   ||  (311) ||  468 
 Increase/(decrease) in payables ||   || 2 511 || (1 390) 
 Prior year budgetary surplus taken as non-cash revenue ||   || (1 023) || (1 497) 
 Other non-cash movements ||   ||  (50) ||  260 
 Increase/(decrease) in pension and employee benefits liability ||   || 4 315 || 7 668 
   ||   ||   ||   
 Investing activities || 4.3 ||   ||   
 (Increase)/decrease in intangible assets and property, plant and equipment ||   ||  (624) || (1 390) 
 (Increase)/decrease in investments accounted for using the equity method ||   ||  43 ||  (18) 
 (Increase)/decrease in available for sale financial assets ||   || (1 142) ||  (837) 
   ||   ||   ||   
 NET CASHFLOW ||   || (1 164) || (8 261) 
   ||   ||   ||   
 Net increase/(decrease) in cash and cash equivalents ||   || (1 164) || (8 261) 
 Cash and cash equivalents at the beginning of the year || 2.11 || 10 674 || 18 935 
 Cash and cash equivalents at year-end || 2.11 || 9 510 || 10 674 
STATEMENT OF
CHANGES IN NET ASSETS
   ||   ||   || EUR millions 
   || Reserves (A) || Amounts to be called from     Member States (B) || Net Assets =(A)+(B) 
   || Fair value reserve || Other reserves || Accumulated Surplus/(Deficit) || Economic result of the year 
 BALANCE AS AT 31.12.2011 ||  (108) || 3 716 || (35 669) || (1 789) || (33 850) 
 Movement in Guarantee Fund reserve || - ||  168 ||  (168) || - || 0 
 Fair value movements ||  258 || - || - || - ||  258 
 Other || - ||  21 ||  (19) || - ||  2 
 Allocation of the 2011 economic result || - ||  6 || (1 795) || 1 789 || 0 
 2011 budget result credited to Member States || - || - || (1 497) || - || (1 497) 
 Economic Result of the year || - || - || - || (5 329) || (5 329) 
 BALANCE AS AT 31.12.2012 ||  150 || 3 911 || (39 148) || (5 329) || (40 416) 
 Movement in Guarantee Fund reserve || - ||  46 ||  (46) || - || 0 
 Fair value movements ||  (51) || - || - || - ||  (51) 
 Other || - ||  12 ||  (9) || - ||  3 
 Allocation of the 2012 economic result || - ||  5 || (5 334) || 5 329 || 0 
 2012 budget result credited to Member States || - || - || (1 023) || - || (1 023) 
 Economic result of the year || - || - || - || (4 365) || (4 365) 
 BALANCE AS AT 31.12.2013 ||  99 || 3 974 || (45 560) || (4 365) || (45 852) 
NOTES TO THE FINANCIAL STATEMENTS
1.            
SIGNIFICANT ACCOUNTING POLICIES
1.1.      LEGAL BASIS AND ACCOUNTING RULES
The accounts of the EU are kept in
accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament
and of the Council of 25 October 2012 on the financial rules applicable to the
general budget of the Union and repealing Council Regulation (EC, Euratom) No
1605/2002 (OJ L 298, 26.10.2012, p. 1) hereinafter referred to
as the 'Financial Regulation' and Commission Delegated Regulation (EU) No 1268/2012
of 29 October 2012 (OJ L 362, 31.12.2012, p. 1) laying down
detailed rules of application of this Financial Regulation.
In accordance with article 143 of
the Financial Regulation, the EU prepares its financial statements on the basis
of accrual-based accounting rules that are based on International Public Sector
Accounting Standards (IPSAS). These accounting rules, adopted by the Accounting
Officer of the Commission, have to be applied by all the institutions and EU
bodies falling within the scope of consolidation in order to establish a
uniform set of rules for accounting, valuation and presentation of the accounts
with a view to harmonising the process for drawing up the financial statements
and consolidation. The accounts are kept in Euro on the basis of the calendar
year.
 
1.2.      ACCOUNTING PRINCIPLES
The objective of the financial
statements is to provide information about the financial position, performance
and cashflows of an entity that is useful to a wide range of users. For the EU
as a public sector entity, the objectives are more specifically to provide
information useful for decision making, and to demonstrate the accountability
of the entity for the resources entrusted to it. It is with these goals in mind
that the present document has been drawn up. 
The overall considerations (or
accounting principles) to be followed when preparing the financial statements
are laid down in EU accounting rule 2 and are the same as those described in
IPSAS 1, that is: fair presentation, accrual basis, going concern, consistency
of presentation, aggregation, offsetting and comparative information. The
qualitative characteristics of financial reporting according to article 144
of the Financial Regulation are relevance, reliability, understandability and
comparability.
Preparation of the financial
statements in accordance with the above mentioned rules and principles requires
management to make estimates that affect the reported amounts of certain items
in the balance sheet and statement of financial performance, as well as the
disclosures of contingent assets and liabilities.
1.3.      CONSOLIDATION
SCOPE OF CONSOLIDATION
The consolidated financial
statements of the EU comprise all significant controlled entities (i.e. the EU
institutions (including the Commission) and the EU agencies), associates and
joint ventures, this being 52 controlled entities, 5 joint ventures and 4
associates. The complete list of consolidated entities can be found in note 11.1 of the EU accounts. In comparison with 2012, the scope
of consolidation has been extended by 1 controlled entity (agency). The impact
of the additions on the consolidated financial statements is not material.
CONTROLLED ENTITIES
The decision to include an entity
in the scope of consolidation is based on the control concept. Controlled
entities are all entities over which the EU has, directly or indirectly, the
power to govern the financial and operating policies so as to be able to
benefit from these entities' activities. This power must be presently exercisable.
Controlled entities are fully consolidated. The consolidation begins at the
first date on which control exists, and ends when such control no longer
exists.
The most common indicators of
control within the EU are: creation of the entity through founding treaties or
secondary legislation, financing of the entity from the general budget, the
existence of voting rights in the governing bodies, audit by the Court and
discharge by the European Parliament. It is clear that an assessment for each
entity needs to be made in order to decide whether one or all of the criteria
listed above are sufficient to trigger control.
Under this approach, the EU's
institutions (except the European Central Bank - ECB) and agencies (excluding
the agencies of the former 2nd pillar) are considered as under the exclusive
control of the EU and are therefore included in the consolidation scope.
Furthermore the European Coal and Steel Community (ECSC) in Liquidation is also
considered as a controlled entity. 
All material inter-company transactions
and balances between EU controlled entities are eliminated, while unrealised
gains and losses on inter-entity transactions are not material and have
therefore not been eliminated.
JOINT VENTURES
A joint venture is a contractual
arrangement whereby the EU and one or more parties (the "venturers")
undertake an economic activity which is subject to joint control. Joint control
is the contractually agreed sharing of control, directly or indirectly, over an
activity embodying service potential.
Participations in joint ventures
are accounted for using the equity method initially recognised at cost. The
EU's interest in the results of its jointly controlled entities is recognised
in the statement of financial performance, and its interest in the movements in
reserves is recognised in the reserves. The initial cost plus all movements
(further contributions, share of economic results and reserve movements,
impairments, and dividends) give the book value of the joint venture in the
financial statements at the balance sheet date.
Unrealised gains and losses on
transactions between the EU and its jointly controlled entities are not
material and have therefore not been eliminated. The accounting policies of
joint ventures may differ from those adopted by the EU for like transactions
and events in similar circumstances.
ASSOCIATES
Associates are entities over which
the EU has, directly or indirectly, significant influence but not control. It
is presumed that significant influence is given if the EU holds directly or
indirectly 20 % or more of the voting rights.
Participations in associates are
accounted for using the equity method, initially recognised at cost. The EU's
share of its associates' results is recognised in the statement of financial
performance, and its share of movements in reserves is recognised in the
reserves. The initial cost plus all movements (further contributions, share of
economic results and reserve movements, impairments, and dividends) give the
book value of the associate in the financial statements at the balance sheet
date. Distributions received from an associate reduce the carrying amount of
the asset. Unrealised gains and losses on transactions between the EU and its
associates are not material and have therefore not been eliminated.
The accounting policies of
associates may differ from those adopted by the EU for like transactions and
events in similar circumstances. In cases where the EU holds 20 % or more
of an investment capital fund, it does not seek to exert significant influence.
Such funds are therefore treated as financial instruments and categorised as
available for sale financial assets.
NON-CONSOLIDATED ENTITIES THE FUNDS OF
WHICH ARE MANAGED BY THE COMMISSION
The funds of the Sickness Insurance
Scheme for staff of the EU, the European Development Fund and the Participant's
Guarantee Fund are managed by the Commission on their behalf, however since
these entities are not controlled by the EU they are therefore not consolidated
in its financial statements – see note 11.2 of
the EU accounts for further details on the amounts concerned.
 
1.4.      BASIS OF PREPARATION
1.4.1.   Currency and basis for conversion
Functional and
reporting currency
The financial statements are
presented in millions of euros, the euro being the EU's functional and reporting
currency.
Transactions and
balances
Foreign currency transactions are
translated into euros using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement
of foreign currency transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the statement of financial performance.
Different conversion methods apply
to property, plant and equipment and intangible assets, which retain their
value in euros at the rate that applied at the date when they were purchased.
Year-end balances of monetary
assets and liabilities denominated in foreign currencies are converted into
euros on the basis of the exchange rates applying on 31 December:
Euro exchange rates
 Currency || 31.12.2013 || 31.12.2012 || Currency || 31.12.2013 || 31.12.2012 
 BGN || 1.9558 || 1.9558 || LTL || 3.4528 || 3.4528 
 CZK || 27.4270 || 25.1510 || PLN || 4.1543 || 4.0740 
 DKK || 7.4593 || 7.4610 || RON || 4.4710 || 4.4445 
 GBP || 0.8337 || 0.8161 || SEK || 8.8591 || 8.5820 
 HRK || 7.6265 || 7.5575 || CHF || 1.2276 || 1.2072 
 HUF || 297.0400 || 292.3000 || JPY || 144.7200 || 113.6100 
 LVL || 0.7028 || 0.6977 || USD || 1.3791 || 1.3194 
            
Changes in the
fair value of monetary financial instruments denominated in a foreign currency
and classified as available for sale that relate to a translation difference
are recognised in the statement of financial performance. Translation
differences on non-monetary financial assets and liabilities held at fair value
through profit or loss are recognised in the statement of financial
performance. Translation differences on non-monetary financial instruments
classified as available for sale are included in the fair value reserve.
1.4.2.  
 Use
of estimates
In accordance with IPSAS and generally accepted accounting
principles, the financial statements necessarily include amounts based on
estimates and assumptions by management based on the most reliable information
available. Significant estimates include, but are not limited to; amounts for
employee benefit liabilities, provisions, financial risk on inventories and
accounts receivables, accrued income and charges, contingent assets and
liabilities, and degree of impairment of intangible assets and property, plant
and equipment. Actual results could differ from those estimates. Changes in
estimates are reflected in the period in which they become known.
 
1.5.      BALANCE SHEET
1.5.1.   Intangible assets
Acquired computer software licences
are stated at historical cost less accumulated amortisation and impairment
losses. The assets are amortised on a straight-line basis over their estimated
useful lives. The estimated useful lives of intangible assets depend on their
specific economic lifetime or legal lifetime determined by an agreement.
Internally developed intangible assets are capitalised when the relevant
criteria of the EU accounting rules are met. The costs capitalisable include
all directly attributable costs necessary to create, produce, and prepare the
asset to be capable of operating in the manner intended by management. Costs
associated with research activities, non-capitalisable development costs and
maintenance costs are recognised as expenses as incurred.   
1.5.2.   Property, plant and equipment
All property, plant and equipment
are stated at historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly attributable to
the acquisition or construction of the asset.
Subsequent costs are included in
the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits or service potential
associated with the item will flow to the EU and its cost can be measured
reliably. Repairs and maintenance costs are charged to the statement of
financial performance during the financial period in which they are incurred.
Land and works of art are not
depreciated as they are deemed to have an indefinite useful life. Assets under
construction are not depreciated as these assets are not yet available for use.
Depreciation on other assets is calculated using the straight-line method to
allocate their cost to their residual values over their estimated useful lives,
as follows:
 Type of asset || Straight line depreciation rate 
 Buildings || 4 % 
 Plant, machinery and equipment || 10 % to 25 % 
 Furniture || 10 % to 25 % 
 Fixtures and fittings || 10 % to 33 % 
 Vehicles || 25 % 
 Computer hardware || 25 % 
 Other tangible assets || 10 % to 33 % 
Gains or losses on disposals are
determined by comparing proceeds less selling expenses with the carrying amount
of the disposed asset and are included in the statement of financial
performance.
Leases
Leases of tangible assets, where
the EU has substantially all the risks and rewards of ownership, are classified
as finance leases. Finance leases are capitalised at the inception of the lease
at the lower of the fair value of the leased asset and the present value of the
minimum lease payments. Each lease payment is allocated between the liability
and finance charges so as to achieve a constant rate on the finance balance
outstanding. The rental obligations, net of finance charges, are included in
other liabilities (non-current and current). The interest element of the
finance cost is charged to the statement of financial performance over the
lease period so as to produce a constant periodic interest rate on the
remaining balance of the liability for each period. The assets held under
finance leases are depreciated over the shorter of the assets' useful life and
the lease term.
Leases where the lessor retains a
significant portion of the risks and rewards inherent to ownership are
classified as operating leases. Payments made under operating leases are
charged to the statement of financial performance on a straight-line basis over
the period of the lease.
1.5.3.   Impairment of non-financial assets
Assets that have an indefinite
useful life are not subject to amortisation/depreciation and are tested
annually for impairment. Assets that are subject to amortisation/depreciation
are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs to sell and its value in use.
Intangible assets and property, plant and equipment residual values
and useful lives are reviewed, and adjusted if appropriate, at least once per
year. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable
amount. If the reasons for impairments recognised in previous years no longer
apply, the impairment losses are reversed accordingly.
1.5.4.   Investments
Participations in associates and joint
ventures
Participations in associates and
joint ventures are accounted for using the equity method. The costs of equity
are adjusted to reflect the share of increases or reductions in net assets of
the associates and joint ventures that are attributable to the EU after initial
recognition. If there are indications of impairment, a write-down to the lower
recoverable amount is necessary. The recoverable amount is determined as
described under 1.5.3. If the reason for
impairment ceases to apply at a later date, the impairment loss is reversed to
the carrying amount that would have been determined had no impairment loss been
recognised.
Investments in venture capital funds
Investments in Venture Capital
Funds are classified as available for sale financial assets (see 1.5.5) and accordingly, are carried at fair value
with gains and losses arising from changes in the fair value (including
translation differences) recognised in the fair value reserve.
Since they do not have a quoted
market price in an active market, investments in Venture Capital Funds are
valued on a line-by-line basis at the lower of cost or attributable net asset
value (“NAV”). Unrealised gains resulting from the fair value measurement are
recognised through reserves and unrealised losses are assessed for impairment
so as to determine whether they are recognised as impairment losses in the
statement of financial performance or as changes in the fair value reserve.          
1.5.5.   Financial assets
Classification
The EU classifies their financial
assets in the following categories: financial assets at fair value through
profit or loss; loans and receivables; held-to-maturity investments; and
available for sale financial assets. The classification of the financial
instruments is determined at initial recognition and re-evaluated at each
balance sheet date.
(i)     Financial assets at fair value through profit or loss
A financial asset is classified in
this category if acquired principally for the purpose of selling in the short
term or if so designated by the EU. Derivatives are also categorised in this
category. Assets in this category are classified as current assets if they are
expected to be realised within 12 months of the balance sheet date. During this
financial year, the EU did not hold any financial assets in this category.
(ii)    Loans and receivables
Loans and receivables are
non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They arise when the EU provides money, goods or
services directly to a debtor with no intention of trading the receivable. They
are included in non-current assets, except for maturities within 12 months of
the balance sheet date.
(iii)   Held-to-maturity investments
Held-to-maturity investments are
non-derivative financial assets with fixed or determinable payments and fixed
maturities that the EU has the positive intention and ability to hold to
maturity. During this financial year, the EU did not hold any investments in
this category. 
(iv)   Available for sale financial assets
Available for sale financial assets
are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are classified as either
current or non-current assets, depending on the time period in which the EU
expects to dispose of them which is usually the remaining maturity at the
balance sheet date. Investments in unconsolidated entities and other equity
investments (e.g. Risk Capital Operations) that are not accounted for using the
equity method are also classified as available for sale financial assets.
Initial recognition and measurement
Purchases and sales of financial
assets at fair value through profit or loss, held-to-maturity and available for
sale are recognised on trade-date – the date on which the EU commits to
purchase or sell the asset. Loans are recognised when cash is advanced to the
borrowers. Financial instruments are initially recognised at fair value. For
all financial assets not carried at fair value through profit or loss
transactions costs are added to the fair value at initial recognition.
Financial assets carried at fair value through profit or loss are initially
recognised at fair value and transaction costs are expensed in the statement of
financial performance.
The fair value of a financial asset
on initial recognition is normally the transaction price (i.e. the fair value
of the consideration received). However, when a long-term loan that carries no
interest or an interest below market conditions is granted, its fair value can
be estimated as the present value of all future cash receipts discounted using
the prevailing market rate of interest for a similar instrument with a similar
credit rating.
Loans granted on borrowed funds are
measured at their nominal amount, which is considered to be the fair value of
the loan. The reasoning for this is as follows:
–     
The “market environment” for EU lending is very
specific and different from the capital market used to issue commercial or
government bonds. As lenders in these markets have the opportunity to choose
alternative investments, the opportunity possibility is factored into market
prices. However, this opportunity for alternative investments does not exist
for the EU which is not allowed to invest money on the capital markets; it only
borrows funds for the purpose of lending at the same rate. This means that
there is no alternative lending or investment option available to the EU for
the sums borrowed. Thus, there is no opportunity cost and therefore no basis of
comparison with market rates. In fact, the EU lending operation itself represents
the market. Essentially, since the opportunity cost "option" is not
applicable, the market price does not fairly reflect the substance of the EU
lending transactions. Therefore, it is not appropriate to determine the fair
value of EU lending with reference to commercial or government bonds. 
–     
Furthermore as there is no active market or
similar transactions to compare with, the interest rate to be used by the EU
for fair valuing its lending operations under the European Financial Stability
Mechanism (EFSM), Balance of Payment (BOP) and other such loans, should be the
interest rate charged.
–     
In addition, for these loans, there are
compensating effects between loans and borrowings due to their back-to-back
character. Thus, the effective interest for the loan equals the effective
interest rate for the related borrowings. The transaction costs incurred by the
EU and then recharged to the beneficiary of the loan are directly recognised in
the statement of financial performance.
Financial instruments are derecognised
when the rights to receive cash flows from the investments have expired or have
been transferred and the EU has transferred substantially all risks and rewards
of ownership.
Subsequent measurement
(i)       
Financial assets at fair value through profit or
loss are subsequently carried at fair value. Gains and losses arising from
changes in their fair value are included in the statement of financial
performance in the period in which they arise.
(ii)      
Loans and receivables and held-to-maturity
investments are carried at amortised cost using the effective interest method.
In the case of loans granted on borrowed funds, the same effective interest
rate is applied to both the loans and borrowings since these loans have the
characteristics of 'back-to-back operations' and the differences between the
loan and the borrowing conditions and amounts are not material. The transaction
costs incurred by the EU and then recharged to the beneficiary of the loan are
directly recognised in the statement of financial performance.
(iii)     
Held-to-maturity – the EU currently holds no
held-to-maturity investments.
(iv)    
Available for sale financial assets are
subsequently carried at fair value. Gains and losses arising from changes in
their fair value are recognised in the fair value reserve. When such assets are
sold or impaired, the cumulative fair value adjustments previously recognised
in the fair value reserve are recognised in the statement of financial
performance. Interest on available for sale financial assets calculated using
the effective interest method is recognised in the statement of financial
performance. Dividends on available for sale equity instruments are recognised
when the EU's right to receive payment is established.
The fair values of quoted
investments in active markets are based on current bid prices. If the market
for a financial asset is not active (and for unlisted securities), the EU
establishes a fair value by using valuation techniques. These include the use
of recent arm’s length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, option pricing models
and other valuation techniques commonly used by market participants. 
In cases where the fair value of
investments in equity instruments that do not have quoted market price in an
active market cannot be reliably measured, these investments are valued at cost
less impairment losses.
Impairment of financial assets
The EU assesses at each balance
sheet date whether there is objective evidence that a financial asset is impaired.
A financial asset is impaired and impairment losses are incurred if, and only
if, there is objective evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset and that loss event
(or events) has an impact on the estimated future cash flows of the financial
asset that can be reliably estimated.
(a)     Assets carried at amortised cost
If there is objective evidence that
an impairment loss on loans and receivables or held-to-maturity investments
carried at amortised cost has been incurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset’s original effective interest rate.
The carrying amount of the asset is reduced and the amount of the loss is
recognised in the statement of financial performance. If a loan or
held-to-maturity investment has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate determined
under the contract. The calculation of the present value of the estimated
future cash flows of a collateralised financial asset reflects the cash flows
that may result from foreclosure less costs for obtaining and selling the
collateral, whether or not foreclosure is probable. If, in a subsequent period,
the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed through the statement of
financial performance.
(b)     Assets carried at fair value
In the case of equity investments
classified as available for sale financial assets, a significant or permanent
(prolonged) decline in the fair value of the security below its cost is
considered in determining whether the securities are impaired. If any such
evidence exists for available for sale financial assets, the cumulative loss –
measured as the difference between the acquisition cost and the current fair
value, less any impairment loss on that financial asset previously recognised
in the statement of financial performance – is removed from reserves and
recognised in the statement of financial performance. Impairment losses
recognised in the statement of financial performance on equity instruments are
not reversed through the statement of financial performance. If, in a
subsequent period, the fair value of a debt instrument classified as available
for sale financial asset increases and the increase can be objectively related
to an event occurring after the impairment loss was recognised, the impairment
loss is reversed through the statement of financial performance.        
1.5.6.   Inventories
Inventories are stated at the lower
of cost and net realisable value. Cost is determined using the first-in,
first-out (FIFO) method. The cost of finished goods and work in progress
comprises raw materials, direct labour, other directly attributable costs and
related production overheads (based on normal operating capacity). Net
realisable value is the estimated selling price in the ordinary course of
business, less the costs of completion and selling expenses. When inventories
are held for distribution at no charge or for a nominal charge, they are
measured at the lower of cost and current replacement cost. Current replacement
cost is the cost the EU would incur to acquire the asset on the reporting date.
1.5.7.   Pre-financing amounts
Pre-financing is a payment intended
to provide the beneficiary with a cash advance, i.e. a float. It may be split
into a number of payments over a period defined in the particular pre-financing
agreement. The float or advance is repaid or used for the purpose for which it
was provided during the period defined in the agreement. If the beneficiary
does not incur eligible expenditures, he has the obligation to return the
pre-financing advance to the EU. The amount of the pre-financing is reduced
(wholly or partially) by the acceptance of eligible costs (which are recognised
as expenses) and amounts returned.
At year-end, outstanding
pre-financing amounts are valued at the original amount(s) paid less: amounts
returned, eligible amounts expensed, estimated eligible amounts not yet cleared
at year-end, and value reductions.
Interest on pre-financing is
recognised as it is earned in accordance with the provisions of the relevant
agreement. An estimate of the accrued interest revenue, based on the most
reliable information, is made at the year-end and included in the balance
sheet.
1.5.8.   Receivables
Receivables are carried at original
amount less write-down for impairment. A write-down for impairment of
receivables is established when there is objective evidence that the EU will
not be able to collect all amounts due according to the original terms of
receivables. The amount of the write-down is the difference between the asset’s
carrying amount and the recoverable amount. The amount of the write-down is
recognised in the statement of financial performance. A general write-down,
based on past experience, is also made for outstanding recovery orders not
already subject to a specific write-down. See note 1.5.14
below concerning the treatment of accrued income at year-end.
1.5.9.   Cash and cash equivalents
Cash and cash equivalents are
financial instruments and classified as available for sale financial assets.
They include cash at hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less.
1.5.10. Pension
and other employee benefits
Pension obligations
The EU operates defined benefit
pension plans. Whilst staff contribute from their salaries one third of the
expected cost of these benefits, the liability is not funded. The liability
recognised in the balance sheet in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the balance sheet date.
The defined benefit obligation is calculated by actuaries using the projected
unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest
rates of government bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating to the terms
of the related pension liability.
Actuarial gains and losses arising
from experience adjustments and changes in actuarial assumptions are recognised
immediately in the statement of financial performance. Past-service costs are
recognised immediately in statement of financial performance, unless the
changes to the pension plan are conditional on the employees remaining in
service for a specified period of time (the vesting period). In this case, the
past-service costs are amortised on a straight-line basis over the vesting
period.
Post-employment
sickness benefits
The EU provides health benefits to
its employees through the reimbursement of medical expenses. A separate fund
has been created for its day-to-day administration. Both current employees,
pensioners, widowers and their beneficiaries benefit from the system. The
benefits granted to the "inactives" (pensioners, orphans, etc.) are
classified as "Post-Employment Employee Benefits". Given the nature
of these benefits, an actuarial calculation is required. The liability in the
balance sheet is determined on a similar basis as that for the pension
obligations (see above).
1.5.11. Provisions
Provisions are recognised when the
EU has a present legal or constructive obligation towards third parties as a
result of past events, it is more likely than not that an outflow of resources
will be required to settle the obligation, and the amount can be reliably
estimated. Provisions are not recognised for future operating losses. The
amount of the provision is the best estimate of the expenditures expected to be
required to settle the present obligation at the reporting date. Where the
provision involves a large number of items, the obligation is estimated by
weighting all possible outcomes by their associated probabilities (“expected
value” method).
1.5.12. Financial
liabilities
Financial liabilities are
classified as financial liabilities at fair value through profit or loss or as
financial liabilities carried at amortised cost (borrowings). Borrowings are
composed of borrowings from credit institutions and debts evidenced by
certificates. They are recognised initially at fair value, being their issue
proceeds (fair value of consideration received) net of transaction costs
incurred, then subsequently carried at amortised cost using the effective
interest method; any difference between proceeds, net of transaction costs, and
the redemption value is recognised in the statement of financial performance
over the period of the borrowings using the effective interest method. 
They are classified as non-current
liabilities, except for maturities less than 12 months after the balance sheet
date. In the case of loans granted on borrowed funds, the effective interest
method may not be applied to loans and borrowings, based on materiality considerations.
The transaction costs incurred by the EU and then recharged to the beneficiary
of the loan are directly recognised in the statement of financial performance.
Financial liabilities categorised
at fair value through profit or loss include derivatives when their fair value
is negative. They follow the same accounting treatment as financial assets at
fair value through profit or loss, see note 1.5.5. During this financial
year, the EU did not hold any financial liabilities in this category.
1.5.13. Payables
A significant amount of the
payables of the EU are not related to the purchase of goods or services –
instead they are unpaid cost claims from beneficiaries of grants or other EU
funding. They are recorded as payables for the requested amount when the cost
claim is received. Upon verification and acceptance of the eligible costs, the
payables are valued at the accepted and eligible amount.
Payables arising from the purchase
of goods and services are recognised at invoice reception for the original
amount and corresponding expenses are entered in the accounts when the supplies
or services are delivered and accepted by the EU. 
1.5.14. Accrued
and deferred income and charges
According to the EU accounting
rules, transactions and events are recognised in the financial statements in
the period to which they relate. At the end of the accounting period, accrued
expenses are recognised based on an estimated amount of the transfer obligation
of the period. The calculation of accrued expenses is done in accordance with
detailed operational and practical guidelines issued by the Commission which
aim at ensuring that the financial statements reflect a true and fair view.
Revenue is also accounted for in
the period to which it relates. At year-end, if an invoice is not yet issued
but the service has been rendered, the supplies have been delivered by the EU
or a contractual agreement exists (i.e. by reference to a treaty), an accrued
income will be recognised in the financial statements.
In addition, at year-end, if an
invoice is issued but the services have not yet been rendered or the goods
supplied have not yet been delivered, the revenue will be deferred and
recognised in the subsequent accounting period.
1.6.      STATEMENT OF FINANCIAL PERFORMANCE
1.6.1.   Revenue
NON-EXCHANGE REVENUE
This makes up the vast majority of
the EU's revenue and includes mainly direct and indirect taxes and own resource
amounts. In addition to taxes the EU may also receive payments from other
parties, such as duties, fines and donations.
GNI based resources and VAT resources
Revenue is recognised for the
period for which the Commission sends out a call for funds to the Member States
claiming their contribution. They are measured at their “called amount”. As VAT
and GNI resources are based on estimates of the data for the budgetary year
concerned, they may be revised as changes occur until the final data are issued
by the Member States. The effect of a change in estimate is included when
determining the net surplus or deficit for the period in which the change
occurred.
Traditional own resources
Receivables and related revenues
are recognised when the relevant monthly "A" statements (including
duties collected and amounts due that are guaranteed and not contested) are
received from the Member States. At the reporting date, revenue collected by
the Member States for the period but not yet paid to the Commission is
estimated and recognised as accrued revenue. The quarterly "B"
statements (including duties neither collected nor guaranteed, as well as
guaranteed amounts that have been contested by the debtor) received from the
Member States are recognised as revenue less the collection costs to which they
are entitled (25 %). In addition, a value reduction is recognised for the
amount of the estimated recovery gap.
Fines 
Revenue from fines is recognised
when the EU's decision imposing a fine has been taken and it is officially
notified to the addressee. If there are doubts about the undertaking's
solvency, a value reduction on the entitlement is recognised. After the decision
to impose a fine, the debtors have two months from the date of notification:
–     
either to accept the decision, in which case
they must pay the fine within the time limit laid down and the amount is
definitively collected by the EU;
–     
or not to accept the decision, in which case
they lodge an appeal under EU law. 
However, even if appealed, the
principal of the fine must be paid within the time limit of three months laid
down as the appeal does not have suspensory effect (Article 278 of the EU
Treaty) or, under certain circumstances and subject to the agreement of the
Commission's Accounting Officer, it may present a bank guarantee for the amount
instead.
If the undertaking appeals against
the decision, and has already provisionally paid the fine, the amount is disclosed
as a contingent liability. However, since an appeal against an EU decision by
the addressee does not have suspensory effect, the cash received is used to
clear the receivable. If a guarantee is received instead of payment, the fine
remains as a receivable. If it appears probable that the General Court may not
rule in favour of the EU, a provision is recognised to cover this risk. If a
guarantee had been given instead, then the receivable outstanding is
written-down as required. The accumulated interest received by the Commission
on the bank accounts where received payments are deposited is recognised as
revenue, and any contingent liability is increased accordingly.
Since 2010, all provisionally
cashed fines are managed by the Commission in a specifically created fund
(BUFI) and invested in financial instruments categorised as available for sale.
EXCHANGE REVENUE
Revenue from the sale of goods and
services is recognised when the significant risk and rewards of ownership of
the goods are transferred to the purchaser. Revenue associated with a
transaction involving the provision of services is recognised by reference to
the stage of completion of the transaction at the reporting date.
INTEREST INCOME AND EXPENSE
Interest income and expense are
recognised in the statement of financial performance using the effective
interest method. This is a method of calculating the amortised cost of a
financial asset or a financial liability and of allocating the interest income
or interest expense over the relevant period. When calculating the effective
interest rate, the EU estimates cash flows considering all contractual terms of
the financial instrument (for example, prepayment options) but does not
consider future credit losses. The calculation includes all fees and points
paid or received between parties to the contract that are an integral part of
the effective interest rate, transaction costs and all other premiums or
discounts.
Once a financial asset or a group
of similar financial assets has been written down as a result of an impairment
loss, interest income is recognised using the rate of interest to discount the
future cash flows for the purpose of measuring the impairment loss.
DIVIDEND INCOME
Dividend income is recognised when
the right to receive payment is established.
1.6.2.   Expenses
Exchange expenses arising from the
purchase of goods and services are recognised when the supplies are delivered
and accepted by the EU. They are valued at original invoice cost. 
Non-exchange expenses account for
the majority of the EU's expenses. They relate to transfers to beneficiaries
and can be of three types: entitlements, transfers under agreement and
discretionary grants, contributions and donations.
Transfers are recognised as
expenses in the period during which the events giving rise to the transfer
occurred, as long as the nature of the transfer is allowed by regulation
(Financial Regulation, Staff Regulations, or other regulation) or a contract
has been signed authorising the transfer; any eligibility criteria have been met
by the beneficiary; and a reasonable estimate of the amount can be made.
When a request for payment or cost
claim is received and meets the recognition criteria, it is recognised as an
expense for the eligible amount. At year-end, incurred eligible expenses due to
the beneficiaries but not yet reported are estimated and recorded as accrued
expenses.
 
1.7.      CONTINGENT ASSETS AND LIABILITIES
1.7.1.  
Contingent assets
A contingent asset is a possible
asset that arises from past events and of which the existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the EU. A contingent asset is disclosed when
an inflow of economic benefits or service potential is probable.
1.7.2.  
Contingent liabilities
A contingent liability is a
possible obligation that arises from past events and of which the existence
will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the EU; or a present
obligation that arises from past events but is not recognised because: it is
not probable that an outflow of resources embodying economic benefits or
service potential will be required to settle the obligation or, in the rare
circumstances where the amount of the obligation cannot be measured with
sufficient reliability.   
2.            
NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS
2.1.     
INTANGIBLE ASSETS
   || EUR millions 
   ||   
 Gross carrying amount at previous year-end ||  379 
 Additions ||  100 
 Disposals ||  (8) 
 Other changes ||  2 
 Gross carrying amount at year-end ||  473 
 Accumulated amortisation at previous year-end ||  (191) 
 Amortisation charge for the year ||  (48) 
 Disposals ||  5 
 Other changes || 0 
 Accumulated amortisation at year-end ||  (235) 
   ||   
 Net carrying amount at year-end ||  237 
 Net carrying amount at previous year-end ||  188 
The above amounts relate
primarily to computer software.
 
2.2.      PROPERTY, PLANT AND EQUIPMENT
Included under assets under
construction at 31 December 2013 are EUR 1 041 million (2012: EUR 660 million) of assets relating to the Galileo
project, the EU's Global Navigation Satellite System (GNSS), being built with
the assistance of the European Space Agency (ESA). An amount of EUR 13 million
of non-capitalisable development costs has been recognised as expenses during
the period.
When completed,
the system will comprise 30 satellites, 2 control centres and around 16 ground
stations. The amount on the balance sheet reflects the capitalisable costs
incurred by the Commission on this project since 22 October 2011, the date on
which the first two satellites of the system were successfully launched. Prior
to this date, and as explained in previous annual accounts, the Commission
considered the project to be in a research phase, thus in accordance with the
EU accounting rules all costs incurred were expensed. Since the beginning of
the project and until the end of the current financial framework, the foreseen
budget amounts to EUR 3 852 million. For the next financial framework, a
further EUR 5 400 million is foreseen to be spent on; fully
deploying the system, exploiting it, delivering Galileo services until 2020 and
preparing the next generation of the constellation, and this will be entirely
financed by the EU budget.
At the balance sheet date four
satellites in total have been launched since October 2011 and once the
subsequent testing of these is complete, this will end the In-Orbit Validation
("IOV") phase of the project. This phase had been jointly funded by
the EU and ESA and according to the grant agreement concluded between the two
parties, ESA shall make an official transfer of the constructed assets to the
EU. This legal transfer will require the ESA Council's agreement, noting that
all except two Member States of ESA (Norway and Switzerland), are also EU
Member States. At this time, the Commission has no reason to believe that such
a transfer would be blocked by any member of ESA.
 
Property, plant and equipment     
   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Land and Buildings || Plant and Equipment || Furniture and Vehicles || Computer Hardware || Other tangible assets || Finance leases ||  Assets under construction || Total 
 Gross carrying amount at previous year-end || 4 314 ||  558 ||  233 ||  577 ||  231 || 3 181 || 1 118 || 10 212 
 Additions ||  30 ||  61 ||  14 ||  60 ||  22 ||  87 ||  516 ||  790 
 Disposals || 0 ||  (22) ||  (15) ||  (46) ||  (8) || 0 || 0 ||  (91) 
 Transfer between asset categories ||  312 ||  11 ||  (1) ||  2 ||  3 ||  (312) ||  (14) || 0 
 Other changes ||  4 || 0 ||  2 ||  2 ||  1 ||  (264) ||  (21) ||  (276) 
 Gross carrying amount at year-end || 4 660 ||  608 ||  233 ||  595 ||  248 || 2 692 || 1 599 || 10 635 
 Accumulated depreciation at previous year-end || (2 137) ||  (449) ||  (165) ||  (436) ||  (150) ||  (897) || 0 || (4 234) 
 Depreciation charge for the year ||  (143) ||  (47) ||  (15) ||  (69) ||  (23) ||  (103) || 0 ||  (401) 
 Depreciation written back ||  5 ||  1 || 0 || 0 || 0 || 0 || 0 ||  6 
 Disposals ||  1 ||  21 ||  15 ||  46 ||  8 || 0 || 0 ||  91 
 Transfer between asset categories ||  (124) || 0 || 0 ||  (2) ||  1 ||  126 || 0 ||  1 
 Other changes ||  (1) || 0 ||  (2) || 0 ||  (1) ||  11 || 0 ||  7 
 Accumulated depreciation at year-end || (2 399) ||  (474) ||  (167) ||  (461) ||  (165) ||  (863) || 0 || (4 531) 
   ||   ||   ||   ||   ||   ||   ||   ||   
 NET CARRYING AMOUNT AT YEAR-END || 2 261 ||  134 ||  65 ||  134 ||  83 || 1 829 || 1 599 || 6 104 
 NET CARRYING AMOUNT AT PREVIOUS YEAR-END || 2 177 ||  109 ||  67 ||  142 ||  81 || 2 284 || 1 118 || 5 978 
Finance
leases
Charges still to be paid in respect of finance leases and similar
entitlements are shown in non-current and current liabilities in the balance
sheet (see note 2.15 and 2.18.3).
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
 Description || Cumulative charges  (A) || Future amounts to be paid || Total value || Subsequent expenses on assets ||  Asset value || Depreciation || Net carrying amount 
   ||   || < 1 year || > 1 year || > 5 years || Total Liability (B) || (A+B) || (C) || (A+ B+C) || (D) || (A+B+C+D) 
 Land and buildings ||  772 ||  76 ||  344 || 1 403 || 1 823 || 2 595 ||  57 || 2 653 ||  (838) || 1 815 
 Other tangible assets ||  24 ||  6 ||  9 ||  1 ||  15 ||  39 || - ||  39 ||  (25) ||  14 
 Total at year-end ||  796 ||  82 ||  353 || 1 403 || 1 838 || 2 634 ||  57 || 2 692 ||  (863) || 1 829 
 Interest element ||  89 ||  319 ||  481 ||  889 ||   ||   ||   ||   ||   
 Total future minimum lease payments at year-end ||  171 ||  672 || 1 884 || 2 727 ||   ||   ||   ||   ||   
 Total future minimum lease payments at previous year-end ||  155 ||  660 || 2 189 || 3 003 ||   ||   ||   ||   ||   
2.3.      INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Participations in joint ventures || 2.3.1 || 0 ||  42 
 Participations in associates || 2.3.2 ||  349 ||  350 
 Total ||   ||  349 ||  392 
2.3.1.   Participations in joint ventures
   ||   ||   ||   ||   ||   || EUR millions 
   || GJU || SESAR || ITER || IMI || FCH || Total 
 Amount at 31.12.2012 || 0 || 0 ||  10 ||  32 || 0 ||  42 
 Contributions || 0 ||  78 ||  121 ||  126 ||  56 ||  380 
 Share of net result || 0 ||  (78) ||  (130) ||  (158) ||  (56) ||  (422) 
 Amount at 31.12.2013 || 0 || 0 || 0 || 0 || 0 || 0 
Participations in joint ventures
are accounted for using the equity method. The following carrying amounts are
attributable to the Commission based on its percentage of participation: 
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Non-current assets ||  198 ||  226 
 Current assets ||  63 ||  106 
 Non-current liabilities || 0 || 0 
 Current liabilities ||  (394) ||  (291) 
 Revenue ||  1 ||  8 
 Expenses ||  (412) ||  (427) 
            
GALILEO JOINT
UNDERTAKING (GJU) IN LIQUIDATION
The Galileo Joint Undertaking (GJU)
was put into liquidation at the end of 2006 and the process is still on-going.
The entity was inactive and still undergoing liquidation in 2013. 
SESAR JOINT UNDERTAKINKG
The aim of this Joint Undertaking
is to ensure the modernisation of the European air traffic management system
and the rapid implementation of the European air traffic management Master Plan
by coordinating and concentrating all relevant research and development efforts
in the EU. At 31 December 2013, the Commission held 46.26 % of the ownership
participation in SESAR. The total Commission contribution foreseen for SESAR
(from 2007 to 2013) is EUR 700 million. The cumulative unrecognised share of
losses is EUR 205 million. The unrecognised share of losses is the result of a
technical accounting exercise needed when using the equity method of
accounting. These unrecognised losses do not represent losses for the EU and
are due to the fact that the expense recognition normally takes place before the
capital increase for the contribution in kind of the venturers other than the
EU.
ITER INTERNATIONAL FUSION ENERGY
ORGANISATION (ITER)
ITER involves the EU and China,
India, Russia, South Korea, Japan and USA. ITER was created to; manage the ITER
facilities, to encourage the exploitation of the ITER facilities, to promote
public understanding and acceptance of fusion energy, and to undertake any
other activities that are necessary to achieve its purpose. The EU (Euratom)
contribution to ITER International is given through the Fusion for Energy
Agency, including also the contributions from Member States and from
Switzerland. The total contribution is legally considered as a Euratom
contribution to ITER since the Member States and Switzerland do not have ownership
interests in ITER. As the EU legally holds the participation in the joint
venture ITER International, the Commission must recognise the participation in
its accounts. At 31 December 2013, the Commission held 43.33 % of the
ownership participation in ITER. The total (indicative) Euratom contribution
foreseen for ITER (from 2007 to 2041) is EUR 8 949 million.
Joint Technology Initiatives
Public private partnerships in the
form of Joint Technology Initiatives, which were implemented through Joint Undertakings
within the meaning of Article 187 of the Treaty, have been created in order to
implement the objectives of the Lisbon Growth and Jobs Agenda. IMI and FCH (see
below) are included under this heading but three others, ARTEMIS, Clean Sky and
ENIAC (see below note 2.3.2), although legally referred to as joint
undertakings, from an accounting perspective must be considered as associates
(and so included as such in note 2.3.2) because
the Commission has a significant influence, not joint control, over them.
IMI JOINT TECHNOLOGY INITIATIVE ON
INNOVATIVE MEDICINES
The IMI Joint Undertaking supports
pre-competitive pharmaceutical research and development in the Member States
and associated countries, aiming at increasing the research investment in the
biopharmaceutical sector and promotes the involvement of small and medium-sized
enterprises (SME) in its activities. At 31 December 2013, the Commission held
74.16 % of the ownership participation in IMI. The maximum indicative
contribution of the Commission shall amount to EUR 1 billion up to 31.12.2017. The
cumulative unrecognised share of losses is EUR 16 million.
FCH FUEL CELLS AND HYDROGEN JOINT
UNDERTAKING
The objective of the FCH Joint
Undertaking is to combine resources from the public and private sectors to
strengthen research activities with a view to increasing the overall efficiency
of European research efforts and accelerate the development and deployment of
fuel cell and hydrogen technologies. At 31 December 2013, the
Commission held 74.20 % of the ownership participation in FCH. The maximum
indicative contribution of the EU shall amount to EUR 470 million up to
31.12.2017. The cumulative unrecognised share of losses is EUR 67 million.
2.3.2.   Participations in associates
   ||   ||   ||   ||   || EUR millions 
   || EIF || ARTEMIS || Clean Sky || ENIAC || Total 
 Amount at 31.12.2012 ||  336 || 0 || 0 ||  14 ||  350 
 Contributions || (2) ||  20 ||  125 ||  37 ||  180 
 Share of net result || 9 || (20) || (125) || (50) || (186) 
 Other equity movements || 6 || 0 || 0 || 0 || 6 
 Amount at 31.12.2013 ||  349 || 0 || 0 || 0 ||  349 
Participations in associates are
accounted for using the equity method. The following carrying amounts are
attributable to the Commission based on its percentage of participation:
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Assets ||  499 ||  505 
 Liabilities ||  (240) ||  (191) 
 Revenue ||  37 ||  33 
 Surplus/(Deficit) ||  (221) ||  (177) 
European
Investment Fund
The European Investment Fund (EIF)
is the EU's financial institution specialising in providing risk capital and
guarantees to SMEs. The Commission has paid in 20 % of its participation, the
balance being uncalled corresponding to an amount of EUR 720 million.
   ||   || EUR millions 
   || Total EIF capital || Commission subscription 
 Total Share Capital || 3 000 ||  900 
 Paid-in ||  (600) ||  (180) 
 Uncalled || 2 400 ||  720 
            
ARTEMIS JOINT
UNDERTAKING 
This entity was created to
implement a Joint Technology Initiative with the private sector on Embedded
Computing Systems. The maximum indicative contribution of the Commission shall
amount to EUR 420 million. The cumulative unrecognised share of
losses is EUR 9 million (94.57 % ownership participation).
CLEAN SKY JOINT UNDERTAKING
The aim of this entity is to
accelerate the development, validation and demonstration of clean air transport
technologies in the EU and in particular to create a radically innovative Air
Transport System with the target of reducing the environmental impact of air
transport. The maximum indicative contribution of the Commission shall amount
to EUR 800 million. The cumulative unrecognised share of losses is EUR 72
million (57.80 % ownership participation).
ENIAC JOINT UNDERTAKING
The aim of ENIAC is to define a
commonly agreed research agenda in the field of nano-electronics in order to
set research priorities for the development and adoption of key competences in
that area. These objectives will be pursued by pooling resources from the
public and private sectors to support R&D activities in the form of
projects. The total commitment of the EU shall amount to EUR 450 million. At
31 December 2013, the Commission held 95.41 % of the ownership
participation in ENIAC. The cumulative unrecognised share of losses is EUR 26
million.
 
2.4.     
NON-CURRENT FINANCIAL ASSETS
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Available for sale financial assets || 2.4.1 || 5 497 || 4 870 
 Loans || 2.4.2 || 54 347 || 57 441 
 Total ||   || 59 844 || 62 311 
2.4.1.    Non-current
available for sale financial assets
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Guarantee Fund* || 1 412 || 1 327 
 ECSC in liquidation || 1 129 || 1 102 
 BUFI investments || 1 013 ||  832 
 Risk Sharing Finance Facility (RSFF) ||  789 ||  593 
 ETF Start up ||  339 ||  305 
 European Bank for Reconstruction & Development ||  188 ||  188 
 Risk Capital Operations ||  124 ||  123 
 Loan Guarantee Instrument for TEN-T projects (LGTT) ||  90 ||  52 
 European Chemicals Agency || 0 ||  52 
 Other available for sale investments ||  413 ||  296 
 Total || 5 497 || 4 870 
* The Guarantee Fund holds
EFSM bonds (EUR 20 million) issued by the Commission, so these have been
eliminated.
GUARANTEE FUND
The Guarantee Fund for external
actions covers loans guaranteed by the EU as a result of a Council Decision, in
particular European Investment Bank (EIB) lending operations outside the EU and
loans under macro-financial assistance (MFA) and Euratom loans outside the EU.
It is a long-term instrument to cover any defaulting loans guaranteed by the
EU. The Fund is endowed by payments from the general budget of the EU equivalent
to 9 % of the capital value of the operations, the proceeds from interest
on investments made from the Fund's assets, and sums recovered from defaulting
debtors for whom the Fund has had to activate its guarantee. Any yearly surplus
arising shall be paid back as revenue for the EU budget. 
The EU is required to include a
guarantee reserve to cover loans to third countries. This reserve is intended
to cover the requirements of the Guarantee Fund and, where necessary, activated
guarantees exceeding the amount available in the Fund, so that these amounts
may be charged to the budget. This reserve corresponds to the target amount of
9 % of the loans outstanding at year-end.
ECSC IN LIQUIDATION
Regarding the ECSC in liquidation
amounts, all available for sale financial assets are debt securities
denominated in EUR and quoted in an active market. 
BUFI INVESTMENTS
Provisionally cashed fines are
since 1 January 2010 managed by the Commission in a specifically created fund
(BUFI) and invested in financial instruments categorised as available for sale
financial assets (see note 8.2).
RISK-SHARING FINANCE FACILITY
The Risk-Sharing Finance Facility
(RSFF) is managed by the EIB and the Commission's investment portfolio is used
to provision financial risk for loans and guarantees given by the EIB to
eligible research projects. In total, a Commission budget of up to EUR 1
billion was foreseen for the period 2007 to 2013, of which up to EUR 800
million are from the “Cooperation” and up to EUR 200 million from the “Capacities”
specific programmes. The EIB has committed itself to provide the same amount.
At 31 December 2013 the Commission
had contributed, including also EFTA and third country contributions, EUR 1 231
million to the RSFF. The amount disclosed as a contingent liability (note 5.2.1),
EUR 958 million, represents the estimated maximum loss at 31 December 2013 that
the Commission would suffer in case of defaults on loans or guarantees given by
the EIB within the framework of the RSFF. It should be noted that the
Commission's overall risk is limited to the amount it contributes to the
Facility.
ETF start up 
The European Technology Facility
(ETF) start-up covers the Growth & Employment programme, the Multi-annual
Programme for enterprise and entreprenuership (MAP) programme, the
Competitiveness and Innovation framework Programme (CIP) programme and the
Technology Transfer Pilot Project, under the trusteeship of the EIF, supporting
the creation and financing of start-up SMEs by investing in suitable
specialised venture capital funds. At year-end, a further EUR 132 million
relating to ETF Start-up had been committed to, but not yet been drawn down by
the other parties.
EUROPEAN BANK FOR RECONSTRUCTION AND
DEVELOPMENT
As the European Bank for
Reconstruction and Development (EBRD) is not quoted on any stock exchange and
in view of the contractual restrictions included in the EBRD’s articles of
incorporation relating, amongst others, to the sale of participating interests,
capped at acquisition cost and only authorised to existing shareholders, the
Commission's shareholding is valued at cost less any write-down for impairment.
   ||   || EUR millions 
 EBRD || Total EBRD capital || Commission subscription 
 Total Share Capital || 29 601 ||  900 
 Paid-in || (6 202) ||  (188) 
 Uncalled || 23 399 ||  712 
Risk Capital Operations
Under Risk Capital Operations
amounts are granted to financial intermediaries to finance equity investments.
They are managed by EIB and financed under the European Neighbourhood Policy.
LOAN GUARANTEE INSTRUMENTS FOR TEN-T
PROJECTS
The Loan Guarantee Instrument for
Ten-T Projects (LGTT) issues guarantees so as to mitigate revenue risk in the
early years of TEN-Transport projects. Specifically the guarantee would fully
cover stand-by credit lines, which would only be drawn upon in cases where
project cash flows are insufficient to service senior debt. The instrument is a
joint financial product of the Commission and the EIB. The Commission shall
allocate a maximum amount of EUR 250 million to the LGTT over the period
2007-2013.
At 31 December 2013 the Commission
had contributed EUR 162 million to the LGTT. At end 2013, EUR 522 million
of loans have been signed and are thus covered by the guarantee. The amount
recognised as a contingent liability (EUR 39 million), represents the estimated
maximum loss at 31 December 2013 that the Commission would suffer in case of
defaults on loans given by the EIB within the framework of the LGTT operations.
It should be noted that the Commission's overall risk is limited to the amount
it contributes to the Instrument.
Other available for sale investments
The main amounts included under
other non-current available for sale investments above are the European Fund
for South East Europe (EUR 116 million) and the Global Energy Efficiency
and Renewable Energy Fund (EUR 67 million).
2.4.2.  
Non-current loans
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Loans granted from the EU budget & ECSC || 2.4.2.1 ||  151 ||  162 
 Loans granted from borrowed funds || 2.4.2.2 || 54 196 || 57 279 
 Total ||   || 54 347 || 57 441 
2.4.2.1.   
Loans granted from the European Union budget and
the ECSC in Liquidation
   ||   ||   || EUR millions 
   || Loans with special conditions || ECSC housing loans || Total 
 Total at 31.12.2012 ||  146 ||  16 ||  162 
 New loans ||  4 || 0 ||  4 
 Repayments ||  (18) ||  (5) ||  (23) 
 Exchange differences ||  (6) || 0 ||  (6) 
 Changes in carrying amount ||  12 ||  1 ||  13 
 Total at 31.12.2013 ||  138 ||  12 ||  151 
 Loans with special conditions are
granted at preferential rates as part of co-operation with non-member
countries. All amounts fall due more than 12 months after year-end. The
effective interest rates on these loans vary between 7.73 % and 14.507 %.
2.4.2.2.   
Loans granted from borrowed funds
   ||   ||   ||   ||   ||   || EUR millions 
   || MFA || Euratom || BOP || EFSM || ECSC in Liqui-dation || Total 
 Total at 31.12.2012 ||  549 ||  425 || 11 623 || 44 476 ||  221 || 57 294 
 New loans ||  100 || - || - || - || - ||  100 
 Repayments ||  (81) ||  (36) || - || - || - ||  (117) 
 Exchange differences || - ||  (1) || - || - ||  (5) ||  (6) 
 Changes in carrying amount ||  1 ||  (1) || - ||  (8) ||  (5) ||  (13) 
 Total at 31.12.2013 ||  569 ||  387 || 11 623 || 44 468 ||  211 || 57 258 
   ||   ||   ||   ||   ||   ||   
 Amount due < 1 year ||  31 || - || 3 033 || - || - || 3 064 
   ||   ||   ||   ||   ||   ||   
 Amount due > 1 year ||  538 ||  387 || 8 590 || 44 468 ||  211 || 54 195 
For more information on borrowing
and lending activities, see note 7.
            
2.5.     
NON-CURRENT RECEIVABLES AND RECOVERABLES
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Member States ||  478 ||  545 
 Other ||  20 ||  19 
 Total ||  498 ||  564 
Of the total
non-current receivables, EUR 483 million (2012: EUR 550 million) relates to
non-exchange transactions. The amounts due from Member States relate to
non-executed conformity clearance decisions for the European Agricultural
Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development
(EAFRD).
 
2.6.     
NON-CURRENT PRE-FINANCING
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Pre-financing || 2.6.1 || 34 819 || 40 790 
 Prepaid expenses || 2.6.2 || 3 253 || 3 715 
 Total ||   || 38 072 || 44 505 
2.6.1.  
Pre-financing
The timing of the recoverability or
utilisation of the pre-financing governs whether it is disclosed as current or
non-current pre-financing. The utilisation is defined by the project's
underlying agreement. All repayments or utilisation due before twelve months of
the reporting date is disclosed as current pre-financing.
Pre-financing represents a large
portion of the EU's total assets, and thus receives proper and regular
attention. It should be noted that the level of pre-financing amounts in the
various programmes must be sufficient to ensure the necessary float for the
beneficiary to start the project, while also safeguarding the financial
interests of the EU and taking into consideration legal, operational and
cost-effectiveness constraints. All these elements have been given due
consideration by the Commission in an effort to improve the follow-up of
pre-financing.
Certain pre-financing amounts paid
out under the 7th Research Framework Programme for research and technological
development (FP7) are effectively covered by a Participants Guarantee Fund
(PGF) – the amount of pre-financing paid out in 2013 totalled EUR 4.5 billion
(2012: EUR 4 billion). This fund is a separate entity from the EU and is not
consolidated in these accounts – see note 11.2.3.
   ||   || EUR millions 
 Management Type || 31.12.2013 || 31.12.2012 
 Direct centralised management || 1 526 || 1 249 
 Indirect centralised management ||  772 || 1 042 
 Decentralised management ||  646 ||  677 
 Shared management || 31 104 || 37 214 
 Joint management ||  694 ||  592 
 Implemented by other Institutions & Agencies || 77 ||  16 
 Total || 34 819 || 40 790 
Article 58 of the new Financial
Regulation which partly revised the methods of implementation of the budget
shall only apply as of 1 January 2014.
The most significant non-current
pre-financing amounts relate to Structural Actions for the 2007-2013
programming period: the regional development fund (ERDF) and the cohesion fund
(CF) EUR 19.6 billion, the social fund (ESF) EUR 5.6 billion, the agricultural
fund for rural development (EAFRD) EUR 5.2 billion and the fisheries fund (EFF)
EUR 0.6 billion. As many of these projects are long-term in nature, it is
necessary that the related advances are available for more than one year. Thus
these pre-financing amounts are shown as non-current assets. The programming
period 2007-2013 is approaching its closing phase and thus the related
pre-financing gradually becomes due within twelve months. Therefore, the
non-current pre-financing is decreasing while the current pre-financing is
increasing (see note 2.10).
Guarantees received in respect of
pre-financing
These are guarantees that the
Commission requests from beneficiaries that are not Member States, in certain
cases when paying out advance payments (pre-financing). There are two values to
disclose for this type of guarantee, the “nominal” and the “on-going” values.
For the “nominal” value, the generating event is linked to the existence of the
guarantee. For the “on-going” value, the guarantee’s generating event is the
pre-financing payment and/or subsequent clearings. At 31 December 2013 the
"nominal" value of guarantees received in respect of pre-financing
amounted to EUR 1 124 million while the "on-going" value of those
guarantees was EUR 887 million (2012: EUR 1 348 million and EUR 1 083 million
respectively).
2.6.2.  
Prepaid expenses
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Financial Engineering Instruments || 2 118 || 2 717 
 Aid Schemes || 1 135 ||  998 
 Total || 3 253 || 3 715 
Under the
framework of the structural funds programmes 2007-2013, payments can be made
from the EU budget to Member States so as to contribute to Financial
Engineering Instruments (be it in the form of loans, equity investments or
guarantees) set up and managed under the responsibility of the Member States.
Monies that are unused by these instruments at year-end are the property of the
EU (as with standard pre-financing) and are thus treated as an asset on the
Commission’s balance sheet. However, the basic legal acts do not oblige the
Member States to provide periodic reports to the Commission on the use made of
these advances, and in some cases not even identify them in the statements of
expenditure submitted to the Commission. Thus, and on the basis of information
received from Member States on the utilisation of funds, an estimation is made
at each year-end of the value of this asset.
Similar to the above, advances paid
by the Member States that were not used at year end are recorded as assets on
the Commission's balance sheet. Member States may pay such advances for various
aid schemes (state aid, market measures of EAGF). The Commission has estimated
the value of these advances based on information provided by the Member States;
the resulting amounts are included under the Aid Schemes heading.
 
CURRENT ASSETS
2.7.     
INVENTORIES
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Scientific materials ||  81 ||  81 
 Other ||  47 ||  57 
 Total ||  128 ||  138 
2.8.      CURRENT FINANCIAL ASSETS
   ||   ||   || EUR millions 
   || Notes || 31.12.2013 || 31.12.2012 
 Available for sale financial assets || 2.8.1 || 2 373 || 1 858 
 Loans || 2.8.2 || 3 198 ||  123 
 Total ||   || 5 571 || 1 981 
2.8.1.   Current available for sale financial assets
Available for sale financial
assets are purchased for their investment return or yield, or held to establish
a particular asset structure or a secondary source of liquidity and may
therefore be sold in response to needs for liquidity or changes in interest
rates. The following table provides an overview of available for sale financial
assets with a remaining maturity before end 2014:
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 BUFI investments ||  897 ||  845 
 ECSC in liquidation ||  567 ||  490 
 Risk Sharing Finance Facility (RSFF) ||  408 ||  160 
 Guarantee Fund ||  361 ||  268 
 European Chemicals Agency ||  76 ||  69 
 Loan Guarantee Instrument for TEN-T projects (LGTT) ||  31 ||  23 
 Other available for sale investments ||  33 ||  3 
 Total || 2 373 || 1 858 
2.8.2.   Current loans
Included under this heading are
mainly loans with remaining final maturities less than 12 months after the
balance sheet date (see note 2.4.2.2 above for more details). The increase compared to last year is due
to repayments of BOP loans scheduled for 2014 (Hungary EUR 2 billion and Latvia
EUR 1 billion).           
2.9.     
CURRENT RECEIVABLES AND RECOVERABLES
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Fines || 2.9.1 || 4 071 || 4 090 
 Member States || 2.9.2 || 5 574 || 6 270 
 Accrued income and deferred charges || 2.9.3 || 3 095 || 3 368 
 Other receivables & recoverables || 2.9.4 ||  442 ||  311 
 Total ||   || 13 182 || 14 039 
The total above contains an
estimated EUR 12 638 million (2012: EUR 13 729 million) relating to
non-exchange transactions.
2.9.1.   Fines
This concerns amounts to be
recovered relating to fines issued by the Commission of EUR 4 310 million (2012:
EUR 4 357 million) less a write-down of EUR 239 million (2012: EUR 267 million).
Guarantees totalling EUR 3 244 million had been received for the fines
outstanding at year-end (2012: EUR 2 513 million). It should be
noted that EUR 1 032 million of these receivables were due for payment after 31
December 2013.            
2.9.2.   Member States
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 EAGF and Rural Development receivables ||   ||   
 European Agricultural Guarantee Fund (EAGF) || 1 858 || 1 172 
 European Agricultural Fund for Rural Development (EAFRD) ||  41 ||  14 
 Temporary Rural Development Instrument (TRDI) ||  45 ||  44 
 Special Accession Programme for Agriculture and Rural Development (SAPARD) ||  155 ||  136 
 Write-down ||  (819) ||  (814) 
 Total || 1 279 ||  552 
   ||   ||   
 VAT paid and recoverable ||  68 ||  44 
   ||   ||   
 Own resources ||   ||   
 Established in the A account ||  47 ||  45 
 Established in the separate account || 1 228 || 1 294 
 Own resources to be received || 3 054 || 3 617 
 Write-down ||  (743) ||  (773) 
 Other ||  6 ||  16 
 Total || 3 592 || 4 199 
   ||   ||   
 Other receivables from Member States ||   ||   
 Pre-financing recovery expected ||  542 || 1 220 
 Other ||  94 ||  255 
 Total || 636 || 1 475 
   ||   ||   
 Total || 5 574 || 6 270 
The increase in agriculture-related
receivables is mainly explained by non-executed clearance decisions as in some
cases the date of implementation is deferred by several years, and in other
cases decisions are executed in deferred annual instalments. This is the case
for Member States subject to financial assistance in accordance with the
European Financial Stability Framework Agreement signed on 7 June 2010.
The amount of own resources to be
received relates to the Amending Budget 8/2013 adopted on 20 November 2013.
According to Article 10 of Council Regulation 1150/2000 of 22 May 2000
(OJ L 130, 31.5.2000) the entries corresponding to the readjustments of
GNI contributions were carried out on the first working day of January 2014. It
is to be noted that certain Member States have anticipated their payments,
which explains why the amount to be received is lower than the contribution
requested in this amending budget.
EAGF and Rural Development receivables
This item primarily covers the
amounts owed by Member States at 31 December, as declared and certified by the
Member States at 15 October. An estimation is made for the receivables arising
after this declaration and up to 31 December. The Commission also estimates a
write-down for the amounts owed by beneficiaries that are unlikely to be
recovered. The fact that such an adjustment is made does not mean that the
Commission is waiving future recovery of these amounts. A deduction of 20 % is
also included in the adjustment, and corresponds to what Member States are
allowed to retain to cover administrative costs. 
Own resources receivables
It should be noted that Member
States are entitled to withhold 25 % of traditional own resources as collection
costs, thus the above figures are shown net of this deduction. Based on the
estimations sent by Member States, a write-down has been deducted from
receivables from Member States. However, this does not mean that the Commission
is waiving recovery of the amounts covered by this value adjustment.
2.9.3.  
Accrued income and deferred charges
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Accrued income || 2 709 || 3 002 
 Deferred charges ||  368 ||  351 
 Other ||  18 ||  15 
 Total || 3 095 || 3 368 
The main amount under this heading is accrued income:
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Own resources || 2 424 || 2 388 
 Agricultural assigned revenue November & December || 0 ||  218 
 Cohesion, Regional & Rural Development Funds: financial corrections ||  31 ||  276 
 Other accrued income ||  254 ||  120 
 Total || 2 709 || 3 002 
Amounts shown under own resources
(EUR 2 424 million) are mainly accrued custom duties of November and December
2013. It should be noted that agricultural assigned revenue for November and
December (EUR 131 million) are now disclosed under current
receivables.
2.9.4.   Other receivables and recoverables
Included under this heading are
mainly recovery of pre-financing amounts, recovery of expenses as well as other
revenue from administrative and operational actions. 
2.10.  CURRENT
PRE-FINANCING
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Pre-financing || 2.10.1 || 16 403 || 9 548 
 Prepaid expenses || 2.10.2 || 4 963 || 3 690 
 Total ||   || 21 367 || 13 238 
2.10.1.
Pre-financing
   ||   || EUR millions 
 Management Type || 31.12.2013 || 31.12.2012 
 Direct centralised management || 3 848 || 3 289 
 Indirect centralised management || 4 711 || 3 908 
 Decentralised management ||  250 ||  301 
 Shared management || 6 263 || 1 008 
 Joint management || 1 018 ||  844 
 Implemented by other Institutions & Agencies ||  313 ||  198 
 Total || 16 403 || 9 548 
Article 58 of the new Financial
Regulation which partly revised the methods of implementation of the budget
shall only apply as of 1 January 2014.
The increase
in current pre-financing is mostly related to shared management. As explained
under note 2.6 the structural funds programs are entering in the final
phase of the programming period 2007-2013. As a consequence a large portion
(EUR 6.1 billion) of previously non-current pre-financing became current at 31
December 2013. 
There is also an increase under
direct centralised management and indirect centralised management. In both
cases, this increase is mostly due to the final phase of the 7th Research
Framework Programme for research and technological development (FP7) which is
marked by the signing of the last agreements leading to new pre-financing
payments of approximately EUR 2.8 billion under direct centralised management
and EUR 1.4 billion under indirect centralised management. In parallel,
projects under older agreements have been completed and the related
pre-financing payments have been cleared.
2.10.2.
Prepaid expenses
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Financial Engineering Instruments || 2 118 || 1 358 
 Aid Schemes || 2 845 || 2 332 
 Total || 4 963 || 3 690 
The variation of the amounts
disclosed under this heading is due mainly to the Member States' increased
contribution to Financial Engineering Instruments in the area of regional
development.
2.11.  CASH
AND CASH EQUIVALENTS
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Unrestricted cash: || 2.11.1 ||   ||   
   Accounts with Treasuries and Central Banks ||   || 2 790 || 2 203 
   Current accounts ||   ||  838 ||  967 
   Imprest accounts ||   ||  39 ||  38 
   Transfers (cash in transit) ||   ||  (1) ||  (1) 
   Total ||   || 3 665 || 3 207 
 Cash belonging to financial instruments & term deposits || 2.11.2 || 1 680 || 2 345 
   ||   ||   ||   
 Restricted cash and cash equivalents || 2.11.3 || 4 165 || 5 122 
   ||   ||   ||   
 Total ||   || 9 510 || 10 674 
2.11.1. Unrestricted
cash 
Unrestricted cash covers all the
funds which the Commission keeps in its accounts in each Member State and EFTA
country (treasury or central bank), as well as in current accounts, imprest
accounts and petty cash.
Unrestricted cash at
31 December 2013 includes EUR 1.1 billion of own resources contributions due by
Members States on 1 January 2014 which were received some days in advance.
Furthermore, the year-end balance contains EUR 1.3 billion of competition
fines, mostly cashed by the Commission in the last weeks of 2013 which were not
yet returned to Member States via an Amending Budget.
2.11.2. Cash
belonging to financial instruments & term deposits
Amounts shown under this heading are
mainly cash equivalents (EUR 1 434 million) managed by
fiduciaries on behalf of the Commission for the purpose of implementing
particular financial instruments programmes funded by the EU budget and other
term deposits (EUR 245 million). The cash belonging to financial instruments
can thus only be used in the financial instruments programme concerned. At
year-end, EUR 138 million had been committed to financial instruments managed
by fiduciaries, but had not yet been drawn down by the other parties.
2.11.3. Restricted
cash and cash equivalents
Restricted cash refers to amounts
received in connection with fines issued by the Commission for which the case
is still open. These are kept in specific deposit accounts that are not used
for any other activities. In case an appeal has been lodged or where it is
unknown if an appeal will be made by the other party, the underlying amount is
shown as contingent liability in note 5.2.
The decrease in restricted cash
is due to the fact that since 2010, all provisionally cashed fines are managed
by the Commission in a specifically created fund (BUFI) and invested in
financial instruments categorised as available for sale (see notes 2.4.1
and 2.8.1).
 
NON-CURRENT LIABILITIES
2.12. 
PENSION AND OTHER EMPLOYEE BENEFITS
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Pensions – staff || 40 933 || 37 528 
 Pensions – others || 1 016 ||  968 
 Joint Sickness Insurance Scheme || 4 869 || 4 007 
 Total || 46 818 || 42 503 
            
2.12.1. Pensions –
staff
In accordance with Article 83 of
the Staff Regulations, the payment of the benefits provided for in the staff
pension scheme (PSEO: Pension Scheme of European Officials) constitutes a
charge to the EU's budget. The scheme is not funded, but the Member States
guarantee the payment of these benefits collectively according to the scale
fixed for the financing of this expense. In addition, officials contribute one
third to the long-term financing of this scheme via a compulsory contribution.
The liabilities of the pension
scheme were assessed on the basis of the number of staff and retired staff at
31 December 2013 and on the rules of the Staff Regulations applicable at this
date. This valuation was carried out in accordance with the methodology of
IPSAS 25 (and therefore also EU accounting rule 12). The method used to
calculate this liability is the projected unit credit method. The main
actuarial assumptions available at the valuation date and used on the valuation
were as follows:
 Actuarial assumptions - staff pension liability || 31.12.2013 || 31.12.2012 
 Nominal discount rate || 3.7 % || 3.6 % 
 Expected inflation rate || 1.9 % || 2.0 % 
 Real discount rate || 1.8 % || 1.6 % 
 Probability of marriage: man/woman || 81 %/49 % || 84 %/38 % 
 General salary growth/pension revaluation || 0 % || 0 % 
 International Civil Servants Life Table (ICSLT) || ICSLT 2013 || ICSLT 2008 
   ||   || EUR millions 
 Movement in gross employee benefits liability || Staff pension liability || Sickness Insurance 
 Gross liability at previous year-end || 41 961 || 4 278 
 Service/normal cost || 1 928 || - 
 Interest cost || 1 603 ||  162 
 Benefits paid || (1 288) ||  (11) 
 Actuarial losses || 1 499 ||  704 
 Change due to newcomers ||  244 || - 
 Gross liability at year-end || 45 947 || 5 133 
 Correction coefficients applied to pensions || 959 || N/A 
 Deduction of taxes on pensions || (5 973) || N/A 
 Plan assets || N/A ||  (264) 
 Net liability at year-end || 40 933 || 4 869 
2.12.2. Pensions –
Others
This refers to the liability
relating to the pension obligations towards Members and former Members of the
Commission, the Court of Justice (and General Court) and the Court of Auditors,
the Secretaries General of the Council, the Ombudsman, the European Data
Protection Supervisor, and the European Union Civil Service Tribunal. Also
included under this heading is a liability relating to the pensions of Members
of the European Parliament.
2.12.3. Joint
Sickness Insurance Scheme
A valuation is also made for the
estimated liability that the EU has regarding its contributions to the Joint
Sickness Insurance Scheme in relation to its retired staff. The gross liability
has been valued at EUR 5 133 million (2012: EUR 4 278 million)
and plan assets of EUR 264 million (2012: EUR 271 million) are
deducted from the gross liability to arrive at the net amount. The discount
rate and the general salary growth used in the calculation are the same as
those used in the staff pension valuation.
            
2.13.  NON-CURRENT
PROVISIONS
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Amount at 31.12.2012 || Additional provisions || Unused amounts reversed || Amounts used || Transfer to current || Change in estimation || Amount at 31.12.2013 
 Legal cases || 132 || 180 ||  (51) ||  (3) || - || - || 258 
 Nuclear site dismantling || 997 || - || - ||  (2) ||  (30) ||  (32) || 933 
 Financial || 108 || 45 || - || - ||  (38) ||  (4) || 111 
 Other || 21 || 2 ||  (2) || 0 || - || - || 21 
 Total || 1 258 || 227 ||  (53) ||  (5) ||  (68) ||  (36) || 1 323 
 
Legal cases
This is the estimate of amounts
that will probably have to be paid out more than 12 months after the year-end
in relation to a number of on-going legal cases. The additional legal cases
provisions concern mostly new court cases in the area of agriculture and
cohesion. 
Nuclear site dismantlement
In 2012 a
consortium of independent experts made an update of their 2008 study on the
estimated costs of the decommissioning of the Joint Research Centre (JRC)
nuclear facilities and waste management programme. Their
revised estimate of EUR 989 million (previously EUR 1
222 million) is taken as the basis for the provision to be included in
the accounts. In accordance with EU accounting rules this provision is indexed
for inflation and then discounted to its net present value (using the Euro
zero-coupon swap curve). In view of the estimated duration of this programme
(around 20 years), it should be pointed out that there is some uncertainty
about this estimate, and the final cost could be different from the amounts
currently entered.
Financial provisions
These concern mainly provisions
which represent the estimated losses that will be incurred in relation to the
guarantees given under the SME Guarantee Facility 1998, the SME Guarantee
Facility 2001 and the SME Guarantee Facility 2007 under the Competitiveness and
Innovation framework Programme (CIP) and the European Progress Microfinance
Facility (Guarantee), where the European Investment Fund (EIF) is empowered to
issue guarantees in its own name but on behalf of and at the risk of the
Commission. The financial risk linked to the drawn and undrawn guarantees is,
however, capped. Non-current financial provisions are discounted to their net
present value (using the Euro Swap annual rate).           
2.14.  NON-CURRENT
FINANCIAL LIABILITIES
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Non-current borrowings || 2.14.1 || 54 173 || 57 252 
 Elimination Guarantee Fund* ||   ||  (20) ||  (20) 
 Total ||   || 54 153 || 57 232 
* The
Guarantee Fund holds EFSM bonds issued by the Commission, so these need to be
eliminated. 
Non-current borrowings
   ||   ||   ||   ||   ||   || EUR millions 
   || MFA || Euratom || BOP || EFSM || ECSC in Liqui-dation || Total 
 Total at 31.12.2012 ||  549 ||  425 || 11 623 || 44 476 ||  194 || 57 267 
 New borrowings ||  100 || - || - || - || - ||  100 
 Repayments ||  (81) ||  (36) || - || - || - ||  (117) 
 Exchange differences || - ||  (1) || - || - ||  (4) ||  (5) 
 Changes in carrying amount ||  1 ||  (1) || - ||  (8) || - ||  (8) 
 Total at 31.12.2013 ||  569 ||  387 || 11 623 || 44 468 ||  190 || 57 237 
   ||   ||   ||   ||   ||   ||   
 Amount due < 1 year ||  31 || - || 3 033 || - || - || 3 064 
   ||   ||   ||   ||   ||   ||   
 Amount due > 1 year ||  538 ||  387 || 8 590 || 44 468 ||  190 || 54 173 
This heading
includes borrowings due by the EU maturing in over one year. Borrowings include debts evidenced by certificates amounting to EUR 56
981 million (2012: EUR 57 026 million). The changes in carrying
amount correspond to the change in accrued interests. For
more information on borrowing and lending activities, see note 7.
 
2.15.  OTHER
NON-CURRENT LIABILITIES
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Finance leasing debts || 1 756 || 2 040 
 Buildings paid for in instalments ||  336 ||  352 
 Other || 124 ||  135 
 Total || 2 216 || 2 527 
            
CURRENT LIABILITIES
2.16. 
CURRENT PROVISIONS
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Amount at 31.12.2012 || Additional provisions || Unused amounts reversed || Amounts used || Transfers from non- current || Change in estimation || Amount at 31.12.2013 
 Legal cases ||  224 ||  8 ||  (2) ||  (2) || 0 ||  1 ||  229 
 Nuclear site dismantlement ||  29 || 0 || 0 ||  (29) ||  30 || 0 ||  30 
 Financial ||  188 ||  53 ||  (45) ||  (55) ||  38 ||  (8) ||  171 
 Other ||  365 ||  4 ||  (114) ||  (139) || 0 ||  (1) ||  115 
 Total ||  806 ||  65 ||  (161) ||  (225) ||  68 ||  (8) ||  545 
            
2.17.  CURRENT
FINANCIAL LIABILITIES
This heading relates to the
portion of non-current borrowings (see note 2.14) that mature during the
12 months following the balance sheet date. The increase compared to last
year is due to repayments of BOP loans scheduled for 2014 (Hungary EUR 2
billion and Latvia EUR 1 billion). 
2.18.  PAYABLES
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Accrued charges and deferred income || 2.18.1 || 56 282 || 68 436 
 Payables || 2.18.2 || 36 213 || 21 558 
 Current portion of non-current liabilities || 2.18.3 ||  99 ||  89 
 Total ||   || 92 594 || 90 083 
2.18.1. Accrued
charges and deferred income
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Accrued charges || 56 062 || 68 216 
 Deferred income ||  190 ||  201 
 Other ||  30 ||  19 
 Total || 56 282 || 68 436 
            
The split of accrued charges is as follows:
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 European Agricultural Guarantee Fund: ||   ||   
 Direct aid and interventions in agricultural markets || 33 489 || 44 532 
 Other ||  2 ||  1 
 Rural Development: ||   ||   
 EAFRD || 12 255 || 12 463 
 Other || 203 || 34 
   || 45 949 || 57 030 
   ||   ||   
 Structural Actions: ||   ||   
 European Fisheries Fund / Financial Instruments for Fisheries Guidance ||  48 ||  66 
 European Regional Development Fund and Cohesion Fund || 4 356 || 4 359 
 Instrument for Structural Policies for pre-Accession ||  114 ||  382 
 European Social Fund || 1 100 || 1 378 
   || 5 618 || 6 185 
 Other accrued charges: ||   ||   
 Research & Development || 1 172 || 1 077 
 Other || 3 323 || 3 924 
   || 4 495 || 5 001 
 Total || 56 062 || 68 216 
            
2.18.2. Payables
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Member States || 37 481 || 23 029 
 Suppliers and other || 1 650 || 1 704 
 Estimated non-eligible amounts and pending pre-payments || (2 918) || (3 175) 
 Total || 36 213 || 21 558 
Payables include cost statements received by the Commission under
the framework of the grant activities. They are credited for the amount being
claimed from the moment the demand is received. If the counterpart is a Member
State, they are classified as such. It is the same procedure for invoices and
credit notes received under procurement activities. The cost claims concerned
have been taken into account for the year-end cut off procedures. Following
these cut off entries, estimated eligible amounts have therefore been recorded
in the accounts as expenses, while the remaining part is disclosed as
“Estimated non-eligible amounts and pending prepayments” (see below). In order
not to overestimate assets and liabilities, it was decided to present the net
amount under current liabilities.
Member States
Payables to Member States relate
primarily to unpaid cost claims for structural actions (EUR 20.8 billion
for ERDF and CF and EUR 4.2 billion for ESF).
Furthermore, the amount includes
EUR 11.3 billion for the European Agricultural Guarantee Fund (EAGF). In order
to better present the economic reality, from 2013 onwards, amounts related to
EAGF for which payment was due on the first working day of January of the
following year are recorded as amounts payable instead of accrued charges. Had
the current approach been followed in the 2012 accounts, the amount of Member
States payables would have been EUR 11.9 billion higher (i.e. EUR 34.9
billion).
The remaining EUR 1.2 billion
Member State payables mainly concern fisheries and maritime policies (EUR 0.6 billion)
and rural development (EUR 0.2 billion).
Suppliers and other
Included under this heading are
sundry payables, amounts owed following grant and procurement activities, as
well as amounts payable to public bodies and non-consolidated entities.
Estimated non-eligible amounts and pending
prepayments
Payables are reduced by that part
of the requests for reimbursement received, but not yet checked, that was
estimated to be ineligible. The largest amounts concern the Structural Actions
Directorates-General. Payables are also reduced by the part of requests for
reimbursement received corresponding to prepaid expenditure still to pay at
year end (EUR 2.2 billion).   
2.18.3. Current
portion of non-current liabilities
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Finance leasing debts ||  82 ||  70 
 Other ||  17 ||  19 
 Total ||  99 ||  89 
            
NET ASSETS
2.19. 
RESERVES
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Fair value reserve || 2.19.1 ||  99 ||  150 
 Guarantee Fund reserve || 2.19.2 || 2 125 || 2 079 
 Other reserves || 2.19.3 || 1 849 || 1 832 
 Total ||   || 4 073 || 4 061 
            
2.19.1. Fair value
reserve
In accordance with the accounting
rules, the adjustment to fair value of available for sale financial assets is
accounted for through the fair value reserve. 
In 2013 a net EUR 29 million
(2012: EUR 5 million) of accumulated fair value increases have been taken out
of the fair value reserve and recognised in the statement of financial
performance relating to available for sale financial assets.
2.19.2.
Guarantee Fund reserve
This reserve reflects the 9 %
target amount of the outstanding amounts guaranteed by the Fund that is
required to be kept as assets.
2.19.3. Other
reserves
The amount relates primarily to the
ECSC in liquidation reserve (EUR 1 537 million) for the assets of the Research
Fund for Coal and Steel and was created in the context of the winding-up of the
ECSC.
 
2.20.  AMOUNTS
TO BE CALLED FROM MEMBER STATES
   || EUR millions 
   ||   
 Amounts to be called from Member States at 31.12.2012 || 44 477 
 Return of 2012 budget surplus to Member States || 1 023 
 Movement in Guarantee Fund reserve ||  46 
 Other reserve movements ||  14 
 Economic result of the year || 4 365 
 Total amounts to be called from Members States at 31.12.2013 || 49 925 
   ||   
 Split between: ||   
 Employee benefits || 46 818 
 Other amounts || 3 107 
            
This amount
represents that part of the expenses already incurred by the Commission up to
31 December 2013 that must be funded by future budgets. Many expenses
are recognised under accrual accounting rules in the year N although they may
be actually paid in year N+1 (or later) and funded using the budget of year N+1
(or later). The inclusion in the accounts of these liabilities coupled with the
fact that the corresponding amounts are financed from future budgets, results in
liabilities greatly exceeding assets at the year-end. The most significant
amounts to be highlighted are the EAGF activities. The majority of the amounts
to be called are in fact paid by the Member States in less than 12 months after
the end of the financial year in question as part of the budget of the
following year. 
It is essentially only the employee
benefits obligations of the Commission towards its staff which are paid out
over a longer period, noting that the funding of the pension payments by the annual
budgets is guaranteed by the Member States. For information purposes only, an
estimate of the split of future employee benefit payments is given below:
   || EUR millions 
   || Amount 
 Amounts to be paid in 2014 || 1 450 
 Amounts to be paid after 2014 || 45 368 
 Total employee benefits liability at 31.12.2013 || 46 818 
It should also be noted that the
above has no effect on the budget result – budget revenue should always equal
or exceed budget expenditure and any excess of revenue is returned to Member
States.
 
3.            
NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE
3.1.     
OWN RESOURCE AND CONTRIBUTIONS REVENUE
   ||   ||   || EUR millions 
   || Note || 2013 || 2012 
 GNI resources ||   || 110 194 || 98 061 
 Traditional own resources: Customs duties ||   || 15 268 || 16 087 
                                        Sugar levies ||   ||  199 ||  157 
 VAT resources ||   || 14 019 || 14 871 
 Own resource revenue || 3.1.1 || 139 680 || 129 176 
 Budgetary adjustments || 3.1.2 || 1 187 || 1 439 
 Contributions of third countries (incl. EFTA) ||   ||  373 ||  304 
 Total ||   || 141 241 || 130 919 
            
3.1.1.   Own resource revenue
Own resource revenue is the primary
element of the EU’s operating revenue. Thus the bulk of expenditure is financed
by own resources as other revenue represents only a minor part of the total
financing. There are three categories of own resources: traditional own
resources (“TOR”), the VAT-based resource and the GNI-based resource.
Traditional own resources comprise sugar levies and customs duties. A
correction mechanism in respect of budgetary imbalances (UK Rebate) as well as
a gross reduction in the annual GNI-based contribution of Netherlands and
Sweden are also part of the own resources system. Member States retain, by way
of collection costs, 25 % of traditional own resources, and the above
amounts are shown net of this deduction.
It should be noted that a refund of
EUR 169 million (gross, EUR 126 million net) claimed by Belgium in 2011 under
Traditional Own Resources was paid out in 2013 after the completion of audits
and controls on the reliability of the Belgian clearance and accounting
systems. The related provision booked in 2012 was used in 2013.
It should also be noted that
following a Court ruling on the sugar levies regulation challenged by certain
companies and Member States, and the subsequent adoption by the Council of a
new regulation end of December 2013, an amount of EUR 214 million will have to
be reimbursed to the concerned parties end of 2014. A provision booked in 2012
and covering this amount is still included in the accounts.
3.1.2.   Budgetary adjustments
The budgetary adjustments include
the budget surplus from 2012 (EUR 1 023 million) which is indirectly refunded
to Member States by deduction of the amounts of own resources they have to
transfer to the EU in the following year – thus it is a revenue for 2013.   
3.2.     
OTHER OPERATING REVENUE
   ||   ||   || EUR millions 
   || Note || 2013 || 2012 
 Fines || 3.2.1 || 2 757 || 1 884 
   ||   ||   ||   
 Agricultural levies || 3.2.2 ||  48 ||  87 
   ||   ||   ||   
 Recovery of expenses: || 3.2.3 ||   ||   
 Direct centralised management ||   ||  69 ||  63 
 Indirect centralised management ||   ||  6 ||  30 
 Decentralised management ||   ||  41 ||  27 
 Joint management ||   ||  33 ||  8 
 Shared management ||   || 1 628 || 1 376 
 Total ||   || 1 777 || 1 504 
 Revenue from administrative operations: || 3.2.4 ||   ||   
 Staff ||   || 1 137 || 1 209 
 Property, plant and equipment related revenue ||   ||  38 ||  23 
 Other administrative revenue ||   ||  83 ||  59 
 Total ||   || 1 257 || 1 291 
 Miscellaneous operating revenue: || 3.2.5 ||   ||   
 Adjustments/provisions ||   ||  208 ||  280 
 Exchange gains ||   ||  334 ||  335 
 Other ||   || 2 033 || 1 445 
 Total ||   || 2 575 || 2 060 
 Total ||   || 8 414 || 6 826 
3.2.1.   Fines
The increase in
other operating revenue is mainly explained by a higher amount of revenue
relating to fines in 2013. These revenues relate to fines imposed by the
Commission for infringement of competition rules. Receivables and related
revenues are recognised when the Commission decision imposing a fine has been
taken and it is officially notified to the addressee.
The higher amount in 2013 is mainly
explained by fines of EUR 1.7 billion which were imposed on a number of banks
for participating in cartels in the interest rate derivatives industry.
Furthermore, in 2013 there is a high value fine case concerning Microsoft (EUR
561 million) and its failure to promote a range of web browsers, rather than
just Internet Explorer, to users in the EU.
3.2.2.   Agricultural levies
These amounts concern primarily
milk levies which are a market management tool aimed at penalising milk producers
who exceed their reference quantities. As it is not linked to prior payments by
the Commission, it is in practice considered as revenue for a specific purpose.
3.2.3.  
Recovery of expenses
This heading represents the
recovery orders issued by the Commission and the deduction from subsequent
payments recorded in the Commission's accounting system, to recover
expenditures previously paid out from the general budget, based on controls,
closed audits or eligibility analysis, together with recovery orders issued by
Member States to beneficiaries of EAGF expenditure. It also includes the
variation of accrued income estimations from the previous year-end to the
current. 
It should be noted that these
figures represent the accounting impact of EU corrective activities only, based
on the EU accounting rules in force. For this reason, these figures cannot and
do not show the full extent of the recovery of EU expenditure, particularly for
the significant spending areas of structural actions where specific mechanisms are
in place to ensure the return of ineligible monies, most of which do not
involve the issuance of a recovery order and therefore do not impact the EU
accounting system. Moreover, recoveries of pre-financing amounts are also not
included as revenue, in accordance with the EU accounting rules. More details
on financial corrections and recoveries of expenses are given in Note 6.
Agriculture: EAGF and rural development
In the framework of the EAGF and
the EAFRD, amounts accounted for as revenue of the year under this heading are
financial corrections decided during the year and reimbursements declared by
Member States and recovered during the year plus the net increase in the
outstanding amounts declared by Member States to be recovered at year-end
concerning fraud and irregularities.
Structural Actions
The main amounts under the
structural actions sub-heading include recovery orders issued by the Commission
to recover undue expenditure made in previous years, deductions from
expenditure less decrease in the accrued income at year-end.
Recovery orders are issued only in
the following cases:
–     
formal financial correction decisions by the
Commission following the detection of irregular expenditure in the amounts
claimed by Member States;
–     
adjustments at closure of a programme leading to
a reduction in the EU contribution where a Member State has not declared
sufficient eligible expenditure to justify the total pre-financing and interim
payments already made; such operations may be without a formal Commission
decision if accepted by the Member State;
–     
repayment of amounts recovered after closure
following the conclusion of legal proceedings which were pending at the time of
closure.
Other recovery orders issued under
structural actions concern the recovery of pre-financing – see note 6.3. These amounts are not shown as revenue, but
credited to the pre-financing heading on the balance sheet.
3.2.4.  
Revenue from administrative operations
This revenue arises from deductions
from staff salaries and is made up primarily of two amounts – staff pension
contributions and taxes on income.
3.2.5.  
Miscellaneous operating revenue
An amount of EUR 779 million (2012:
EUR 672 million) relates to amounts received from accession countries. Exchange
gains, except on financial activities dealt with in note 3.5 below, are
also included under this heading. These arise from the everyday activities and
related transactions made in currencies other than the Euro, as well as the
year-end revaluation required to prepare the accounts. They contain both
realised and unrealised gains. There was a net exchange loss for the year of
EUR 39 million (2012: net exchange gain of EUR 52 million).
            
3.3.     
ADMINISTRATIVE EXPENSES
   ||   || EUR millions 
   || 2013 || 2012 
 Staff expenses || 5 527 || 5 708 
 Depreciation and impairment ||  450 ||  451 
 Other administrative expenses || 3 293 || 3 161 
 Total || 9 269 || 9 320 
Included under other administrative expenses are EUR 388 million
(2012: EUR 379 million) relating to operating leases. Amounts committed to be
paid during the remaining term of these lease contracts are as follows:
   ||   || EUR millions 
   || Future amounts to be paid ||   
   || < 1 year || 1- 5 years || > 5 years || Total 
 Buildings ||  338 ||  912 ||  739 || 1 990 
 IT materials and other equipment ||  7 ||  17 || 0 ||  24 
 Total ||  346 ||  929 ||  739 || 2 014 
            
3.4.     
OPERATING EXPENSES
   ||   ||   || EUR millions 
   || Note || 2013 || 2012 
 Primary operating expenses: || 3.4.1 ||   ||   
   Direct centralised management ||   || 8 722 || 9 883 
   Indirect centralised management ||   || 5 491 || 4 151 
   Decentralised management ||   ||  720 || 1 019 
   Shared management ||   || 120 070 || 106 378 
   Joint management ||   || 1 745 || 1 819 
   Total ||   || 136 747 || 123 250 
 Other operating expenses: || 3.4.2 ||   ||   
   Adjustments/provisions ||   ||  301 ||  427 
   Exchange losses ||   ||  378 ||  281 
   Other ||   || 1 145 ||  675 
   Total ||   || 1 824 || 1 383 
 Total ||   || 138 571 || 124 633 
            
3.4.1.   Primary operating expenses
Operating expenses cover the
various headings of the financial framework and take different forms, depending
on how the money is paid out and managed. The majority of the expenses falls
under the heading “Shared Management” involving the delegation of tasks to
Member States, covering such areas as EAGF spending and actions financed
through the different Structural Actions (the regional development fund, the
social fund, the agricultural fund for rural development, the cohesion fund and
the fisheries fund).
The main elements of the operating
expenses above cover the following areas: agriculture and rural development EUR
59 billion (2012: EUR 57 billion), regional development and cohesion EUR 49 billion
(2012: EUR 39 billion), employment and social affairs EUR 12 billion
(2012: EUR 11 billion), research and communication networks, content and
technology EUR 6 billion (2012: EUR 6 billion) and external relations EUR 3
billion (2012: EUR 3 billion).
The overall increase in operating
expenses is driven by the advancement of the projects in the area of regional
development for the programming period 2007-2013.
3.4.2.   Other operating expenses
Exchange losses, except on
financial activities dealt with in note 3.6 below, occur on the everyday
activities and related transactions made in currencies other than the Euro, as
well as the year-end revaluation required to prepare the accounts – they are
both realised and unrealised. 
The 2013 heading other (under
other operating expenses) mainly comprised the correction of fines issued in
previous years totalling EUR 360 million.
Research and
Development costs
Included under administrative and
operating expenses are expenses relating to research and development as
follows:
   ||   || EUR millions 
   || 2013 || 2012 
 Research costs ||  335 ||  331 
 Non-capitalised development costs ||  74 ||  76 
 Total ||  409 ||  407 
            
3.5.     
FINANCIAL REVENUE
   ||   || EUR millions 
   || 2013 || 2012 
 Dividend income ||  6 ||  12 
   ||   ||   
 Interest income: ||   ||   
   On pre-financing ||  29 ||  28 
   On late payments ||  88 ||  242 
   On available for sale financial assets ||  71 ||  100 
   On loans || 1 712 || 1 559 
   On cash and cash equivalents ||  21 ||  26 
   Other ||  1 ||  2 
   Total || 1 922 || 1 957 
 Other financial income: ||   ||   
   Realised gain on sale of financial assets ||  24 ||  18 
   Other ||  85 ||  160 
   Total ||  108 ||  178 
   ||   ||   
 Exchange gains ||  2 ||  10 
   ||   ||   
 Total || 2 038 || 2 157 
3.6.     
FINANCIAL EXPENSES
   ||   || EUR millions 
   || 2013 || 2012 
 Interest expenses: ||   ||   
   Leasing ||  99 ||  88 
   On borrowings || 1 697 || 1 545 
   Other ||  22 ||  23 
   Total || 1 818 || 1 656 
 Other financial expenses: ||   ||   
   Adjustments to financial provisions ||  98 ||  75 
   Relating to financial instruments managed by fiduciaries ||  68 ||  43 
   Impairment losses on available for sale financial assets ||  8 ||  8 
   Realised loss on sale of financial assets || 0 ||  4 
   Other ||  35 ||  143 
   Total ||  209 ||  273 
 Exchange losses ||  18 ||  13 
   ||   ||   
 Total || 2 045 || 1 942 
            
3.7.      SHARE OF NET DEFICIT OF JOINT VENTURES AND ASSOCIATES
In accordance with the equity
method of accounting, the Commission includes in its statement of financial
performance its share of the net deficit of its joint ventures and associates
(see also notes 2.3.1 and 2.3.2).
 
3.8.      REVENUE FROM NON-EXCHANGE TRANSACTIONS
In 2013 EUR 148 874 million (2012:
EUR 137 023 million) revenue from non-exchange transactions have been
recognised in the statement of financial performance.
 
3.9.      SEGMENT REPORTING
The segment report gives the split of the operating revenues and
expenses by policy area, based on the Activity Based Budget structure, within
the Commission. These policy areas can be grouped under three larger headings –
Activities within the EU, Activities outside the EU and Services & other. “Activities
within the EU” is the largest of these headings as it covers the many policy
areas within the EU. “Activities outside the EU” concerns the policies operated
outside the EU, such as trade and external aid. “Services & other” are the
internal and horizontal activities necessary for the functioning of the EU
Institutions and bodies. Note that the information relating to Agencies is
included under the relevant policy area. Note also that own resources and
contributions are not split amongst the various activities as these are
calculated, collected and managed by central Commission services.
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Activities within the EU || Activities outside the EU || Services and Other || ECSC in Liquidation || Other Institutions || Consolidation eliminations || Total 
 Fines || 2 757 || 0 || 0 || 0 || 0 || 0 || 2 757 
 Agricultural levies ||  48 || 0 || 0 || 0 || 0 || 0 ||  48 
 Recovery of expenses || 1 687 ||  79 || 0 || 0 ||  4 ||  6 || 1 777 
 Revenues from admin operations ||  111 ||  1 ||  998 || 0 ||  625 ||  (478) || 1 257 
 Miscellaneous operating revenue || 3 178 ||  104 ||  531 ||  3 ||  55 || (1 296) || 2 575 
 Other operating revenue                      || 7 781 ||  184 || 1 529 ||  3 ||  685 || (1 768) || 8 414 
   ||   ||   ||   ||   ||   ||   ||   
 Staff expenses || (2 248) ||  (321) || (1 279) || 0 || (1 704) ||  25 || (5 527) 
 Intangible assets & PPE related expenses ||  (137) || 0 ||  (115) || 0 ||  (205) ||  7 ||  (450) 
 Other administrative expenses ||  (986) ||  (329) ||  (887) || 0 || (1 720) ||  628 || (3 293) 
 Administrative expenses                      || (3 370) ||  (649) || (2 281) || 0 || (3 628) ||  660 || (9 269) 
   ||   ||   ||   ||   ||   ||   ||   
 Direct centralised management || (6 068) || (3 348) ||  (264) || 0 || 0 ||  957 || (8 722) 
 Indirect centralszed management || (4 943) ||  (585) ||  (32) || 0 || 0 ||  69 || (5 491) 
 Decentralised management ||  (181) ||  (539) || 0 || 0 || 0 || 0 ||  (720) 
 Shared management || (119 995) ||  (74) || 0 || 0 || 0 || 0 || (120 070) 
 Joint management ||  (233) || (1 512) || 0 || 0 || 0 || 0 || (1 745) 
 Other operational expenses || (1 475) ||  (6) ||  (367) ||  (48) ||  (9) ||  82 || (1 824) 
 Operating Expenses || (132 894) || (6 064) ||  (664) ||  (48) ||  (9) || 1 108 || (138 571) 
 Total operating expenses || (136 265) || (6 713) || (2 945) ||  (48) || (3 638) || 1 768 || (147 840) 
 Net operating expenses || (128 483) || (6 529) || (1 416) ||  (44) || (2 953) || 0 || (139 426) 
 Own resource and contributions revenue ||   ||   ||   ||   ||   ||   || 141 241 
 Surplus from operating activities ||   ||   ||   ||   ||   ||   || 1 815 
 Net financial expenses ||   ||   ||   ||   ||   ||   ||  (7) 
 Movement in pension & other employee benefits liability ||   ||   ||   ||   ||   ||   || (5 565) 
 Share of associates/ joint venture deficit ||   ||   ||   ||   ||   ||   ||  (608) 
 Economic result of the year ||   ||   ||   ||   ||   ||   || (4 365) 
SEGMENT REPORTING – ACTIVITIES WITHIN
THE EU
   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Economic & Financial || Enterprise & Industry || Competition || Employment || Agriculture || Transport & Energy || Environ- ment || Research || Information Society 
 Fines || 0 || 0 || 2 738 || 0 || 0 || 0 ||  16 || 0 || 0 
 Agricultural levies || 0 || 0 || 0 || 0 ||  48 || 0 || 0 || 0 || 0 
 Recovery of expenses || 0 ||  3 || 0 ||  263 || 1 350 ||  20 || 0 ||  17 ||  14 
 Revenues from admin operations || 0 ||  3 || 0 || 0 || 0 ||  23 ||  9 ||  16 || 0 
 Miscellaneous operating revenue ||  5 ||  131 ||  112 ||  36 ||  147 ||  212 ||  127 || 1 052 ||  13 
 Other operating revenue ||  5 ||  136 || 2 850 ||  299 || 1 545 ||  255 ||  152 || 1 084 ||  27 
 Staff expenses ||  (66) ||  (100) ||  (78) ||  (79) ||  (101) ||  (268) ||  (141) ||  (233) ||  (104) 
 Intangible assets & PPE expenses || 0 ||  (4) || 0 ||  (1) || 0 ||  (15) ||  (7) ||  (16) || 0 
 Other administrative expenses ||  (9) ||  (45) ||  (7) ||  (24) ||  (19) ||  (109) ||  (46) ||  (177) ||  (24) 
 Administrative Expenses ||  (74) ||  (148) ||  (85) ||  (104) ||  (119) ||  (391) ||  (195) ||  (427) ||  (128) 
 Centralised direct management ||  (10) ||  (229) ||  1 ||  (141) ||  (48) ||  519 ||  (324) || (3 057) || (1 318) 
 Centralised indirect management || 0 ||  (108) || 0 ||  (1) || 0 || (1 137) ||  (24) || (1 919) ||  (14) 
 Decentralised management || 0 || 0 || 0 ||  (58) ||  (187) || 0 || 0 || 0 || 0 
 Shared management || 0 || 0 || 0 || (12 183) || (58 652) || 0 || 0 || 0 || 0 
 Joint management || 0 ||  (87) || 0 ||  (10) || 0 ||  (131) || 0 || 0 || 0 
 Other operational expenses || 0 || 0 ||  (476) ||  (15) ||  (189) ||  (60) ||  (40) ||  (160) ||  (6) 
 Operating Expenses ||  (10) ||  (424) ||  (475) || (12 408) || (59 075) ||  (808) ||  (388) || (5 136) || (1 338) 
 Total operating expenses ||  (84) ||  (572) ||  (560) || (12 511) || (59 195) || (1 199) ||  (582) || (5 563) || (1 466) 
 Net operating expenses ||  (80) ||  (436) || 2 290 || (12 213) || (57 650) ||  (945) ||  (430) || (4 479) || (1 439) 
SEGMENT REPORTING – ACTIVITIES WITHIN
THE EU (CONTINUED)
   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Joint Research Centre || Fisheries || Internal   Market || Regional    Policy || Taxation & Customs || Education & Culture || Health & Consumer Protection || Justice, Freedom & Security || Total 
 Fines || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  3 || 2 757 
 Agricultural levies || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  48 
 Recovery of expenses ||  1 ||  3 ||  1 ||  12 || 0 ||  5 ||  2 ||  (4) || 1 687 
 Revenues from admin operations ||  37 || 0 ||  1 || 0 ||  1 || 0 ||  12 ||  10 ||  111 
 Miscellaneous operating revenue ||  107 ||  7 ||  252 ||  (2) ||  1 ||  318 ||  379 ||  281 || 3 178 
 Other operating revenue ||  146 ||  10 ||  254 ||  10 ||  3 ||  323 ||  393 ||  290 || 7 781 
 Staff expenses ||  (255) ||  (37) ||  (164) ||  (63) ||  (46) ||  (104) ||  (231) ||  (179) || (2 248) 
 Intangible assets & PPE related expenses ||  (30) ||  (1) ||  (12) || 0 ||  (5) ||  (1) ||  (24) ||  (20) ||  (137) 
 Other administrative expenses ||  (83) ||  (14) ||  (89) ||  (12) ||  (72) ||  (96) ||  (86) ||  (75) ||  (986) 
 Administrative Expenses ||  (368) ||  (52) ||  (264) ||  (75) ||  (123) ||  (202) ||  (341) ||  (274) || (3 370) 
 Centralised direct management ||  (78) ||  (217) ||  (44) ||  (72) ||  (16) ||  (253) ||  (331) ||  (451) || (6 068) 
 Centralised indirect management || 0 || 0 || 0 || 0 || 0 || (1 671) ||  (67) || 0 || (4 943) 
 Decentralised management || 0 || 0 || 0 ||  64 || 0 || 0 || 0 || 0 ||  (181) 
 Shared management || 0 ||  (465) || 0 || (48 470) || 0 || 0 || 0 ||  (225) || (119 995) 
 Joint management || 0 || 0 || 0 || 0 || 0 ||  (3) ||  (2) || 0 ||  (233) 
 Other operational expenses ||  3 ||  (1) ||  (43) ||  (96) || 0 ||  (133) ||  (162) ||  (98) || (1 475) 
 Operating Expenses ||  (75) ||  (683) ||  (87) || (48 574) ||  (16) || (2 059) ||  (562) ||  (775) || (132 894) 
 Total operating expenses ||  (444) ||  (735) ||  (351) || (48 649) ||  (139) || (2 261) ||  (904) || (1 049) || (136 265) 
 Net operating expenses ||  (297) ||  (725) ||  (97) || (48 639) ||  (136) || (1 938) ||  (511) ||  (759) || (128 483) 
SEGMENT
REPORTING – ACTIVITIES OUTSIDE THE EU
   ||   ||   ||   ||   ||   || EUR millions 
   || External Relations || Trade || Development || Enlargement || Humanitarian Aid || Total Activities outside the EU 
 Recovery of expenses ||  36 || 0 ||  6 ||  36 ||  1 ||  79 
 Revenues from admin operations ||  1 || 0 || 0 || 0 || 0 ||  1 
 Miscellaneous operating revenue ||  (1) || 0 ||  86 ||  2 ||  18 ||  104 
 Other operating revenue ||  35 || 0 ||  92 ||  38 ||  19 ||  184 
 Staff expenses ||  (27) ||  (62) ||  (163) ||  (45) ||  (23) ||  (321) 
 Intangible assets & PPE related expenses || 0 || 0 || 0 || 0 || 0 || 0 
 Other administrative expenses ||  (24) ||  (8) ||  (282) ||  (8) ||  (8) ||  (329) 
 Administrative Expenses ||  (51) ||  (70) ||  (444) ||  (53) ||  (31) ||  (649) 
 Direct centralised management || (1 624) ||  (6) ||  (628) ||  (417) ||  (673) || (3 348) 
 Indirect centralised management ||  (531) || 0 ||  (16) ||  (38) || 0 ||  (585) 
 Decentralised management ||  (218) || 0 ||  (67) ||  (254) || 0 ||  (539) 
 Shared management ||  (74) || 0 || 0 || 0 || 0 ||  (74) 
 Joint management ||  (553) ||  (5) ||  (241) ||  (79) ||  (633) || (1 512) 
 Other operational expenses ||  (1) || 0 ||  (3) ||  (1) ||  (1) ||  (6) 
 Operating Expenses || (3 001) ||  (11) ||  (955) ||  (789) || (1 308) || (6 064) 
 Total operating expenses || (3 052) ||  (80) || (1 400) ||  (843) || (1 339) || (6 713) 
 Net operating expenses || (3 017) ||  (80) || (1 308) ||  (805) || (1 319) || (6 529) 
SEGMENT
REPORTING – SERVICES & OTHER
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Press & Communication || Anti-Fraud Office || Co-ordination || Personnel & Admin || Eurostat || Budget || Audit || Languages || Other || Total Services & Other 
 Recovery of expenses || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 Revenues from admin operations || 0 ||  5 ||  2 ||  834 || 0 ||  60 || 0 ||  95 || 0 ||  998 
 Miscellaneous operating revenue ||  (2) ||  7 ||  1 ||  121 ||  (1) ||  31 || 0 ||  49 ||  325 ||  531 
 Other operating revenue ||  (2) ||  12 ||  3 ||  956 ||  (1) ||  91 || 0 ||  145 ||  325 || 1 529 
 Staff expenses ||  (79) ||  (38) ||  (149) ||  (611) ||  (63) ||  (42) ||  (10) ||  (330) ||  43 || (1 279) 
 Intangible assets & PPE related expenses ||  (2) ||  (1) || 0 ||  (110) || 0 || 0 || 0 ||  (2) || 0 ||  (115) 
 Other administrative expenses ||  (43) ||  (14) ||  (28) ||  (687) ||  (17) ||  (13) ||  (1) ||  (83) || 0 ||  (887) 
 Administrative Expenses ||  (125) ||  (52) ||  (177) || (1 408) ||  (81) ||  (55) ||  (10) ||  (415) ||  43 || (2 281) 
 Direct centralised management ||  (101) ||  (17) || 0 ||  (23) ||  (31) ||  (78) || 0 ||  (15) || 0 ||  (264) 
 Indirect centralised management ||  (32) || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  (32) 
 Decentralised management || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 Shared management || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 Joint management || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 Other operational expenses || 0 || 0 ||  (2) ||  (1) || 0 || 0 || 0 || 0 ||  (365) ||  (367) 
 Operating Expenses ||  (133) ||  (17) ||  (2) ||  (24) ||  (31) ||  (78) || 0 ||  (15) ||  (365) ||  (664) 
 Total operating expenses ||  (257) ||  (69) ||  (179) || (1 431) ||  (112) ||  (133) ||  (10) ||  (430) ||  (322) || (2 945) 
 Net operating expenses ||  (259) ||  (57) ||  (176) ||  (476) ||  (113) ||  (42) ||  (10) ||  (285) ||  3 || (1 416) 
4.            
NOTES TO THE CASHFLOW STATEMENT
4.1.      PURPOSE AND PREPARATION OF THE CASHFLOW STATEMENT
Cashflow information is used to
provide a basis for assessing the ability of the EU to generate cash and cash
equivalents, and its needs to utilise those cashflows.
The cashflow statement is
prepared using the indirect method. This means that the economic result of the
financial year is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash receipts or
payments, and items of revenue or expense associated with investing cashflows.
Cashflows arising from
transactions in a foreign currency are recorded in the EU’s reporting currency
(Euro), by applying to the foreign currency amount the exchange rate between
the euro and the foreign currency at the date of the cashflow.
The cashflow statement presented
reports cashflows during the period classified by operating and investing
activities (the EU does not have financing activities).
 
4.2.      OPERATING ACTIVITIES
Operating activities are the
activities of the EU that are not investing activities. These are the majority
of the activities performed. Loans granted to beneficiaries (and the related
borrowings, when applicable) are not considered as investing (or financing)
activities as they are part of the general objectives and thus daily operations
of the EU. Operating activities also include investments such as EIF, EBRD and
venture capital funds. Indeed, the objective of these activities is to
participate in the achievement of policy targeted outcomes.     
4.3.      INVESTING ACTIVITIES
Investing activities are the
acquisition and disposal of intangible assets and property, plant and equipment
and of other investments which are not included in cash equivalents. Investing
activities do not include loans granted to beneficiaries. The objective is to
show the real investments made by the EU.
5.            
CONTINGENT ASSETS & LIABILITIES AND OTHER
SIGNIFICANT DISCLOSURES
5.1.      CONTINGENT ASSETS
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Guarantees received: ||   ||   
    Performance guarantees || 441 || 337 
    Other guarantees || 39 || 43 
 Other contingent assets || 16 || 14 
 Total || 496 || 394 
            
Performance
guarantees are requested to ensure that beneficiaries of EU funding meet the
obligations of their contracts with the EU. 
5.2.      CONTINGENT LIABILITIES
   ||   ||   || EUR millions 
   || Note || 31.12.2013 || 31.12.2012 
 Guarantees given || 5.2.1 || 22 162 || 22 317 
 Fines || 5.2.2 || 5 227 || 6 378 
 EAGF, rural development and pre-accession || 5.2.3 || 1 537 || 1 188 
 Cohesion policy || 5.2.4 ||  137 ||  546 
 Legal cases and other disputes || 5.2.5 ||  689 ||  91 
 Total ||   || 29 753 || 30 521 
All contingent
liabilities, except those relating to fines, would be financed, should they
fall due, by the EU budget in the years to come.
5.2.1.  
Guarantees given
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 On loans granted by the EIB from its own resources: ||   ||   
   65 % guarantee || 19 077 || 18 683 
   70 % guarantee || 1 361 || 1 654 
   75 % guarantee ||  257 ||  383 
   100 % guarantee ||  461 ||  594 
   Total || 21 156 || 21 314 
 Other guarantees given || 1 006 || 1 003 
   ||   ||   
 Total || 22 162 || 22 317 
            
The EU budget
guarantees loans signed and granted by the EIB from its own resources to third
countries at 31 December 2013 (including loans granted to Member States before
accession). However, the EU’s guarantee is limited to a percentage of the
ceiling of the credit lines authorised: 65 % (for the mandate 2000-2007), 70 %,
75 % or 100 %. For the mandate 2007-2013, the EU’s guarantee is limited to 65 %
of the outstanding balances and not on the credit lines authorised. Where the
ceiling is not reached, the EU guarantee covers the full amount. At 31 December
2013 the amount outstanding totalled EUR 21 156 million and
this, therefore, is the maximum exposure faced by the EU.
Other
guarantees given relate mainly to the Risk-Sharing Finance Facility (EUR 958
million). For
more information on this facility see note 2.4.
5.2.2.  
 Fines
These amounts concern fines
imposed by the Commission for infringement of competition rules that have been
provisionally paid and where either an appeal has been lodged or where it is
unknown if an appeal will be made. The contingent liability will be maintained
until a decision by the Court of Justice on the case is final. Interest earned
on provisional payments is included in the economic result of the year and also
as a contingent liability to reflect the uncertainty of the Commission’s title
to these amounts.
5.2.3.  
EAGF, rural development and pre-accession
These are contingent liabilities
towards the Member States connected with the EAGF conformity decisions, rural
development and pre-accession financial corrections pending judgement of the
Court of Justice. The determination of the final amount of the liability and
the year in which the effect of successful appeals will be charged to the
budget will depend on the length of the procedure before the Court of Justice.
5.2.4.  
Cohesion policy
These are contingent liabilities
towards the Member States in conjunction with actions under cohesion policy
awaiting the oral hearing date or pending judgement of the Court of Justice.
5.2.5.  
Legal cases and other disputes
This heading relates to actions
for damages currently being brought against the EU, other legal disputes and
the estimated legal costs. It should be noted that in an action for damages
under Article 288 EC the applicant must demonstrate a sufficiently serious
breach by the institution of a rule of law intended to confer rights on
individuals, real harm suffered by the applicant, and a direct causal link
between the unlawful act and the harm.
 
5.3.      OTHER SIGNIFICANT DISCLOSURES
5.3.1.  
Outstanding commitments not yet expensed
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Outstanding commitments not yet expensed || 178 382 || 175 853 
The amount disclosed above is the
budgetary RAL ("Reste à Liquider") less related amounts that have
been included as expenses in the 2013 statement of financial performance. The
budgetary RAL is an amount representing the open commitments for which payments
and/or de-commitments have not yet been made. This is the normal consequence of
the existence of multi-annual programmes. At 31 December 2013 the
budgetary RAL totalled EUR 222 410 million (2012: EUR 217 810 million).
5.3.2.  
Significant legal commitments
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Structural Actions ||  150 || 71 775 
 Protocol with Mediterranean countries ||  264 ||  264 
 Fisheries agreements ||  79 ||  173 
 Galileo || 0 ||  143 
 Global Monitoring for Environment and Security (GMES) || 0 ||  233 
 Trans-European Transport Networks (TEN-T) ||  850 || 1 331 
 Other contractual commitments || 3 516 || 3 884 
 Total || 4 858 || 77 803 
            
These
commitments originated because the EU entered into long-term legal commitments
in respect of amounts that were not yet covered by commitment appropriations in
the budget. This can relate to multi-annual programmes such as Structural
Actions or amounts that the EU is committed to pay in the future under
administrative contracts existing at the balance sheet date (e.g. relating to
the provision of services such as security, cleaning, etc, but also contractual
commitments concerning specific projects such as building works).
Structural Actions
The table below shows a
comparison between the legal commitments for which budget commitments have not
yet been made and the maximum commitments in relation to the amounts foreseen
in the financial framework 2007-2013. 
The future obligations represent
the outstanding amounts for which the Commission is still committed to make
payments after 31 December 2013. The EUR 150 million remaining outstanding
amount corresponds to the Amending Budget 7/2013 for structural funds.
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Financial framework 2007-2013 (A) || Legal commitments concluded (B) || Budget commitments  (C ) || Decommit- ments          (D) || Legal commitments less budget commitments (=B-C+D) || Maximum commitment (=A-C+D) || Future obligations (=A-C) 
 Structural funds || 348 151 || 347 767 || 348 001 ||  264 || 30 || 414 || 150 
 Natural Resources || 100 558 || 100 353 || 100 558 ||  205 || 0 || 205 || 0 
 Instrument for Pre-Accession Assistance || 11 110 || 10 856 || 11 110 ||  259 || 6 || 259 || 0 
 Total || 459 818 || 458 976 || 459 668 ||  728 || 36 || 878 || 150 
Protocols with Mediterranean countries
These commitments relate to
financial protocols with Mediterranean non-member countries. The amount
included here is the difference between the total amount of the protocols
signed and the amount of the budget commitments entered in the accounts. These
protocols are international treaties that cannot be wound-up without the
agreement of both parties, although the winding-up process is on-going.
Fisheries agreements
These are commitments entered
into with third countries for operations under international fisheries
agreements.
Galileo
These are amounts committed to
the Galileo programme developing a European Global Navigation Satellite System
– see also note 2.2.
GMES
The
Commission has entered into a contract with the ESA for the period from 2008 to
2013 for the implementation of the space component of Global Monitoring for
Environment and Security (GMES). The total indicative amount for that period is
EUR 728 million. 
TEN-T
This amount relates to grants in
the field of the Trans-European Transport Networks (TEN-T) for the period 2007-2013.
The programme applies to projects identified to support both infrastructure
projects and research and innovation projects to foster the integration of new
technologies and innovative processes on the deployment of new transport
infrastructure. The total indicative amount for this programme is EUR 7.9 billion.
The
decrease in legal commitments relating to TEN-T is the combined effect of
reduced legal commitments following amendment decisions and increased budget
commitments. 
Other contractual
commitments
The amounts included under this
disclosure correspond to amounts committed to be paid during the term of the
contracts. The largest amounts included here concern EUR 2 035 million for the
Fusion for Energy Agency in the context of the ITER project and EUR 831 million
for building contracts of the European Parliament.
6.            
PROTECTION OF THE EU BUDGET
6.1.      FINANCIAL CORRECTIONS AND RECOVERIES 2013
6.1.1.  
Financial corrections and recoveries confirmed/decided
in 2013
   ||   ||   ||   || EUR millions 
   || Financial Corrections || Recoveries || 2013 Total || 2012 Total 
 Agriculture: ||   ||   ||   ||   
 EAGF ||  843 ||  227 || 1 070 ||  638 
 Rural Development ||  247 ||  139 ||  386 ||  221 
 Cohesion Policy: ||   ||   ||   ||   
 ERDF ||  337 ||  1 ||  338 ||  958 
 Cohesion Fund ||  220 ||  - ||  220 ||  203 
 ESF ||  834 ||  40 ||  874 ||  425 
 FIFG/EFF ||  10 ||  24 ||  34 ||  2 
 EAGGF Guidance ||  1 ||  2 ||  3 ||  34 
 Other ||  - ||  16 ||  16 ||  19 
 Internal policy areas ||  3 ||  393 ||  396 ||  253 
 External policy areas || N/A ||  93 ||  93 ||  107 
 Administration || N/A ||  6 ||  6 ||  7 
 Total decided/confirmed in 2013 || 2 495 ||  941 || 3 436 ||   
 Total decided/confirmed in 2012 || 2 172 ||  695 ||   || 2 867 
The
total amount of financial corrections and recoveries confirmed/decided in 2013
increased by 20 % compared to 2012 (financial corrections increased by 15 %
and recoveries increased by 35 %). Out of the amount of EUR 1 402 million
that concerned Cohesion policy, EUR 514 million related to the 2007-2013
programming period, EUR 714 million related to the 2000-2006 programming
period, and the remaining amount of EUR 174 million related to the 1994-1999
programming period. 
6.1.2.  
Financial corrections and recoveries implemented
in 2013
   ||   ||   ||   || EUR millions 
   || Financial Corrections || Recoveries || 2013 Total || 2012 Total 
 Agriculture: ||   ||   ||   ||   
 EAGF ||  481 ||  155 ||  636 ||  771 
 Rural Development ||  230 ||  129 ||  359 ||  225 
 Cohesion Policy: ||   ||   ||   ||   
 ERDF ||  622 ||  - ||  622 || 2 416 
 Cohesion Fund ||  277 ||  - ||  277 ||  207 
 ESF ||  842 ||  40 ||  882 ||  430 
 FIFG/EFF ||  4 ||  23 ||  28 ||  1 
 EAGGF Guidance ||  14 ||  2 ||  16 ||  20 
 Other ||  - ||  16 ||  16 ||  11 
 Internal policy areas ||  3 ||  398 ||  401 ||  230 
 External policy areas || N/A ||  93 ||  93 ||  99 
 Administration || N/A ||  6 ||  6 ||  9 
 Total implemented in 2013 || 2 472 ||  862 || 3 334 ||   
 Total implemented in 2012 || 3 742 ||  678 ||   || 4 419 
The
total amount of financial corrections and recoveries implemented in 2013
decreased by 25 % compared to 2012. The increase of recoveries implemented
in 2013 by 27 % was offset by the decrease of financial corrections
implemented in 2013 by 34 %. This reduction is due to a significant case
related to the implementation, and therefore recognition, in 2012 of a
financial correction of EUR 1.8 billion concerning Cohesion
programmes 2000-2006 in Spain (representing 49 % of the total amount of
financial corrections implemented in 2012). Out of the amount of EUR 1 759
million that concerned Cohesion policy, EUR 693 million related to the
2007-2013 programming period, EUR 889 million related to the 2000-2006
programming period, and the remaining amount of EUR 177 million related to the
1994-1999 programming period.
Agriculture and Rural Development: 
The
financial corrections confirmed/decided are mainly related to conformity and
clearance decisions arising as a result of audits performed by the Commission.
The amount effectively implemented is different from the amount decided due to
payments made in instalments by Member States. 
Cohesion Policy:
ERDF and the Cohesion Fund: 
- Period 2007-2013: Financial corrections decreased as the result of the strict
supervision and interruption policy of the Directorate-General for Regional and
Urban Policy and the growing number of action plans implemented as a result of
interruption or pre-suspension letters. Financial corrections confirmed/decided
in 2013 concern 17 Member States and in particular the Czech Republic (EUR 128 million),
Hungary (EUR 139 million), Slovakia (EUR 56 million), and Italy (EUR 49 million).
They are primarily a result of significant flat-rate corrections for
deficiencies in the implementation of public procurement procedures. Financial
corrections implemented in 2013 concern mainly Hungary (EUR 140 million),
Greece (EUR 86 million) and Slovakia (EUR 66 million).
- Period 2000-2006: 81 % of the 2013 financial corrections confirmed/decided were
imposed on Italy (EUR 114 million) and Spain (EUR 96 million), being the result
of the closure of programmes and the exclusion of the expenditure considered as
ineligible. For Italy, the main reason for the financial corrections at closure
is unfinished projects after the expiration of the eligibility period and their
consequent exlusion from EU funding. Italy and Spain are also the Member States
with the highest amount of financial corrections implemented in 2013 (being EUR
118 million and EUR 177 million respectively).
ESF: 
- Period 2007-2013: A significant financial correction of EUR 219 million was both
confirmed/decided and implemented for Romania during 2013. Other financial
corrections confirmed/decided in 2013 concerned Spain (EUR 45 million) and the
United Kingdom (EUR 25 million) as the result of the supervisory role of the
Directorate-General for Employment, Social Affairs and Inclusion. The main
financial corrections implemented in 2013 concerned Spain (EUR 44 million) and
the Czech Republic (EUR 41 million). The total amount represents financial
corrections applied during the life of the programmes. Implementation was
effected by means of a deduction from the interim payment claims submitted by
Member States.
- Period 2000-2006: The main financial corrections which were both confirmed/decided
and implemented in 2013 relate to Spain (EUR 260 million), Italy (EUR 103
million) and the Netherlands (EUR 44 million). The total amount
represents financial corrections applied at the closure of programmes. All
financial corrections reported as implemented were made by means of a deduction
from the final statements of expenditure submitted by Member States during the
closure process.
- Period 1994-1999: the amount of EUR 153 million of financial corrections imposed by
Commission decision and reported both as decided and as implemented during the
closure concerns two old Spanish programmes.
6.1.3.  
Cumulative figures for financial corrections and
recoveries implemented
Information is given below showing
the cumulative financial corrections by programming period: 
   ||   ||   ||   ||   ||   ||   || EUR millions 
  Financial || Programming Period || Cumulated EAGF decisions since 1999  || Total financial corrections implemented at end 2013 || Implemented / Decided-confirmed || Financial corrections not yet implemented || Financial corrections implemented at end 2012 
 corrections || 1994-1999 Period || 2000-2006 Period || 2007-2013 Period 
 Agriculture: ||  - ||  111 ||  294 || 8 229 || 8 633 || 89.61% || 1 001 || 7 902 
 EAGF ||  - ||  - ||  - || 8 229 || 8 229 || 89.95% ||  920 || 7 728 
 Rural Development ||  - ||  111 ||  294 || N/A ||  404 || 83.16% ||  82 ||  174 
 Cohesion Policy: || 2 711 || 7 248 || 1 472 || N/A || 11 431 || 93.78% ||  756 || 9 673 
 ERDF || 1 788 || 4 905 ||  474 || N/A || 7 166 || 93.76% ||  477 || 6 544 
 Cohesion Fund ||  264 ||  587 ||  241 || N/A || 1 092 || 90.65% ||  113 ||  815 
 ESF ||  560 || 1 677 ||  755 || N/A || 2 992 || 97.86% ||  65 || 2 150 
 FIFG/EFF ||  100 ||  7 ||  3 || N/A ||  109 || 51.77% ||  102 ||  105 
 EAGGF Guidance ||  0 ||  71 ||  - || N/A ||  72 || 100.0% || 0 ||  58 
 Other ||  - ||  - ||  - || N/A ||  4 || 100.0% || 0 ||  2 
   ||   ||   ||   ||   ||   ||   ||   ||   
 Total || 2 711 || 7 358 || 1 766 || 8 229 || 20 068 || 91.94% || 1 758 || 17 577 
Included in the above table are a
few cases of financial corrections that are being challenged by certain Member
States (noting that past experience has shown that the Commission has very
rarely had to repay amounts following such cases). For more details, see notes 5.2.3 and 5.2.4.
The amounts of financial
corrections disclosed in the above table concerning Agriculture represent
amounts related to conformity clearance decisions, whereas the amounts
disclosed in note 6.1.2 also take
into account the annual financial clearance decisions.
Concerning EAGF, the cumulated amount implemented
of EUR 8 229 million covers all corrections made and implemented as from when
the first decision was made in 1999.
Concerning
Rural Development, the cumulated amount of EUR 404
million covers all corrections implemented since 2007.
It is to be
noted that in some cases, for EAGF and for Rural Development, the
date of implementation was deferred by several years, and some decisions are
also reimbursed in deferred annual instalments. This is the case for Member
States subject to financial assistance in accordance with the European
Financial Stability Framework Agreement signed on 7 June 2010. As a
consequence, there is an increasing discrepancy between the cumulative amounts
decided and implemented.
Concerning Cohesion policy: 
ERDF
and the Cohesion Fund: 67 %
of the total amount of cumulative financial corrections reported as implemented
concern the 2000-2006 programming period, for which the closure is well
advanced, with significant financial corrections at the final stage of
implementation.  There are also corrections for the 2007-2013 period, for which
programmes are still on-going.
-
Period 2007-2013: 83 %
of the cumulative financial corrections reported as implemeted since the
beginning of the programming period concern the following Member States:
Hungary (EUR 142.9 million), Czech Republic (EUR 132.7 million),
Slovakia (EUR 87.9 million), Greece (EUR 86 million), Poland (EUR 84.6 million)
and Spain (EUR 62 million). This demonstrates the increased supervisory role of
the Commission, as well as the preventive actions taken at Member State level.
-
Period 2000-2006: EUR
5.5 billion financial corrections have been reported as implemented so far,
reflecting the advanced stage of closure of this programming period as only EUR
384 million remained to be implemented at end 2013 (less than 7 %).
ESF:
- Period 2007-2013: The implementation rate for this programming period is 92 %.
Member States with the largest financial corrections implemented are Romania
(EUR 299 million), Spain (EUR 150 million) and Poland (EUR 118
million). Amounts not yet implemented relate mainly to the United Kingdom (EUR 24 million),
Ireland (EUR 19 million) and Romania (EUR 13 million).
- Period 2000-2006: All financial corrections reported decided/confirmed have been
implemented except for a residual amount related to France and Sweden (EUR 0.3
million), which results in an implementation rate of 99.98 % for this
programming period. The main Member States concerned by financial corrections
implemented are Spain (EUR 734 million), Italy (EUR 376 million), France (EUR 220 million)
and the United Kingdom (EUR 163 million).
- Period 1994-1999: All corrections reported decided/confirmed have been implemented.
The main Member States concerned are Spain (EUR 180 million), the Netherlands
(EUR 160 million) and Italy (EUR 117 million).
FIFG/EFF:
The
low implementation rate is the consequence of a large correction of EUR 90
million on Spanish programmes related to FIFG 2000-2006, for which the closure
process is on-going. The correction has been accepted by the Member State but
will only be implemented at closure.
For recoveries, reliable cumulative
information is only available since 2008 when a specific functionality was
introduced into the Commission's accounting system to better track and report
such recoveries. The information below shows the breakdown of recoveries
implemented per year:
   ||   ||   ||   ||   ||   ||   || EUR millions 
   ||   || Total as at || Total as at 
 Recoveries || Years || end 2013 || end 2012 
   || 2008 || 2009 || 2010 || 2011 || 2012 || 2013 ||   ||   
 Agriculture: ||   ||   ||   ||   ||   ||   ||   ||   
 EAGF ||  356 ||  148 ||  172 ||  178 ||  161 ||  155 || 1 170 || 1 015 
 Rural Development || 0 ||  25 ||  114 ||  161 ||  166 ||  129 ||  595 ||  466 
 Cohesion policy ||  31 ||  102 ||  25 ||  48 ||  14 ||  81 ||  301 ||  219 
 Internal policy areas ||  40 ||  100 ||  162 ||  268 ||  229 ||  398 || 1 197 ||  799 
 External policy areas ||  32 ||  81 ||  136 ||  77 ||  99 ||  93 ||  518 ||  425 
 Administration || 0 ||  9 ||  5 ||  2 ||  9 ||  6 ||  31 ||  25 
 Total ||  459 ||  464 ||  614 ||  734 ||  678 ||  862 || 3 811 || 2 949 
            
6.2.      PROTECTION OF THE EU BUDGET – A SUMMARY
An important consideration in
implementing the EU budget is the need to ensure the proper prevention or
detection and subsequent correction of errors, irregularities and fraud. The
objective of this note is to present a best estimate of the total amounts covered
by EU controls and actions, so as to illustrate in real terms how the EU budget
is protected. More details on these figures and on the preventive and
corrective mechanisms foreseen in the applicable legislation can be found in the
Communication prepared by the Commission and sent to the Discharge Authority
and the Court every September – this is available on the Europa website of the
Director ate-General for the Budget. This Communication not only provides more
details on the figures in this note (in particular break-downs of financial
corrections per Member State), it also includes additional information (such as
data on net financial corrections which lead to assigned revenue for the EU
budget, and the results of the corrective work done by Member States).
6.2.1.  
Financial corrections 
Under shared management, Member
States are primarily responsible for preventing, detecting and correcting
errors, irregularities or frauds committed by beneficiaries in the first
instance, while the Commission ensures an overall supervisory role. Where
serious failings in the management and control systems of Member States have
led or could lead to individual or systemic errors, irregularities or fraud,
the Commission can apply financial
corrections. The processing of financial
corrections follows these three main steps:
(1) Financial corrections in progress: at this stage the financial corrections
are still subject to change since they are not yet formally accepted by the
Member States, for example in the case of an audit which has been finalised,
but where the Commission is still in the contradictory phase with the Member
State concerned. These are reported in the Communication mentioned above.
(2) Financial correction confirmed/decided: these
amounts are final, meaning that they have been either confirmed (i.e. agreed)
by the Member State concerned or adopted by a Commission decision. They are
reported in table 6.1.1 above.
(3) Financial corrections implemented: These amounts represent the final step
of the process whereby the observed situation of undue expenditure is
definitively corrected. Several correction mechanisms are foreseen in the
sector-based regulatory frameworks. These figures are reported in tables 6.1.2 and 6.1.3 above.
6.2.2.  
Recoveries 
Under direct management, and in
accordance with the Financial Regulation, recovery orders should be established
by the authorising officer for amounts unduly paid. Recoveries are then
implemented by direct bank transfer from the debtor (e.g. Member State) or by
offsetting from other amounts that the Commission owes to the debtor. The
Financial Regulation foresees additional procedures to ensure the collection of
recovery orders overdue, which are the object of a specific follow up by the
Accounting Officer of the Commission.
Under shared management, and in
accordance with the Financial Regulation and sector regulations, Member States
(and not the Commission) are primarily responsible for identifying and for recovering
in accordance with national rules and procedures, from beneficiaries amounts
unduly paid. For the EAGF, amounts recovered from the beneficiaries are
credited to the Commission, after deduction applied by Member States of 20 %
(on average), who books them as revenue. For EAFRD and Cohesion policy,
recoveries are taken into consideration in the next payment claim before it is
sent to the Commission's services, and therefore the relevant amount can be reused
for the programme. If a Member State does not pursue the recovery or is not
diligent in its actions, the Commission may decide to intervene and to impose a
financial correction on the Member State concerned. 
6.2.3.  
Preventive mechanisms of the Commission 
In addition to the corrective
mechanisms mentioned above, the Commission uses a number of preventive
mechanisms to protect the EU budget. Under direct management, preventive
actions include checks made by the responsible services on eligibility of
expenditure being claimed by beneficiaries. These ex-ante controls are embedded
in the programmes’ management processes and are intended to provide reasonable
assurance on the legality and regularity of expenditure being paid. The
Commission services can also provide guidance, particularly on contractual
issues, with the aim of ensuring a sound and efficient management of funding
and therefore a lower risk of irregularities.
Under the shared management mode
(i.e. agricultural and cohesion policy expenditure), Member States are
primarily responsible throughout the expenditure life cycle for ensuring that
expenditure paid out from the EU budget is legal and regular. Preventive
mechanisms also exist at the level of the Commission in its role of supervising
body. The Commission may, for Cohesion expenditure:
- interrupt the payment deadline for a
maximum period of 6 months for the 2007-2013 programmes if:
(a) There is evidence to suggest a
significant deficiency in the functioning of the management and control systems
of the Member State concerned; or
(b) The Commission services have to
carry out additional verifications following information that expenditure in a
certified statement of expenditure is linked to a serious irregularity which
has not been corrected.
- suspend all or part of an interim
payment to a Member State for the 2007-2013 programmes in the following three
cases:
(a) Where there is evidence of
serious deficiency in the management and control system of the programme and
the Member State has not taken the necessary corrective measures; or
(b) Where expenditure in a
certified statement of expenditure is linked to a serious irregularity which
has not been corrected; or
(c) If there has been a serious
breach by a Member State of its management and control obligations.
Where
the required measures are not taken by the Member State, the Commission may
decide to impose a financial correction. 
Interruptions:
   ||   ||   ||   ||   ||   ||   ||           EUR millions 
 2007-2013 programming period 
   || Total open cases at 31.12.2012 || New cases 2013 || Closed cases during 2013 || Total open cases at 31.12.2013 
 Fund || Number of cases || Amount || Number of cases || Amount || Number of cases || Amount || Number of cases || Amount 
 ERDF & Cohesion Fund ||  38 || 1 638 ||  220 || 4 242 ||  157 || 4 272 ||  101 || 1 608 
 ESF ||  15 ||  181 ||  25 ||  349 ||  20 ||  258 ||  20 ||  272 
 EFF ||  30 ||  108 ||  20 ||  339 ||  40 ||  350 ||  10 ||  97 
 Total ||  83 || 1 927 ||  265 || 4 930 ||  217 || 4 880 ||  131 || 1 977 
Suspensions:
Concerning ERDF and the
Cohesion Fund and the 2 suspension decisions still in force at end 2012, the
decision was taken in 2013 to lift the suspension for Germany. The suspension
decision related to Italy however remains in force at end 2013. 4 new
suspension decisions were adopted in 2013: 3 related to Spain, that were still
in force at year-end; one related to Estonia that was lifted before the year-end.
It should be noted that 2 new suspension decisions were adopted in January
2014, both on programmes implemented in Spain.
Concerning ESF, 2 suspension
decisions adopted in 2012 were still effective at end 2012. The suspension was
lifted in 2013 for Czech Republic, but it remained in force in 2013 for
Slovakia. 11 suspension decisions were adopted in 2013. All but one (Germany)
were still on-going at year-end (Belgium, Czech Republic, Spain, France, Italy,
Slovakia and the United Kingdom). One suspension decision adopted in 2011 was
still on-going at year-end (France).
There were no suspension decisions
taken in 2013 for EFF.
6.3.      RECOVERY OF UNUSED PRE-FINANCING AMOUNTS
   ||   || EUR millions 
   || 2013 || 2012 
 Agriculture: ||   ||   
 EAGF || 0 || 0 
 Rural Development || 0 || 0 
 Cohesion Policy: ||   ||   
 ERDF ||  68 ||  38 
 Cohesion Fund ||  4 ||  5 
 ESF ||  53 ||  214 
 FIFG/EFF ||  7 || 0 
 EAGGF Guidance ||  3 ||  5 
 Internal policy areas ||  208 ||  207 
 External policy areas ||  91 ||  104 
 Administration ||  1 ||  2 
 Total recovered ||  435 ||  575 
            
The above
amounts have been deducted in arriving at the pre-financing amounts included
under notes 2.6 and 2.10. Recoveries of unused
pre-financing amounts should not be confused with irregular expenditure
recovered. Where the Commission services identify and recover such expenditure
in relation to pre-financing amounts paid out, these are included in the normal
financial correction or recovery processes described above.
            
7.            
FINANCIAL SUPPORT MECHANISMS
This note intends to give a
complete overview of the currently existing financial support mechanisms in the
EU, and so provides further information to that reported under note 2. The information included in the first part of this
note (7.1) relates to borrowing and lending
activities of the EU managed by the Commission. The information in the second
part of this note (7.2) covers
intergovernmental financial stability mechanisms outside the EU Treaty
framework and thus without an impact on the EU budget.
 
7.1.      BORROWING AND LENDING ACTIVITIES MANAGED BY THE COMMISSION
7.1.1.  
Borrowing and lending activities – Overview
AMOUNTS AT CARRYING VALUE
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || MFA || Euratom || BOP || EFSM || ECSC in Liquidation || Total 31.12.2013 || Total 31.12.2012 
 Loans ||  569 ||  387 || 11 623 || 44 468 ||  211 || 57 258 || 57 294 
 (note 2.4.2) ||   ||   ||   ||   ||   ||   ||   
 Borrowing ||  569 ||  387 || 11 623 || 44 468 ||  190 || 57 237 || 57 267 
 (note 2.14) ||   ||   ||   ||   ||   ||   ||   
The above amounts are at
carrying value whereas the tables below are presented in nominal values.
The EU is empowered by the EU
Treaty to adopt borrowing operations to mobilise the financial resources
necessary to fulfill specific mandates. The Commission, acting on behalf of the
EU, currently operates three main programmes, MFA, BOP assistance and the EFSM,
under which it may grant loans and fund these by issuing debt instruments in
the capital markets or with financial institutions.
The key points or characterisitics
to note for these three instruments are:
–     
EU borrowing are off budget operations. The
capital required to fund the EU lending under the above programmes is raised on
the capital markets or with financial institutions. The EU is not permitted to
borrow to finance its ordinary budgetary expenses or a budget deficit.
–     
The size of the borrowings varies from private
placements for amounts of up to EUR 500 million to benchmark-size bond issues
(at least EUR 1 billion). 
–     
The funds raised are on-lent back-to-back to the
beneficiary country, i.e. with the same coupon, maturity and amount.
Notwithstanding the back-to-back methodology, the debt service of the funding
instruments is a legal obligation of the EU, which will ensure that all payments
are made timely and fully. To this effect, BOP beneficiares are required to
deposit reimbursements 7 days in advance of the due dates and EFSM
beneficiaries 14 days in advance, which allows the Commission sufficient time
to ensure timely payment in all circumstances.
–     
For each country programme, the Council and
Commission Decisions determine the overall granted amount, the (maximum) number
of instalments to be disbursed, and the maximum (average) maturity of the loan
package. Subsequently, the Commission and the beneficiary country agree
loan/funding parameters, including instalments and the payment of tranches. In
addition, except for the first, one all instalments of the loan depend on
compliance with strict conditions, with agreed terms and conditions similar to
IMF support, in the context of a joint EU/IMF financial assistance, which is
another factor influencing the timing of funding. 
–     
This implies that the timing and maturities of
issuances are dependent on the related EU lending activity.
–     
Funding is exclusively denominated in euro and
the maturity spectrum is 3 to 30 years. 
–     
Borrowings of the EU constitute direct and
unconditional obligations of the EU and are guaranteed by the 28 Member States.
Borrowings undertaken to fund loans to third countries are covered by the
Guarantee Fund for external actions (see note 2.4).
–     
Should a beneficiary Member State default, the
debt service will be drawn from the available treasury balance of the
Commission, if possible. If that would not be possible, the Commission would
draw the necessary funds from the Member States. EU Member States are legally
obliged, according to the EU own resources legislation (Article 12 of Council
Regulation 1150/2000), to make available sufficient funds to meet the EU’s
obligations. Thus investors are only exposed to the credit risk of the EU, not
to that of the beneficiary of loans funded. 
–     
“Back-to-back” lending ensures that the EU
budget does not assume any interest rate or foreign exchange risk.
Additionally, the Euratom legal entity (represented by the Commission)
borrows money to lend to both Member and non-Member States to finance projects
relating to energy installations. Finally, the European Coal & Steel
Community (ECSC) in liquidation has, following
a restructuring of debts of a defaulting debtor, acquired in 2002 and 2007
promissory notes from the EIB (rated AAA). At the balance sheet date, the book
value of these promissory notes amounted to EUR 212 million.
More details on each of these
instruments are given below. The effective interest rates (expressed as a range
of interest rates) were as follows:
 Loans || 31.12.2013 || 31.12.2012 
 Macro Financial Assistance (MFA) || 0.27 %-4.54 % || 0.298 %-4.54 % 
 Euratom || 0.34 %-5.76 % || 0.431 %-5.76 % 
 Balance of Payment (BOP) || 2.375 %-3.625 % || 2.375 %-3.625 % 
 European Financial Stability Mechanism (EFSM) || 2.375 %-3.750 % || 2.375 %-3.750 % 
 ECSC in liquidation || 5.2354 %-5.8103 % || 5.2354 %-5.8103 % 
 Borrowings || 31.12.2013 || 31.12.2012 
 Macro Financial Assistance (MFA) || 0.27 %-4.54 % || 0.298 %-4.54 % 
 Euratom || 0.291 %-5.6775 % || 0.351 %-5.6775 % 
 Balance of Payment (BOP) || 2.375 %-3.625 % || 2.375 %-3.625 % 
 European Financial Stability Mechanism (EFSM) || 2.375 %-3.750 % || 2.375 %-3.750 % 
 ECSC in liquidation || 6.92 %-9.78 % || 6.92 %-9.78 % 
7.1.2.  
Balance of Payments
The BOP facility, a policy-based
financial instrument, provides medium-term financial assistance to Member
States of the EU. It enables the granting of loans to Member States which are
experiencing, or are seriously threatened with, difficulties in their balance
of payments or capital movements. Only Member States which have not adopted the
Euro may benefit from this facility. BOP assistance to Latvia has been granted
before the introduction of the Euro on 1 January 2014. The maximum outstanding
amount of loans granted under the instrument is limited to EUR 50 billion.
Borrowings related to these BOP loans are guaranteed by the EU budget – thus at
31 December 2013, the budget is exposed to a maximum possible risk of EUR 11
623 million regarding these loans (EUR 11.4 billion below being the nominal
value).
BOP NOMINAL VALUE
   ||   ||   ||   || EUR millions 
   || Hungary || Latvia || Romania || Total 
 Total loans granted || 6 500 || 3 100 || 8 400 || 18 000 
 Disbursed at 31.12.12 || 5 500 || 2 900 || 5 000 || 13 400 
 Disbursed in 2013 || 0 || 0 || 0 || 0 
 Loans disbursed 31.12.2013 || 5 500 || 2 900 || 5 000 || 13 400 
 Loans repaid at 31.12.2013 || (2 000) || 0 || 0 || (2 000) 
 Outstanding amount at 31.12.2013 || 3 500 || 2 900 || 5 000 || 11 400 
 Undrawn amounts 31.12.2013 || 0 || 0 || 0 || 0 
A
table showing the reimbursement schedule for these loans is given at the end of
note 7.1.3.
Between November 2008 and end 2013,
financial assistance amounting to EUR 18 billion was granted to Hungary, Latvia
and Romania, of which EUR 13.4 billion had been disbursed by the end of 2013.
It should be noted that the BOP assistance programme for Hungary expired in
November 2010 (with EUR 1 billion undrawn) and a first repayment of
EUR 2 billion was received as scheduled in December 2011. The BOP assistance
programme for Latvia expired in January 2012 (with EUR 200 million undrawn) and
a first repayment of EUR 1 billion was received as scheduled in April 2014. The
BOP first assistance programme for Romania expired in May 2012 with the full
amount granted, EUR 5 million, being disbursed. As the various BOP programmes
have expired, no undrawn amounts are disclosed in the table above.
In February 2011, Romania requested
a follow-up precautionary financial assistance programme under the BOP Facility
to support the re-launch of economic growth. On 12 May 2011 the Council decided
to make available precautionary EU BOP assistance for Romania of up to EUR 1.4
billion (Council Decision 2011/288/EU), however this expired at end-March 2013
without being drawn down. Following Romania's second request for precautionary
assistance, the Council has decided to provide new EU BOP precautionary
assistance of up to EUR 2 billion, on 22 October 2013 (Council Decision
2013/531/EU), which will remain available for activation until 30 September
2015. If its activation is ever requested, this financial assistance shall be
provided in the form of a loan with a maximum average maturity of eight years.
7.1.3.  
European Financial Stabilisation Mechanism
EFSM NOMINAL VALUE
   ||   ||   || EUR millions 
   || Ireland || Portugal || Total 
 Total loans granted || 22 500 || 26 000 || 48 500 
 Disbursed at 31.12.12 || 21 700 || 22 100 || 43 800 
 Disbursed in 2013 || 0 || 0 || 0 
 Loans disbursed at 31.12.13 || 21 700 || 22 100 || 43 800 
 Loans repaid at 31.12.13 || 0 || 0 || 0 
 Loans outstanding at 31.12.13 || 21 700 || 22 100 || 43 800 
 Undrawn amounts at 31.12.13 ||  800 || 3 900 || 4 700 
A table showing the
reimbursement schedule for these loans is given at the end of this note.
On 11 May 2010 the Council adopted
the EFSM to preserve financial stability in Europe (Council Regulation (EU) n°
407/2010). The mechanism is based on Art. 122(2) of the TFEU and enables the
granting of financial assistance to a Member State in difficulties or seriously
threatened with severe difficulties caused by exceptional circumstances beyond
its control. The assistance may take the form of a loan or credit line. The
Commission borrows funds on the capital markets or with financial institutions
on behalf of the EU and lends these funds to the beneficiary Member State. For
each country receiving a loan under the EFSM, a quarterly assessment on the
fulfilment of the policy conditions attached to the loan is carried out before
an instalment is disbursed.
The ECOFIN Council conclusions of 9
May 2010 restrict the facility to EUR 60 billion but the legal limit is
provided in Article 2(2) of the Council Regulation no. 407/2010, which
restricts the outstanding amount of loans or credit lines to the margin
available under the own resources ceiling. Borrowings related to loans
disbursed under the EFSM are guaranteed by the EU budget – thus at 31 December
2013, the budget is exposed to a maximum possible risk of EUR 44 469 million
regarding these loans (the EUR 43.8 billion above being the nominal
value). As the borrowings under the EFSM are guaranteed by the EU budget, the
European Parliament scrutinises the Commission's EFSM actions and exercises
control in the context of the budget and discharge procedure.
The Council decided by Implementing
Decision in December 2010 on a loan to Ireland of maximum
EUR 22.5 billion, and in May 2011 on a loan to Portugal of maximum
EUR 26 billion. The initial implementing decisions fixed interest with a margin
to result in conditions similar to those of the IMF support. With the adoption
of Council Implementing Decisions no. 682/2011 and 683/2011 of
11 October 2011, the Council suppressed the interest margin
retroactively and extended the maximum average maturity from 7.5 years to 12.5
years and the maturity of individual tranches up to 30 years. With the adoption
of Council Implementing Decisions no. 313/2013 and 323/2013 of 21 June 2013,
the Council has further lengthened the maximum average maturity of the EFSM
loans to Ireland and Portugal by 7 years to 19.5 years. The extension smoothes
the debt redemption profile of both countries and lowers their refinancing
needs in the post-programme period.
The EFSM will no longer engage in new financing programmes or enter
into new loan facility agreements, but will remain active in financing the
on-going programmes for Portugal and Ireland (see also note 7.2.2 below). On 25 March 2014, EUR 2.6 billion was
disbursed under EFSM (EUR 0.8 billion for Ireland and EUR 1.8 billion for
Portugal) with a reimbursement date of April 2024.
The following table provides an overview of the planned
reimbursement schedule in nominal value for outstanding EFSM and BOP loan
amounts at the date of signature of these accounts:
   ||   ||   ||   ||   ||   ||   ||   
 Year || BOP || EFSM || Total 
   || Hungary || Latvia || Romania || Total || Ireland || Portugal || Total 
 2014 || 2 || 1 ||   || 3 ||   ||   || 0 || 3 
 2015 ||   || 1.2 || 1.5 || 2.7 || 5 ||   || 5 || 7.7 
 2016 || 1.5 ||   ||   || 1.5 ||   || 4.75 || 4.75 || 6.25 
 2017 ||   ||   || 1.15 || 1.15 ||   ||   || 0 || 1.15 
 2018 ||   ||   || 1.35 || 1.35 || 3.9 || 0.6 || 4.5 || 5.85 
 2019 ||   || 0.5 || 1 || 1.5 ||   ||   || 0 || 1.5 
 2021 ||   ||   ||   || 0 || 3 || 6.75 || 9.75 || 9.75 
 2022 ||   ||   ||   || 0 ||   || 2.7 || 2.7 || 2.7 
 2024 ||   ||   ||   || 0 || 0.8 || 1.8 || 2.6 || 2.6 
 2025 ||   || 0.2 ||   || 0.2 ||   ||   || 0 || 0.2 
 2026 ||   ||   ||   || 0 || 2 || 2 || 4 || 4 
 2027 ||   ||   ||   || 0 || 1 || 2 || 3 || 3 
 2028 ||   ||   ||   || 0 || 2.3 ||   || 2.3 || 2.3 
 2032 ||   ||   ||   || 0 || 3 ||   || 3 || 3 
 2038 ||   ||   ||   || 0 ||   || 1.8 || 1.8 || 1.8 
 2042 ||   ||   ||   || 0 || 1.5 || 1.5 || 3 || 3 
 Total || 3.5 || 2.9 || 5 || 11.4 || 22.5 || 23.9 || 46.4 || 57.8 
7.1.4.  
MFA, EURATOM & ECSC in Liquidation
MFA is a policy-based financial instrument of untied and undesignated
balance of payment and/or budget support to partner third-countries
geographically close to the EU territory. It takes the form of medium/long term
loans or grants or an appropriate combination of both and generally complements
financing provided in the context of an IMF-supported adjustment and reform
program. These loans are are guaranteed by the Guarantee Fund (see note 2.4).
Euratom is a legal entity of the EU and is represented by the Commission.
It grants loans to Member States for the purpose of financing investment
projects in the Member States relating to the industrial production of
electricity in nuclear power stations and to industrial fuel cycle
installations. It also grants loans to non-Member States for improving the
level of safety and efficiency of nuclear power stations and installations in
the nuclear fuel cycle which are in service or under construction. Guarantees
from third-parties of EUR 387 million (2012: EUR 423 million) have been
received covering these loans.
ECSC loans are granted by the ECSC in liquidation on borrowed funds (EUR 212
million) in accordance with articles 54 and 56 of the ECSC Treaty as well as
three unquoted debt securities issued by the EIB as substitute of a defaulted
debtor. These debt securities will be held till their final maturity (2017 and
2019) in order to cover the service of related borrowings. The changes in
carrying amount correspond to the change in accrued interests plus the
amortisation of the year of premiums paid and transaction cost incurred at
inception, calculated according to the effective interest rate method.
 
7.2.      INTER-GOVERMENTAL FINANCIAL STABILITY MECHANISMS OUTSIDE THE EU
TREATY FRAMEWORK
7.2.1.  
European Financial Stability Facility
The European Financial Stability
Facility (EFSF) was created by the Eurozone Member States with the mandate to
safeguard financial stability in Europe by providing financial assistance to
Eurozone Member States. The EFSF is a Luxembourg-registered commercial company
owned by euro-area Member States outside the EU Treaty framework and thus is
not an EU body and is entirely separate from and not consolidated in the EU
accounts. It is not guaranteed by the EU budget. Consequently it has no impact
on the EU accounts, aside from the possible sanctions revenue described below.
With the entry into force of the ESM (see below), the EFSF did not provide new
lending after 1 July 2013.
The Commission is responsible for
negotiating the policy conditionality attached to the financial assistance and
the monitoring of compliance with that conditionality. Regulation 1173/2011 of
the Parliament and Council allows for the imposition of sanctions in the form
of fines on Member States whose currency is the Euro. These fines, being 0.2 %
of the Member State's GDP in the preceding year, can be applied in cases where
a Member State has not taken appropriate actions to correct an excessive budget
deficit, or where there has been manipulation of statistics. Similarly,
Regulation 1174/2011 on macroeconomic imbalances makes provision for an annual
fine on a Eurozone Member State of 0.1 % of GDP in the cases where a
Member State has not taken the requested corrective action  or in case an
insufficient corrective action plan has been submitted. Regulation 1177/2011
updated Regulation 1467/97 on speeding up and clarifying the implementation of
the excessive deficit procedure. This updated Regulation also foresees the
possibility of issuing fines to Eurozone Member States (equal to 0.2 % of
GDP plus a variable component). According to all three Regulations, any fines
collected by the Commission shall be passed to the EFSF, or its successor
mechanism. Fines will transit through the EU Budget and then be transferred to
the EFSF. This would mean that such amounts would appear as both a budget
revenue and expense, thus having no impact on the overall budget result.
Likewise they would have no impact on the economic result as presented in the
EU financial statements.
7.2.2.  
European Stability Mechanism
The European Council agreed on 17
December 2010 on the need for Eurozone Member States to establish a permanent
stability mechanism: the European Stability Mechanism (ESM), an
intergovernmental organisation under public international law outside the EU
Treaty framework. The ESM Treaty was signed by the 17 Eurozone Member States on
2 February 2012 and became operational in October 2012. The ESM has assumed the
tasks fulfilled by the EFSM and the EFSF becoming the sole and permanent
mechanism for responding to new requests for financial assistance to Eurozone
Member States. Consequently, the EFSF and the EFSM will no longer engage in new
financing programmes or enter into new loan facility agreements. The creation
of the ESM does not have an impact on the existing commitments under the EFSM
or EFSF. It must also be noted that the EU budget will not guarantee ESM
borrowings. As this mechanism has its own legal personality and is funded
directly by the Eurozone Member States, it is not an EU body and it has no
impact on either the EU accounts or the EU budget, aside from the possible
sanctions revenue described below. 
As stated above, fines collected
under Regulations 1173/2011, 1174/2011 and 1177/2011 will pass through the EU
budget and be transferred to the ESM once the EFSF is no longer operational.
Furthermore, the Treaty on Stability, Coordination and Governance signed by 25
Member States (excluding the UK and Czech Republic) foresees penalty payments on
any of the "Contracting Parties" where that Member State has not
taken necessary measures to address a breach of deficit criterion. Penalties
imposed (which cannot exceed 0.1 % of GDP) will be payable to the ESM if
applied to Eurozone Member States (thus with no impact on the EU budget result,
as with the EFSF above), or to the EU budget for non-Euro Member States – see
Article 8 paragraph 2 of the Treaty. In the latter case, the sanction amount
will be revenue for the EU budget and be reflected as such in its accounts.
 
8.            
FINANCIAL RISK MANAGEMENT
The following disclosures with
regard to the financial risk management of the EU relate to:
–     
lending and borrowing activities carried out by
the Commission through: EFSM, BOP, MFA, Euratom actions and the ECSC in Liquidation;

–     
the treasury operations carried out by the
Commission in order to implement the EU budget, including the receipt of fines;
and
–     
the Guarantee Fund for external actions.
 
8.1.      TYPES OF RISK
Market
risk is the risk that the fair value or future
cashflows of a financial instrument will fluctuate, because of changes in
market prices. Market risk embodies not only the potential for loss, but also
the potential for gain. It comprises currency risk, interest rate risk and
other price risk (the EU has no significant other price risk).
(1)         
Currency risk is the risk that the EU's operations or its investments' value will
be affected by changes in exchange rates. This risk arises from the change in
price of one currency against another. 
(2)         
Interest rate risk is the possibility of a reduction in the value of a security,
especially a bond, resulting from an increase in interest rates. In general,
higher interest rates will lead to lower prices of fixed rate bonds, and vice
versa.
Credit
risk is the risk of loss due to a
debtor's/borrower's non-payment of a loan or other line of credit (either the
principal or interest or both) or other failure to meet a contractual
obligation. The default events include a delay in repayments, restructuring of
borrower repayments and bankruptcy.
Liquidity
risk is the risk that arises from the difficulty
of selling an asset; for example, the risk that a given security or asset
cannot be traded quickly enough in the market to prevent a loss or meet an
obligation.
8.2.      RISK MANAGEMENT POLICIES 
Borrowing & Lending activities
The lending and borrowing
transactions, as well as related treasury management, are carried out by the EU
according to the respective Council Decisions, if applicable, and internal
guidelines. Written procedure manuals covering specific areas such as
borrowings, loans and treasury management have been developed and are used by
the relevant operating units. As a general rule, there are no activities to
compensate interest rate variations or foreign currency variations ("hedging"
activities) carried-out as lending operations are generally financed by
"back-to-back" borrowings, which thus do not generate open interest
rate or currency positions. The application of the "back-to-back"
character is checked regularly.
Regarding the ECSC in liquidation,
the Commission manages the liquidation of its liabilities and no new loans or
corresponding funding are foreseen. New ECSC borrowings are restricted to
refinancing with the aim of reducing the cost of funds. As far as treasury
operations are concerned, the principles of prudent management with a view to
limiting financial risks are applied.
Treasury
The rules and principles for the
management of the Commission's treasury operations are laid down in the Council
Regulation 1150/2000 (amended by Council Regulations 2028/2004 and 105/2009)
and in the Financial Regulation and its rules of application.
As a result of the above
regulations, the following main principles apply:
–     
Own resources are paid by the Member States in
accounts opened for this purpose in the name of the Commission with the
Treasury or the body appointed by each Member State. The Commission may draw on
the above accounts solely to cover its cash requirements.
–     
Own Resources are paid by Member States in their
own national currencies, while the Commission's payments are mostly denominated
in EUR.
–     
Bank accounts opened in the name of the
Commission may not be overdrawn. This restriction does not apply to the
Commission's own resource accounts in case of a default on loans contracted or
guaranteed pursuant to EU Council regulations and decision and under certain
conditions in case the cash resource requirements are in excess of the assets
of the accounts.
–     
Funds held in bank accounts denominated in
currencies other than EUR are either used for payments in the same currencies
or periodically converted in EUR.
In addition to the own resources
accounts, other bank accounts are opened by the Commission, with central banks
and commercial banks, for the purpose of executing payments and receiving
receipts other than the Member State contributions to the budget. 
Treasury and payment operations are
highly automated and rely on modern information systems. Specific procedures
are applied to guarantee system security and to ensure segregation of duties in
line with the Financial Regulation, the Commission’s internal control
standards, and audit principles.
A written set of guidelines and
procedures regulates the management of the Commission's treasury and payment
operations with the objective of limiting operational and financial risk and
ensuring an adequate level of control. They cover the different areas of
operation (for example: payment execution and cash management, cashflow
forecasting, business continuity, etc.), and compliance with the guidelines and
procedures is checked regularly. Additionally, information is exchanged between
Directorate General for the Budget and Directorate-General for Economic and
Financial Affairs on risk management and best exposures. 
Fines
Provisionally cashed fines:
deposits
Amounts received before 2010 remain
in bank accounts with banks specifically selected for the deposit of
provisionally cashed fines. The selection of banks is conducted in compliance
with tender procedures defined by the Financial Regulation. Placement of funds
with specific banks is determined by the internal risk management policy
defining the credit rating requirements and the amount of funds which could be
placed in proportion to the counterparty equity. Financial and operational
risks are identified and evaluated and compliance with internal policies and
procedures is checked regularly.
Provisionally cashed fines:
BUFI portfolio
Fines imposed and provisionnaly
cashed from 2010 onwards are invested in a specifically created fund, BUFI. The
main objectives of the Fund are the reduction of risks associated with
financial markets and the equal treatment of all fined entities by offering a
guaranteed return calculated on the same basis. The asset management for
provisionally cashed fines is carried out by the Commission in accordance with
internal asset management guidelines. Procedural manuals covering specific
areas such as treasury management have been developed and are used by the
relevant operating units. Financial and operational risks are identified and
evaluated and compliance with internal guidelines and procedures is checked
regularly.
The objectives of the asset
management activities are to invest the fines provisionally paid to the
Commission in such a way as to:
a)         ensure
that the funds are easily available when needed, while
b)         aiming
at delivering, under normal circumstances, a return which on average is at
least equal to  the return of the BUFI Benchmark minus costs incurred.
Investments are restricted
essentially to the following categories: term deposits with Eurozone Central
Banks, Eurozone sovereign debt agencies, fully state-owned or state-guaranteed
banks or supranational institutions, and bonds, bills and Certificates of
Deposit issued by either sovereign entities creating a direct Eurozone
sovereign exposure or issued by supranational institutions.
With a view to covering the
residual risk that the performance of the BUFI may temporarily not achieve the
guaranteed return, a buffer not exceeding 2 % of the total nominal amount of fines
may be created, funded by using the gains earned on the BUFI investments that
exceeds the guaranteed return. This buffer ensures a guaranteed return to the
company if the decision imposing the fine is overruled by the Court of Justice
of the European Union.
Bank guarantees
Significant amounts of guarantees
issued by financial institutions are held by the Commission in relation to the
fines it imposes to companies breaching EU competition rules (see note 2.9.1). These guarantees are provided by fined companies
as an alternative to making provisional payments. The guarantees are managed in
compliance with the internal risk management policy. Financial and operational
risks are identified and evaluated and compliance with internal policies and
procedures is checked regularly.
Guarantee Fund
The rules and principles for the
asset management of the Guarantee Fund (see note 2.4) are laid out in
the Convention between the Commission and the EIB dated 25 November 1994 and
the subsequent amendments dated 17/23 September 1996, 8 May 2002, 25 February
2008 and 9 November 2010. The Guarantee Fund operates only in EUR. It
exclusively invests in this currency in order to avoid any foreign currency
risk. Management of the assets is based upon the traditional rules of prudence
adhered to for financial activities. It is required to pay particular attention
to reducing the risks and to ensuring that the managed assets can be sold or
transferred without significant delay, taking into account the commitments
covered.
 
8.3.      CURRENCY RISKS
Borrowing & Lending activities
Most financial assets and
liabilities are in EUR, so in these cases the EU has no foreign currency risk.
However, the EU does give loans in USD through the financial instrument
Euratom, which are financed by borrowings with an equivalent amount in USD
(back-to-back operation). At the balance sheet date the EU has no foreign
currency risk with regard to Euratom. The ECSC in liquidation has a small
foreign currency net exposure of EUR equivalent 1.33 million arising from EUR
equivalent 0.19 million housing loans and EUR equivalent 1.14 million current
account balances.
Treasury
Own resources paid by Member States
in currencies other than EUR are kept on the own resources accounts, in
accordance with the Own Resources Regulation. They are converted into EUR when
they are needed to cover for the execution of payments. The procedures applied
for the management of these funds are dictated by the above Regulation. In a
limited number of cases these funds are directly used for payments to be
executed in the same currencies.
A number of accounts in EU
currencies other than EUR, and in USD and CHF, are held by the Commission with
commercial banks, for the purpose of executing payments denominated in these
same currencies. These accounts are replenished depending on the amount of
payments to be executed, as a consequence their balances do not represent
exposure to currency risk.
When miscellaneous receipts (other
than own resources) are received in currencies other than EUR, they are either
transferred to Commission's accounts held in the same currencies, if they are
needed to cover for the execution of payments, or converted into EUR and
transferred to accounts held in EUR. Imprest accounts held in currencies other
than EUR are replenished depending on the estimated short term local payments
needs in the same currencies. Balances on these accounts are kept within their
respective ceilings.
Fines
Provisionally cashed fines
(deposits and BUFI portfolio) and bank guarantees
Since all fines are imposed and
paid in EUR, there is no foreign currency risk.
Guarantee Fund
The financial assets are in EUR so
there is no currency risk.
 
8.4.      INTEREST RATE RISK
Borrowing & Lending activities
Borrowings and loans with
variable interest rates
Due to the nature of its borrowing
and lending activities, the EU has significant interest-bearing assets and
liabilities. MFA and Euratom borrowings issued at variable rates expose the EU
to interest rate risk. However, the interest rate risks that arise from borrowings
are offset by equivalent loans in terms and conditions (back-to-back). At the
balance sheet date, the EU has loans (expressed in nominal amounts) with
variable rates of EUR 583 million (2012: EUR 697 million), with a re-pricing
taking place every 6 months. 
Borrowings and loans with
fixed interest rates
The EU also has MFA and Euratom
loans with fixed rates totalling EUR 367 million in 2013 (2012: EUR 271 million)
and which have a final maturity date between one and five years (EUR 55
million) and more than five years (EUR 312 million). More significantly, the EU
has 11 loans under the financial instrument BOP with fixed interest rates
totalling EUR 11.4 billion in 2013 (2012: EUR 11.4 billion) and which have a
final maturity of less than one year (EUR 3 billion), more than one year but
less than five years (EUR 6.7 billion) and more than five years
(EUR 1.7 billion). Under the financial instrument EFSM, the EU has 18
loans with fixed interest rates totalling EUR 43.8 billion in 2013 (2012: EUR 43.8 billion)
which have a final maturity between one and five years (EUR 14.2 billion) and
more than five years (EUR 29.6 billion).
Due to the nature of its
activities, the ECSC in liquidation is exposed to interest rate risk. The
interest rate risks that arise from borrowings are generally offset by
equivalent loans in terms and conditions. As regards asset management
operations, there are bonds with variable interest rates represent 8 % of
the ECSC portfolio. Zero coupon bonds represented 9 % of the bond portfolio
at the balance sheet date.
Treasury
The Commission's treasury does not
borrow any money; as a consequence it is not exposed to interest rate risk. It
does, however, earn interest on balances it holds on its different banks
accounts. The Commission has therefore put in place measures to ensure that
interest earned on its bank accounts regularly reflects market interest rates,
as well as their possible fluctuation. 
Accounts opened with Member States
Treasuries or National Central Banks for own resources receipts are
non-interest bearing and free of charges. For all other accounts held with
National Central Banks the remuneration depends on the specific conditions
offered by each bank; interest rates applied are variable and adjusted to
market fluctuations. 
Overnight balances held on
commercial bank accounts earn interest on a daily basis. This is based on
variable market rates to which a contractual margin (positive or negative) is
applied. For most of the accounts, the interest calculation is linked to the
EONIA (Euro over night index average) and is adjusted to reflect any
fluctuations of this rate. For some other accounts, the interest calculation is
linked to the ECB marginal rate for its main refinancing operations. As a
result no risk exists that the Commission earns interest at rates lower than
market rates.
Fines
Provisionally cashed fines
(deposits, BUFI portfolio) and bank guarantees
Depositis and bank guarantees are
not exposed to interest rate risks. Interest earned by deposits reflect market interest
rates as well as their possible fluctuation. There are no bonds with variable
interest rates in the BUFI portfolio. The interest rate sensitivity parameter,
the duration of the portfolio, follows very closely the duration of the BUFI
index. Therefore any negative effects on the asset valuation would be matched
on the side of the BUFI liability. There remains only a remote exposure to the
interest rate risk in case such negative effects during the fine's maturity
period would result in an overall negative index performance.
Guarantee Fund
Debt securities within the
Guarantee Fund issued at variable interest rates are subject to the volatility
effects of these rates, whereas debt securities at fixed rates have a risk with
regard to their fair value. Fixed rate bonds represent approximately 58 %
of the investment portfolio at the balance sheet date (2012: 67 %).
 
8.5.      CREDIT RISK
Borrowing & Lending activities
Exposure to credit risk is managed
firstly by obtaining country guarantees in the case of Euratom, then through
the Guarantee Fund (MFA & Euratom), then by the possibility of drawing the
necessary funds from the Commission's own resource accounts with the Member
States and ultimately through the Budget of the EU. The Own Resource
legislation fixes the ceiling for own resource payments at 1.23 % of
Member States' GNI and during 2013 1.06 % was actually used to cover
payment appropriations. This means that at 31 December 2013 there existed an
available margin of 0.17 % to cover these guarantees. The Guarantee Fund
for external actions was set up in 1994 to cover default risks related to
borrowings which finance loans to countries outside the EU. In any case, the
exposure to credit risk is mitigated by the possibility to draw on the
Commission's own resource accounts with Member States in excess of the assets
on those accounts in case a debtor would be unable to reimburse the amounts due
in full. To this end the EU is entitled to call upon all the Member States to
ensure compliance with the EU's legal obligation towards its lenders.
As far as treasury operations are
concerned, guidelines on the choice of counterparties must be applied.
Accordingly, the operating unit will be able to enter into deals only with
eligible banks having sufficient counterparty limits.
ECSC's exposure to credit risk is
managed through regular analysis of the ability of borrowers to meet interest
and capital repayment obligations. Exposure to credit risk is also managed by
obtaining collateral as well as country, corporate and personal guarantees. As
far as treasury operations are concerned, guidelines on the choice of
counterparties must be applied. The operating unit is only allowed to enter
into deals with eligible banks having sufficient counterparty limits.
Treasury
Most of the Commission's treasury
resources are kept, in accordance with Council Regulation 1150/2000 on own
resources, in the accounts opened by Member States for the payment of their
contributions (own resources). All such accounts are held with Member States'
treasuries or national central banks. These institutions carry the lowest
credit (or counterparty) risk for the Commission as the exposure is with its
Member States. For the part of the Commission's treasury resources kept with
commercial banks, in order to cover the execution of payments, replenishment of
these accounts is instructed on a just-in-time basis and is automatically
managed by the treasury cash management system. Minimum cash levels,
proportional to the average amount of daily payments executed from it, are kept
on each account. As a consequence the amounts kept overnight on these accounts
remain constantly at low levels (overall between EUR 5 million and EUR 40
million on average, spread over more than 20 accounts) and so ensure the
Commission's risk exposure is limited. These amounts should be viewed with
regard to the overall treasury balances which fluctuated in 2013 between EUR
100 million and EUR 44 billion, and with an overall amount of payments executed
in 2013 that equals EUR 148.3 billion.
In addition, specific guidelines
are applied for the selection of commercial banks in order to further minimise
counterparty risk to which the Commission is exposed:
–    All commercial banks are selected by call for tenders. The
minimum short term credit rating required for admission to the tendering
procedures is Moody's P-1 or equivalent (S&P A-1 or Fitch F1). A lower
level may be accepted in specific and duly justified circumstances.
–    The credit ratings of the commercial banks where the Commission
has accounts are reviewed at least on a monthly basis, or higher frequency if
and when needed. Intensified monitoring measures and daily reviews of
commercial banks' ratings were adopted in the context of the financial crisis,
and kept in place during 2013.
–    In delegations outside the EU, imprest accounts are held with
local banks selected by a simplified tendering procedure. Rating requirements
depend on the local situation and may significantly differ from one country to
another. In order to limit risk exposure, balances on these accounts are kept
at the lowest possible levels (taking into account operational needs), they are
regularly replenished, and the applied ceilings are reviewed on a yearly basis.
–       Commercial
banks eligible for receiveing unsecured term deposits from ECSC must have a
minimum short-term rating from Moody's of P-1, or equivalent (S&P A-1 or
Fitch F1). In case where the receiving bank provides sufficient collateral to
the Commission (tripartite collateralised deposits) the minimum short-term rating
is lowered to Moody's P-2 or equivalent (S&P A-2 or Fitch F2).
Fines
Provisionally cashed fines:
deposits
The banks holding deposits for the
fines provisionaly cashed before 2010 are selected by tender procedure in
compliance with the risk management policy which defines the credit rating
requirements and the amount of funds which could be placed in proportion to the
counterparty equity.
For commercial banks that have been
specifically selected for the deposit of provisionally cashed fines (restricted
cash), a minimum long-term rating A (S&P or equivalent) in all the three
main rating agencies and a minimum short term rating A-1 (S&P or
equivalent) is required as a general rule. Specific measures are applied in
case banks in this group are subject to downgrade. In addition the amount
deposited with each bank is limited to a certain percentage of its own funds,
which varies depending on the rating level of each institution. The calculation
of such limits also takes into account the amount of outstanding guarantees
issued to the Commission by the same institution. The compliance of outstanding
deposits with the applicable policy requirements is reviewed regularly.
Provisionally cashed fines:
BUFI portfolio
For investments from provisionally
cashed fines, the Commission takes on exposure to credit risk which is the risk
that a counterparty will be unable to pay amounts in full when due. The highest
concentration of exposure is towards France and Germany as each of these
countries represents 61 % and 30 % respectively of the total volume
of the portfolio.
Bank guarantees
Significant amounts of guarantees
issued by financial institutions are also held by the Commission in relation to
the fines it imposes on companies breaching EU competition rules (see note 2.9.1). These guarantees are provided by fined
companies as an alternative to making provisional payments. The risk management
policy applied for the acceptance of such guarantees has been reviewed in 2012
and a new combination of credit rating requirements and limited percentages per
counterpart (proportional to each counterpart's own funds) has been defined in
the light of the current financial environment in the EU. It continues to
ensure a high credit quality for the Commission. The compliance of the outstanding
guarantees with the applicable policy requirements is reviewed regularly.
Guarantee Fund
In accordance with the agreement
between the EU and the EIB on the management of the Guarantee Fund, all
interbank investments should have a minimum rating from Moody's or equivalent
of P-1. As at 31 December 2013 fixed term deposits of EUR 151 million
were made with such counterparties (2012: EUR 242 million). 
8.6.      Liquidity risk
Borrowing & Lending activities
The liquidity risk that arises from
borrowings is generally offset by equivalent loans in terms and conditions
(back-to-back operations). For MFA and Euratom, the Guarantee Fund serves as a
liquidity reserve (or safety net) in case of payment default and payment delays
of borrowers. For BOP, the Council Regulation 431/2009 provides for a procedure
allowing sufficient time to mobilise funds through the Commission's own
resource accounts with the Member States. For EFSM, the Council Regulation
407/2010 provides for a similar procedure.
For the asset and liability management
of ECSC in liquidation, the Commission manages liquidity requirements based on
disbursement forecasts obtained through consultations with the responsible
Commission services.
Treasury
EU budget principles ensure that
overall cash resources for a given year are always sufficient for the execution
of all payments. In fact, the total Member States contributions equal the
amount of payment appropriations for the budgetary year. Member States’
contributions, however, are received in twelve monthly instalments throughout
the year, while payments are subject to certain seasonality. Moreover, in
accordance with the Council Regulation 1150/2000 (Own Resources Regulation),
Member States contributions relating to (amending) budgets approved after the
16th of a given month (N) become only available in month N+2, while the related
payment appropriations are immediately available. In order to ensure that
available treasury resources are always sufficient to cover the payments to be
executed in any given month, procedures regarding regular cash forecasting are
in place, and own resources or additional funding can be called up in advance
from Member States if needed, up to certain limits and under certain
conditions. Seasonality of expenditure and overall budgetary restrictions in
recent years have resulted in the need for increased monitoring of the rythm of
payments over the year. In addition to the above, in the context of the
Commission's daily treasury operations, automated cash management tools ensure
that sufficient liquidity is available on each of the Commission's bank
accounts, on a daily basis.
Guarantee Fund
The fund is managed according to
the principle that the assets shall have a sufficient degree of liquidity and
mobilisation in relation to the relevant commitments. The fund must maintain a
minimum of EUR 100 million in a portfolio with a maturity of < 12
months which is to be invested in monetary instruments. As at 31 December 2013
these investments including cash amounted to EUR 152 million.
Furthermore, a minimum of 20 % of the fund's nominal value shall comprise
monetary instruments, fixed-rate bonds with a remaining maturity of no more
than one year, and floating-rate bonds. As at 31 December 2013 this
ratio stood at 59 %.
 
9.            
RELATED PARTY DISCLOSURES
9.1.      RELATED PARTIES
The related parties of the EU are the EU consolidated entities and
the key management personnel of these entities. Transactions between these
entities take place as part of the normal operations of the EU and as this is
the case, no specific disclosure requirements are necessary for these
transactions in accordance with the EU accounting rules.
            
9.2.      KEY MANAGEMENT ENTITLEMENTS
For the purposes of presenting
information on related party transactions concerning the key management of the
EU, such persons are shown here under five categories:
Category 1: the Presidents of the
European Council, the Commission and the Court of Justice of the European Union
Category 2: the Vice-president of the
Commission and High Representative of the EU for Foreign Affairs and Security
Policy and the other Vice-presidents of the Commission
Category
3: the Secretary-General of the Council, the
Members of the Commission, the Judges and Advocates General of the Court of
Justice of the European Union, the President and Members of the General Court,
the President and Members of the European Civil Service Tribunal, the Ombudsman
and the European Data Protection Supervisor
Category
4: the President and Members of the European
Court of Auditors
Category
5: the highest ranking civil servants of the
Institutions and Agencies
A summary of their entitlements are
given below – further information can be found in the Staff Regulations
published on the Europa website which is the official document describing the
rights and obligations of all officials of the EU. Key management personnel
have not received any preferential loans from the EU. 
KEY MANAGEMENT FINANCIAL ENTITLEMENTS
   ||   ||   ||   || EUR 
 Entitlement (per employee) || Category 1 || Category 2 || Category 3 || Category 4 || Category 5 
 Basic salary (per month) || 25 352 || 22 964 - || 18 371 - || 19 840 - || 11 681 - 
   ||   ||  23 882 ||  20 667 || 21 126 || 18 371 
   ||   ||   ||   ||   ||   
 Residential/Expatriation allowance || 15% || 15% || 15% || 15% || 0-4%-16% 
   ||   ||   ||   ||   ||   
 Family allowances: ||   ||   ||   ||   ||   
 Household (% salary) || 2% + 170.52 || 2% + 170.52 || 2% + 170.52 || 2% + 170.52 || 2% + 170.52 
 Dependent child || 372.61 || 372.61 || 372.61 || 372.61 || 372.61 
 Pre-school || 91.02 || 91.02 || 91.02 || 91.02 || 91.02 
 Education, or || 252.81 || 252.81 || 252.81 || 252.81 || 252.81 
 Education outside place of work || 505.39 || 505.39 || 505.39 || 505.39 || 505.39 
 Presiding judges allowance || N/A || N/A || 554.17 – 607.71 || N/A || N/A 
   ||   ||   ||   ||   ||   
 Representation allowance || 1 418.07 || 911.38 || 554.17 – 607.71 || N/A || N/A 
   ||   ||   ||   ||   ||   
 Annual travel costs || N/A || N/A || N/A || N/A || N/A 
   ||   ||   ||   ||   ||   
 Transfers to Member State: ||   ||   ||   ||   ||   
 Education allowance* || Yes || Yes || Yes || Yes || Yes 
 % of salary* || 5% || 5% || 5% || 5% || 5% 
 % of salary with no cc || max 25% || max 25% || max 25% || max 25% || max 25% 
 Representation expenses || Reimbursed || Reimbursed || Reimbursed || N/A || N/A 
   ||   ||   ||   ||   ||   
 Taking up duty: ||   ||   ||   ||   ||   
 Installation expenses || 50 703.52 || 45 927.10 - || 36 741.68 - || 39 681.02 - || Reimbursed 
   ||   || 47 764.18 ||  41 334.40 ||  42 252.94 ||   
 Family travel expenses || Reimbursed || Reimbursed || Reimbursed || Reimbursed || Reimbursed 
 Moving expenses || Reimbursed || Reimbursed || Reimbursed || Reimbursed || Reimbursed 
 Leaving office: ||   ||   ||   ||   ||   
 Resettlement expenses || 25 352 || 22 964 || 18 371 - || 19 840 - || Reimbursed 
   ||   ||  - 23 882 ||  20 667 || 21 126 ||   
 Family travel expenses || Reimbursed || Reimbursed || Reimbursed || Reimbursed || Reimbursed 
 Moving expenses || Reimbursed || Reimbursed || Reimbursed || Reimbursed || Reimbursed 
 Transition (% salary)** || 40% - 65% || 40% - 65% || 40% - 65% || 40% - 65% || N/A 
 Sickness insurance || Covered || Covered || Covered || Covered || Optional 
 Pension (% salary, before tax) || Max 70% || Max 70% || Max 70% || Max 70% || Max 70% 
   ||   ||   ||   ||   ||   
 Deductions: ||   ||   ||   ||   ||   
 Tax on salary || 8% - 45% || 8% - 45% || 8% - 45% || 8% - 45% || 8% - 45% 
 Sickness insurance (% salary) || 1.7% || 1.7% || 1.7% || 1.7% || 1.7% 
 Special levy on salary || 7% || 7% || 7% || 7% || 7% 
 Pension deduction || N/A || N/A || N/A || N/A || 11.3% 
 Number of persons at year-end || 3 || 9 || 93 || 28 || 111 
* with correction coefficient (“cc”) applied
**
paid for the first 3 years following departure
 
10.       
EVENTS AFTER THE BALANCE SHEET DATE
At the date of transmission of
these annual accounts, no material issues had come to the attention of the
Accounting Officer of the Commission or were reported to him that would require
separate disclosure under this section. The annual accounts and related notes
were prepared using the most recently available information and this is
reflected in the information presented.      
11.       
SCOPE OF CONSOLIDATION
11.1.  CONSOLIDATED
ENTITIES
 A. CONTROLLED ENTITIES (52) ||   
 1. Institutions and consultative bodies (11) ||   
 European Parliament || European Data Protection Supervisor 
 European Council || European Economic and Social Committee 
 European Commission || European Ombudsman 
 Committee of the Regions || European Court of Auditors 
 Court of Justice of the European Union || Council of the European Union 
 European External Action Service ||   
   ||   
 2. EU Agencies (39) ||   
 2.1. Executive Agencies (6) ||   
 Education, Audiovisual & Culture Executive Agency || Executive Agency for Competitiveness and Innovation 
 Executive Agency for Health and Consumers || Trans-European Transport Network Executive Agency 
 Research Executive Agency || European Research Council Executive Agency 
 2.2. Decentralised Agencies (33) ||   
 European Maritime Safety Agency || European Food Safety Authority 
 European Medicines Agency || European Railway Agency 
 European GNSS Supervisory Authority || Community Plant Variety Office 
 European Chemicals Agency || European Fisheries Control Agency 
 Fusion for Energy (European Joint Undertaking for ITER and the Development of Fusion Energy) || European Monitoring Centre for Drugs and Drug Addiction 
 Eurojust || European Police College (CEPOL) 
 European Institute for Gender Equality || European Police Office (EUROPOL) 
 European Agency for Safety and Health at Work || European Aviation Safety Agency 
 European Centre for Disease Prevention and Control || European Network and Information Security Agency 
 European Environment Agency || European Union Agency for Fundamental Rights 
 European Centre for the Development of Vocational training || European Insurance and Occupational Pensions Authority 
 European Agency for Cooperation of Energy Regulators || Translation Centre for the Bodies of the European Union 
 European Banking Authority || European Securities and Markets Authority 
 European Asylum Support Office || European Training Foundation 
 Office for the Body of European Regulators for Electronic Communication || European Foundation for the Improvement of Living and Working Conditions 
 European Agency for the Management of Operational Co-operation at External Borders of the Member States of the EU || EU Office for Harmonisation in the Internal Market (Trade Marks and Designs) 
 EU-LISA (European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice)* ||   
   ||   
 3. Other controlled entities (2) ||   
 European Coal and Steel Community (in liquidation) || European Institute of Innovation and Technology 
   ||   
 B. JOINT VENTURES (5) ||   
 ITER International Fusion Energy Organisation || Galileo Joint Undertaking in liquidation 
 SESAR Joint Undertaking || IMI Joint Undertaking 
 FCH Joint Undertaking ||   
   ||   
 C. ASSOCIATES (4) ||   
 European Investment Fund || ARTEMIS Joint Undertaking 
 Clean Sky Joint Undertaking || ENIAC Joint Undertaking 
* Consolidated for the first time in 2013
            
11.2.  NON-CONSOLIDATED
ENTITIES
Although the EU manages the assets
of the below mentioned entities, they do not meet the requirements to be
consolidated and so are not included in the EU accounts.
11.2.1.
The European Development Fund
The European Development Fund (EDF)
is the main instrument for providing EU aid for development cooperation to the
African, Caribbean and Pacific (ACP) States and Overseas Countries and
Territories (OCTs). The 1957 Treaty of Rome made provision for its creation
with a view to granting technical and financial assistance, initially limited
to African countries with which some Member States had historical links.
The EDF is not funded from the EU’s
budget but from direct contributions from the Member States, which are based on
an internal agreement of the representatives of the Member States, sitting
within the Council. The Commission and the EIB manage the resources of the EDF.
Each EDF is usually concluded for a period of around five years. Since the
conclusion of the first partnership convention in 1964, the EDF programming
cycles have generally followed the partnership agreement/convention cycles.
The EDF is governed by its own
Financial Regulation (OJ L 78 of 19/03/2008) which foresees the presentation of
its own financial statements, separately from those of the EU. The EDF annual
accounts and resource management are subject to the external control of the
European Court of Auditors and the European Parliament. For information
purposes, the balance sheet and the statement of financial performance of the
8th, 9th and 10th EDFs are shown below:
BALANCE SHEET – 8th, 9th AND 10th EDFs
   ||   || EUR millions 
   || 31.12.2013 || 31.12.2012 
 Non-current assets ||  424 ||  438 
 Current assets || 2 129 || 2 094 
 TOTAL ASSETS || 2 553 || 2 532 
 Non-current liabilities || (25) || (40) 
 Current liabilities ||  (1 214) ||  (1 057) 
 TOTAL LIABILITIES || (1 239) || (1 097) 
   ||   ||   
 NET ASSETS || 1 313 || 1 435 
   ||   ||   
 FUNDS & RESERVES ||   ||   
 Called fund capital || 32 529 || 29 579 
 Other reserves || 2 252 || 2 252 
 Economic result carried forward from previous years || (30 396) || (27 374) 
 Economic result of the year || (3 072) || (3 023) 
 NET ASSETS || 1 313 || 1 435 
STATEMENT OF FINANCIAL PERFORMANCE – 8th,
9th AND 10th EDFs
   ||   || EUR millions 
   || 2013 || 2012 
 Operating revenue ||  123 ||  124 
 Operating expenses || (3 027) || (3 017) 
 Administrative expenses ||  (167) ||  (107) 
 DEFICIT FROM OPERATING ACTIVITIES || (3 072) || (3 001) 
 Financial activities || 0 ||  (22) 
 ECONOMIC RESULT OF THE YEAR || (3 072) || (3 023) 
11.2.2.
The Sickness Insurance Scheme
The Sickness Insurance Scheme is
the scheme that provides medical insurance to the staff of the various EU
bodies. The funds of the Scheme are its own property and are not controlled by
the EU, although its financial assets are managed by the Commission. The Scheme
is funded by contributions from its members (staff) and from the employers (the
Institutions/Agencies/Bodies.) Any surplus remains within the scheme.
The scheme has four separate
entities – the main scheme covering staff of the Institutions, Agencies of the
EU, and three smaller schemes covering staff in the European University
Institute, the European schools and staff working outside the EU such as staff
in the EU delegations. The total assets of the Scheme at 31 December 2013
totalled EUR 291 million (2012: EUR 296 million).
11.2.3.
The Participants Guarantee Fund
Certain pre-financing amounts paid
out under the 7th Research Framework Programme for research and technological
development (FP7) are effectively covered by a Participants Guarantee Fund
(PGF) - the amount of pre-financing paid out in 2013 totalled EUR 4.5 billion
(2012: EUR 4 billion). This fund is a separate entity from the Commission and
is not consolidated in these accounts.
The PGF is a mutual benefit
instrument set up to cover the financial risks incurred by the EU and the
participants during the implementation of the indirect actions of FP7, its
capital and interests constituting a performance security. All participants of
indirect actions taking the form of a grant contribute 5 % of the total EU
contribution to the PGF's capital for the duration of the action. As such the
participants are the owners of the PGF, the EU (represented by the Commission)
acting as their executive agent. At the end of an indirect action, participants
shall recover their contribution to the capital in full, except where the PGF
incurs losses due to defaulting beneficiaries – in this case participants shall
recover, at a minimum, 80 % of their contribution. The PGF thus guarantees
the financial interest of both the EU and the participants. 
As at 31 December 2013 the PGF had
total assets of EUR 1 658 million (2012: EUR 1 452 million). The funds of the
PGF are its own property and are not controlled by the EU, and its financial
assets are managed by the EIB.
 
EUROPEAN UNION
FINANCIAL YEAR 2013
EUROPEAN UNION
fINANIAL YEAR 2013
AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET AND
EXPLANATORY NOTES*
* It should be noted
that due to the rounding of figures into millions of euros, some financial data
in the tables below may appear not to add-up.
CONTENTS
BUDGETARY STRUCTURE AND PRINCIPLES. 98
1.                RESULT
OF IMPLEMENTATION OF THE EU BUDGET. 100
1.1        EU
BUDGET RESULT. 100
1.2        RECONCILIATION
OF ECONOMIC RESULT WITH BUDGET RESULT. 100
1.3        STATEMENT
OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS. 101
2.                IMPLEMENTATION
OF EU BUDGET REVENUE. 106
               SUMMARY OF THE IMPLEMENTATION OF
BUDGET REVENUE. 106
3.                IMPLEMENTATION
OF EU BUDGET EXPENDITURE. 110
3.1        BREAKDOWN
& CHANGES IN COMMITMENT & PAYMENT APPROPRIATIONS BY FINANCIAL FRAMEWORK
HEADING. 110
3.2        IMPLEMENTATION
OF COMMITMENT APPROPRIATIONS BY FINANCIAL FRAMEWORK HEADING  110
3.3        IMPLEMENTATION
OF PAYMENT APPROPRIATIONS BY FINANCIAL FRAMEWORK HEADING. 111
3.4        MOVEMENTS
IN COMMITMENTS OUTSTANDING BY FINANCIAL FRAMEWORK HEADING. 111
3.5        BREAKDOWN
OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN BY FINANCIAL FRAMEWORK HEADING. 112
3.6        BREAKDOWN
AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS BY POLICY AREA  113
3.7        IMPLEMENTATION
OF COMMITMENT APPROPRIATIONS BY POLICY AREA. 114
3.8        IMPLEMENTATION
OF PAYMENT APPROPRIATIONS BY POLICY AREA. 115
3.9        MOVEMENTS
IN COMMITMENTS OUTSTANDING BY POLICY AREA. 116
3.10     BREAKDOWN
OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN BY POLICY AREA. 117
4.                INSTITUTIONS
AND AGENCIES. 120
4.1        SUMMARY
OF THE IMPLEMENTATION OF BUDGET REVENUE BY INSTITUTION. 120
4.2        IMPLEMENTATION
OF COMMITMENT AND PAYMENT APPROPRIATIONS BY INSTITUTION. 121
4.3        AGENCIES
INCOME: BUDGET FORECASTS, ENTITLEMENTS AND AMOUNTS RECEIVED. 123
4.4        Commitment & payment
appropriations by Agency. 125
4.5        BUDGET RESULT INCLUDING AGENCIES. 126
BUDGETARY STRUCTURE AND PRINCIPLES
The budgetary accounts are kept in
accordance with the Financial Regulation  and its rules of application. The
general budget, the main instrument of the Union's financial policy, is the
instrument which provides for and authorises the Union's revenue and
expenditure every year.
Every year, the Commission
estimates all the Institutions' revenue and expenditure for the year and draws
up a draft budget which it sends to the budgetary authority. On the basis of
this draft budget, the Council draws its position which is then the subject of
negotiations between the two arms of the budgetary authority. The President of
Parliament declares that the joint draft has been finally adopted, thus making
the budget enforceable. The task of executing the budget is mainly the
responsibility of the Commission.
The budget
structure for the Commission consists of administrative and operational
appropriations. The other Institutions have only administrative appropriations.
Furthermore, the budget distinguishes between two types of appropriations:
non-differentiated and differentiated. Non-differentiated appropriations are
used to finance operations of an annual nature (which comply with the principle
of annuality). Differentiated appropriations were introduced in order to
reconcile the principle of annuality with the need to manage multi-annual
operations. They are intended to cover mainly multi-annual operations.
Differentiated appropriations are split into commitment and payment
appropriations:
–     
commitment appropriations: cover the total cost of the legal obligations entered into for the
current financial year for operations extending over a number of years.
However, budgetary commitments for actions extending over more than one
financial year may be broken down over several years into annual instalments
where the basic act so provides.
–     
payment appropriations: cover expenditure arising from commitments entered into in the
current financial year and/or earlier financial years.
Origin of
Appropriations
The main source of appropriations
is the Union's budget for the current year. However, there are other types of
appropriations resulting from the provisions of the Financial Regulation. They
come from previous financial years or outside sources:
–     
Initial budget
appropriations adopted for the current year can
be supplemented with transfers between lines and by amending budgets.
–     
Appropriations carried
over from previous year or made available again
also supplement the current budget. These are: 
(i)    non-differentiated payment appropriations which may be carried over
automatically for one financial year only; 
(ii)   appropriations carried over by decision of the Institutions in one
of two cases: if the preparatory stages have been completed or if the legal
base is adopted late; and
(iii)  appropriations
made available again as a result of decommitments: This involves the re-entry
of commitment appropriations concerning structural funds which have been
decommitted. Amounts can be re-entered by way of exception in the event of
error by the Commission or if they are indispensable for completion of the
programme. 
–     
Assigned revenue which is made up of: 
(i)    refunds where the amounts are assigned revenue on the budget line
which incurred the initial expenditure and may be carried over without limit; 
(ii)   EFTA appropriations: The agreement on the European Economic Area
(EEA) provides for financial contribution by its members to certain activities
in the EU budget. The budget lines concerned and the amounts projected are
published in Annex III of the EU budget. These budget lines are increased by
the EFTA contribution. Appropriations not used at the year-end are cancelled
and returned to the EEA countries; 
(iii)  Revenue
from third parties/ other countries that have concluded agreements with the EU
involving a financial contribution to EU activities. The amounts received are
considered to be revenue from third parties which is allocated to the budget
lines concerned (often in the field of research) and may be carried over
without limit; 
(iv)  Work
for third parties: As part of their research activities, the EU research
centres may work for outside bodies. As with the revenue from third parties,
the work for third parties is assigned to specific budget lines and may be
carried over without limit; and 
(v)   Appropriations made available again as a result of repayment of
payments on account: These are EU funds which have been repaid by beneficiaries
and may be carried over without limit.
Composition of Appropriations
Available
–     
Initial budget = appropriations voted in year
N-1;
–     
Final budget appropriations = initial budget
appropriations adopted + amending budget appropriations + transfers +
additional appropriations;
–     
Additional appropriations = assigned revenue
(see above) + appropriations carried over from the previous financial year or
made available again following decommitments.
Calculation of the Budget
Result
The amounts of own resources
entered in the accounts are those credited in the course of the year to the
accounts opened in the Commission's name by the governments of the Member
States. Revenue comprises also, in the case of a surplus, the budget result for
the previous financial year. The other revenue entered in the accounts is the
amount actually received during the course of the year.
For the purposes of calculating the
budget result for the year, expenditure comprises payments made against the
year's appropriations plus any of the appropriations for that year that are
carried over to the following year. Payments made against the year's
appropriations means payments that are made by the accounting officer by 31
December of the financial year. For the EAGF, payments are those effected by
the Member States between 16 October N-1 and 15 October N, provided that the
accounting officer was notified of the commitment and authorisation by 31
January N+1. EAGF expenditure may be subject to a conformity decision following
controls in the Member States.
The budget result comprises two
elements: the result of the EU and the result of the participation of the EFTA
countries belonging to the EEA. In accordance with Article 15 of Regulation No 1150/2000
on own resources, this result represents the difference between:
–     
total revenue received for that year; and
–     
total payments made against that year's
appropriations plus the total amount of that year's appropriations carried over
to the following year.
–     
The following are added to or deducted from the
resulting figure:
·        
the net balance of cancellations of payment
appropriations carried over from previous years and any payments which, because
of fluctuations in the euro rate, exceed non-differentiated appropriations
carried over from the previous year; and
·        
the balance of exchange-rate gains and losses
recorded during the year.
Appropriations carried over from
the previous financial year in respect of contributions by and work for third
parties, which by definition never lapse, are included with the additional
appropriations for the financial year. This explains the difference between
carryovers from the previous year in the 2013 budget implementation statements
and those carried over to the following year in the 2012 budget implementation
statements. Payment appropriations for re-use and appropriations made available
again following the repayment of payments on account are disregarded when
calculating the budget result.
Payment appropriations carried over
include: automatic carryovers and carryovers by decision. The cancellation of
unused payment appropriations carried over from the previous year shows the
cancellations on appropriations carried over automatically and by decision. It
also includes the decrease in assigned revenue appropriations carried over to
the next year in comparison with 2012.          
1.              
RESULT OF IMPLEMENTATION OF THE EU BUDGET
1.1          
EU BUDGET RESULT
   ||   || EUR millions 
   || 2013 || 2012 
 Revenue for the financial year || 149 504 || 139 541 
 Payments against current year appropriations || (147 567) || (137 738) 
 Payment appropriations carried over to  year N+1 || (1 329) ||  (936) 
 Cancellation of unused payment appropriations carried over from year N-1 ||  437 ||  92 
 Exchange differences for the year ||  (42) ||  60 
 Budget result* || 1 002 || 1 019 
* Of which EFTA result is EUR
(4) million in 2013 and EUR (4) million in 2012.
The budget result of the EU is returned
to the Member States during the following year through deduction of their amounts
due for that financial year.
            
1.2          
RECONCILIATION OF ECONOMIC RESULT WITH BUDGET
RESULT
   ||   || EUR millions 
   || 2013 || 2012 
 ECONOMIC RESULT OF THE YEAR || (4 365) || (5 329) 
   ||   ||   
 Revenue ||   ||   
 Entitlements established in current year but not yet collected || (2 071) || (2 000) 
 Entitlements established in previous years and collected in current year || 3 357 || 4 582 
 Accrued revenue (net) ||  (134) ||  (38) 
 Expenses ||   ||   
 Accrued expenses (net) || 3 216 || (1 544) 
 Expenses prior year paid in current year || (1 123) || (2 695) 
 Net-effect pre-financing ||  (902) ||  820 
 Payment appropriations carried over to next year || (1 528) || (4 666) 
 Payments made from carry-overs & cancellation of unused payment appropriations || 1 538 || 4 768 
 Movement in provisions || 4 136 || 7 805 
 Other || (1 028) ||  (670) 
   ||   ||   
 Economic result Agencies and ECSC ||  (93) ||  (15) 
   ||   ||   
 BUDGET RESULT OF THE YEAR || 1 002 || 1 019 
The economic
result of the year is calculated on the basis of accrual accounting principles.
The budget result is however based on modified cash accounting rules, in
accordance with the Financial Regulation. As the economic result and the budget
result both cover the same underlying operational transactions, it is a useful
control to ensure that they are reconcilable. 
In 2013, prepaid expenses relating
to financial engineering instruments and aid schemes (see 2.6.2 and 2.10.2)
have been included in the 'net-effect pre-financing ' category for the first
time. The same reclassification has been made to the comparative figures above.

Reconciling items - Revenue
The actual budgetary revenue for a
financial year corresponds to the revenue collected from entitlements
established in the course of the year and amounts collected from entitlements
established in previous years. Therefore the entitlements
established in the current year but not yet collected are to be deducted
from the economic result for reconciliation purposes as they do not form part
of budgetary revenue. On the contrary the entitlements
established in previous years and collected in current year must be
added to the economic result for reconciliation purposes. 
The net
accrued revenue mainly consists of accrued revenue for agricultural
levies, own resources and interests and dividends. Only the net-effect, i.e.
accrued revenue for current year minus reversal accrued revenue from previous
year, is taken into consideration.  
Reconciling items - Expenditure

The net
accrued expenses mainly consist of accruals made for year-end cut-off
purposes, i.e. eligible expenses incurred by beneficiaries of EU funds but not
yet reported to the Commission. While accrued expenses are not considered as
budgetary expenditure, payments made in the current
year relating to invoices registered in prior years are part of current
year's budgetary expenditure. 
The net
effect of pre-financing is the combination of (1) the new pre-financing
amounts paid in the current year and recognised as budgetary expenditure of the
year and (2) the clearing of the pre-financing paid in current year or previous
years through the acceptance of eligible costs. The latter represent an expense
in accrual terms but not in the budgetary accounts since the payment of the
initial pre-financing had already been considered as a budgetary expenditure at
the time of its payment. 
Besides the payments made against
the year's appropriations, the appropriations for that year that are carried to the next year also need to be taken into
account in calculating the budget result for the year (in accordance with
Article 15 of Regulation No 1150/2000). The same applies for the budgetary
payments made in the current year from carry-overs and
the cancellation of unused payment appropriations.
The movement
in provisions relates to year-end estimates made in the accrual accounts
(employee benefits mainly) that do not impact the budgetary accounts. Other reconciling amounts comprise different elements
such as asset depreciation, asset acquisitions, capital lease payments and
financial participations for which the budgetary and accrual accounting
treatments differ.
 
1.3          
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL
AMOUNTS
1.3.1.        
REVENUE
   ||   ||   ||   || EUR millions 
   ||   || Initial Budget || Final Budget || Actual Revenue 
 1. || Own resources || 131 288 || 140 326 || 140 100 
   ||    Of which Customs duties || 18 632 || 14 857 || 15 164 
   ||    Of which VAT || 15 030 || 14 680 || 14 542 
   ||    Of which GNI || 97 503 || 110 823 || 110 032 
 3. || Surpluses, balances and adjustments || 0 || 1 057 ||  698 
 4. || Revenue accruing from persons working with the institutions and with other Union bodies || 1 278 || 1 278 || 1 199 
 5. || Revenue accruing from the administrative operation of the institutions ||  54 ||  54 ||  611 
 6. || Contributions and refunds in connection with Union agreements and programmes ||  60 ||  60 || 3 898 
 7. || Interests on late payments and fines ||  123 || 1 642 || 2 973 
 8. || Borrowing and lending operations ||  4 ||  4 ||  2 
 9. || Miscellaneous revenue ||  30 ||  30 ||  24 
 Total ||   || 132 837 || 144 451 || 149 504 
1.3.2.        
EXPENDITURE BY FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   || EUR millions 
   ||   || Initial Budget || Final Budget* || Payments made 
 1. || Sustainable growth || 59 085 || 73 528 || 71 238 
   || 1.1 Competetiveness for Growth & employment || 11 886 || 16 290 || 14 307 
   || 1.2 Cohesion for Growth & Employment || 47 199 || 57 238 || 56 931 
 2 || Preservation & mgt of natural resources || 57 484 || 60 404 || 59 524 
 3 || Citizenship, freedom, security and justice || 1 515 || 2 197 || 1 883 
 4 || The EU as a global player || 6 323 || 7 200 || 7 055 
 5 || Administration || 8 430 || 10 056 || 8 693 
 6 || Compensations || 0 ||  75 ||  75 
 Total ||   || 132 837 || 153 461 || 148 469 
*
Including amending budgets, appropriations carried over and assigned revenue.
1.3.3.        
EXPENDITURE BY POLICY AREA
   ||   ||   ||   || EUR millions 
   ||   || Initial Budget || Final Budget* || Payments made 
 01 || Economic and financial affairs ||  428 ||  411 ||  397 
 02 || Enterprise || 1 162 || 1 587 || 1 456 
 03 || Competition ||  92 ||  107 ||  93 
 04 || Employment and social affairs || 10 429 || 14 286 || 14 107 
 05 || Agriculture and rural development || 56 344 || 59 234 || 58 339 
 06 || Mobility and transport ||  984 || 1 120 || 1 059 
 07 || Environment and Climate action ||  391 ||  438 ||  406 
 08 || Research || 4 808 || 6 556 || 5 771 
 09 || Communication networks, content and technlology || 1 389 || 2 024 || 1 826 
 10 || Direct research ||  411 ||  959 ||  496 
 11 || Maritime affairs and Fisheries ||  794 ||  831 ||  820 
 12 || Internal market ||  103 ||  127 ||  116 
 13 || Regional policy || 37 434 || 43 960 || 43 494 
 14 || Taxation and customs union ||  112 ||  140 ||  129 
 15 || Education and culture || 2 373 || 3 301 || 3 052 
 16 || Communication ||  253 ||  273 ||  252 
 17 || Health and consumer protection ||  593 ||  622 ||  599 
 18 || Home affairs ||  799 || 1 053 || 1 035 
 19 || External relations || 3 089 || 3 354 || 3 295 
 20 || Trade ||  102 ||  112 ||  104 
 21 || Development and relations with ACP States || 1 207 || 1 377 || 1 345 
 22 || Enlargement ||  832 ||  933 ||  920 
 23 || Humanitarian aid ||  829 || 1 278 || 1 249 
 24 || Fight against fraud ||  73 ||  83 ||  73 
 25 || Commission's policy coordinination & legal advice ||  194 ||  221 ||  193 
 26 || Commission’s administration || 1 013 || 1 318 || 1 082 
 27 || Budget ||  67 ||  146 ||  135 
 28 || Audit ||  12 ||  13 ||  12 
 29 || Statistics ||  115 ||  147 ||  126 
 30 || Pensions and related expenditure || 1 399 || 1 401 || 1 397 
 31 || Language Services ||  397 ||  506 ||  436 
 32 || Energy ||  814 ||  838 ||  758 
 33 || Justice ||  184 ||  208 ||  195 
 40 || Reserves ||  80 || 0 || 0 
 90 || Other Institutions || 3 527 || 4 497 || 3 703 
 Total ||   || 132 837 || 153 461 || 148 469 
* Including
amending budgets, appropriations carried over and assigned revenue.
1.3.4.        
COMMITMENTS BY FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   || EUR millions 
   ||   || Initial Budget || Final Budget* || Commitments 
 1. || Sustainable growth || 70 630 || 75 054 || 72 682 
   || 1.1 Competetiveness for Growth & Employment || 16 121 || 19 191 || 17 723 
   || 1.2 Cohesion for Growth & Employment || 54 509 || 55 863 || 54 959 
 2. || Preservation & management of natural resources || 60 149 || 62 540 || 61 463 
 3. || Citizenship, freedom, security and justice || 2 106 || 2 846 || 2 777 
 4. || The EU as a global player || 9 583 || 10 015 || 9 793 
 5. || Administration || 8 430 || 9 281 || 8 870 
 6. || Compensations || 0 ||  75 ||  75 
 Total ||   || 150 898 || 159 810 || 155 659 
* Including amending
budgets, appropriations carried over and assigned revenue.
1.3.5.        
COMMITMENTS BY POLICY AREA
   ||   ||   ||   || EUR millions 
   ||   || Initial Budget || Final Budget* || Commitments 
 01 || Economic and financial affairs ||  556 ||  527 ||  517 
 02 || Enterprise || 1 154 || 1 269 || 1 241 
 03 || Competition ||  92 ||  99 ||  94 
 04 || Employment and social affairs || 12 004 || 12 823 || 12 131 
 05 || Agriculture and rural development || 58 852 || 61 226 || 60 167 
 06 || Mobility and transport || 1 741 || 1 843 || 1 807 
 07 || Environment and Climate action ||  498 ||  518 ||  506 
 08 || Research || 6 878 || 8 130 || 7 915 
 09 || Communication networks, content and technology || 1 805 || 2 131 || 2 085 
 10 || Direct research ||  424 || 1 000 ||  518 
 11 || Maritime affairs and Fisheries || 1 024 || 1 043 ||  997 
 12 || Internal market ||  106 ||  123 ||  117 
 13 || Regional policy || 43 389 || 44 464 || 44 170 
 14 || Taxation and customs union ||  145 ||  151 ||  147 
 15 || Education and culture || 2 813 || 3 433 || 3 303 
 16 || Communication ||  266 ||  275 ||  269 
 17 || Health and consumer protection ||  634 ||  648 ||  635 
 18 || Home affairs || 1 296 || 1 444 || 1 420 
 19 || External relations || 5 001 || 5 088 || 5 023 
 20 || Trade ||  107 ||  111 ||  108 
 21 || Development and relations with ACP States || 1 572 || 1 701 || 1 664 
 22 || Enlargement || 1 062 || 1 152 || 1 147 
 23 || Humanitarian aid ||  917 || 1 360 || 1 339 
 24 || Fight against fraud ||  79 ||  79 ||  79 
 25 || Commission's policy coordination & legal advice ||  193 ||  205 ||  194 
 26 || Commission’s administration || 1 030 || 1 184 || 1 119 
 27 || Budget ||  67 ||  138 ||  134 
 28 || Audit ||  12 ||  13 ||  12 
 29 || Statistics ||  134 ||  144 ||  134 
 30 || Pensions and related expenditure || 1 399 || 1 401 || 1 397 
 31 || Language Services ||  397 ||  482 ||  435 
 32 || Energy ||  738 ||  818 ||  782 
 33 || Justice ||  218 ||  235 ||  225 
 40 || Reserves ||  764 ||  528 || 0 
 90 || Other Institutions || 3 527 || 4 023 || 3 830 
 Total ||   || 150 898 || 159 810 || 155 659 
* Including
amending budgets, appropriations carried over and assigned revenue.
In the initial adopted EU budget,
signed by the President of the European Parliament on 12 December 2012,
the amount of payment appropriations was EUR 132 837 million and the amount to
be financed by own resources totalled EUR 131 288 million. The revenue and
expenditure estimates in the initial budget are typically adjusted during the
budgetary year, such modifications being presented in Amending Budgets.
Adjustments in the GNI-based own resources ensure that budgeted revenue matches
exactly budgeted expenditure. In accordance with the principle of equilibrium,
budget revenue and expenditure (payment appropriations) must be in balance.
Revenue:
During 2013 nine amending budgets
were adopted. Taking them into account, the total final budgeted revenue for
2013 amounted to EUR 144 451 million. This was financed by own resources
totalling EUR 140 326 million (thus EUR 9 038 million more than
initially forecasted) and the remainder by other revenue. The increased need
for financing payment appropriations was covered mainly from the call of the
GNI-based resource entered in Amending Budgets No. 2 and 8/2013.
The amending letter to the Amending
Budget No. 6/2013 included fines on undertakings totalling EUR 1 614 million
that where known at the time the Draft Amending Budget No. 6/2013 was
established. By 31 December 2013, other fines became definitive, either after a
definitive judgement or because companies did not appeal new fine decisions.
Revenue, contributions and refunds
in connection with Union agreements and programmes, total an amount of
EUR  3 888 million. The principal amounts concern the EAGF and EAFRD (and
in particular the clearance of accounts and irregularities), the participation
of third countries in research programs and other contributions and refunds to
Union programs/activities. A substantial part of this total is made of
earmarked revenue, which typically gives rise to the entering of additional
appropriations in the expenditure side.
As far as the own resources result
is concerned, the collection of traditional own resources was close to the forecasted
amounts. Namely because the budget estimates that were modified at the time the
Amending Budget No. 6/2013 was established (they were decreased by EUR 1 871
million according to the new macroeconomic forecasts of spring 2013), were once
again amended in the Amending Letter to that Amending Budget to take into
account the actual rhythm of collection. Thus they were once again decreased by
EUR 2 062 million.
The final Member States' VAT and
GNI payments also correspond closely to the final budgetary estimate. The
differences between the forecasted amounts and the amounts actually paid are
due to the differences between the euro rates used for budgetary purposes and
the rates in force at the time when the Member States outside the EMU actually
made their payments.
Expenditure:
The year 2013 was the last year of
the programming period 2007-2013. The initial budget for all institutions set
commitment appropriations at EUR 150 898 million, representing
an increase of 1.7 % compared to the final 2012 budget. This was a
reduction of EUR 160 million compared to the Commission's Draft
Budget, and left a margin of EUR 2.45 billion below the ceiling of
the multi-annual financial framework.
Payment appropriations were finally
set at EUR 132 837 million, after a cut of
EUR 4.96 billion to the Draft Budget 2013. This meant a decrease of
2.2 % compared to the final budget for 2012. The initial level of payment
appropriations in 2013 corresponded to 0.99 % of the Union's GNI and left
a margin of EUR 11.24 billion below the financial framework ceiling. 
For commitments, the final budget
appropriations, and hence the political targets set, were fully implemented
(99.7 % excluding the un-mobilised reserves).  The most notable
adjustments by means of amending budgets during the year concerned the amounts
necessary to accommodate the accession of Croatia (EUR 655 million),
the mobilisation of the European Union Solidarity Fund
(EUR 415 million), unforeseeable expenditure by its very nature, and
additional commitments under heading 1b for France, Italy and Spain
(EUR 150 million), arising from an agreement by the European Council
to increase their allocation under the structural funds. The total
implementation of EUR 151 080 million left EUR 1 011 million
unused. After the carryover to 2014, an amount of EUR 833 million
lapses. However, most of this concerns un-mobilised reserves:
EUR 464 million for the European Globalisation Adjustment Fund,
EUR 64 million for the Emergency Aid Reserve and
EUR 43 million from the reserve for international fisheries
agreements.
The total increases to the initial
budgeted payment appropriations, introduced via amending budgets amounted to
EUR 11.6 billion. Confronted with the heavy pressure of payment
claims and the backlog of outstanding claims from 2012, the Budget Authority
adopted increases of EUR 11.2 billion in payment appropriations in
two steps (Amending Budgets 2/2013 and 8/2013). This brought the level of
payment appropriations up to that of the ceiling of the financial framework,
helping to reduce the growth of outstanding commitments (RAL).
The payment needs of the European
Union Solidarity Fund were covered by EUR 15 million of fresh
appropriations via Amending Budget 5/2013 and with a reallocation of
EUR 250 million via Amending Budget 9/2013 from some budget lines
which the Commission had proposed in the context of the Global Transfer. The
remaining EUR 150 million in payments were entered in the 2014
budget.
The total implementation of final
budget payment appropriations was EUR 142 883 million, being 98.9 %. This
is EUR 8 billion more than in 2012 but also EUR 7 billion
more than the financial framework ceiling for 2014. Nevertheless the backlog of
unpaid payment claims at year-end increased further to EUR 26.2 billion.
Once account is taken of the carryover of payment appropriations to 2014, a
total of EUR 238 million lapses.
More than half of lapsing
Commission’s appropriations arise from the rejection by the Council’s refusal
to transfer appropriations related to the salary adjustment. From payment
appropriations carried forward from 2012, an amount of EUR 97 million was
cancelled.
A more detailed analysis of
budgetary adjustments, their relevant context, their justification and their
impact is presented in Commission's Report on Budgetary and Financial
Management 2013, Part A "Overview at budget level" and Part B dealing
with each heading of the multi-annual financial framework.
 
2.              
IMPLEMENTATION OF EU BUDGET REVENUE
2.1          
SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Title || Income appropriations || Entitlements established || Revenue || Receipts as || Outstanding 
   ||   || Initial || Final || Current  year || Carried  over || Total || On entitlements current year || On entitlements carried over || Total || % of budget ||   
 1. || Own resources || 131 288 || 140 326 || 140 102 ||  45 || 140 147 || 140 097 ||  3 || 140 100 || 99.84% ||  47 
 3. || Surpluses, balances and adjustments || 0 || 1 057 ||  698 || 0 ||  698 ||  698 || 0 ||  698 || 65.99% || 0 
 4. || Revenue accruing from persons working with the institutions & with other EU bodies || 1 278 || 1 278 || 1 206 ||  5 || 1 211 || 1 194 ||  5 || 1 199 || 93.83% ||  12 
 5. || Revenue from the administrative operations of the institutions ||  54 ||  54 ||  604 ||  29 ||  632 ||  587 ||  24 ||  611 || 1133.46% ||  21 
 6. || Contributions and refunds in connection with community agreements & programmes ||  60 ||  60 || 3 601 ||  525 || 4 126 || 3 500 ||  398 || 3 898 || 6496.27% ||  228 
 7. || Interests on late payments and fines ||  123 || 1 642 || 2 631 || 10 774 || 13 406 ||  634 || 2 338 || 2 973 || 181.05% || 10 433 
 8. || Borrowing and lending operations ||  4 ||  4 ||  35 ||  222 ||  257 ||  2 || 0 ||  2 || 49.77% ||  255 
 9. || Miscellaneous revenue ||  30 ||  30 ||  25 ||  9 ||  34 ||  22 ||  2 ||  24 || 79.42% ||  10 
   || Total || 132 837 || 144 451 || 148 901 || 11 609 || 160 510 || 146 733 || 2 771 || 149 504 || 103.50% || 11 006 
 Detail Title 1: Own resources 
   || Chapter || Income appropriations || Entitlements established || Revenue || Receipts as || Outstanding 
   ||   || Initial || Final || Current  year || Carried  over || Total || On entitlements current year || On entitlements carried over ||  Total || % of budget ||   
 11. || Sugar levies ||  123 ||  (35) ||  202 || 0 ||  202 ||  202 || 0 ||  202 || (582.66)% || 0 
 12. || Customs duties || 18 632 || 14 857 || 15 166 ||  45 || 15 211 || 15 161 ||  3 || 15 164 || 102.06% ||  47 
 13. || VAT || 15 030 || 14 680 || 14 542 || 0 || 14 542 || 14 542 || 0 || 14 542 || 99.06% || 0 
 14. || GNI || 97 503 || 110 823 || 110 032 || 0 || 110 032 || 110 032 || 0 || 110 032 || 99.29% || 0 
 15. || Correction of budgetary imbalances || 0 || 0 ||  166 || 0 ||  166 ||  166 || 0 ||  166 || 0.00% || 0 
 16. || Reduction GNI-based contributions NL, S || 0 || 0 || (6) || 0 || (6) || (6) || 0 || (6) || 0.00% || 0 
   || Total || 131 288 || 140 326 || 140 102 ||  45 || 140 147 || 140 097 ||  3 || 140 100 || 99.84% ||  47 
 Detail Title 3: Surpluses, balances and adjustments 
   || Chapter || Income appropriations || Entitlements established || Revenue || Receipts as || Outstanding 
   ||   || Initial || Final || Current  year || Carried  over || Total || On entitlements current year || On entitlements carried over || Total || % of budget ||   
 30. || Surplus from previous year || 0 || 1 057 || 1 054 || 0 || 1 054 || 1 054 || 0 || 1 054 || 99.65% || 0 
 31. || VAT balances || 0 || 0 ||  (522) || 0 ||  (522) ||  (522) || 0 ||  (522) || 0.00% || 0 
 32. || GNI balances || 0 || 0 ||  162 || 0 ||  162 ||  162 || 0 ||  162 || 0.00% || 0 
 34. || Adjustment for non-participation in JHAP || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0.00% || 0 
 35. || UK correction-adjustments || 0 || 0 ||  4 || 0 ||  4 ||  4 || 0 ||  4 || 0.00% || 0 
   || Total || 0 || 1 057 ||  698 || 0 ||  698 ||  698 || 0 ||  698 || 65.99% || 0 
2.1.1.        
Own resources revenue
The vast majority of revenue comes
from own resources. This is laid down in Article 311 of the Treaty on the
Functioning of the EU, which states that: "Without prejudice to other
revenue, the budget shall be financed wholly from own resources." The main
bulk of budgetary expenditure is financed by own resources. Other revenue
represents only a minor part of total financing.
Own resources can be divided into
the following categories:
(1)        Traditional own resources (TOR) consist of customs duties
and sugar levies. These own resources are levied on economic operators and
collected by Member States on behalf of the EU. However, Member States keep 25 %
as a compensation for their collection costs. Customs duties are levied on
imports of products coming from third countries, at rates based on the Common
Customs Tariff. Sugar levies are paid by sugar producers to finance the export
refunds for sugar. TOR usually account for +/- 13 % of own resource
revenue.
(2)        The own resource based on value added tax (VAT) is levied
on Member States' VAT bases, which are harmonised for this purpose in
accordance with EU rules. The same percentage is levied on the harmonised base
of each Member State. However, the VAT base to take into account is capped at
50 % of each Member State’s GNI. The VAT-based resource usually accounts
for around 12 % of own resource revenue.
(3)        The resource based on gross national income (GNI) is used
to balance budget revenue and expenditure, i.e. to finance the part of the
budget not covered by any other sources of revenue. The same percentage rate is
levied on each Member States' GNI, which is established in accordance with EU
rules. The GNI-based resource usually accounts for +/- 75 % of own
resource revenue.
The allocation of own resources is
made in accordance with the rules laid down in the Council Decision No.
2007/436/EC, Euratom of 7 June 2007 on the system of the EU's own resources
(ORD 2007).
2.1.2.        
Traditional own resources
Traditional own resources: All
established traditional own resource amounts must be entered in one or other of
the accounts kept by the competent authorities.
–     
In the ordinary account provided for in Article
6(3)(a) of Regulation No 1150/2000: all amounts recovered or guaranteed.
–     
In the separate account provided for in Article
6(3)(b) of Regulation No 1150/2000: all amounts not yet recovered and/or not
guaranteed; amounts guaranteed but challenged may also be entered in this
account.
For the separate account, the
Member States quarterly statement to the Commission includes:
–     
the balance to be recovered during the previous
quarter,
–     
the established entitlements during the quarter
in question,
–     
rectifications of the base
(corrections/cancellations) during the quarter in question,
–     
amounts written off (which cannot be made
available according to Article 17(2) of Regulation 1150/2000),
–     
the amounts recovered during the quarter in
question,
–     
the balance to be recovered at the end of the
quarter in question.
Traditional own resources must be
entered in the Commission's account with the Treasury or the body appointed by
the Member State at the latest on the first working day following the 19th day
of the second month following the month during which the entitlement was
established (or recovered in the case of the separate account). Member States
retain, by way of collection costs, 25 % of traditional own resources. The
contingent own resources entitlements are adjusted on the basis of the
likelihood of their recovery.
2.1.3.        
VAT-based resources and GNI-based resources
VAT-based own resources derive from
the application of a uniform rate, for all Member States, to the harmonised VAT
base determined in accordance with the rules of Article 2(1)(b) of the ORD
2007. The uniform rate is fixed at 0.30 % except for the period 2007-2013
in which the rate of call for Austria is fixed at 0.225 %, for Germany at
0.15 % and for Netherlands and Sweden at 0.10 %. The VAT base is
capped at 50 % of GNI for all Member States.
The GNI-based resource is a
variable resource intended to supply the revenue required, in any given year,
to cover expenditure exceeding the amount collected from traditional own
resources, VAT resources and miscellaneous revenue. The revenue derives from
the application of a uniform rate to the aggregate GNI of all the Member
States. VAT and GNI-based resources are determined on the basis of forecasts of
VAT and GNI bases made when the draft budget is being prepared. These forecasts
are subsequently revised; the figures are updated during the budget year in
question by means of an amending budget.
The actual figures for the VAT and
GNI bases are available in the course of the year following the budget year in
question. The Commission calculates the differences between the amounts due by
the Member States by reference to the actual bases and the sums actually paid
on the basis of the (revised) forecasts. These VAT and GNI balances, either
positive or negative, are called in by the Commission from the Member States
for the first working day of December of the year following the budget year in
question. Corrections may still be made to the actual VAT and GNI bases during
the subsequent four years, unless a reservation is issued. The balances
calculated earlier are adjusted and the difference is called in at the same
time as the VAT and GNI balances for the previous budget year.
When conducting controls of VAT
statements and GNI data, the Commission may notify reservations to the Member
States regarding certain points which may have consequences to their own
resources contributions. These points, for example, may result from an absence
of acceptable data, or a need to develop a suitable methodology. These
reservations have to be seen as potential claims on the Member States for
uncertain amounts as their financial impact cannot be estimated with accuracy.
When the exact amount can be determined, the corresponding VAT and GNI-based
resources are called either in connection with VAT and GNI balances or by
individual calls for funds.
2.1.4.        
UK correction
This mechanism reduces the own
resources payments of the UK in proportion to what is known as its
"budgetary imbalance" and increases the own resources payments of the
other Member States correspondingly. The budgetary imbalance correction
mechanism in favour of the United Kingdom was instituted by the European
Council in Fontainebleau (June 1984) and the resulting Own Resources Decision
of 7 May 1985. The purpose of the mechanism was to reduce the budgetary
imbalance of the UK through a reduction in its payments to the EU. Germany,
Austria, Sweden and Netherlands benefit from a reduced financing of the
correction (restricted to one fourth of their normal share).
2.1.5.        
Gross reduction
The European Council of 15 and 16
December 2005 concluded that the Netherlands and Sweden shall benefit from
gross reductions in their annual GNI-based contributions during the period
2007-2013. Thus this mechanism of compensation stipulates that the Netherlands
shall benefit from a gross reduction in its annual GNI contribution of EUR 605
million and Sweden from a gross reduction in its annual GNI contribution of EUR
150 million, measured in 2004 prices.
 
3.              
IMPLEMENTATION OF EU BUDGET EXPENDITURE
3.1          
BREAKDOWN & CHANGES IN COMMITMENT &
PAYMENT APPROPRIATIONS BY FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Commitment appropriations || Payment appropriations 
 Financial Framework Heading || Appropr. adopted || Modifications (Transfers & AB) || Carried over || Assigned revenue || Total additional || Total authorised || Appropr. adopted || Modifications (Transfers & AB) || Carried over || Assigned revenue || Total additional || Total authorised 
   || 1 || 2 || 3 || 4 || 5=3+4 || 6=1+2+5 || 7 || 8 || 9 || 10 || 11=9+10 || 12=7+8+11 
 1 || Sustainable growth || 70 630 ||  620 ||  28 || 3 777 || 3 805 || 75 054 || 59 085 || 10 037 ||  157 || 4 250 || 4 407 || 73 528 
 2 || Preservation and management of natural resources || 60 149 ||  (4) ||  2 || 2 393 || 2 395 || 62 540 || 57 484 ||  552 ||  36 || 2 332 || 2 368 || 60 404 
 3 || Citizenship, freedom, security and justice || 2 106 ||  507 || 0 ||  233 ||  233 || 2 846 || 1 515 ||  450 ||  9 ||  224 ||  232 || 2 197 
 4 || The EU as a global player || 9 583 ||  (4) ||  2 ||  433 ||  435 || 10 015 || 6 323 ||  500 ||  30 ||  346 ||  377 || 7 200 
 5 || Administration || 8 431 || 0 || 0 ||  851 ||  851 || 9 281 || 8 430 ||  (1) ||  767 ||  859 || 1 627 || 10 056 
 6 || Compensations || 0 ||  75 || 0 || 0 || 0 ||  75 || 0 ||  75 || 0 || 0 || 0 ||  75 
   || Total || 150 898 || 1 193 ||  31 || 7 687 || 7 719 || 159 810 || 132 837 || 11 614 ||  999 || 8 011 || 9 010 || 153 461 
            
3.2          
IMPLEMENTATION OF COMMITMENT APPROPRIATIONS BY
FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Financial Framework Heading || Commitment appropriations || Commitments made || Appropriations carried over || Appropriations lapsing 
   ||   || authorised || From the year’s appropriations || From carry overs || From assigned revenue || Total || % || Assigned revenue || Carry overs by decision || Total || % || From the year’s budget appropr. || From carry overs || Assigned revenue || Total || % 
   ||   || 1 || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9=7+8 || 10=9/1 || 11 || 12 || 13 || 14=11+ 12+13 || 15=14/1 
 1 || Sustainable growth || 75 054 || 70 585 ||  28 || 2 069 || 72 682 || 96.84% || 1 708 ||  169 || 1 877 || 2.50% ||  495 || 0 || 0 ||  495 || 0.66% 
 2 || Preservation and management of natural resources || 62 540 || 60 080 ||  2 || 1 381 || 61 463 || 98.28% || 1 012 ||  1 || 1 013 || 1.62% ||  64 || 0 || 0 ||  64 || 0.10% 
 3 || Citizenship, freedom, security and justice || 2 846 || 2 606 || 0 ||  171 || 2 777 || 97.59% ||  62 ||  2 ||  64 || 2.26% ||  4 || 0 || 0 ||  4 || 0.15% 
 4 || The EU as a global player || 10 015 || 9 500 ||  2 ||  291 || 9 793 || 97.78% ||  142 ||  6 ||  149 || 1.48% ||  74 || 0 || 0 ||  74 || 0.73% 
 5 || Administration || 9 281 || 8 234 || 0 ||  636 || 8 870 || 95.57% ||  215 || 0 ||  215 || 2.32% ||  196 || 0 || 0 ||  196 || 2.11% 
 6 || Compensations ||  75 ||  75 || 0 || 0 ||  75 || 100.00% || 0 || 0 || 0 || 0.00% || 0 || 0 || 0 || 0 || 0.00% 
   || Total || 159 810 || 151 080 ||  31 || 4 548 || 155 659 || 97.40% || 3 140 ||  178 || 3 318 || 2.08% ||  833 || 0 || 0 ||  833 || 0.52% 
            
3.3          
IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY
FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Financial Framework Heading || Payment || Payments made || Appropriations carried over || Appropriations lapsing 
   ||   || Appropr. authorised || From the year’s appropr. || From carry overs || From assigned revenue || Total || % || Automatic carry overs || Carry overs by decision || Assigned revenue || Total || % || From the year’s appropr. || From carry overs || Assigned revenue || Total || % 
   ||   ||   || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9 || 10=7+8+9 || 11=10/1 || 12 || 13 || 14 || 15=12+ 13+14 || 16= 
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || 15/1 
 1 || Sustainable growth || 73 528 || 68 804 ||  138 || 2 296 || 71 238 || 96.89% ||  135 ||  165 || 1 954 || 2 254 || 3.06% ||  18 ||  18 || 0 ||  37 || 0.05% 
 2 || Preservation & management of natural resources || 60 404 || 57 980 ||  32 || 1 512 || 59 524 || 98.54% ||  34 ||  2 ||  820 ||  856 || 1.42% ||  20 ||  4 || 0 ||  24 || 0.04% 
 3 || Citizenship, freedom, security & justice || 2 197 || 1 703 ||  8 ||  173 || 1 883 || 85.71% ||  9 ||  251 ||  51 ||  311 || 14.15% ||  2 ||  1 || 0 ||  3 || 0.15% 
 4 || The EU as a global player || 7 200 || 6 786 ||  26 ||  243 || 7 055 || 97.99% ||  34 ||  1 ||  103 ||  138 || 1.92% ||  2 ||  5 || 0 ||  7 || 0.09% 
 5 || Administration || 10 056 || 7 534 ||  699 ||  460 || 8 693 || 86.44% ||  699 || 0 ||  399 || 1 098 || 10.92% ||  196 ||  68 || 0 ||  265 || 2.63% 
 6 || Compensations ||  75 ||  75 || 0 || 0 ||  75 || 100.00% || 0 || 0 || 0 || 0 || 0.00% || 0 || 0 || 0 || 0 || 0.00% 
   || Total || 153 461 || 142 883 ||  902 || 4 684 || 148 469 || 96.75% ||  911 ||  419 || 3 327 || 4 657 || 3.03% ||  238 ||  97 || 0 ||  335 || 0.22% 
            
3.4          
MOVEMENTS IN COMMITMENTS OUTSTANDING BY
FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   ||   || Commitments outstanding at the end of the previous year || Commitments of the year ||   
   || Financial Framework Heading || Commitments carried forward from previous year || Decommitments /Revaluations/ Cancellations || Payments || Commitments outstanding at year-end || Commitments made during the year || Payments || Cancellation of commitments which cannot be carried over || Commitments outstanding at year-end || Total Commitments outstanding at year-end 
 1 || Sustainable growth || 166 271 || (1 019) || (63 822) || 101 430 || 72 682 || (7 416) ||  (3) || 65 263 || 166 693 
 2 || Preservation and management of natural resources || 26 886 ||  (396) || (13 444) || 13 045 || 61 463 || (46 080) || 0 || 15 383 || 28 428 
 3 || Citizenship, freedom, security and justice || 2 316 ||  (133) ||  (628) || 1 555 || 2 777 || (1 255) || 0 || 1 522 || 3 077 
 4 || The EU as a global player || 21 429 ||  (852) || (5 002) || 15 575 || 9 793 || (2 053) ||  (2) || 7 738 || 23 313 
 5 || Administration ||  909 ||  (191) ||  (715) ||  3 || 8 870 || (7 978) ||  4 ||  896 ||  899 
 6 || Compensations || 0 || 0 || 0 || 0 ||  75 ||  (75) || 0 || 0 || 0 
   || Total || 217 810 || (2 590) || (83 611) || 131 609 || 155 659 || (64 858) ||  (1) || 90 801 || 222 410 
            
3.5          
BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF
ORIGIN BY FINANCIAL FRAMEWORK HEADING
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Financial Framework Heading || <2007 || 2007 || 2008 || 2009 || 2010 || 2011 || 2012 || 2013 || Total 
 1 || Sustainable growth || 4 097 ||  337 ||  859 || 3 760 || 12 112 || 28 399 || 51 867 || 65 263 || 166 693 
 2 || Preservation & management of natural resources ||  479 ||  46 ||  95 ||  139 ||  219 || 2 571 || 9 496 || 15 383 || 28 428 
 3 || Citizenship, freedom, security and justice ||  6 ||  16 ||  50 ||  144 ||  214 ||  398 ||  728 || 1 522 || 3 077 
 4 || The EU as a global player ||  956 ||  415 ||  823 || 1 237 || 2 375 || 3 845 || 5 923 || 7 738 || 23 313 
 5 || Administration || 0 || 0 || 0 || 0 || 0 ||  1 ||  139 ||  759 ||  899 
   || Total || 5 537 ||  815 || 1 827 || 5 280 || 14 920 || 35 214 || 68 153 || 90 664 || 222 410 
3.6          
BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT
APPROPRIATIONS BY POLICY AREA
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Commitment appropriations || Payment appropriations 
   || Approps adopted || Modifications (Transfer /AB) || Carried over || Assigned revenue || Total additional || Total authorised || Approps adopted || Modifications (Transfer/ AB) || Carried over || Assigned revenue || Total additional || Total authorised 
   || 1 || 2 || 3 || 4 || 5=3+4 || 6=1+2+5 || 7 || 8 || 9 || 10 || 11=9+10 || 12=7+8+11 
 01 || Economic & financial affairs ||  556 ||  (60) || 0 ||  31 ||  31 ||  527 ||  428 ||  (52) ||  6 ||  29 ||  35 ||  411 
 02 || Enterprise || 1 154 ||  (16) || 0 ||  131 ||  131 || 1 269 || 1 162 ||  214 ||  19 ||  192 ||  211 || 1 587 
 03 || Competition ||  92 ||  1 || 0 ||  6 ||  6 ||  99 ||  92 ||  1 ||  8 ||  6 ||  13 ||  107 
 04 || Employment & social affairs || 12 004 ||  276 ||  24 ||  518 ||  542 || 12 823 || 10 429 || 3 303 ||  38 ||  517 ||  555 || 14 286 
 05 || Agriculture & rural develop. || 58 852 ||  (33) ||  2 || 2 406 || 2 407 || 61 226 || 56 344 ||  512 ||  27 || 2 351 || 2 378 || 59 234 
 06 || Mobility & transport || 1 741 || 0 || 0 ||  102 ||  102 || 1 843 ||  984 ||  18 ||  6 ||  112 ||  118 || 1 120 
 07 || Environment & Climate ||  498 ||  (1) || 0 ||  21 ||  21 ||  518 ||  391 ||  9 ||  18 ||  19 ||  37 ||  438 
 08 || Research || 6 878 ||  (4) || 0 || 1 256 || 1 256 || 8 130 || 4 808 ||  174 ||  26 || 1 548 || 1 573 || 6 556 
 09 || Comm. netw. content & technology || 1 805 ||  6 ||   ||  320 ||  321 || 2 131 || 1 389 ||  167 ||  14 ||  454 ||  468 || 2 024 
 10 || Direct research ||  424 || 0 || 0 ||  576 ||  576 || 1 000 ||  411 ||  8 ||  48 ||  491 ||  539 ||  959 
 11 || Maritime affairs & Fisheries || 1 024 ||  15 || 0 ||  4 ||  4 || 1 043 ||  794 ||  30 ||  3 ||  4 ||  7 ||  831 
 12 || Internal market ||  106 || 0 || 0 ||  16 ||  16 ||  123 ||  103 ||  2 ||  6 ||  17 ||  22 ||  127 
 13 || Regional policy || 43 389 ||  780 ||  3 ||  292 ||  295 || 44 464 || 37 434 || 6 222 ||  12 ||  292 ||  304 || 43 960 
 14 || Taxation & customs union ||  145 ||  1 || 0 ||  6 ||  6 ||  151 ||  112 ||  16 ||  7 ||  5 ||  12 ||  140 
 15 || Education & culture || 2 813 ||  15 || 0 ||  604 ||  604 || 3 433 || 2 373 ||  254 ||  13 ||  661 ||  674 || 3 301 
 16 || Communication ||  266 ||  1 || 0 ||  8 ||  8 ||  275 ||  253 ||  (2) ||  14 ||  8 ||  23 ||  273 
 17 || Health & consumer protection ||  634 ||  (14) || 0 ||  28 ||  28 ||  648 ||  593 ||  (5) ||  11 ||  23 ||  34 ||  622 
 18 || Home affairs || 1 296 ||  60 || 0 ||  88 ||  88 || 1 444 ||  799 ||  174 ||  5 ||  75 ||  80 || 1 053 
 19 || External relations || 5 001 ||  (125) || 0 ||  212 ||  212 || 5 088 || 3 089 ||  118 ||  13 ||  134 ||  147 || 3 354 
 20 || Trade ||  107 || 0 ||   ||  3 ||  4 ||  111 ||  102 ||  2 ||  4 ||  3 ||  7 ||  112 
 21 || Development & relations ACP || 1 572 ||  1 ||  2 ||  127 ||  129 || 1 701 || 1 207 ||  23 ||  11 ||  136 ||  147 || 1 377 
 22 || Enlargement || 1 062 ||  54 || 0 ||  35 ||  35 || 1 152 ||  832 ||  76 ||  8 ||  17 ||  25 ||  933 
 23 || Humanitarian aid ||  917 ||  411 || 0 ||  32 ||  32 || 1 360 ||  829 ||  410 ||  7 ||  32 ||  39 || 1 278 
 24 || Fight against fraud ||  79 || 0 || 0 ||   ||   ||  79 ||  73 || 0 ||  10 ||   ||  10 ||  83 
 25 || Policy coord. & legal advice ||  193 || 0 || 0 ||  11 ||  11 ||  205 ||  194 || 0 ||  16 ||  11 ||  27 ||  221 
 26 || Commission administration || 1 030 ||  (2) || 0 ||  156 ||  156 || 1 184 || 1 013 ||  14 ||  133 ||  158 ||  290 || 1 318 
 27 || Budget ||  67 ||  63 || 0 ||  7 ||  7 ||  138 ||  67 ||  63 ||  8 ||  7 ||  16 ||  146 
 28 || Audit ||  12 || 0 || 0 ||  1 ||  1 ||  13 ||  12 || 0 ||  1 ||  1 ||  1 ||  13 
 29 || Statistics ||  134 ||  (1) || 0 ||  11 ||  11 ||  144 ||  115 ||  7 ||  6 ||  19 ||  24 ||  147 
 30 || Pensions and related expenditure || 1 399 || 0 || 0 ||  1 ||  1 || 1 401 || 1 399 || 0 || 0 ||  1 ||  1 || 1 401 
 31 || Language Services ||  397 || 0 || 0 ||  86 ||  86 ||  482 ||  397 || 0 ||  24 ||  86 ||  109 ||  506 
 32 || Energy ||  738 ||  1 || 0 ||  80 ||  80 ||  818 ||  814 ||  (70) ||  6 ||  88 ||  93 ||  838 
 33 || Justice ||  218 ||  1 || 0 ||  16 ||  16 ||  235 ||  184 ||  4 ||  4 ||  15 ||  19 ||  208 
 40 || Reserves ||  764 ||  (236) || 0 || 0 || 0 ||  528 ||  80 ||  (80) || 0 || 0 || 0 || 0 
 90 || Other Institutions || 3 527 || 0 || 0 ||  496 ||  496 || 4 023 || 3 527 || 0 ||  468 ||  502 ||  970 || 4 497 
   || Total || 150 898 || 1 193 ||  31 || 7 687 || 7 719 || 159 810 || 132 837 || 11 614 ||  999 || 8 011 || 9 010 || 153 461 
3.7          
IMPLEMENTATION OF COMMITMENT APPROPRIATIONS BY
POLICY AREA
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   EUR millions 
   || Policy Area || Commitment || Commitments made || Appropriations carried over || Appropriations lapsing 
   ||   ||  appropriations authorised || From the year’s approps || From carry overs || Assigned revenue || Total || % || Assigned revenue || Carry overs: decision || Total || % || From year’s budget approps || From carry overs || Assigned revenue || Total || % 
   ||   || 1 || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9=7+8 || 10=9/1 || 11 || 12 || 13 || 14=11+ 12+13 || 15=14/1 
 01 || Economic & financial affairs ||  527 ||  488 || 0 ||  29 ||  517 || 98.09% ||  2 || 0 ||  2 || 0.44% ||  8 || 0 || 0 ||  8 || 1.47% 
 02 || Enterprise || 1 269 || 1 135 || 0 ||  105 || 1 241 || 97.77% ||  26 || 0 ||  26 || 2.03% ||  2 || 0 || 0 ||  2 || 0.19% 
 03 || Competition ||  99 ||  91 || 0 ||  3 ||  94 || 94.88% ||  3 || 0 ||  3 || 2.62% ||  2 || 0 || 0 ||  2 || 2.50% 
 04 || Employment & social affairs || 12 823 || 12 097 ||  24 ||  10 || 12 131 || 94.61% ||  509 ||  168 ||  677 || 5.28% ||  14 || 0 || 0 ||  14 || 0.11% 
 05 || Agriculture & rural develop. || 61 226 || 58 797 ||  2 || 1 368 || 60 167 || 98.27% || 1 038 || 0 || 1 038 || 1.69% ||  21 || 0 || 0 ||  21 || 0.03% 
 06 || Mobility and transport || 1 843 || 1 734 || 0 ||  73 || 1 807 || 98.03% ||  30 || 0 ||  30 || 1.61% ||  7 || 0 || 0 ||  7 || 0.36% 
 07 || Environment & Climate ||  518 ||  495 || 0 ||  11 ||  506 || 97.67% ||  10 || 0 ||  10 || 1.88% ||  2 || 0 || 0 ||  2 || 0.45% 
 08 || Research || 8 130 || 6 874 || 0 || 1 041 || 7 915 || 97.35% ||  215 || 0 ||  215 || 2.64% || 0 || 0 || 0 || 0 || 0.01% 
 09 || Communication network, content and technology || 2 131 || 1 810 || 0 ||  276 || 2 085 || 97.84% ||  45 || 0 ||  45 || 2.10% ||  1 || 0 || 0 ||  1 || 0.06% 
 10 || Direct research || 1 000 ||  424 || 0 ||  94 ||  518 || 51.79% ||  482 || 0 ||  482 || 48.21% || 0 || 0 || 0 || 0 || 0.00% 
 11 || Maritime affairs & Fisheries || 1 043 ||  995 || 0 ||  1 ||  997 || 95.55% ||  2 || 0 ||  2 || 0.20% ||  44 || 0 || 0 ||  44 || 4.25% 
 12 || Internal market ||  123 ||  104 || 0 ||  13 ||  117 || 95.22% ||  4 || 0 ||  4 || 3.10% ||  2 || 0 || 0 ||  2 || 1.69% 
 13 || Regional policy || 44 464 || 44 162 ||  3 ||  5 || 44 170 || 99.34% ||  287 || 0 ||  287 || 0.65% ||  7 || 0 || 0 ||  7 || 0.02% 
 14 || Taxation & customs union ||  151 ||  144 || 0 ||  3 ||  147 || 97.21% ||  3 || 0 ||  3 || 1.81% ||  1 || 0 || 0 ||  1 || 0.97% 
 15 || Education & culture || 3 433 || 2 826 || 0 ||  477 || 3 303 || 96.20% ||  127 || 0 ||  127 || 3.71% ||  3 || 0 || 0 ||  3 || 0.09% 
 16 || Communication ||  275 ||  264 || 0 ||  5 ||  269 || 98.10% ||  3 || 0 ||  3 || 1.08% ||  2 || 0 || 0 ||  2 || 0.82% 
 17 || Health & consumer protect. ||  648 ||  614 || 0 ||  20 ||  635 || 97.88% ||  8 ||  1 ||  9 || 1.35% ||  5 || 0 || 0 ||  5 || 0.77% 
 18 || Home affairs || 1 444 || 1 352 || 0 ||  68 || 1 420 || 98.31% ||  20 ||  2 ||  22 || 1.50% ||  3 || 0 || 0 ||  3 || 0.19% 
 19 || External relations || 5 088 || 4 869 || 0 ||  153 || 5 023 || 98.71% ||  58 ||  5 ||  64 || 1.25% ||  2 || 0 || 0 ||  2 || 0.04% 
 20 || Trade ||  111 ||  105 || 0 ||  2 ||  108 || 96.66% ||  2 || 0 ||  2 || 1.40% ||  2 || 0 || 0 ||  2 || 1.94% 
 21 || Develop. & relations ACP || 1 701 || 1 564 ||  2 ||  99 || 1 664 || 97.82% ||  28 ||  1 ||  29 || 1.71% ||  8 || 0 || 0 ||  8 || 0.46% 
 22 || Enlargement || 1 152 || 1 115 || 0 ||  31 || 1 147 || 99.53% ||  4 || 0 ||  4 || 0.35% ||  1 || 0 || 0 ||  1 || 0.13% 
 23 || Humanitarian aid || 1 360 || 1 326 || 0 ||  12 || 1 339 || 98.42% ||  20 || 0 ||  20 || 1.46% ||  2 || 0 || 0 ||  2 || 0.11% 
 24 || Fight against fraud ||  79 ||  79 || 0 || 0 ||  79 || 99.81% || 0 || 0 || 0 || 0.04% || 0 || 0 || 0 || 0 || 0.15% 
 25 || Policy coord. and legal adv. ||  205 ||  188 || 0 ||  6 ||  194 || 94.96% ||  5 || 0 ||  5 || 2.45% ||  5 || 0 || 0 ||  5 || 2.59% 
 26 || Commission’s administr. || 1 184 || 1 028 || 0 ||  91 || 1 119 || 94.50% ||  64 || 0 ||  65 || 5.46% || 0 || 0 || 0 || 0 || 0.03% 
 27 || Budget ||  138 ||  129 || 0 ||  4 ||  134 || 96.82% ||  3 || 0 ||  3 || 2.23% ||  1 || 0 || 0 ||  1 || 0.95% 
 28 || Audit ||  13 ||  11 || 0 || 0 ||  12 || 93.31% || 0 || 0 ||  1 || 4.03% || 0 || 0 || 0 || 0 || 2.66% 
 29 || Statistics ||  144 ||  126 || 0 ||  8 ||  134 || 93.14% ||  3 || 0 ||  3 || 2.37% ||  6 || 0 || 0 ||  6 || 4.49% 
 30 || Pensions & related expend. || 1 401 || 1 397 || 0 || 0 || 1 397 || 99.74% ||  1 || 0 ||  1 || 0.10% ||  2 || 0 || 0 ||  2 || 0.16% 
 31 || Language Services ||  482 ||  387 || 0 ||  48 ||  435 || 90.08% ||  38 || 0 ||  38 || 7.84% ||  10 || 0 || 0 ||  10 || 2.08% 
 32 || Energy ||  818 ||  734 || 0 ||  48 ||  782 || 95.66% ||  31 || 0 ||  31 || 3.82% ||  4 || 0 || 0 ||  4 || 0.52% 
 33 || Justice ||  235 ||  216 || 0 ||  8 ||  225 || 95.71% ||  8 || 0 ||  8 || 3.23% ||  2 || 0 || 0 ||  2 || 1.06% 
 40 || Reserves ||  528 || 0 || 0 || 0 || 0 || 0.00% || 0 || 0 || 0 || 0.00% ||  528 || 0 || 0 ||  528 || 100.00% 
 90 || Other Institutions || 4 023 || 3 396 || 0 ||  434 || 3 830 || 95.21% ||  62 || 0 ||  62 || 1.53% ||  131 || 0 || 0 ||  131 || 3.26% 
   || Total || 159 810 || 151 080 ||  31 || 4 548 || 155 659 || 97.40% || 3 140 ||  178 || 3 318 || 2.08% ||  833 || 0 || 0 ||  833 || 0.52% 
            
3.8          
IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY POLICY
AREA
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Policy Area || Payment Appropr. || Payments made || Appropriations carried over || Appropriations lapsing 
   ||   || authorised || From the year's appr. || From carry overs || Assigned revenue || Total || % || Automatic carry overs || Carry overs by decision || Assigned revenue || Total || % || From the year's appr. || From carry-overs || Assigned revenue || Total || % 
   ||   || 1 || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9 || 10=7+8+9 || 11=10/1 || 12 || 13 || 14 || 15= 12+13 +14 || 16=15/1 
 01 || Economic & financial affairs ||  411 ||  366 ||  6 ||  26 ||  397 || 96.68% ||  8 || 0 ||  3 ||  11 || 2.60% ||  2 ||  1 || 0 ||  3 || 0.72% 
 02 || Enterprise || 1 587 || 1 359 ||  17 ||  80 || 1 456 || 91.76% ||  14 || 0 ||  111 ||  126 || 7.91% ||  3 ||  2 || 0 ||  5 || 0.33% 
 03 || Competition ||  107 ||  84 ||  7 ||  2 ||  93 || 87.19% ||  7 || 0 ||  3 ||  10 || 9.61% ||  2 ||  1 || 0 ||  3 || 3.20% 
 04 || Employm. and social affairs || 14 286 || 13 672 ||  36 ||  399 || 14 107 || 98.74% ||  14 ||  36 ||  117 ||  168 || 1.18% ||  9 ||  2 || 0 ||  11 || 0.08% 
 05 || Agriculture & rural develop. || 59 234 || 56 815 ||  23 || 1 501 || 58 339 || 98.49% ||  21 || 0 ||  850 ||  871 || 1.47% ||  20 ||  4 || 0 ||  24 || 0.04% 
 06 || Mobility and transport || 1 120 ||  990 ||  5 ||  64 || 1 059 || 94.58% ||  6 || 0 ||  48 ||  54 || 4.86% ||  5 ||  1 || 0 ||  6 || 0.56% 
 07 || Environment & Climate ||  438 ||  377 ||  17 ||  12 ||  406 || 92.71% ||  21 || 0 ||  7 ||  28 || 6.41% ||  3 ||  1 || 0 ||  4 || 0.89% 
 08 || Research || 6 556 || 4 958 ||  23 ||  790 || 5 771 || 88.02% ||  24 || 0 ||  758 ||  782 || 11.92% || 0 ||  3 || 0 ||  3 || 0.05% 
 09 || Communication network, content & technology || 2 024 || 1 539 ||  13 ||  273 || 1 826 || 90.21% ||  15 || 0 ||  181 ||  196 || 9.69% ||  1 ||  1 || 0 ||  2 || 0.10% 
 10 || Direct research ||  959 ||  366 ||  41 ||  89 ||  496 || 51.68% ||  54 || 0 ||  402 ||  456 || 47.57% || 0 ||  7 || 0 ||  7 || 0.75% 
 11 || Maritime affairs & Fisheries ||  831 ||  816 ||  3 ||  1 ||  820 || 98.71% ||  3 ||  1 ||  2 ||  7 || 0.87% ||  3 ||  1 || 0 ||  4 || 0.42% 
 12 || Internal market ||  127 ||  97 ||  5 ||  13 ||  116 || 90.79% ||  6 || 0 ||  3 ||  9 || 7.08% ||  2 ||  1 || 0 ||  3 || 2.13% 
 13 || Regional policy || 43 960 || 43 262 ||  10 ||  222 || 43 494 || 98.94% ||  12 ||  380 ||  70 ||  461 || 1.05% ||  2 ||  2 || 0 ||  4 || 0.01% 
 14 || Taxation & customs union ||  140 ||  120 ||  7 ||  3 ||  129 || 92.07% ||  7 || 0 ||  3 ||  9 || 6.71% ||  1 || 0 || 0 ||  2 || 1.22% 
 15 || Education & culture || 3 301 || 2 614 ||  12 ||  426 || 3 052 || 92.45% ||  11 || 0 ||  235 ||  247 || 7.47% ||  2 ||  1 || 0 ||  3 || 0.08% 
 16 || Communication ||  273 ||  234 ||  14 ||  5 ||  252 || 92.32% ||  14 || 0 ||  4 ||  17 || 6.34% ||  3 ||  1 || 0 ||  4 || 1.34% 
 17 || Health & consumer protect. ||  622 ||  574 ||  10 ||  15 ||  599 || 96.32% ||  12 || 0 ||  8 ||  19 || 3.09% ||  3 ||  1 || 0 ||  4 || 0.59% 
 18 || Home affairs || 1 053 ||  966 ||  5 ||  64 || 1 035 || 98.33% ||  4 || 0 ||  11 ||  15 || 1.41% ||  2 ||  1 || 0 ||  3 || 0.26% 
 19 || External relations || 3 354 || 3 189 ||  11 ||  94 || 3 295 || 98.23% ||  17 || 0 ||  39 ||  56 || 1.68% ||  1 ||  2 || 0 ||  3 || 0.09% 
 20 || Trade ||  112 ||  99 ||  4 ||  2 ||  104 || 93.10% ||  3 || 0 ||  2 ||  5 || 4.67% ||  2 || 0 || 0 ||  2 || 2.23% 
 21 || Develop. & relations ACP || 1 377 || 1 212 ||  9 ||  124 || 1 345 || 97.67% ||  11 || 0 ||  12 ||  24 || 1.71% ||  7 ||  2 || 0 ||  8 || 0.61% 
 22 || Enlargement ||  933 ||  901 ||  6 ||  12 ||  920 || 98.56% ||  5 || 0 ||  5 ||  10 || 1.07% ||  2 ||  2 || 0 ||  3 || 0.37% 
 23 || Humanitarian aid || 1 278 || 1 230 ||  7 ||  12 || 1 249 || 97.74% ||  8 || 0 ||  20 ||  28 || 2.17% ||  1 || 0 || 0 ||  1 || 0.09% 
 24 || Fight against fraud ||  83 ||  65 ||  8 || 0 ||  73 || 87.45% ||  9 || 0 || 0 ||  9 || 10.39% || 0 ||  2 || 0 ||  2 || 2.16% 
 25 || Policy coord.& legal advice ||  221 ||  175 ||  13 ||  5 ||  193 || 87.38% ||  14 || 0 ||  6 ||  20 || 9.04% ||  5 ||  3 || 0 ||  8 || 3.57% 
 26 || Commission administration || 1 318 ||  894 ||  125 ||  64 || 1 082 || 82.08% ||  134 || 0 ||  94 ||  227 || 17.26% ||  1 ||  8 || 0 ||  9 || 0.67% 
 27 || Budget ||  146 ||  124 ||  8 ||  3 ||  135 || 91.97% ||  6 || 0 ||  4 ||  10 || 6.75% ||  1 ||  1 || 0 ||  2 || 1.29% 
 28 || Audit ||  13 ||  11 || 0 || 0 ||  12 || 89.13% || 0 || 0 || 0 ||  1 || 8.05% || 0 || 0 || 0 || 0 || 2.82% 
 29 || Statistics ||  147 ||  115 ||  5 ||  7 ||  126 || 85.55% ||  6 || 0 ||  12 ||  18 || 12.02% ||  2 ||  1 || 0 ||  4 || 2.43% 
 30 || Pensions & related expend. || 1 401 || 1 397 || 0 || 0 || 1 397 || 99.74% || 0 || 0 ||  1 ||  1 || 0.10% ||  2 || 0 || 0 ||  2 || 0.16% 
 31 || Language Services ||  506 ||  371 ||  22 ||  44 ||  436 || 86.22% ||  16 || 0 ||  42 ||  58 || 11.42% ||  10 ||  2 || 0 ||  12 || 2.36% 
 32 || Energy ||  838 ||  734 ||  5 ||  20 ||  758 || 90.53% ||  5 || 0 ||  68 ||  73 || 8.76% ||  5 ||  1 || 0 ||  6 || 0.71% 
 33 || Justice ||  208 ||  183 ||  3 ||  9 ||  195 || 93.62% ||  4 || 0 ||  6 ||  10 || 4.62% ||  2 ||  1 || 0 ||  4 || 1.75% 
 40 || Reserves || 0 || 0 || 0 || 0 || 0 || 0.00% || 0 || 0 || 0 || 0 || 0.00% || 0 || 0 || 0 || 0 || 0.00% 
 90 || Other Institutions || 4 497 || 2 975 ||  425 ||  303 || 3 703 || 82.35% ||  421 || 0 ||  199 ||  620 || 13.79% ||  131 ||  43 || 0 ||  174 || 3.86% 
   || Total || 153 461 || 142 883 ||  902 || 4 684 || 148 469 || 96.75% ||  911 ||  419 || 3 327 || 4 657 || 3.03% ||  238 ||  97 || 0 ||  335 || 0.22% 
3.9          
MOVEMENTS IN COMMITMENTS OUTSTANDING BY POLICY
AREA
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   ||   || Commitments outstanding at end of the previous year || Commitments of the year ||   
   || Policy Area || Commitments carried forward from previous year || Decommitments /Revaluations/ Cancellations || Payments || Commitments outstanding at year-end || Commitments made during the year || Payments || Cancellation  commitments which cannot be carried over || Commitments outstanding at year-end || Total commitments outstanding at year-end 
 01 || Economic & financial affairs ||  623 ||  (3) ||  (142) ||  478 ||  517 ||  (256) || 0 ||  261 ||  739 
 02 || Enterprise || 2 090 ||  (20) ||  (963) || 1 107 || 1 241 ||  (493) || 0 ||  748 || 1 855 
 03 || Competition ||  8 ||  (1) ||  (7) || 0 ||  94 ||  (86) || 0 ||  8 ||  8 
 04 || Employment & social affairs || 29 668 ||  (133) || (13 541) || 15 994 || 12 131 ||  (566) || 0 || 11 565 || 27 559 
 05 || Agriculture & rural develop. || 23 847 ||  (320) || (12 377) || 11 150 || 60 167 || (45 962) || 0 || 14 205 || 25 354 
 06 || Mobility and transport || 3 317 ||  (64) ||  (885) || 2 368 || 1 807 ||  (174) || 0 || 1 633 || 4 001 
 07 || Environment & Climate || 1 002 ||  (12) ||  (268) ||  723 ||  506 ||  (138) || 0 ||  368 || 1 090 
 08 || Research || 10 781 ||  (92) || (3 109) || 7 579 || 7 915 || (2 661) ||  (2) || 5 252 || 12 831 
 09 || Communication network, content and technology || 2 594 ||  (31) ||  (952) || 1 611 || 2 085 ||  (874) || 0 || 1 211 || 2 822 
 10 || Direct research ||  199 ||  (20) ||  (121) ||  59 ||  518 ||  (375) || 0 ||  143 ||  202 
 11 || Maritime affairs & Fisheries || 2 290 ||  (107) ||  (633) || 1 551 ||  997 ||  (188) || 0 ||  809 || 2 360 
 12 || Internal market ||  21 ||  (2) ||  (16) ||  4 ||  117 ||  (100) || 0 ||  17 ||  21 
 13 || Regional policy || 112 307 ||  (811) || (42 832) || 68 664 || 44 170 ||  (662) || 0 || 43 508 || 112 172 
 14 || Taxation & customs union ||  93 ||  (5) ||  (59) ||  29 ||  147 ||  (70) || 0 ||  77 ||  106 
 15 || Education & culture || 2 194 ||  (57) ||  (938) || 1 199 || 3 303 || (2 114) || 0 || 1 188 || 2 387 
 16 || Communication ||  119 ||  (10) ||  (84) ||  25 ||  269 ||  (168) || 0 ||  101 ||  126 
 17 || Health & consumer protection ||  642 ||  (62) ||  (293) ||  288 ||  635 ||  (306) || 0 ||  328 ||  616 
 18 || Home affairs || 1 677 ||  (69) ||  (331) || 1 277 || 1 420 ||  (704) || 0 ||  715 || 1 992 
 19 || External relations || 11 342 ||  (352) || (2 421) || 8 569 || 5 023 ||  (874) || 0 || 4 149 || 12 718 
 20 || Trade ||  18 ||  (1) ||  (11) ||  6 ||  108 ||  (93) || 0 ||  15 ||  21 
 21 || Development & relations ACP || 3 453 ||  (103) ||  (905) || 2 444 || 1 664 ||  (439) || 0 || 1 225 || 3 669 
 22 || Enlargement || 3 039 ||  (58) ||  (763) || 2 218 || 1 147 ||  (157) ||  (1) ||  988 || 3 206 
 23 || Humanitarian aid ||  831 ||  (3) ||  (555) ||  273 || 1 339 ||  (694) || 0 ||  645 ||  918 
 24 || Fight against fraud ||  35 ||  (3) ||  (18) ||  14 ||  79 ||  (55) || 0 ||  25 ||  38 
 25 || Policy coord. & legal advice ||  17 ||  (3) ||  (14) || 0 ||  194 ||  (179) || 0 ||  15 ||  15 
 26 || Commission administration ||  174 ||  (10) ||  (153) ||  11 || 1 119 ||  (929) || 0 ||  190 ||  201 
 27 || Budget ||  8 ||  (1) ||  (8) || 0 ||  134 ||  (127) || 0 ||  7 ||  7 
 28 || Audit ||  1 || 0 || 0 || 0 ||  12 ||  (11) || 0 ||  1 ||  1 
 29 || Statistics ||  114 ||  (9) ||  (48) ||  57 ||  134 ||  (78) || 0 ||  55 ||  113 
 30 || Pensions & related expenditure || 0 || 0 || 0 || 0 || 1 397 || (1 397) || 0 || 0 || 0 
 31 || Language Services ||  24 ||  (2) ||  (22) || 0 ||  435 ||  (415) || 0 ||  20 ||  20 
 32 || Energy || 4 517 ||  (40) ||  (639) || 3 838 ||  782 ||  (119) || 0 ||  664 || 4 502 
 33 || Justice ||  179 ||  (25) ||  (79) ||  75 ||  225 ||  (116) || 0 ||  109 ||  184 
 90 || Other Institutions ||  588 ||  (163) ||  (425) || 0 || 3 830 || (3 278) ||  5 ||  557 ||  557 
   || Total || 217 810 || (2 590) || (83 611) || 131 609 || 155 659 || (64 858) ||  (1) || 90 801 || 222 410 
            
3.10     
BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF
ORIGIN BY POLICY AREA
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Policy Area || <2007 || 2007 || 2008 || 2009 || 2010 || 2011 || 2012 || 2013 || Total 
 01 || Economic & financial affairs ||  32 ||  10 || 0 || 0 ||  73 ||  184 ||  180 ||  261 ||  739 
 02 || Enterprise ||  4 ||  14 ||  23 ||  55 ||  135 ||  364 ||  513 ||  748 || 1 855 
 03 || Competition || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  8 ||  8 
 04 || Employment and social affairs ||  673 ||  57 ||  7 ||  246 ||  924 || 4 862 || 9 225 || 11 565 || 27 559 
 05 || Agriculture & rural develop. ||  196 ||   ||   ||  2 ||  144 || 2 079 || 8 729 || 14 205 || 25 354 
 06 || Mobility and transport ||  21 ||  103 ||  48 ||  211 ||  375 ||  707 ||  903 || 1 633 || 4 001 
 07 || Environment & Climate ||  8 ||  45 ||  65 ||  105 ||  133 ||  170 ||  197 ||  368 || 1 090 
 08 || Research ||  102 ||  85 ||  209 ||  397 || 1 003 || 2 069 || 3 714 || 5 252 || 12 831 
 09 || Communication network, content and technology ||  7 ||  15 ||  30 ||  115 ||  188 ||  394 ||  863 || 1 211 || 2 822 
 10 || Direct research ||  3 ||  1 ||  9 ||  5 ||  5 ||  8 ||  27 ||  143 ||  202 
 11 || Maritime affairs and Fisheries ||  275 ||  1 ||  3 ||  10 ||  44 ||  490 ||  728 ||  809 || 2 360 
 12 || Internal market || 0 || 0 || 0 || 0 ||  1 ||   ||  3 ||  17 ||  21 
 13 || Regional policy || 3 583 ||  9 ||  421 || 1 560 || 7 925 || 19 331 || 35 836 || 43 508 || 112 172 
 14 || Taxation & customs union || 0 || 0 || 0 || 0 ||   ||  7 ||  22 ||  77 ||  106 
 15 || Education & culture ||  1 ||  33 ||  54 ||  81 ||  138 ||  332 ||  560 || 1 188 || 2 387 
 16 || Communication || 0 || 0 ||   || 0 ||  1 ||  3 ||  19 ||  101 ||  126 
 17 || Health & consumer protection ||  4 ||  1 ||  30 ||  29 ||  52 ||  65 ||  108 ||  328 ||  616 
 18 || Home affairs || 0 ||  14 ||  41 ||  128 ||  183 ||  340 ||  570 ||  715 || 1 992 
 19 || External relations ||  335 ||  318 ||  573 ||  822 || 1 257 || 1 971 || 3 293 || 4 149 || 12 718 
 20 || Trade || 0 || 0 ||   || 0 ||   ||  2 ||  4 ||  15 ||  21 
 21 || Development & relations ACP ||  92 ||  41 ||  118 ||  227 ||  352 ||  609 || 1 005 || 1 225 || 3 669 
 22 || Enlargement ||  137 ||  45 ||  125 ||  172 ||  369 ||  600 ||  770 ||  988 || 3 206 
 23 || Humanitarian aid ||  1 ||  1 ||  9 ||  14 ||  28 ||  37 ||  182 ||  645 ||  918 
 24 || Fight against fraud || 0 ||  1 ||  1 ||  1 ||  2 ||  3 ||  6 ||  25 ||  38 
 25 || Policy coord. & legal advice || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  15 ||  15 
 26 || Commission administration || 0 || 0 || 0 || 0 ||   ||   ||  11 ||  190 ||  201 
 27 || Budget || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  7 ||  7 
 28 || Audit || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  1 ||  1 
 29 || Statistics ||  2 ||   ||   ||  1 ||  6 ||  18 ||  31 ||  55 ||  113 
 30 || Pensions & related expenditure || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 31 || Language Services || 0 || 0 || 0 || 0 || 0 || 0 || 0 ||  20 ||  20 
 32 || Energy ||  61 ||  21 ||  62 || 1 095 || 1 576 ||  549 ||  475 ||  664 || 4 502 
 33 || Justice || 0 ||   ||  2 ||  5 ||  7 ||  18 ||  43 ||  109 ||  184 
 90 || Other Institutions || 0 || 0 || 0 || 0 || 0 || 0 ||  137 ||  420 ||  557 
   || Total || 5 537 ||  815 || 1 827 || 5 280 || 14 920 || 35 214 || 68 153 || 90 664 || 222 410 
            
Financial
Framework 2007-2013 
   ||   ||   ||   ||   ||   ||   || EUR millions 
   || 2007 || 2008 || 2009 || 2010 || 2011 || 2012 || 2013 || Total 
 1. Sustainable Growth || 53 979 || 57 653 || 61 696 || 63 555 || 63 974 || 67 614 || 70 644 || 439 115 
 2. Preservation & management of natural resources || 55 143 || 59 193 || 56 333 || 59 955 || 59 888 || 60 810 || 61 289 || 412 611 
 3. Citizenship, freedom, security & justice || 1 273 || 1 362 || 1 518 || 1 693 || 1 889 || 2 105 || 2 407 || 12 247 
 4. EU as a global player || 6 578 || 7 002 || 7 440 || 7 893 || 8 430 || 8 997 || 9 595 || 55 935 
 5. Administration || 7 039 || 7 380 || 7 525 || 7 882 || 8 091 || 8 523 || 8 492 || 54 932 
 6. Compensations ||  445 ||  207 ||  210 || 0 || 0 || 0 ||  75 ||  937 
 Commitment appropriations: || 124 457 || 132 797 || 134 722 || 140 978 || 142 272 || 148 049 || 152 502 || 975 777 
   ||   ||   ||   ||   ||   ||   ||   ||   
 Total payment appropriations: || 122 190 || 129 681 || 120 445 || 134 289 || 133 700 || 141 360 || 144 285 || 925 950 
This section describes the main
categories of EU expenditure, classified by heading of the financial framework
2007-2013. The 2013 financial year was the seventh and last covered by the financial
framework 2007-2013. The overall ceiling on commitments appropriations for 2013
comes to EUR 152 502 million, equivalent to 1.15 % of GNI. The
corresponding ceiling on the appropriations for payments comes to EUR 144 285
million, i.e. 1.08 % of GNI. The above table shows the financial framework at
current prices.
Heading 1 – Sustainable growth
This heading is divided into two
separate, but interlinked components:
1a.    Competitiveness for growth and employment, encompassing expenditure
on research and innovation, education and training, trans-European networks,
social policy, the internal market and accompanying policies.
1b.   Cohesion for growth and employment, designed to enhance convergence
of the least developed Member States and regions, to complement the EU strategy
for sustainable development outside the less prosperous regions and to support
inter regional cooperation..
Heading 2 – Preservation and management of
natural resources
Heading 2 includes the common
agricultural and fisheries policies, rural development and environmental
measures, in particular Natura 2000. The amount earmarked for the common
agricultural policy reflects the agreement reached at the European Council in
October 2002.
Heading 3 – Citizenship, freedom, security
and justice
Heading 3 (Citizenship, freedom,
security and justice) reflects the growing importance attached to certain
fields where the EU has been assigned particular tasks – justice and home
affairs, border protection, immigration and asylum policy, public health and
consumer protection, culture, youth, information and dialogue with citizens. It
is split in two components:
3a.    Freedom, Security and Justice
3b.   Citizenship
Heading 4 – The EU as a global player
Heading 4 covers all external
action, including pre-accession instruments. Whereas the Commission had
proposed to integrate the EDF into the financial framework, the European
Parliament and the European Council agreed to leave it outside.
Heading 5 - Administration
This heading covers administrative
expenditure for all institutions, pensions and the European Schools. For the
Institutions other than the Commission, these costs make up the total of their
expenditure, but the Agencies and other bodies make both administrative and
operational expenditure.
Heading 6 - Compensations
In accordance with the political
agreement that the new Member States should not become net-contributors to the
budget at the very beginning of their membership, compensation was foreseen
under this heading. This amount was available as transfers to them to balance
their budgetary receipts and contributions.
Policy areas
As part of its use of Activity
Based Management (ABM) the Commission implements Activity Based Budgeting (ABB)
in its planning and management processes. ABB involves a budget structure where
budget titles correspond to policy areas and budget chapters to activities. ABB
aims to provide a clear framework for translating the Commission's policy
objectives into action, either through legislative, financial or any other
public policy means. By structuring the Commission's work in terms of
activities, a clear picture is obtained of the Commission's undertakings and
simultaneously a common framework is established for priority setting.
Resources are allocated to priorities during the budget procedure, using the
activities as the building blocks for budgeting purposes. By establishing such
a link between activities and the resources allocated to them, ABB aims to
increase efficiency and effectiveness in the use of resources in the
Commission.
A policy area may be defined as a
homogeneous grouping of activities constituting parts of the Commission's work,
which are relevant for the decision-making process. Each policy area
corresponds, in general, to a DG, and encompassing an average of about 6 or 7 individual
activities. Policy areas are mainly operational, since their core activities
aim at benefiting a third-party beneficiary within their respective domains of
activity. The operational budget is completed with the necessary administrative
expenditure for each policy area.
4.              
INSTITUTIONS AND AGENCIES
4.1          
SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE
BY INSTITUTION
   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
 Institution || Income appropriations || Entitlements established || Revenue || Receipts as || Outstanding 
   || Initial || Final || Current year || Carried || Total || On entitlements of current year || On entitlements Carried || Total || % of budget ||   
 European Parliament ||  143 ||  143 ||  157 ||  25 ||  182 ||  155 ||  4 ||  158 || 110.55% ||  24 
 European Council and Council ||  57 ||  57 ||  77 ||  11 ||  88 ||  70 ||  10 ||  81 || 142.17% ||  7 
 Commission || 132 514 || 144 128 || 148 268 || 11 573 || 159 841 || 146 110 || 2 756 || 148 866 || 103.29% || 10 975 
 Court of Justice ||  45 ||  45 ||  43 || 0 ||  43 ||  42 || 0 ||  42 || 94.44% ||  1 
 Court of Auditors ||  20 ||  20 ||  17 || 0 ||  17 ||  17 || 0 ||  17 || 85.85% || 0 
 Economic and Social Committee ||  11 ||  11 ||  14 || 0 ||  14 ||  14 || 0 ||  14 || 132.16% || 0 
 Committee of the Regions ||  8 ||  8 ||  10 || 0 ||  10 ||  9 || 0 ||  9 || 119.48% || 0 
 Ombudsman ||  1 ||  1 ||  1 || 0 ||  1 ||  1 || 0 ||  1 || 90.89% || 0 
 European Data Protection Supervisor ||  1 ||  1 ||  1 || 0 ||  1 ||  1 || 0 ||  1 || 70.20% || 0 
 European External Action Service ||  37 ||  37 ||  313 || 0 ||  313 ||  313 || 0 ||  313 || 840.31% || 0 
   || 132 837 || 144 451 || 148 901 || 11 609 || 160 510 || 146 733 || 2 771 || 149 504 || 103.50% || 11 006 
The consolidated reports on the
implementation of the general budget of the EU include, as in previous years,
the budget implementation of all Institutions since within the EU budget a
separate budget for each Institution is established. Agencies do not have a
separate budget inside the EU budget and they are partially financed by a
Commission budget subsidy. 
Concerning the EEAS, it should be noted that, in addition to its own
budget, it also receives contributions from the Commission of EUR 210 million
(2012: EUR 212 million) and the EDF of EUR 59 million (2012: EUR 53
million). These budget credits are put at the disposal of the EEAS (as assigned
revenue) so as to cover primarily the costs of Commission staff working in the
EU delegations, these delegations being administratively managed by the EEAS.
            
4.2          
IMPLEMENTATION OF COMMITMENT AND PAYMENT
APPROPRIATIONS BY INSTITUTION
Commitment appropriations
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Commitment appropriations authorised || Commitments made || Appropriations carried over || Appropriations lapsing 
 Institution ||   || From the year's appropr. || From carry overs || From assigned revenue || Total || % || From assigned revenue || Carry overs by decision || Total || % || From the year's budget appropr. || from carry overs || Assigned revenue || Total || % 
   || 1 || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9=7+8 || 10=9/1 || 11 || 12 || 13 || 14=11 +12+13 || 15=14/1 
 European Parliament || 1 883 || 1 736 || 0 ||  121 || 1 857 || 98.6% ||  12 || 0 ||  12 || 0.6% ||  15 || 0 || 0 ||  15 || 0.8% 
 European Council and Council ||  605 ||  464 || 0 ||  42 ||  507 || 83.8% ||  27 || 0 ||  27 || 4.4% ||  71 || 0 || 0 ||  71 || 11.8% 
 Commission || 155 788 || 147 684 ||  31 || 4 114 || 151 829 || 97.5% || 3 078 ||  178 || 3 256 || 2.1% ||  702 || 0 || 0 ||  702 || 0.5% 
 Court of Justice ||  357 ||  342 || 0 ||  1 ||  343 || 96.1% ||  1 || 0 ||  1 || 0.2% ||  13 || 0 || 0 ||  13 || 3.6% 
 Court of Auditors ||  143 ||  132 || 0 || 0 ||  132 || 92.2% || 0 || 0 || 0 || 0.2% ||  11 || 0 || 0 ||  11 || 7.6% 
 Economic & Social Committee ||  134 ||  122 || 0 ||  4 ||  126 || 93.9% ||  1 || 0 ||  1 || 0.4% ||  8 || 0 || 0 ||  8 || 5.7% 
 Committee of the Regions ||  90 ||  85 || 0 ||  2 ||  87 || 97.1% || 0 || 0 || 0 || 0.0% ||  3 || 0 || 0 ||  3 || 2.9% 
 Ombudsman ||  10 ||  10 || 0 || 0 ||  10 || 98.2% || 0 || 0 || 0 || 0.0% || 0 || 0 || 0 || 0 || 1.8% 
 European Data Protection Supervisor ||  8 ||  7 || 0 || 0 ||  7 || 95.1% || 0 || 0 || 0 || 0.0% || 0 || 0 || 0 || 0 || 4.9% 
 European External Action Service ||  793 ||  498 || 0 ||  263 ||  761 || 96.0% ||  21 || 0 ||  21 || 2.7% ||  10 || 0 || 0 ||  10 || 1.3% 
   || 159 810 || 151 080 ||  31 || 4 548 || 155 659 || 97.4% || 3 140 ||  178 || 3 318 || 2.1% ||  833 || 0 || 0 ||  833 || 0.5% 
Payment appropriations
   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   || EUR millions 
   || Payment appropriations authorised || Payments made || Appropriations carried over ||   || Appropriations lapsing 
 Institution ||   || From year's appropr. || From carry overs || From assigned revenue || Total || % || Automatic carry overs || Carry overs by decision || From assigned revenue || Total || % || From year's appropr. || From carry overs || Assigned revenue || Total || % 
   || 1 || 2 || 3 || 4 || 5=2+3+4 || 6=5/1 || 7 || 8 || 9 || 10=7+8+9 || 11=10/1 || 12 || 13 || 14 || 15=12 +13+ 14 || 16=15/1 
 European Parliament || 2 189 || 1 458 ||  286 ||  25 || 1 770 || 80.9% ||  278 || 0 ||  107 ||  385 || 17.6% ||  15 ||  19 || 0 ||  34 || 1.5% 
 European Council and Council ||  651 ||  416 ||  39 ||  41 ||  496 || 76.3% ||  48 || 0 ||  28 ||  76 || 11.7% ||  71 ||  7 || 0 ||  78 || 12.0% 
 Commission || 148 964 || 139 908 ||  477 || 4 381 || 144 766 || 97.2% ||  490 ||  419 || 3 128 || 4 037 || 2.7% ||  107 ||  54 || 0 ||  161 || 0.1% 
 Court of Justice ||  375 ||  326 ||  15 ||  1 ||  342 || 91.2% ||  16 || 0 ||  1 ||  17 || 4.5% ||  13 ||  3 || 0 ||  16 || 4.2% 
 Court of Auditors ||  156 ||  121 ||  11 || 0 ||  132 || 84.7% ||  11 || 0 || 0 ||  11 || 7.3% ||  11 ||  2 || 0 ||  12 || 8.0% 
 Economic & Social Committee ||  142 ||  114 ||  7 ||  3 ||  125 || 87.7% ||  8 || 0 ||  1 ||  9 || 6.2% ||  8 ||  1 || 0 ||  9 || 6.1% 
 Committee of the Regions ||  98 ||  78 ||  7 ||  2 ||  87 || 88.9% ||  7 || 0 || 0 ||  7 || 7.2% ||  3 ||  1 || 0 ||  4 || 3.8% 
 Ombudsman ||  10 ||  9 ||  1 || 0 ||  10 || 91.9% ||  1 || 0 || 0 ||  1 || 6.0% || 0 || 0 || 0 || 0 || 2.1% 
 European Data protection Supervisor ||  9 ||  6 || 0 || 0 ||  7 || 81.5% ||  1 || 0 || 0 ||  1 || 9.3% || 0 || 0 || 0 ||  1 || 9.3% 
 European External Action Service ||  868 ||  446 ||  59 ||  229 ||  735 || 84.7% ||  52 || 0 ||  61 ||  113 || 13.0% ||  10 ||  9 || 0 ||  20 || 2.3% 
   || 153 461 || 142 883 ||  902 || 4 684 || 148 469 || 96.7% ||  911 ||  419 || 3 327 || 4 657 || 3.0% ||  238 ||  97 || 0 ||  335 || 0.2% 
4.3          
AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS
AND AMOUNTS RECEIVED
   ||   ||   ||   || EUR millions 
 Agency || Forecasted Income budget || Entitlements established || Amounts received || Outstanding || Funding Commission Policy Area 
 European Agency for the Cooperation of Energy Regulators ||  12 ||  12 ||  12 || 0 || 06 
 European Asylum Support Office ||  11 ||  10 ||  10 || 0 || 18 
 European Aviation Safety Agency ||  151 ||  125 ||  125 || 0 || 06 
 Frontex ||  94 ||  92 ||  92 || 0 || 18 
 European Centre for the Development of Vocational Training ||  19 ||  18 ||  18 || 0 || 15 
 European Police College ||  8 ||  9 ||  9 || 0 || 18 
 European Chemicals Agency ||  99 ||  98 ||  98 || 0 || 02 
 European Centre for Disease prevention and control ||  58 ||  59 ||  59 || 0 || 17 
 European Monitoring Centre for Drugs and Drug Addiction ||  16 ||  16 ||  16 || 0 || 18 
 European Banking Authority ||  26 ||  26 ||  26 || 0 || 12 
 European Insurance and Occupational Pensions Authority ||  19 ||  18 ||  18 || 0 || 12 
 European Environment Agency ||  49 ||  63 ||  63 || 0 || 07 
 European Police office ||  83 ||  83 ||  83 || 0 || 18 
 European Securities and Markets Authority ||  28 ||  30 ||  30 || 0 || 12 
 Community Fisheries Control Agency ||  9 ||  9 ||  9 || 0 || 11 
 European Food Safety Authority ||  76 ||  76 ||  76 || 0 || 17 
 European Institute for Gender Equality ||  7 ||  8 ||  8 || 0 || 04 
 European GNSS supervisory authority ||  14 ||  54 ||  54 || 0 || 06 
 Fusion for Energy ||  432 ||  432 ||  432 || 0 || 08 
 Eurojust ||  32 ||  32 ||  32 || 0 || 18 
 EU. LISA ||  34 ||  19 ||  19 || 0 || 18 
 European Maritime Safety Agency ||  57 ||  58 ||  56 ||  2 || 06 
 Office For Harmonisation in the Internal Market ||  418 ||  189 ||  189 || 0 || 12 
 European Medicines Agency ||  252 ||  269 ||  240 ||  29 || 02 
 European Network and Information Security Agency ||  10 ||  10 ||  9 || 0 || 09 
 European Regulators for Electronic Communications office ||  4 ||  4 ||  4 || 0 || 09 
 European Union Agency for Fundamental Rights ||  22 ||  22 ||  22 || 0 || 18 
 European Railway Agency ||  26 ||  26 ||  26 || 0 || 06 
 European Agency for Safety and Health at Work ||  15 ||  16 ||  16 || 0 || 04 
 European Institute of Innovation and Technology ||  99 ||  97 ||  97 || 0 || 15 
 Translation Centre for the Bodies of the EU ||  52 ||  54 ||  50 ||  4 || 15 
 European Training Foundation ||  20 ||  22 ||  22 || 0 || 15 
 Community Plant Variety Office ||  14 ||  13 ||  13 || 0 || 17 
 European Foundation for the Improvement of Living and Working Conditions ||  21 ||  21 ||  21 || 0 || 04 
 Education, Audiovisual & Culture Executive Agency ||  51 ||  52 ||  52 || 0 || 15 
 Executive Agency for Competitiveness and Innovation ||  16 ||  16 ||  16 || 0 || 06 
 European Research Council Executive Agency ||  40 ||  40 ||  40 || 0 || 08 
 Research Executive Agency ||  47 ||  47 ||  47 || 0 || 08 
 Executive Agency for Health and Consumers ||  7 ||  7 ||  7 || 0 || 17 
 Trans-European Transport Network Executive Agency ||  10 ||  10 ||  10 || 0 || 06 
   || 2 457 || 2 260 || 2 224 ||  37 ||   
   ||   ||   ||   || EUR millions 
 Type of revenue || Forecasted income budget || Entitlements established || Amounts received || Outstanding 
 Commission Subsidy || 1 349 || 1 370 || 1 370 ||  1 
 Fee income ||  569 ||  591 ||  564 ||  27 
 Other income ||  539 ||  299 ||  290 ||  9 
   || 2 457 || 2 260 || 2 224 ||  37 
4.4          
Commitment & payment appropriations by Agency
   ||   ||   ||   ||   || EUR millions 
 Agency || Commitment appropriations || Payment appropriations 
   || Appropri-ations || Commit-ments made || Carried over || Appropri-ations || Payments made || Carried over 
 European Agency for the Cooperation of Energy Regulators ||  12 ||  12 || 0 ||  14 ||  8 ||  5 
 European Asylum Support Office ||  12 ||  10 || 0 ||  12 ||  11 ||  1 
 European Aviation Safety Agency ||  169 ||  135 ||  32 ||  180 ||  125 ||  52 
 Frontex ||  95 ||  92 || 0 ||  116 ||  79 ||  32 
 European Centre for the Development of Vocational Training ||  20 ||  20 || 0 ||  21 ||  19 ||  2 
 European Police College ||  9 ||  8 || 0 ||  10 ||  9 ||  1 
 European Chemicals Agency ||  108 ||  106 || 0 ||  123 ||  106 ||  14 
 European Centre for Disease prevention and control ||  59 ||  54 || 0 ||  70 ||  53 ||  11 
 European Monitoring Centre for Drugs and Drug Addiction ||  17 ||  16 || 0 ||  17 ||  16 ||  1 
 European Banking Authority ||  26 ||  23 || 0 ||  33 ||  25 ||  4 
 European Insurance and Occupational Pensions Authority ||  19 ||  18 || 0 ||  22 ||  16 ||  5 
 European Environment Agency ||  72 ||  54 ||  17 ||  76 ||  47 ||  27 
 European Police office ||  84 ||  82 || 0 ||  100 ||  87 ||  10 
 European Securities and Markets Authority ||  28 ||  26 || 0 ||  32 ||  24 ||  6 
 Community Fisheries Control Agency ||  9 ||  9 || 0 ||  11 ||  9 ||  1 
 European Food Safety Authority ||  79 ||  78 || 0 ||  85 ||  77 ||  7 
 European Institute for Gender Equality ||  8 ||  7 || 0 ||  10 ||  8 ||  2 
 European GNSS supervisory authority ||  94 ||  81 ||  13 ||  75 ||  26 ||  49 
 Fusion for Energy || 1 297 || 1 297 || 0 ||  439 ||  393 ||  23 
 Eurojust ||  34 ||  33 || 0 ||  37 ||  32 ||  5 
 EU.LISA ||  61 ||  61 || 0 ||  38 ||  19 ||  7 
 European Maritime Safety Agency ||  62 ||  59 ||  2 ||  59 ||  53 ||  3 
 Office for Harmonisation in the Internal Market ||  418 ||  209 || 0 ||  37 ||  201 ||  38 
 European Medicines Agency ||  252 ||  243 || 0 ||  292 ||  249 ||  33 
 European Network & Information Security Agency ||  10 ||  9 ||  1 ||  10 ||  9 ||  1 
 European Regulators for Electronic Communications office ||  4 ||  3 || 0 ||  4 ||  3 || 0 
 European Union Agency for Fundamental Rights ||  22 ||  22 || 0 ||  26 ||  20 ||  7 
 European Railway Agency ||  26 ||  25 || 0 ||  28 ||  25 ||  2 
 European Agency for Safety & Health at Work ||  17 ||  15 ||  2 ||  21 ||  14 ||  6 
 European Institute of Innovation and Technology ||  142 ||  138 ||  1 ||  106 ||  102 ||  2 
 Translation Centre for the Bodies of the EU ||  52 ||  44 || 0 ||  56 ||  44 ||  3 
 European Training Foundation ||  22 ||  22 || 0 ||  23 ||  21 ||  2 
 Community Plant Variety Office ||  16 ||  14 || 0 ||  15 ||  13 || 0 
 European Foundation for the Improvement of Living and Working Conditions ||  21 ||  21 || 0 ||  25 ||  20 ||  5 
 Education, Audiovisual & Culture Executive Agency ||  51 ||  50 || 0 ||  58 ||  50 ||  5 
 Executive Agency for Competitiveness and Innovation ||  16 ||  16 || 0 ||  18 ||  15 ||  1 
 European Research Council Exec. Agency ||  40 ||  39 || 0 ||  42 ||  39 ||  2 
 Research Executive Agency ||  47 ||  46 || 0 ||  50 ||  46 ||  3 
 Executive Agency for Health & Consumers ||  7 ||  7 || 0 ||  8 ||  7 ||  1 
 Trans-European Transport Network Executive Agency ||  10 ||  10 || 0 ||  11 ||  10 ||  1 
   || 3 546 || 3 215 ||  70 || 2 410 || 2 130 ||  381 
   ||   ||   ||   ||   || EUR millions 
 Type of expenditure || Commitment appropriations || Payment appropriations 
   || Appropri-ations || Commit-ments made || Carried over || Appropri-ations || Payments made || Carried over 
 Staff ||  875 ||  844 ||  1 ||  796 ||  838 ||  16 
 Administrative expenses ||  350 ||  343 ||  1 ||  351 ||  335 ||  83 
 Operational expenses || 2 322 || 2 028 ||  68 || 1 262 ||  957 ||  282 
   || 3 546 || 3 215 ||  70 || 2 410 || 2 130 ||  381 
            
4.5          
BUDGET RESULT
INCLUDING AGENCIES
   ||   ||   ||   || EUR millions 
   || EU || AGENCIES || Elimination of subsidies to agencies || TOTAL 
 Revenue for the financial year || 149 504 || 2 224 || (1 370) || 150 358 
 Payments against current year appropriations || (147 567) || (1 909) || 1 370 || (148 106) 
 Payment appropriations carried over to year N+1 || (1 329) ||  (381) || 0 || (1 710) 
 Cancellation of unused appropriations carried over from year N-1 ||  437 ||  107 || 0 ||  543 
 Exchange differences for the year ||  (42) || 0 || 0 ||  (42) 
   || 1 002 ||  41 || 0 || 1 043 
In order to provide all relevant
budgetary data for the Agencies, the budgetary part of the consolidated annual
accounts include separate reports on the implementation of the individual
budgets of the traditional agencies consolidated.