Consolidated annual accounts of the European Union 2013.
Date: 2014-09-09
Institutions: Directorate-General for Budget
Subjects: Community budget, consolidated account, financial year, implementation of the budget, public accounting, public finance

ISSN 1830-5830 

Financial

year 2013

annual 
accounts
of the 
European 
Union

Consolidated

Consolidated annual 
accounts of the 
European Union 2013

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

Brussels, 30.7.2014
COM(2014) 510 final

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Final annual accounts of the European Union – Financial Year 2013

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ISBN 978-92-79-38675-6
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CONTENTS

NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS �����������������������������������������������������������������������������5

PAGE

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 ....................................................................................................21

AGGREGATED REPORTS ON THE IMPLEMENTATION OF THE BUDGET AND 
EXPLANATORY NOTES ����������������������������������������������������������������������������������������������������������������������������������������������95

 
5

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 neces-
sary 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 Euro-
pean 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

 
7

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 sup-
porting 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 en-
hance 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 identifica-
tion 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 accor-
dance 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 ex-
penditure 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).

 
 
8

2�2 

Sundry revenues

Sundry revenues arising from the activities of the EU normally represent less than 10 % of total revenue. These are, for in-
stance, 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� 
3�1 

 HOW THE EU BUDGET IS MANAGED AND SPENT
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 bud-
getary 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 man-
agement, 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 

Consolidated annual accounts of the European Union 2013EU bu dget: f rom pre paration to  di sch arg e

9

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 con-
sumed 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 expen-
ditures 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. 

10

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, recover-
ies 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 legisla-
tion 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 vari-
ous 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 re-
sources 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 pay-
ments (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 pres-
ent 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. 

Consolidated annual accounts of the European Union 2013EU bu dget: f rom pre paration to  di sch arg e

11

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� 
7�1 

AUDIT AND DISCHARGE
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 dis-
charge 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 an-
nual 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 responsi-
bility 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 Euro-
pean 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

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

PAGE

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 ....................................................................................................21

1.  SIGNIFICANT ACCOUNTING POLICIES ...................................................................................22

2.  NOTES TO THE BALANCE SHEET ............................................................................................ 33

3. 

 NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE ....................................54

4.  NOTES TO THE CASHFLOW STATEMENT .............................................................................64

5. 

 CONTINGENT ASSETS & LIABILITIES AND OTHER  
SIGNIFICANT DISCLOSURES ......................................................................................................65

6.  PROTECTION OF THE EU BUDGET .......................................................................................... 69

7. 

FINANCIAL SUPPORT MECHANISMS ..................................................................................... 76

8.  FINANCIAL RISK MANAGEMENT .............................................................................................. 81

9.  RELATED PARTY DISCLOSURES ...............................................................................................88

10.  EVENTS AFTER THE BALANCE SHEET DATE ......................................................................90

11.  SCOPE OF CONSOLIDATION ....................................................................................................... 91

 
16

BALANCE SHEET

NON-CURRENT ASSETS
Intangible assets

Property, plant and equipment

Investments accounted for using the equity method

Financial assets

Receivables and recoverables

Pre-financing

CURRENT ASSETS
Inventories

Financial assets

Receivables and recoverables

Pre-financing

Cash and cash equivalents 

TOTAL ASSETS

NON-CURRENT LIABILITIES
Pension and other employee benefits

Provisions

Financial liabilities

Other liabilities

CURRENT LIABILITIES
Provisions

Financial liabilities

Payables

TOTAL LIABILITIES

NET ASSETS

Reserves

Amounts to be called from Member States*

NET ASSETS

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

2.12

2.13

2.14

2.15

2.16

2.17

2.18

2.19

2.20

Note

31�12�2013

 EUR millions

31�12�2012

 188

5 978

 392

62 311

 564

44 505

 237

6 104

 349

59 844

 498

38 072

105 104

113 938

 128

5 571

13 182

21 367

9 510

49 758

 138

1 981

14 039

13 238

10 674

40 070

154 862

154 008

(46 818)

(1 323)

(54 153)

(2 216)

(104 510)

 (545)

(3 065)

(92 594)

(96 204)

(200 714)

(42 503)

(1 258)

(57 232)

(2 527)

(103 520)

 (806)

 (15)

(90 083)

(90 904)

(194 424)

(45 852)

(40 416)

4 073

(49 925)

4 061

(44 477)

(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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

17

STATEMENT OF FINANCIAL PERFORMANCE

OPERATING REVENUE
Own resource and contributions revenue

Other operating revenue

OPERATING EXPENSES
Administrative expenses

Operating expenses

SURPLUS FROM OPERATING ACTIVITIES
Financial revenue

Financial expenses

Movement in pension and other employee benefits liability

Share of net deficit of joint ventures and associates

ECONOMIC RESULT OF THE YEAR

Note

3.1

3.2

3.3

3.4

3.5

3.6

3.7

2013

141 241

8 414

149 655

(9 269)

(138 571)

(147 840)

1 815
2 038

(2 045)

(5 565)

 (608)

(4 365)

EUR millions

2012

130 919

6 826

137 745

(9 320)

(124 633)

(133 953)

3 792
2 157

(1 942)

(8 846)

 (490)

(5 329)

18

CASHFLOW STATEMENT

Economic result of the year

Operating activities
Amortisation

Depreciation

(Increase)/decrease in loans

(Increase)/decrease in receivables and recoverables

(Increase)/decrease in pre-financing

(Increase)/decrease in inventories

Increase/(decrease) in provisions

Increase/(decrease) in financial liabilities

Increase/(decrease) in other liabilities

Increase/(decrease) in payables

Prior year budgetary surplus taken as non-cash revenue

Other non-cash movements

Increase/(decrease) in pension and employee benefits liability

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

4.3

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

(Increase)/decrease in available for sale financial assets

NET CASHFLOW

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at year-end

2.11

2.11

EUR millions

2012

(5 329)

2013

(4 365)

Note

4.2

 48

 401

 20

 923

(1 695)

 10

 (196)

 (29)

 (311)

2 511

(1 023)

 (50)

4 315

 (624)

 43

(1 142)

 39

 405

(16 062)

(4 837)

(2 013)

 (44)

 299

16 017

 468

(1 390)

(1 497)

 260

7 668

(1 390)

 (18)

 (837)

(1 164)

(8 261)

(1 164)

10 674

9 510

(8 261)

18 935

10 674

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

19

STATEMENT OF CHANGES IN NET ASSETS

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Consol id ated  fi nanci al state ments  and   expl anatory  note s

21

NOTES TO THE FINANCIAL 
STATEMENTS

22

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 Regu-
lation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1) hereinafter referred to as the ‘Financial Regulation’ and Com-
mission 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, consis-
tency 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 associ-
ates. 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 consolida-
tion 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 legisla-
tion, 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

23

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 sig-
nificant 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 associ-
ates’ 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, impair-
ments, 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 circum-
stances. 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 there-
fore 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.

24

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

BGN

CZK

DKK

GBP

HRK

HUF

LVL

1�9558

27�4270

7�4593

0�8337

7�6265

297�0400

0�7028

31�12�2012
1.9558

25.1510

7.4610

 0.8161

7.5575

292.3000

0.6977

Currency

31�12�2013

LTL

PLN

RON

SEK

CHF

JPY

USD

3�4528

4�1543

4�4710

8�8591

1�2276

144�7200

1�3791

31�12�2012
3.4528

4.0740

4.4445

8.5820

1.2072

113.6100

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 attribut-
able costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by manage-
ment. 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

25

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
Buildings

Plant, machinery and equipment

Furniture

Fixtures and fittings

Vehicles

Computer hardware

Other tangible assets

Straight line depreciation rate

4 %

10 % to 25 %

10 % to 25 %

10 % to 33 %

25 %

25 %

10 % to 33 %

Gains or losses on disposals are determined by comparing proceeds less selling expenses with the carrying amount of the dis-
posed 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 as-
set’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.

26

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 recog-
nised 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

27

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 re-
flect 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 char-
acter. 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 finan-
cial 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 borrow-
ings 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 adjust-
ments 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 as-
set 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.

28

(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 amor-
tised 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 finan-
cial 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 impair-
ment 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 evi-
dence 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 recog-
nised in the statement of financial performance on equity instruments are not reversed through the statement of financial per-
formance. 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 estab-
lished 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

29

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 esti-
mated 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 immedi-
ately in the statement of financial performance. Past-service costs are recognised immediately in statement of financial per-
formance, 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 Ben-
efits”. 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 (“ex-
pected 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 am-
ortised 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 ma-
teriality 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.

30

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 cor-
responding 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 guide-
lines 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 ef-
fect 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 col-
lected 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

31

Fines 

Revenue from fines is recognised when the EU’s decision imposing a fine has been taken and it is officially notified to the ad-
dressee. If there are doubts about the undertaking’s solvency, a value reduction on the entitlement is recognised. After the deci-
sion 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 defini-
tively 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 con-
tingent 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 ap-
pears 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 ef-
fective 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 in-
come 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 ac-
cepted 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 

32

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 oc-
currence 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

33

2�  NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS

2�1� 

INTANGIBLE ASSETS

Gross carrying amount at previous year-end

Additions

Disposals

Other changes

Gross carrying amount at year-end
Accumulated amortisation at previous year-end

Amortisation charge for the year

Disposals

Other changes

Accumulated amortisation at year-end

Net carrying amount at year-end
Net carrying amount at previous year-end

The above amounts relate primarily to computer software.

EUR millions 

 379

 100

 (8)

 2

 473
 (191)

 (48)

 5

0

 (235)

 237
 188

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.

34

PROPERTY, PLANT AND EQUIPMENT

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Consolidated annual accounts of the European Union 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consol id ated  fi nanci al state ments  and   expl anatory  note s

35

2�3� 

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Participations in joint ventures

Participations in associates

Total

2.3.1. 

Participations in joint ventures

Note
2.3.1

2.3.2

31�12�2013
0

 349

 349

EUR millions

31�12�2012
 42

 350

 392

Amount at 31.12.2012

Contributions

Share of net result

Amount at 31�12�2013

GJU
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0

SESAR
0

 78

 (78)

0

ITER
 10

 121

 (130)

0

IMI
 32

 126

 (158)

0

EUR millions

Total
 42

 380

 (422)

0

FCH
0

 56

 (56)

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: 

Non-current assets

Current assets

Non-current liabilities

Current liabilities

Revenue

Expenses

31�12�2013
 198

 63

0

 (394)

 1

 (412)

EUR millions

31�12�2012
 226

 106

0

 (291)

 8

 (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 

36

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 as-
sociates (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 associ-
ated 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 de-
ployment of fuel cell and hydrogen technologies. At 31 December 2013, the Commission held 74.20 % of the ownership partici-
pation 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

Amount at 31.12.2012

Contributions

Share of net result

Other equity movements

Amount at 31�12�2013

EIF
 336

(2)

9

6

 349

ARTEMIS
0

Clean Sky
0

 20

(20)

0

0

 125

(125)

0

0

ENIAC
 14

 37

(50)

0

0

EUR millions

Total
 350

 180

(186)

6

 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:

Assets

Liabilities

Revenue

Surplus/(Deficit)

EUROPEAN INVESTMENT FUND

31�12�2013
 499

 (240)

 37

 (221)

EUR millions

31�12�2012
 505

 (191)

 33

 (177)

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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

37

Total Share Capital

Paid-in

Uncalled

Total EIF capital
3 000

 (600)

2 400

EUR millions

Commission subscription
 900

 (180)

 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 un-
recognised 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 priori-
ties 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

Available for sale financial assets

Loans

Total

Note
2.4.1

2.4.2

31�12�2013
5 497

54 347

59 844

2.4.1. 

 Non-current available for sale financial assets

Guarantee Fund*

ECSC in liquidation

BUFI investments

Risk Sharing Finance Facility (RSFF)

ETF Start up

European Bank for Reconstruction & Development

Risk Capital Operations

Loan Guarantee Instrument for TEN-T projects (LGTT)

European Chemicals Agency

Other available for sale investments

Total

31�12�2013
1 412

1 129

1 013

 789

 339

 188

 124

 90

0

 413

5 497

EUR millions

31�12�2012
4 870

57 441

62 311

EUR millions

31�12�2012
1 327

1 102

 832

 593

 305

 188

 123

 52

 52

 296

4 870

* The Guarantee Fund holds EFSM bonds (EUR 20 million) issued by the Commission, so these have been eliminated.

38

GUARANTEE FUND

The Guarantee Fund for external actions covers loans guaranteed by the EU as a result of a Council Decision, in particular Euro-
pean 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 inter-
est 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 require-
ments 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 in-
vested 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) pro-
gramme 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.

EBRD
Total Share Capital

Paid-in

Uncalled

Total EBRD capital
29 601

(6 202)

23 399

EUR millions

Commission subscription
 900

 (188)

 712

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

39

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 Commis-
sion 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

Loans granted from the EU budget & ECSC

Loans granted from borrowed funds

Total

Note
2.4.2.1

2.4.2.2

31�12�2013
 151

54 196

54 347

EUR millions

31�12�2012
 162

57 279

57 441

2.4.2.1.  Loans granted from the European Union budget and the ECSC in Liquidation

Total at 31.12.2012

New loans

Repayments

Exchange differences

Changes in carrying amount 

Total at 31�12�2013

Loans with special 
conditions
 146

 4

 (18)

 (6)

 12

 138

ECSC housing loans

EUR millions

Total

 16

0

 (5)

0

 1

 12

 162

 4

 (23)

 (6)

 13

 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 %.

40

2.4.2.2.  Loans granted from borrowed funds

EUR millions

Total at 31.12.2012

New loans 

Repayments

Exchange differences

Changes in carrying amount 

Total at 31�12�2013

Amount due < 1 year

MFA

Euratom

BOP

EFSM

 549

 100

 (81)

 1

 569

 31

 425

11 623

44 476

 (36)

 (1)

 (1)

 387

 (8)

11 623

44 468

3 033

ECSC in 
Liquidation
 221

 (5)

 (5)

 211

Total

57 294

 100

 (117)

 (6)

 (13)

57 258

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

Member States

Other

Total

31�12�2013
 478

 20

 498

EUR millions

31�12�2012
 545

 19

 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

Pre-financing

Prepaid expenses

Total

2.6.1. 

Pre-financing

Note
2.6.1

2.6.2

31�12�2013
34 819

3 253

38 072

EUR millions

31�12�2012
40 790

3 715

44 505

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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

41

Certain pre-financing amounts paid out under the 7th Research Framework Programme for research and technological devel-
opment (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�

Management Type
Direct centralised management

Indirect centralised management

Decentralised management

Shared management

Joint management

Implemented by other Institutions & Agencies

Total

31�12�2013
1 526

 772

 646

31 104

 694

77

34 819

EUR millions

31�12�2012
1 249

1 042

 677

37 214

 592

 16

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 agricul-
tural 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 pay-
ing 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

Financial Engineering Instruments

Aid Schemes

Total

31�12�2013
2 118

1 135

3 253

EUR millions

31�12�2012
2 717

 998

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 Com-
mission’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.

42

CURRENT ASSETS

2�7� 

INVENTORIES

Scientific materials

Other

Total

31�12�2013
 81

 47

 128

2�8�  CURRENT FINANCIAL ASSETS

Available for sale financial assets

Loans

Total

Notes
2.8.1

2.8.2

31�12�2013
2 373

3 198

5 571

EUR millions

31�12�2012
 81

 57

 138

EUR millions

31�12�2012
1 858

 123

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:

BUFI investments

ECSC in liquidation

Risk Sharing Finance Facility (RSFF)

Guarantee Fund

European Chemicals Agency

Loan Guarantee Instrument for TEN-T projects (LGTT)

Other available for sale investments

Total

2�8�2�  Current loans

31�12�2013
 897

 567

 408

 361

 76

 31

 33

2 373

EUR millions

31�12�2012
 845

 490

 160

 268

 69

 23

 3

1 858

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). 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

43

2�9�  CURRENT RECEIVABLES AND RECOVERABLES

Fines

Member States

Accrued income and deferred charges

Other receivables & recoverables

Total

Note
2.9.1

2.9.2

2.9.3

2.9.4

31�12�2013
4 071

5 574

3 095

 442

13 182

EUR millions

31�12�2012
4 090

6 270

3 368

 311

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

EAGF and Rural Development receivables
European Agricultural Guarantee Fund (EAGF)

European Agricultural Fund for Rural Development (EAFRD)

Temporary Rural Development Instrument (TRDI)

Special Accession Programme for Agriculture and Rural Development (SAPARD)

Write-down

Total

VAT paid and recoverable

Own resources
Established in the A account

Established in the separate account

Own resources to be received

Write-down

Other

Total

Other receivables from Member States
Pre-financing recovery expected

Other

Total

Total

31�12�2013

EUR millions

31�12�2012

1 858

 41

 45

 155

 (819)

1 279

 68

 47

1 228

3 054

 (743)

 6

3 592

 542

 94

636

5 574

1 172

 14

 44

 136

 (814)

 552

 44

 45

1 294

3 617

 (773)

 16

4 199

1 220

 255

1 475

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.

44

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 read-
justments 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 ad-
justment 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

Accrued income

Deferred charges

Other

Total

The main amount under this heading is accrued income:

Own resources

Agricultural assigned revenue November & December

Cohesion, Regional & Rural Development Funds: financial corrections

Other accrued income

Total

31�12�2013
2 709

 368

 18

3 095

31�12�2013
2 424

0

 31

 254

2 709

EUR millions

31�12�2012
3 002

 351

 15

3 368

EUR millions

31�12�2012
2 388

 218

 276

 120

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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

45

2�10�  CURRENT PRE-FINANCING

Pre-financing

Prepaid expenses

Total

2.10.1.  Pre-financing

Management Type
Direct centralised management

Indirect centralised management

Decentralised management

Shared management

Joint management

Implemented by other Institutions & Agencies

Total

Note
2.10.1

2.10.2

31�12�2013
16 403

4 963

21 367

31�12�2013
3 848

4 711

 250

6 263

1 018

 313

16 403

EUR millions

31�12�2012
9 548

3 690

13 238

EUR millions

31�12�2012
3 289

3 908

 301

1 008

 844

 198

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 bil-
lion) 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

Financial Engineering Instruments

Aid Schemes

Total

31�12�2013
2 118

2 845

4 963

EUR millions

31�12�2012
1 358

2 332

3 690

The variation of the amounts disclosed under this heading is due mainly to the Member States’ increased contribution to Finan-
cial Engineering Instruments in the area of regional development.

46

2�11�  CASH AND CASH EQUIVALENTS

Unrestricted cash:
 Accounts with Treasuries and Central Banks

 Current accounts

 Imprest accounts

 Transfers (cash in transit)

 Total

Cash belonging to financial instruments & term deposits

2.11.2

Restricted cash and cash equivalents

2.11.3

Total

2.11.1.  Unrestricted cash 

31�12�2013

EUR millions

31�12�2012

Note
2.11.1

2 790

 838

 39

 (1)

3 665

1 680

4 165

9 510

2 203

 967

 38

 (1)

3 207

2 345

5 122

10 674

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 com-
petition 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).

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

47

NON-CURRENT LIABILITIES

2�12�  PENSION AND OTHER EMPLOYEE BENEFITS

Pensions – staff 

Pensions – others

Joint Sickness Insurance Scheme

Total

2.12.1.  Pensions – staff

31�12�2013
40 933

1 016

4 869

46 818

EUR millions

31�12�2012
37 528

 968

4 007

42 503

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 ad-
dition, 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 methodol-
ogy 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
Nominal discount rate 

Expected inflation rate 

Real discount rate

Probability of marriage: man/woman

General salary growth/pension revaluation

International Civil Servants Life Table (ICSLT)

31�12�2013
3.7 %

1.9 %

1.8 %

81 % / 49 %

0 %

ICSLT 2013

Movement in gross employee benefits liability

Staff pension liability

Gross liability at previous year-end
Service/normal cost 
Interest cost
Benefits paid
Actuarial losses
Change due to newcomers
Gross liability at year-end
Correction coefficients applied to pensions
Deduction of taxes on pensions
Plan assets
Net liability at year-end

2.12.2.  Pensions – Others

41 961
1 928
1 603
(1 288)
1 499
 244
45 947
959
(5 973)
N/A
40 933

31�12�2012
3.6 %

2.0 %

1.6 %

84 % / 38 %

0 %

ICSLT 2008

EUR millions
Sickness Insurance

4 278
-
 162
 (11)
 704
-
5 133
N/A
N/A
 (264)
4 869

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 Eu-
ropean 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.

48

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

Amount at 
31�12�2012

Additional 
provisions

132

997

108

21

1 258

180

-

45

2

227

Unused 
amounts 
reversed
 (51)

-

-

 (2)

 (53)

Amounts 
used

Transfer to 
current

Change in 
estimation

Amount at 
31�12�2013

EUR millions

 (3)

 (2)

-

0

 (5)

-

 (30)

 (38)

-

 (68)

-

 (32)

 (4)

-

 (36)

258

933

111

21

1 323

Legal cases

Nuclear site 
dismantling

Financial

Other

Total

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 decommis-
sioning  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 accord-
ance 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 Com-
petitiveness 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

Non-current borrowings

Elimination Guarantee Fund*

Total

Note
2.14.1

31�12�2013
54 173

 (20)

54 153

EUR millions

31�12�2012
57 252

 (20)

57 232

* The Guarantee Fund holds EFSM bonds issued by the Commission, so these need to be eliminated. 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

49

NON-CURRENT BORROWINGS

MFA

Euratom

BOP

EFSM

 425

11 623

44 476

Total at 31.12.2012

New borrowings 

Repayments

Exchange differences

Changes in carrying amount 

Total at 31.12.2013

Amount due < 1 year

 549

 100

 (81)

 1

 569

 31

 (36)

 (1)

 (1)

 387

ECSC in 
Liquidation
 194

 (4)

 (8)

EUR millions

Total

57 267

 100

 (117)

 (5)

 (8)

11 623

44 468

 190

57 237

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 ac-
crued interests. For more information on borrowing and lending activities, see note 7.

2�15�  OTHER NON-CURRENT LIABILITIES

31�12�2013
1 756

 336

124

2 216

EUR millions

31�12�2012
2 040

 352

 135

2 527

Finance leasing debts

Buildings paid for in instalments

Other

Total

CURRENT LIABILITIES

2�16� 

CURRENT PROVISIONS

Amount at 
31�12�2012

Additional 
provisions

Legal cases

Nuclear site 
dismantlement

Financial

Other

Total

 224

 29

 188

 365

 806

 8

0

 53

 4

 65

Unused 
amounts 
reversed
 (2)

0

 (45)

 (114)

 (161)

Amounts 
used

 (2)

 (29)

 (55)

 (139)

 (225)

Trans-
fers from 
non- current
0

 30

 38

0

 68

EUR millions

Change in 
estimation

Amount at 
31�12�2013

 1

0

 (8)

 (1)

 (8)

 229

 30

 171

 115

 545

50

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

Accrued charges and deferred income

Payables

Current portion of non-current liabilities

Total

Note
2.18.1

2.18.2

2.18.3

2.18.1.  Accrued charges and deferred income

Accrued charges

Deferred income

Other

Total

The split of accrued charges is as follows:

European Agricultural Guarantee Fund:
Direct aid and interventions in agricultural markets

Other

Rural Development:
EAFRD

Other

Structural Actions:
European Fisheries Fund / Financial Instruments for Fisheries Guidance

European Regional Development Fund and Cohesion Fund

Instrument for Structural Policies for pre-Accession

European Social Fund

Other accrued charges:
Research & Development

Other

Total

31�12�2013
56 282

36 213

 99

92 594

31�12�2013
56 062

 190

 30

56 282

EUR millions

31�12�2012
68 436

21 558

 89

90 083

EUR millions

31�12�2012
68 216

 201

 19

68 436

31�12�2013

EUR millions

31�12�2012

33 489

 2

12 255

203

45 949

 48

4 356

 114

1 100

5 618

1 172

3 323

4 495

56 062

44 532

 1

12 463

34

57 030

 66

4 359

 382

1 378

6 185

1 077

3 924

5 001

68 216

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

51

2.18.2.  Payables

Member States

Suppliers and other

Estimated non-eligible amounts and pending pre-payments

Total

31�12�2013
37 481

1 650

(2 918)

36 213

EUR millions

31�12�2012
23 029

1 704

(3 175)

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 pre-
sent 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

Finance leasing debts

Other

Total

31�12�2013
 82

 17

 99

EUR millions

31�12�2012
 70

 19

 89

52

NET ASSETS

2�19�  RESERVES

Fair value reserve

Guarantee Fund reserve

Other reserves

Total

2.19.1.  Fair value reserve

Note
2.19.1

2.19.2

2.19.3

31�12�2013
 99

2 125

1 849

4 073

EUR millions

31�12�2012
 150

2 079

1 832

4 061

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

Amounts to be called from Member States at 31.12.2012

Return of 2012 budget surplus to Member States

Movement in Guarantee Fund reserve

Other reserve movements

Economic result of the year

Total amounts to be called from Members States at 31�12�2013

Split between:

Employee benefits

Other amounts

EUR millions

44 477
1 023

 46

 14

4 365

49 925

46 818

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 ques-
tion as part of the budget of the following year. 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

53

It is essentially only the employee benefits obligations of the Commission towards its staff which are paid out over a longer pe-
riod, noting that the funding of the pension payments by the annual budgets is guaranteed by the Member States. For informa-
tion purposes only, an estimate of the split of future employee benefit payments is given below:

Amounts to be paid in 2014

Amounts to be paid after 2014

Total employee benefits liability at 31�12�2013

EUR millions

Amount
1 450

45 368

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.

54

3� 

 NOTES TO THE STATEMENT OF FINANCIAL 
PERFORMANCE

3�1�  OWN RESOURCE AND CONTRIBUTIONS REVENUE

GNI resources

Traditional own resources:  Customs duties

Sugar levies

VAT resources

Own resource revenue
Budgetary adjustments

Contributions of third countries (incl. EFTA)

Total

3.1.1.  Own resource revenue

Note

3.1.1

3.1.2

2013
110 194

15 268

 199

14 019

139 680
1 187

 373

141 241

EUR millions

2012
98 061

16 087

 157

14 871

129 176
1 439

 304

130 919

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. 

Consolidated annual accounts of the European Union 2013 
Consol id ated  fi nanci al state ments  and   expl anatory  note s

55

3�2�  OTHER OPERATING REVENUE

Fines

Agricultural levies

Recovery of expenses:

Direct centralised management

Indirect centralised management

Decentralised management

Joint management

Shared management

Total

Note
3.2.1

3.2.2

3.2.3

Revenue from administrative operations:

3.2.4

Staff

Property, plant and equipment related revenue

Other administrative revenue

Total

Miscellaneous operating revenue:
Adjustments/provisions

Exchange gains

Other

Total

Total

3.2.1. 

Fines

3.2.5

2013

2 757

 48

 69

 6

 41

 33

1 628

1 777

1 137

 38

 83

1 257

 208

 334

2 033

2 575

8 414

EUR millions

2012

1 884

 87

 63

 30

 27

 8

1 376

1 504

1 209

 23

 59

1 291

 280

 335

1 445

2 060

6 826

The increase in other operating revenue is mainly explained by a higher amount of revenue relating to fines in 2013. These rev-
enues 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 partici-
pating 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. 

56

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 pre-
pare 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

Staff expenses 

Depreciation and impairment

Other administrative expenses

Total

2013
5 527

 450

3 293

9 269

EUR millions

2012
5 708

 451

3 161

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:

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

57

Buildings

IT materials and other equipment

Total

Future amounts to be paid

< 1 year
 338

 7

 346

1- 5 years
 912

 17

 929

> 5 years
 739

0

 739

3�4�  OPERATING EXPENSES

Primary operating expenses:
 Direct centralised management

 Indirect centralised management

 Decentralised management

 Shared management

 Joint management

 Total

Other operating expenses:
 Adjustments/provisions

 Exchange losses

 Other

 Total

Total

Note
3.4.1

3.4.2

2013

8 722

5 491

 720

120 070

1 745

136 747

 301

 378

1 145

1 824

138 571

EUR millions

Total
1 990

 24

2 014

EUR millions

2012

9 883

4 151

1 019

106 378

1 819

123 250

 427

 281

 675

1 383

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 del-
egation 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 bil-
lion (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 transac-
tions 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 total-
ling EUR 360 million.

58

RESEARCH AND DEVELOPMENT COSTS

Included under administrative and operating expenses are expenses relating to research and development as follows:

Research costs

Non-capitalised development costs

Total

3�5�  FINANCIAL REVENUE

Dividend income

Interest income:

 On pre-financing

 On late payments

 On available for sale financial assets

 On loans

 On cash and cash equivalents

 Other

 Total

Other financial income:

 Realised gain on sale of financial assets

 Other

 Total

Exchange gains

Total

2013
 335

 74

 409

2013

 6

 29

 88

 71

1 712

 21

 1

1 922

 24

 85

 108

 2

EUR millions 

2012
 331

 76

 407

EUR millions

2012

 12

 28

 242

 100

1 559

 26

 2

1 957

 18

 160

 178

 10

2 038

2 157

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

59

3�6�  FINANCIAL EXPENSES

Interest expenses:

 Leasing

 On borrowings

 Other

 Total

Other financial expenses:

 Adjustments to financial provisions

 Relating to financial instruments managed by fiduciaries

 Impairment losses on available for sale financial assets

 Realised loss on sale of financial assets

 Other

 Total

Exchange losses

Total

2013

 99

1 697

 22

1 818

 98

 68

 8

0

 35

 209

 18

EUR millions

2012

 88

1 545

 23

1 656

 75

 43

 8

 4

 143

 273

 13

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, Ac-
tivities 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 contribu-
tions are not split amongst the various activities as these are calculated, collected and managed by central Commission services.

60

SEGMENT REPORTING

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Consol id ated  fi nanci al state ments  and   expl anatory  note s

61

SEGMENT REPORTING – ACTIVITIES WITHIN THE EU

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64

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 ad-
justed 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 per-
formed. Loans granted to beneficiaries (and the related borrowings, when applicable) are not considered as investing (or financ-
ing) 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 achieve-
ment 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 invest-
ments 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

65

5� 

 CONTINGENT ASSETS & LIABILITIES AND OTHER 
SIGNIFICANT DISCLOSURES

5�1�  CONTINGENT ASSETS

Guarantees received:

 Performance guarantees

 Other guarantees

Other contingent assets

Total

31�12�2013

EUR millions

31�12�2012

441

39

16

496

337

43

14

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

Guarantees given

Fines

EAGF, rural development and pre-accession

Cohesion policy

Legal cases and other disputes

Total

Note
5.2.1

5.2.2

5.2.3

5.2.4

5.2.5

31�12�2013
22 162

5 227

1 537

 137

 689

29 753

EUR millions

31�12�2012
22 317

6 378

1 188

 546

 91

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

On loans granted by the EIB from its own resources:
 65 % guarantee

 70 % guarantee

 75 % guarantee

 100 % guarantee

 Total

Other guarantees given

Total

31�12�2013

EUR millions

31�12�2012

19 077

1 361

 257

 461

21 156

1 006

22 162

18 683

1 654

 383

 594

21 314

1 003

22 317

66

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 ceil-
ing 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

Outstanding commitments not yet expensed

31�12�2013
178 382

EUR millions

31�12�2012
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).

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

67

5.3.2.  Significant legal commitments

Structural Actions

Protocol with Mediterranean countries

Fisheries agreements

Galileo

Global Monitoring for Environment and Security (GMES)

Trans-European Transport Networks (TEN-T)

Other contractual commitments

Total

31�12�2013
 150

 264

 79

0

0

 850

3 516

4 858

EUR millions

31�12�2012
71 775

 264

 173

 143

 233

1 331

3 884

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 struc-
tural funds.

Financial 
framework 
2007-2013 
(A)

Legal 
commitments 
concluded (B)

Budget 
commitments 
(C)

Decommit- 
ments (D)

348 151

100 558

347 767

100 353

348 001

100 558

11 110

10 856

11 110

 264

 205

 259

Legal 
commitments 
less budget 
commitments 
(=B-C+D)
30

0

6

Maximum 
commitment 
(=A-C+D)

EUR millions

Future 
obligations 
(=A-C)

414

205

259

150

0

0

459 818

458 976

459 668

 728

36

878

150

Structural funds

Natural 
Resources

Instrument for 
Pre-Accession 
Assistance

Total

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 ac-
counts. 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.

68

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 pro-
gramme 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 amend-
ment 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

69

6�  PROTECTION OF THE EU BUDGET

6�1�  FINANCIAL CORRECTIONS AND RECOVERIES 2013

6.1.1. 

Financial corrections and recoveries confirmed/decided in 2013

Agriculture:

EAGF

Rural Development

Cohesion Policy:

ERDF

Cohesion Fund

ESF

FIFG/EFF

EAGGF Guidance

Other

Internal policy areas

External policy areas

Administration

Total decided/confirmed in 2013
Total decided/confirmed in 2012

Financial 
Corrections

Recoveries

2013 Total

EUR millions

2012 Total

 843

 247

 337

 220

 834

 10

 1

 - 

 3

N/A

N/A

2 495
2 172

 227

 139

 1

 - 

 40

 24

 2

 16

 393

 93

 6

 941
 695

1 070

 386

 338

 220

 874

 34

 3

 16

 396

 93

 6

3 436

 638

 221

 958

 203

 425

 2

 34

 19

 253

 107

 7

2 867

The total amount of financial corrections and recoveries confirmed/decided in 2013 increased by 20 % compared to 2012 (finan-
cial 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

Agriculture:

EAGF

Rural Development

Cohesion Policy:

ERDF

Cohesion Fund

ESF

FIFG/EFF

EAGGF Guidance

Other

Internal policy areas

External policy areas

Administration

Total implemented in 2013
Total implemented in 2012

Financial 
Corrections

Recoveries

2013 Total

EUR millions

2012 Total

 481

 230

 622

 277

 842

 4

 14

 - 

 3

N/A

N/A

2 472
3 742

 155

 129

 - 

 - 

 40

 23

 2

 16

 398

 93

 6

 862
 678

 636

 359

 622

 277

 882

 28

 16

 16

 401

 93

 6

3 334

 771

 225

2 416

 207

 430

 1

 20

 11

 230

 99

 9

4 419

70

The total amount of financial corrections and recoveries implemented in 2013 decreased by 25 % compared to 2012. The in-
crease 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 fi-
nancial corrections implemented in 2012). Out of the amount of EUR 1 759 million that concerned Cohesion policy, EUR 693 mil-
lion 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 Directo-
rate-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 cor-
rections 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 Roma-
nia 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.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

71

6.1.3.  Cumulative figures for financial corrections and recoveries implemented

Information is given below showing the cumulative financial corrections by programming period: 

 Financial 
corrections

Agriculture:

EAGF

Rural Development

Cohesion Policy:

ERDF

Cohesion Fund

ESF

FIFG/EFF

EAGGF Guidance

Other

Total

Programming Period

1994-
1999 
Period

 - 

 - 

 - 

2 711

1 788

 264

 560

 100

 0

 - 

2000-
2006 
Period

 111

2007-
2013 
Period

 294

 - 

 - 

 111

7 248

4 905

 587

1 677

 7

 71

 - 

 294

1 472

 474

 241

 755

 3

 - 

 - 

Cumulated 
EAGF 
decisions 
since 1999 

Total financial 
corrections 
implemented 
at end 2013

Imple-
mented / 
Decided-
confirmed

Financial 
corrections 
not yet 
implemented

Financial 
corrections 
implemented 
at end 2012

EUR millions

8 229

8 229

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

8 633

8 229

 404

89�61%

89.95%

83.16%

11 431

93�78%

7 166

1 092

2 992

 109

 72

 4

93.76%

90.65%

97.86%

51.77%

100.0%

100�0%

1 001

 920

 82

 756

 477

 113

 65

 102

0

0

7 902

7 728

 174

9 673

6 544

 815

2 150

 105

 58

 2

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 (not-
ing 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.

AGRICULTURE AND RURAL DEVELOPMENT:

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 con-
sequence, there is an increasing discrepancy between the cumulative amounts decided and implemented.

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 program-
ming 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 %).

72

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:

Recoveries

Years

2008

2009

2010

2011

2012

2013

Total as at 
end 2013

EUR millions
Total as at 
end 2012

Agriculture:
EAGF
Rural Development

Cohesion policy
Internal policy areas
External policy areas
Administration
Total

 356
0
 31
 40
 32
0
 459

 148
 25
 102
 100
 81
 9
 464

 172
 114
 25
 162
 136
 5
 614

 178
 161
 48
 268
 77
 2
 734

 161
 166
 14
 229
 99
 9
 678

 155
 129
 81
 398
 93
 6
 862

1 170
 595
 301
1 197
 518
 31
3 811

1 015
 466
 219
 799
 425
 25
2 949

Consolidated annual accounts of the European Union 2013 
Consol id ated  fi nanci al state ments  and   expl anatory  note s

73

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 subse-
quent 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 Communica-
tion prepared by the Commission and sent to the Discharge Authority and the Court every September – this is available on the 
Europa website of the Directorate-General for 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, irregulari-
ties 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 for-
mally 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 frame-
works. 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 au-
thorising 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. 

74

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 ser-
vices 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. Preven-
tive 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 Mem-
ber State concerned; or

(b) The Commission services have to carry out additional verifications following information that expenditure in a certified state-
ment 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:

Fund

ERDF & Cohesion Fund

ESF

EFF

Total 

Total open cases at 
31�12�2012

Number 
of cases
 38

 15

 30

 83

Amount

1 638

 181

 108

1 927

2007-2013 programming period

New cases 2013

Closed cases during 
2013 

Total open cases at 
31�12�2013

EUR millions

Number 
of cases
 220

 25

 20

Amount

4 242

 349

 339

Number 
of cases
 157

 20

 40

Amount

Number 
of cases

Amount

4 272

 258

 350

 101

 20

 10

 131

1 608

 272

 97

1 977

 265

4 930

 217

4 880

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

75

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 pro-
grammes 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

Agriculture:

EAGF

Rural Development

Cohesion Policy:

ERDF

Cohesion Fund

ESF

FIFG/EFF

EAGGF Guidance

Internal policy areas

External policy areas

Administration

Total recovered

2013

0

0

 68

 4

 53

 7

 3

 208

 91

 1

 435

EUR millions

2012

0

0

 38

 5

 214

0

 5

 207

 104

 2

 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.

76

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 inter-
governmental 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

MFA

Euratom

BOP

 569

 387

11 623

44 468

EFSM ECSC 

in 
Liquidation
 211

Total 
31�12�2013

57 258

EUR millions

Total 
31�12�2012
57 294

 569

 387

11 623

44 468

 190

57 237

57 267

Loans

(note 2�4�2)

Borrowing

(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 reim-
bursements 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 Com-
mission 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. 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

77

– 

– 

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
Macro Financial Assistance (MFA)

Euratom

Balance of Payment (BOP)

European Financial Stability Mechanism (EFSM)

ECSC in liquidation

Borrowings
Macro Financial Assistance (MFA)

Euratom

Balance of Payment (BOP)

European Financial Stability Mechanism (EFSM)

ECSC in liquidation

7.1.2.  Balance of Payments

31�12�2013
0.27 % - 4.54 %

0.34 % - 5.76 %

2.375 % - 3.625 %

2.375 % - 3.750 %

31�12�2012
0.298 % - 4.54 %

0.431 % - 5.76 %

2.375 % - 3.625 %

2.375 % - 3.750 %

5.2354 % - 5.8103 %

5.2354 % - 5.8103 %

31�12�2013
0.27 % - 4.54 %

31�12�2012
0.298 % - 4.54 %

0.291 % - 5.6775 %

0.351 % - 5.6775 %

2.375 % - 3.625 %

2.375 % - 3.750 %

6.92 % - 9.78 %

2.375 % - 3.625 %

2.375 % - 3.750 %

6.92 % - 9.78 %

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 regard-
ing these loans (EUR 11.4 billion below being the nominal value).

78

BOP NOMINAL VALUE

Total loans granted
Disbursed at 31.12.12

Disbursed in 2013

Loans disbursed 31�12�2013
Loans repaid at 31.12.2013

Outstanding amount at 
31�12�2013
Undrawn amounts 31.12.2013

Hungary

6 500
5 500

0

5 500
(2 000)

3 500

0

Latvia

3 100
2 900

0

2 900
0

2 900

0

Romania

8 400
5 000

0

5 000
0

5 000

0

EUR millions

Total

18 000
13 400

0

13 400
(2 000)

11 400

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 pro-
gramme 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 sup-
port 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

Total loans granted
Disbursed at 31.12.12

Disbursed in 2013

Loans disbursed at 31�12�13
Loans repaid at 31.12.13

Loans outstanding at 31�12�13
Undrawn amounts at 31.12.13

Ireland

22 500
21 700

0

21 700
0

21 700
 800

Portugal

26 000
22 100

0

22 100
0

22 100
3 900

EUR millions

Total

48 500
43 800

0

43 800
0

43 800
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 difficul-
ties 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 be-
half of the EU and lends these funds to the beneficiary Member State. For each country receiving a loan under the EFSM, a quar-
terly 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 avail-
able 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 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

79

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

2014

2015

2016

2017

2018

2019

2021

2022

2024

2025

2026

2027

2028

2032

2038

2042

Total

Romania

1.5

1.15

1.35

1

BOP

Latvia
1

1.2

Hungary
2

1.5

0.5

0.2

Total
3

2.7

1.5

1.15

1.35

1.5

0

0

0

0.2

0

0

0

0

0

0

3�5

2�9

5

11�4

EFSM

Ireland

Portugal

5

3.9

3

0.8

2

1

2.3

3

1.5

22�5

4.75

0.6

6.75

2.7

1.8

2

2

1.8

1.5

23�9

EUR Billions

Total

3

7.7

6.25

1.15

5.85

1.5

9.75

2.7

2.6

0.2

4

3

2.3

3

1.8

3

Total
0

5

4.75

0

4.5

0

9.75

2.7

2.6

0

4

3

2.3

3

1.8

3

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 effi-
ciency 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 

80

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 transac-
tion 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 com-
ponent). 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 op-
erational 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 Govern-
ance 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.

Consolidated annual accounts of the European Union 2013 
Consol id ated  fi nanci al state ments  and   expl anatory  note s

81

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 mar-
ket 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 can-
not 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  Regula-
tion 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.

82

–  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 Commis-
sion’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 com-
mercial 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 objec-
tives 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 sover-
eign 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 impos-
ing the fine is overruled by the Court of Justice of the European Union.

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

83

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 be-
tween 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 depend-
ing 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.

 
84

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 signifi-
cantly, 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 EO-
NIA (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 sensitiv-
ity 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 %).

Consolidated annual accounts of the European Union 2013 
Consol id ated  fi nanci al state ments  and   expl anatory  note s

85

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 re-
source 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 operat-
ing 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 re-
payment 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 operat-
ing 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 Com-
mission 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 re-
main 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 bal-
ances 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. Rat-
ing 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).

86

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 mini-
mum 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 is-
sued 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 coun-
terparty 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 im-
poses 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 in-
vestments 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 dis-
bursement 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, 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

87

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 Commis-
sion’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 rela-
tion 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 %.

88

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. Transac-
tions 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 per-
sons 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. 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

89

KEY MANAGEMENT FINANCIAL ENTITLEMENTS

Entitlement (per employee)
Basic salary (per month)

Category 1
25 352

Category 2
22 964 -

Category 3
18 371 -

Category 4
19 840 -

Category 5
11 681 -

 23 882

 20 667

21 126

18 371

Residential/Expatriation allowance 

15%

15%

15%

15%

0-4%-16%

EUR

Representation allowance

1 418.07

911.38

Family allowances:
Household (% salary)

Dependent child

Pre-school

Education, or

Education outside place of work

Presiding judges allowance

Annual travel costs

Transfers to Member State:
Education allowance*

% of salary*

% of salary with no cc

Representation expenses

Taking up duty:
Installation expenses

Family travel expenses

Moving expenses

Leaving office:
Resettlement expenses

Family travel expenses

Moving expenses

Transition (% salary)**

Sickness insurance
Pension (% salary, before tax)

Deductions:
Tax on salary
Sickness insurance (% salary)
Special levy on salary

Pension deduction

Number of persons at year-end

* with correction coefficient (“cc”) applied
** paid for the first 3 years following departure

2% + 170.52

2% + 170.52

2% + 170.52

2% + 170.52

2% + 170.52

372.61

91.02

252.81

505.39

N/A

372.61

91.02

252.81

505.39

N/A

N/A

Yes

5%

N/A

Yes

5%

372.61

91.02

252.81

505.39

554.17 – 
607.71

554.17 – 
607.71

N/A

Yes

5%

372.61

91.02

252.81

505.39

N/A

N/A

N/A

Yes

5%

372.61

91.02

252.81

505.39

N/A

N/A

N/A

Yes

5%

max 25%

max 25%

max 25%

max 25%

max 25%

Reimbursed

Reimbursed

Reimbursed

N/A

N/A

50 703.52

45 927.10 -

36 741.68 -

39 681.02 -

Reimbursed

47 764.18

 41 334.40

 42 252.94

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

25 352

22 964 -

 23 882

18 371 -

 20 667

19 840 -

Reimbursed

21 126

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

Reimbursed

40% - 65%

40% - 65%

40% - 65%

40% - 65%

Covered

Max 70%

Covered

Max 70%

Covered

Max 70%

Covered

Max 70%

N/A

Optional

Max 70%

8% - 45%

8% - 45%

8% - 45%

8% - 45%

8% - 45%

1.7%

7%

N/A

3

1.7%

7%

N/A

9

1.7%

7%

N/A

93

1.7%

7%

N/A

28

1.7%

7%

11.3%

111

 
90

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 re-
lated notes were prepared using the most recently available information and this is reflected in the information presented. 

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

91

11�  SCOPE OF CONSOLIDATION

11�1�  CONSOLIDATED ENTITIES

A� CONTROLLED ENTITIES (52)

1� Institutions and consultative bodies (11)
European Parliament

European Council

European Commission

Committee of the Regions

Court of Justice of the European Union

European External Action Service

2� EU Agencies (39)

2.1. Executive Agencies (6)
Education, Audiovisual & Culture Executive Agency

European Data Protection Supervisor

European Economic and Social Committee

European Ombudsman

European Court of Auditors

Council of the European Union

Executive Agency for Competitiveness and Innovation

Executive Agency for Health and Consumers

Trans-European Transport Network Executive Agency

Research Executive Agency

2.2. Decentralised Agencies (33)
European Maritime Safety Agency

European Medicines Agency

European GNSS Supervisory Authority

European Chemicals Agency

European Research Council Executive Agency

European Food Safety Authority

European Railway Agency

Community Plant Variety Office

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 Institute for Gender Equality

European Agency for Safety and Health at Work

European Police College (CEPOL)

European Police Office (EUROPOL)

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 Asylum Support Office

European Securities and Markets Authority

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-oper-
ation 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)

B� JOINT VENTURES (5)
ITER International Fusion Energy Organisation

SESAR Joint Undertaking

FCH Joint Undertaking

C� ASSOCIATES (4)
European Investment Fund 

Clean Sky Joint Undertaking

* Consolidated for the first time in 2013

European Institute of Innovation and Technology

Galileo Joint Undertaking in liquidation

IMI Joint Undertaking

ARTEMIS Joint Undertaking

ENIAC Joint Undertaking

92

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 inter-
nal 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

Non-current assets

Current assets

TOTAL ASSETS
Non-current liabilities

Current liabilities

TOTAL LIABILITIES

NET ASSETS

FUNDS & RESERVES
Called fund capital

Other reserves

Economic result carried forward from previous years

Economic result of the year

NET ASSETS

31�12�2013
 424

EUR millions

31�12�2012
 438

2 129

2 553
(25)

 (1 214)

(1 239)

1 313

32 529

2 252

(30 396)

(3 072)

1 313

2 094

2 532
(40)

 (1 057)

(1 097)

1 435

29 579

2 252

(27 374)

(3 023)

1 435

STATEMENT OF FINANCIAL PERFORMANCE – 8TH, 9TH AND 10TH EDFS

Operating revenue

Operating expenses

Administrative expenses

DEFICIT FROM OPERATING ACTIVITIES
Financial activities

ECONOMIC RESULT OF THE YEAR

2013
 123

(3 027)

 (167)

(3 072)
0

(3 072)

EUR millions

2012
 124

(3 017)

 (107)

(3 001)
 (22)

(3 023)

Consolidated annual accounts of the European Union 2013Consol id ated  fi nanci al state ments  and   expl anatory  note s

93

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 devel-
opment (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

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 ����������������������������������������������������������������������������������������������������99

1�  RESULT OF IMPLEMENTATION OF THE EU BUDGET ������������������������������������������������������������������������ 101

1.1 

EU BUDGET RESULT ............................................................................................................................101

1.2 

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT .............................101

1.3 

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS ......................103

PAGE

2� 

IMPLEMENTATION OF EU BUDGET REVENUE ������������������������������������������������������������������������������������� 108

3� 

IMPLEMENTATION OF EU BUDGET EXPENDITURE ��������������������������������������������������������������������������� 112

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

 BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT APPROPRIATIONS BY 
FINANCIAL FRAMEWORK HEADING ............................................................................................112

 IMPLEMENTATION OF COMMITMENT APPROPRIATIONS BY FINANCIAL 
FRAMEWORK HEADING .....................................................................................................................113

 IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY FINANCIAL 
FRAMEWORK HEADING .....................................................................................................................114

 MOVEMENTS IN COMMITMENTS OUTSTANDING BY FINANCIAL 
FRAMEWORK HEADING .....................................................................................................................115

 BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN 
BY FINANCIAL FRAMEWORK HEADING .....................................................................................115

 BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT 
APPROPRIATIONS BY POLICY AREA ............................................................................................116

3.7 

 IMPLEMENTATION OF COMMITMENT APPROPRIATIONS BY POLICY AREA ...........118

3.8 

 IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY POLICY AREA .....................121

3.9 

MOVEMENTS IN COMMITMENTS OUTSTANDING BY POLICY AREA ..........................124

3.10 

 BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN 
BY POLICY AREA ....................................................................................................................................126

Aggregated reports on the implementation of 

the budget and explanatory notes

 
4� 

INSTITUTIONS AND AGENCIES ����������������������������������������������������������������������������������������������������������������� 129

4.1 

4.2 

4.3 

4.4 

4.5 

 SUMMARY OF THE IMPLEMENTATION OF BUDGET REVENUE 
BY INSTITUTION .....................................................................................................................................129

 IMPLEMENTATION OF COMMITMENT AND PAYMENT APPROPRIATIONS 
BY INSTITUTION .................................................................................................................................... 130

 AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS AND AMOUNTS 
RECEIVED ...................................................................................................................................................132

COMMITMENT & PAYMENT APPROPRIATIONS BY AGENCY ...........................................133

BUDGET RESULT INCLUDING AGENCIES ................................................................................. 134

Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

99

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 sub-
ject 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-differenti-
ated 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 appropria-
tions 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 appropria-
tions 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 car-
ried 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; 

100

(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 + ad-
ditional 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 ap-
propriations 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 account-
ing officer was notified of the commitment and authorisation by 31 January N+1. EAGF expenditure may be subject to a conform-
ity 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 belong-
ing 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, be-
cause 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 pay-
ment 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.

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

101

1�  RESULT OF IMPLEMENTATION OF THE EU BUDGET

1�1 

EU BUDGET RESULT

Revenue for the financial year

Payments against current year appropriations

Payment appropriations carried over to year N+1

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

Exchange differences for the year

Budget result*

2013
149 504

(147 567)

(1 329)

 437

 (42)

1 002

EUR millions

2012
139 541

(137 738)

 (936)

 92

 60

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

ECONOMIC RESULT OF THE YEAR

Revenue
Entitlements established in current year but not yet collected

Entitlements established in previous years and collected in current year

Accrued revenue (net)

Expenses
Accrued expenses (net)

Expenses prior year paid in current year

Net-effect pre-financing

Payment appropriations carried over to next year

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

Movement in provisions

Other

Economic result Agencies and ECSC

BUDGET RESULT OF THE YEAR

2013

(4 365)

(2 071)

3 357

 (134)

3 216

(1 123)

 (902)

(1 528)

1 538

4 136

(1 028)

EUR millions

2012

(5 329)

(2 000)

4 582

 (38)

(1 544)

(2 695)

 820

(4 666)

4 768

7 805

 (670)

 (93)

 (15)

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 in-
cluded in the ‘net-effect pre-financing ‘ category for the first time. The same reclassification has been made to the comparative 
figures above. 

102

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 estab-
lished 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 budg-
etary 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 pay-
ment 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 ac-
quisitions, capital lease payments and financial participations for which the budgetary and accrual accounting treatments differ.

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

103

1�3 

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

1.3.1.  REVENUE

1.

3.
4.

5.

6.

Own resources
 Of which Customs duties
 Of which VAT
 Of which GNI
Surpluses, balances and adjustments
Revenue accruing from persons working with the institutions and 
with other Union bodies
Revenue accruing from the administrative operation of the 
institutions
Contributions and refunds in connection with Union agreements 
and programmes
Interests on late payments and fines
Borrowing and lending operations

7.
8.
9. Miscellaneous revenue

Total

Initial Budget
131 288
18 632
15 030
97 503
0
1 278

Final Budget
140 326
14 857
14 680
110 823
1 057
1 278

EUR millions

Actual Revenue
140 100
15 164
14 542
110 032
 698
1 199

 54

 60

 123
 4
 30
132 837

 54

 60

1 642
 4
 30
144 451

 611

3 898

2 973
 2
 24
149 504

1.3.2. 

EXPENDITURE BY FINANCIAL FRAMEWORK HEADING

Sustainable growth
1.1 Competetiveness for Growth & employment
1.2 Cohesion for Growth & Employment
Preservation & mgt of natural resources
Citizenship, freedom, security and justice
The EU as a global player
Administration
Compensations

1.

2
3
4
5
6
Total

Initial Budget

Final Budget*

59 085
11 886
47 199
57 484
1 515
6 323
8 430
0
132 837

73 528
16 290
57 238
60 404
2 197
7 200
10 056
 75
153 461

EUR millions

Payments 
made
71 238
14 307
56 931
59 524
1 883
7 055
8 693
 75
148 469

* Including amending budgets, appropriations carried over and assigned revenue.

104

1.3.3. 

EXPENDITURE BY POLICY AREA

Initial Budget 

Final Budget*

Taxation and customs union

Economic and financial affairs

01
02 Enterprise
03 Competition
04 Employment and social affairs
05 Agriculture and rural development
06 Mobility and transport
07 Environment and Climate action
08 Research
09 Communication networks, content and technlology
10 Direct research
11 Maritime affairs and Fisheries
12 Internal market
13 Regional policy
14
15 Education and culture
Communication
16
17 Health and consumer protection
18 Home affairs
19 External relations
20 Trade
21 Development and relations with ACP States
22 Enlargement
23 Humanitarian aid
24
25 Commission’s policy coordinination & legal advice
26 Commission’s administration
27 Budget
28 Audit
29 Statistics
30 Pensions and related expenditure
31
32 Energy
33 Justice
40 Reserves
90 Other Institutions

Fight against fraud

Language Services

Total

* Including amending budgets, appropriations carried over and assigned revenue.

1.3.4.  COMMITMENTS BY FINANCIAL FRAMEWORK HEADING

 428
1 162
 92
10 429
56 344
 984
 391
4 808
1 389
 411
 794
 103
37 434
 112
2 373
 253
 593
 799
3 089
 102
1 207
 832
 829
 73
 194
1 013
 67
 12
 115
1 399
 397
 814
 184
 80
3 527
132 837

 411
1 587
 107
14 286
59 234
1 120
 438
6 556
2 024
 959
 831
 127
43 960
 140
3 301
 273
 622
1 053
3 354
 112
1 377
 933
1 278
 83
 221
1 318
 146
 13
 147
1 401
 506
 838
 208
0
4 497
153 461

EUR millions

Payments 
made
 397
1 456
 93
14 107
58 339
1 059
 406
5 771
1 826
 496
 820
 116
43 494
 129
3 052
 252
 599
1 035
3 295
 104
1 345
 920
1 249
 73
 193
1 082
 135
 12
 126
1 397
 436
 758
 195
0
3 703
148 469

Sustainable growth
1.1 Competetiveness for Growth & Employment
1.2 Cohesion for Growth & Employment
Preservation & management of natural resources
Citizenship, freedom, security and justice
The EU as a global player
Administration
Compensations

1.

2.
3.
4.
5.
6.
Total

Initial Budget

70 630
16 121
54 509
60 149
2 106
9 583
8 430
0
150 898

Final 
Budget*
75 054
19 191
55 863
62 540
2 846
10 015
9 281
 75
159 810

EUR millions

Commitments

72 682
17 723
54 959
61 463
2 777
9 793
8 870
 75
155 659

* Including amending budgets, appropriations carried over and assigned revenue.

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

105

1.3.5.  COMMITMENTS BY POLICY AREA

Initial Budget 

Taxation and customs union

Economic and financial affairs

01
02 Enterprise
03 Competition
04 Employment and social affairs
05 Agriculture and rural development
06 Mobility and transport
07 Environment and Climate action
08 Research
09 Communication networks, content and technology
10 Direct research
11 Maritime affairs and Fisheries
12 Internal market
13 Regional policy
14
15 Education and culture
16
Communication
17 Health and consumer protection
18 Home affairs
19 External relations
20 Trade
21 Development and relations with ACP States
22 Enlargement
23 Humanitarian aid
24
25 Commission’s policy coordination & legal advice
26 Commission’s administration
27 Budget
28 Audit
29 Statistics
30 Pensions and related expenditure
31
32 Energy
33 Justice
40 Reserves
90 Other Institutions

Fight against fraud

Language Services

Total

* Including amending budgets, appropriations carried over and assigned revenue.

 556
1 154
 92
12 004
58 852
1 741
 498
6 878
1 805
 424
1 024
 106
43 389
 145
2 813
 266
 634
1 296
5 001
 107
1 572
1 062
 917
 79
 193
1 030
 67
 12
 134
1 399
 397
 738
 218
 764
3 527
150 898

Final 
Budget*
 527
1 269
 99
12 823
61 226
1 843
 518
8 130
2 131
1 000
1 043
 123
44 464
 151
3 433
 275
 648
1 444
5 088
 111
1 701
1 152
1 360
 79
 205
1 184
 138
 13
 144
1 401
 482
 818
 235
 528
4 023
159 810

EUR millions

Commitments

 517
1 241
 94
12 131
60 167
1 807
 506
7 915
2 085
 518
 997
 117
44 170
 147
3 303
 269
 635
1 420
5 023
 108
1 664
1 147
1 339
 79
 194
1 119
 134
 12
 134
1 397
 435
 782
 225
0
3 830
155 659

106

In the initial adopted EU budget, signed by the President of the European Parliament on 12 December 2012, the amount of pay-
ment 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 ap-
propriations) must be in balance.

REVENUE:

During 2013 nine amending budgets were adopted. Taking them into account, the total final budgeted revenue for 2013 amount-
ed 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 mil-
lion. 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 sub-
stantial 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 be-
tween the forecasted amounts and the amounts actually paid are due to the differences between the euro rates used for budget-
ary 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 reduc-
tion 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 corre-
sponded 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 mil-
lion), arising from an agreement by the European Council to increase their allocation under the structural funds. The total implementa-
tion 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 bil-
lion. Confronted with the heavy pressure of payment claims and the backlog of outstanding claims from 2012, the Budget Au-
thority 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).

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

107

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 Commis-
sion 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 appropria-
tions 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 re-
lated 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. 

s
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110

2.1. 

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 ac-
count 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).

2.2. 

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.

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

111

2.3. 

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 de-
termined 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 de-
termined 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 bal-
ances 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.

2.4. 

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 result-
ing 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).

2.5. 

Gross reduction

The European Council of 15 and 16 December 2005 concluded that the Netherlands and Sweden shall benefit from gross reduc-
tions 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.

 
112

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116

3.6 

 BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT 
APPROPRIATIONS BY POLICY AREA

Policy Area

Approps 
adopted

Modifications 
(Transfer /AB) 

Carried 
over 

Assigned 
revenue

Total ad-
ditional

Commitment appropriations

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility & transport

Environment & Climate

Research

Comm. netw. content 
& technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protection

Home affairs

External relations

Trade

Development & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. & legal advice

Commission administration

Budget

Audit

Statistics

Pensions and related expenditure

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

1
 556

1 154

 92

12 004

58 852

1 741

 498

6 878

1 805

 424

1 024

 106

43 389

 145

2 813

 266

 634

1 296

5 001

 107

1 572

1 062

 917

 79

 193

1 030

 67

 12

 134

1 399

 397

 738

 218

 764

3 527

150 898

2
 (60)

 (16)

 1

 276

 (33)

0

 (1)

 (4)

 6

0

 15

0

 780

 1

 15

 1

 (14)

 60

 (125)

0

 1

 54

 411

0

0

 (2)

 63

0

 (1)

0

0

 1

 1

 (236)

0

1 193

3
0

0

0

 24

 2

0

0

0

0

0

0

 3

0

0

0

0

0

0

 2

0

0

0

0

0

0

0

0

0

0

0

0

0

0

 31

EUR millions

Total au-
thorised

6=1+2+5
 527

1 269

 99

12 823

61 226

1 843

 518

8 130

2 131

1 000

1 043

 123

44 464

 151

3 433

 275

 648

1 444

5 088

 111

1 701

1 152

1 360

 79

 205

1 184

 138

 13

 144

1 401

 482

 818

 235

 528

4
 31

 131

 6

 518

2 406

 102

 21

1 256

 320

 576

 4

 16

 292

 6

 604

 8

 28

 88

 212

 3

 127

 35

 32

 11

 156

 7

 1

 11

 1

 86

 80

 16

0

5=3+4
 31

 131

 6

 542

2 407

 102

 21

1 256

 321

 576

 4

 16

 295

 6

 604

 8

 28

 88

 212

 4

 129

 35

 32

 11

 156

 7

 1

 11

 1

 86

 80

 16

0

 496

7 687

 496

4 023

7 719

159 810

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

117

3.6 

 BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT 
APPROPRIATIONS BY POLICY AREA (CONTINUED)

Payment appropriations

Policy Area

Approps 
adopted

Modifications 
(Transfer/ AB)

Carried 
over

Assigned 
revenue

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility & transport

Environment & Climate

Research

Comm. netw. content 
& technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protection

Home affairs

External relations

Trade

Development & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. & legal advice

Commission administration

Budget

Audit

Statistics

Pensions and related expenditure

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

7
428

1 162

 92

10 429

56 344

 984

 391

4 808

1 389

 411

 794

 103

37 434

 112

2 373

 253

 593

 799

3 089

 102

1 207

 832

 829

 73

 194

1 013

 67

 12

 115

1 399

 397

 814

 184

 80

3 527

132 837

8
 (52)

 214

 1

3 303

 512

 18

 9

 174

 167

 8

 30

 2

6 222

 16

 254

 (2)

 (5)

 174

 118

 2

 23

 76

 410

0

0

 14

 63

0

 7

0

0

 (70)

 4

 (80)

0

11 614

EUR millions

Total ad-
ditional

11=9+10
 35

Total 
authorised

12=7+8+11
 411

 211

 13

 555

2 378

 118

 37

1 573

 468

 539

 7

 22

 304

 12

 674

 23

 34

 80

 147

 7

 147

 25

 39

 10

 27

 290

 16

 1

 24

 1

 109

 93

 19

0

1 587

 107

14 286

59 234

1 120

 438

6 556

2 024

 959

 831

 127

43 960

 140

3 301

 273

 622

1 053

3 354

 112

1 377

 933

1 278

 83

 221

1 318

 146

 13

 147

1 401

 506

 838

 208

0

9
 6

 19

 8

 38

 27

 6

 18

 26

 14

 48

 3

 6

 12

 7

 13

 14

 11

 5

 13

 4

 11

 8

 7

 10

 16

 133

 8

 1

 6

0

 24

 6

 4

0

10
 29

 192

 6

 517

2 351

 112

 19

1 548

 454

 491

 4

 17

 292

 5

 661

 8

 23

 75

 134

 3

 136

 17

 32

 11

 158

 7

 1

 19

 1

 86

 88

 15

0

 468

 999

 502

8 011

 970

9 010

4 497

153 461

118

3.7 

 IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 
BY POLICY AREA

Policy Area

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, 
content and technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. and legal adv.

Commission’s administr.

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Commit-
ment ap-
propriations 
authorised

Commitments made

From the 
year’s 
approps

From 
carry-
overs

Assigned 
revenue

EUR millions

Total

%

1
 527

1 269

 99

12 823

61 226

1 843

 518

8 130

2 131

1 000

1 043

 123

2
 488

1 135

 91

12 097

58 797

1 734

 495

6 874

1 810

 424

 995

 104

44 464

44 162

 151

3 433

 275

 648

1 444

5 088

 111

1 701

1 152

1 360

 79

 205

1 184

 138

 13

 144

1 401

 482

 818

 235

 528

 144

2 826

 264

 614

1 352

4 869

 105

1 564

1 115

1 326

 79

 188

1 028

 129

 11

 126

1 397

 387

 734

 216

0

3
0

0

0

 24

 2

0

0

0

0

0

0

0

 3

0

0

0

0

0

0

0

 2

0

0

0

0

0

0

0

0

0

0

0

0

0

0

4
 29

 105

 3

 10

1 368

 73

 11

1 041

 276

 94

 1

 13

 5

 3

 477

 5

 20

 68

 153

 2

 99

 31

 12

0

 6

 91

 4

0

 8

0

 48

 48

 8

0

5=2+3+4
 517

1 241

 94

12 131

60 167

1 807

 506

7 915

2 085

 518

 997

 117

44 170

 147

3 303

 269

 635

1 420

5 023

 108

1 664

1 147

1 339

 79

 194

1 119

 134

 12

 134

1 397

 435

 782

 225

0

 434

4 548

3 830

155 659

6=5/1
98.09%

97.77%

94.88%

94.61%

98.27%

98.03%

97.67%

97.35%

97.84%

51.79%

95.55%

95.22%

99.34%

97.21%

96.20%

98.10%

97.88%

98.31%

98.71%

96.66%

97.82%

99.53%

98.42%

99.81%

94.96%

94.50%

96.82%

93.31%

93.14%

99.74%

90.08%

95.66%

95.71%

0.00%

95.21%

97�40%

Other Institutions

4 023

3 396

Total

159 810

151 080

 31

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

119

3.7 

  IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 
BY POLICY AREA (continued)

Policy Area

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, content and technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. and legal adv.

Commission’s administr.

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Appropriations carried over

EUR millions

Assigned 
revenue

Carry 
overs: 
decision

Total

%

7
 2

 26

 3

 509

1 038

 30

 10

 215

 45

 482

 2

 4

 287

 3

 127

 3

 8

 20

 58

 2

 28

 4

 20

0

 5

 64

 3

0

 3

 1

 38

 31

 8

0

 62

8
0

0

0

 168

0

0

0

0

0

0

0

0

0

0

0

0

 1

 2

 5

0

 1

0

0

0

0

0

0

0

0

0

0

0

0

0

0

9=7+8
 2

 26

 3

 677

1 038

 30

 10

 215

 45

 482

 2

 4

 287

 3

 127

 3

 9

 22

 64

 2

 29

 4

 20

0

 5

 65

 3

 1

 3

 1

 38

 31

 8

0

 62

10=9/1
0.44%

2.03%

2.62%

5.28%

1.69%

1.61%

1.88%

2.64%

2.10%

48.21%

0.20%

3.10%

0.65%

1.81%

3.71%

1.08%

1.35%

1.50%

1.25%

1.40%

1.71%

0.35%

1.46%

0.04%

2.45%

5.46%

2.23%

4.03%

2.37%

0.10%

7.84%

3.82%

3.23%

0.00%

1.53%

Total

3 140

 178

3 318

2�08%

120

3.7 

  IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 
BY POLICY AREA (continued)

Policy Area

From 
year’s budget 
approps

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, content and 
technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. and legal adv.

Commission’s administr.

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

11

 8

 2

 2

 14

 21

 7

 2

0

 1

0

 44

 2

 7

 1

 3

 2

 5

 3

 2

 2

 8

 1

 2

0

 5

0

 1

0

 6

 2

 10

 4

 2

 528

 131

 833

Appropriations lapsing

From carry 
overs

Assigned 
revenue 

12

13

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

EUR millions

Total

%

14=11+ 
12+13
 8

 2

 2

 14

 21

 7

 2

0

 1

0

 44

 2

 7

 1

 3

 2

 5

 3

 2

 2

 8

 1

 2

0

 5

0

 1

0

 6

 2

 10

 4

 2

 528

 131

 833

15=14/1

1.47%

0.19%

2.50%

0.11%

0.03%

0.36%

0.45%

0.01%

0.06%

0.00%

4.25%

1.69%

0.02%

0.97%

0.09%

0.82%

0.77%

0.19%

0.04%

1.94%

0.46%

0.13%

0.11%

0.15%

2.59%

0.03%

0.95%

2.66%

4.49%

0.16%

2.08%

0.52%

1.06%

100.00%

3.26%

0�52%

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

121

3.8 

 IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY POLICY 
AREA

Policy Area

Economic & financial affairs

Enterprise

Competition

Employm. and social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, 
content & technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord.& legal advice

Commission administration

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

Payment  
Appropr� 
authorised

From the 
year’s appr�

From 
carry 
overs

Payments made

Assigned 
revenue

EUR millions

Total

%

1
 411

1 587

 107

14 286

59 234

1 120

 438

6 556

2 024

 959

 831

 127

2
 366

1 359

 84

13 672

56 815

 990

 377

4 958

1 539

 366

 816

 97

43 960

43 262

 140

3 301

 273

 622

1 053

3 354

 112

1 377

 933

1 278

 83

 221

1 318

 146

 13

 147

1 401

 506

 838

 208

0

 120

2 614

 234

 574

 966

3 189

 99

1 212

 901

1 230

 65

 175

 894

 124

 11

 115

1 397

 371

 734

 183

0

3
 6

 17

 7

 36

 23

 5

 17

 23

 13

 41

 3

 5

 10

 7

 12

 14

 10

 5

 11

 4

 9

 6

 7

 8

 13

 125

 8

0

 5

0

 22

 5

 3

0

4
 26

 80

 2

 399

1 501

 64

 12

 790

 273

 89

 1

 13

 222

 3

 426

 5

 15

 64

 94

 2

 124

 12

 12

0

 5

 64

 3

0

 7

0

 44

 20

 9

0

5=2+3+4
 397

1 456

 93

14 107

58 339

1 059

 406

5 771

1 826

 496

 820

 116

43 494

 129

3 052

 252

 599

1 035

3 295

 104

1 345

 920

1 249

 73

 193

1 082

 135

 12

 126

1 397

 436

 758

 195

0

4 497

2 975

153 461

142 883

 425

 902

 303

4 684

3 703

148 469

6=5/1
96.68%

91.76%

87.19%

98.74%

98.49%

94.58%

92.71%

88.02%

90.21%

51.68%

98.71%

90.79%

98.94%

92.07%

92.45%

92.32%

96.32%

98.33%

98.23%

93.10%

97.67%

98.56%

97.74%

87.45%

87.38%

82.08%

91.97%

89.13%

85.55%

99.74%

86.22%

90.53%

93.62%

0.00%

82.35%

96�75%

122

3.8 

 IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY POLICY 
AREA (continued)

Appropriations carried over

EUR millions

Policy Area

Automatic 
carry overs

Assigned 
revenue

Carry 
overs 
by 
decision

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, content and 
technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. and legal adv.

Commission’s administr.

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

7
 8

 14

 7

 14

 21

 6

 21

 24

 15

 54

 3

 6

 12

 7

 11

 14

 12

 4

 17

 3

 11

 5

 8

 9

 14

 134

 6

0

 6

0

 16

 5

 4

0

 421

 911

8
0

0

0

 36

0

0

0

0

0

0

 1

0

 380

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

 419

Total

%

10=7+8+9
 11

 126

 10

 168

 871

 54

 28

 782

 196

11=10/1
2.60%

7.91%

9.61%

1.18%

1.47%

4.86%

6.41%

11.92%

9.69%

 456

47.57%

 7

 9

 461

 9

 247

 17

 19

 15

 56

 5

 24

 10

 28

 9

 20

 227

 10

 1

 18

 1

 58

 73

 10

0

0.87%

7.08%

1.05%

6.71%

7.47%

6.34%

3.09%

1.41%

1.68%

4.67%

1.71%

1.07%

2.17%

10.39%

9.04%

17.26%

6.75%

8.05%

12.02%

0.10%

11.42%

8.76%

4.62%

0.00%

13.79%

3�03%

9
 3

 111

 3

 117

 850

 48

 7

 758

 181

 402

 2

 3

 70

 3

 235

 4

 8

 11

 39

 2

 12

 5

 20

0

 6

 94

 4

0

 12

 1

 42

 68

 6

0

 199

3 327

 620

4 657

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

123

3.8 

 IMPLEMENTATION OF PAYMENT APPROPRIATIONS BY POLICY 
AREA (continued)

Policy Area

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, content and 
technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protect.

Home affairs

External relations

Trade

Develop. & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. and legal adv.

Commission’s administr.

Budget

Audit

Statistics

Pensions & related expend.

Language Services

Energy

Justice

Reserves

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

40

90

Total

Appropriations lapsing

From the 
year’s appr�

From 
carry-overs

Assigned 
revenue 

EUR millions

Total

%

12
 2

 3

 2

 9

 20

 5

 3

0

 1

0

 3

 2

 2

 1

 2

 3

 3

 2

 1

 2

 7

 2

 1

0

 5

 1

 1

0

 2

 2

 10

 5

 2

0

 131

 238

13
 1

14
0

15=12+13+14 16=15/1
0.72%
 3

 2

 1

 2

 4

 1

 1

 3

 1

 7

 1

 1

 2

0

 1

 1

 1

 1

 2

0

 2

 2

0

 2

 3

 8

 1

0

 1

0

 2

 1

 1

0

 43

 97

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

 5

 3

 11

 24

 6

 4

 3

 2

 7

 4

 3

 4

 2

 3

 4

 4

 3

 3

 2

 8

 3

 1

 2

 8

 9

 2

0

 4

 2

 12

 6

 4

0

 174

 335

0.33%

3.20%

0.08%

0.04%

0.56%

0.89%

0.05%

0.10%

0.75%

0.42%

2.13%

0.01%

1.22%

0.08%

1.34%

0.59%

0.26%

0.09%

2.23%

0.61%

0.37%

0.09%

2.16%

3.57%

0.67%

1.29%

2.82%

2.43%

0.16%

2.36%

0.71%

1.75%

0.00%

3.86%

0�22%

124

3.9  MOVEMENTS IN COMMITMENTS OUTSTANDING BY POLICY AREA

Policy Area

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, content and 
technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protection

Home affairs

External relations

Trade

Development & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. & legal advice

Commission administration

Budget

Audit

Statistics

Pensions & related expenditure

Language Services

Energy

Justice

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

90

EUR millions

Commitments outstanding at end of the previous year

Commit-
ments carried 
forward from 
previous year

Decom-
mitments /
Revaluations/ 
Cancellations

Payments 

Commitments 
outstanding at 
year-end

 623

2 090

 8

29 668

23 847

3 317

1 002

10 781

2 594

 199

2 290

 21

112 307

 93

2 194

 119

 642

1 677

11 342

 18

3 453

3 039

 831

 35

 17

 174

 8

 1

 114

0

 24

4 517

 179

 588

 (3)

 (20)

 (1)

 (133)

 (320)

 (64)

 (12)

 (92)

 (31)

 (20)

 (107)

 (2)

 (811)

 (5)

 (57)

 (10)

 (62)

 (69)

 (352)

 (1)

 (103)

 (58)

 (3)

 (3)

 (3)

 (10)

 (1)

0

 (9)

0

 (2)

 (40)

 (25)

 (163)

 (142)

 (963)

 (7)

(13 541)

(12 377)

 (885)

 (268)

(3 109)

 (952)

 (121)

 (633)

 (16)

(42 832)

 (59)

 (938)

 (84)

 (293)

 (331)

(2 421)

 (11)

 (905)

 (763)

 (555)

 (18)

 (14)

 (153)

 (8)

0

 (48)

0

 (22)

 (639)

 (79)

 (425)

 478

1 107

0

15 994

11 150

2 368

 723

7 579

1 611

 59

1 551

 4

68 664

 29

1 199

 25

 288

1 277

8 569

 6

2 444

2 218

 273

 14

0

 11

0

0

 57

0

0

3 838

 75

0

Total

217 810

(2 590)

(83 611)

131 609

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

125

3.9 

 MOVEMENTS IN COMMITMENTS OUTSTANDING BY POLICY AREA 
(continued)

Commitments of the year

EUR millions

Policy Area

Payments

Commitments 
made during 
the year

Cancellation 
commitments 
which cannot 
be carried 
over

Commitments 
outstanding at 
year-end

Total com-
mitments 
outstanding at 
year-end

Economic & financial affairs

Enterprise

Competition

Employment & social affairs

Agriculture & rural develop.

Mobility and transport

Environment & Climate

Research

Communication network, 
content and technology

Direct research

Maritime affairs & Fisheries

Internal market

Regional policy

Taxation & customs union

Education & culture

Communication

Health & consumer protection

Home affairs

External relations

Trade

Development & relations ACP

Enlargement

Humanitarian aid

Fight against fraud

Policy coord. & legal advice

Commission administration

Budget

Audit

Statistics

Pensions & related 
expenditure

Language Services

Energy

Justice

Other Institutions

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

90

Total

 517

1 241

 94

12 131

60 167

1 807

 506

7 915

2 085

 518

 997

 117

44 170

 147

3 303

 269

 635

1 420

5 023

 108

1 664

1 147

1 339

 79

 194

1 119

 134

 12

 134

 (256)

 (493)

 (86)

 (566)

(45 962)

 (174)

 (138)

(2 661)

 (874)

 (375)

 (188)

 (100)

 (662)

 (70)

(2 114)

 (168)

 (306)

 (704)

 (874)

 (93)

 (439)

 (157)

 (694)

 (55)

 (179)

 (929)

 (127)

 (11)

 (78)

1 397

(1 397)

 435

 782

 225

 (415)

 (119)

 (116)

3 830

(3 278)

155 659

(64 858)

0

0

0

0

0

0

0

 (2)

0

0

0

0

0

0

0

0

0

0

0

0

0

 (1)

0

0

0

0

0

0

0

0

0

0

0

 5

 (1)

 261

 748

 8

11 565

14 205

1 633

 368

5 252

1 211

 143

 809

 17

43 508

 77

1 188

 101

 328

 715

4 149

 15

1 225

 988

 645

 25

 15

 190

 7

 1

 55

0

 20

 664

 109

 557

 739

1 855

 8

27 559

25 354

4 001

1 090

12 831

2 822

 202

2 360

 21

112 172

 106

2 387

 126

 616

1 992

12 718

 21

3 669

3 206

 918

 38

 15

 201

 7

 1

 113

0

 20

4 502

 184

 557

90 801

222 410

126

3.10   BREAKDOWN OF COMMITMENTS OUTSTANDING BY YEAR OF 

ORIGIN BY POLICY AREA

8

9
3
7

l

a
t
o
T

5
5
8
1

9
5
5

7
2

4
5
3
5
2

1
0
0

4

0
9
0
1

1
3
8

2
1

2
2
8
2

1
2

2
0
2

0
6
3
2

s
n
o

i
l
l
i

m
R
U
E

8

1
6
2

8
4
7

3
1
0
2

5
6
5

1
1

5
0
2

4
1

8
6
3

3
3
6
1

2
5
2
5

1
1
2

1

3
4
1

9
0
8

7
1

0

0
8
1

3
1
5

2
1
0
2

5
2
2
9

9
2
7
8

3
0
9

7
9
1

3
6
8

4
1
7

3

3

7
2

8
2
7

0

4
8
1

4
6
3

1
1
0
2

2
6
8
4

9
7
0
2

7
0
7

0
7
1

4
9
3

9
6
0
2

8

0
9
4

0

3
7

5
3
1

4
2
9

4
4
1

5
7
3

3
3
1

8
8
1

3
0
0
1

5

4
4

1

0

0

5
5

6
4
2

2

1
1
2

5
0
1

7
9
3

5
1
1

5

0
1

0

2
7
1

2
1
1

8
0
5
3
4

6
3
8
5
3

1
3
3

9
1

5
2
9
7

0
6
5
1

6
0
1

7
8
3
2

6
2
1

6
1
6

2
9
9
1

8
1
7

2
1

1
2

9
6
6
3

6
0
2
3

8
3

5
1

8
1
9

1
0
2

7

1

0

0
2

3
1
1

4
8
1

7
5
5

2
0
5
4

7
7

8
8
1

1

1
0
1

8
2
3

5
1
7

5
1

9
4
1

4

5
2
2
1

8
8
9

5
4
6

5
2

5
1

0
9
1

7

1

0

5
5

0
2

4
6
6

9
0
1

0
2
4

2
2

0
6
5

9
1

8
0
1

0
7
5

4

3
9
2

3

5
0
0
1

0
7
7

2
8
1

6

0

0

0

1
1

0

0

1
3

3
4

5
7
4

7
3
1

7

2
3
3

3

5
6

0
4
3

1
7
9

1

2

9
0
6

0
0
6

7
3

3

0

0

0

0

0

8
1

0

8
1

9
4
5

1

2
5

8
3
1

3
8
1

7
5
2
1

2
5
3

9
6
3

8
2

2

0

0

0

6

0

0

0

0

1
8

9
2

8
2
1

2
2
8

0

7
2
2

2
7
1

4
1

1

0

0

0

0

1

0

0

7

0

5

0

6
7
5

1

5
9
0
1

0

3
2

0

7

8
4

5
6

0
3

9
0
2

9

3

0

0

4
5

1
2
4

0
3

1
4

3
7
5

8
1
1

5
2
1

9

1

0

0

0

0

0

0

2

0

2
6

0
1
4
2
2
2

4
6
6
0
9

3
5
1
8
6

4
1
2

5
3

0
2
9
4
1

0
8
2
5

7
2
8
1

0
1

4
1

0

7
5

5
4

5
8

5
1

3
0
1

1

1

0

9

0

0

1

3
3

4
1

8
1
3

0

1
4

5
4

1

1

0

0

0

0

0

0

1
2

0

5
1
8

4

0

2
3

3
7
6

6
9
1

8

1
2

2
0
1

7

3

0

5
7
2

3
8
5
3

0

1

0

4

0

0

2
9

5
3
3

7
3
1

1

0

0

0

0

0

2

0

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Consolidated annual accounts of the European Union 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

127

FINANCIAL FRAMEWORK 2007-2013 

1. Sustainable Growth
2. Preservation & management 
of natural resources
3. Citizenship, freedom, security 
& justice
4. EU as a global player
5. Administration
6. Compensations
Commitment appropriations:

2007
53 979
55 143

2008
57 653
59 193

2009
61 696
56 333

2010
63 555
59 955

2011
63 974
59 888

2012
67 614
60 810

2013
70 644
61 289

Total
439 115
412 611

EUR millions

1 273

1 362

1 518

1 693

1 889

2 105

2 407

12 247

6 578
7 039
 445
124 457

7 002
7 380
 207

7 440
7 525
 210
132 797 134 722

7 893
7 882
0
140 978

8 430
8 091
0

8 997
8 523
0
142 272 148 049

9 595
8 492
 75

55 935
54 932
 937
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 commit-
ments 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 train-

ing, 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 re-
gional 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.

128

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 admin-
istrative 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 plan-
ning 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 set-
ting. 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.

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

129

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130

4.2 

 IMPLEMENTATION OF COMMITMENT AND PAYMENT 
APPROPRIATIONS BY INSTITUTION

Commitment appropriations

Institution

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data Protection Supervisor
European External Action Service
Total

Institution

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data Protection Supervisor
European External Action Service
Total

Com-
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authorised

1
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 605
155 788
 357
 143
 134
 90
 10
 8
 793
159 810

Commitments made

EUR millions

From the 
year’s approps

From 
carry-overs

From assigned 
revenue

Total

%

2
1 736
 464
147 684
 342
 132
 122
 85
 10
 7
 498
151 080

3
0
0
 31
0
0
0
0
0
0
0
 31

4 5=2+3+4
1 857
 507
151 829
 343
 132
 126
 87
 10
 7
 761
4 548 155 659

 121
 42
4 114
 1
0
 4
 2
0
0
 263

6=5/1
98.6%
83.8%
97.5%
96.1%
92.2%
93.9%
97.1%
98.2%
95.1%
96.0%
97�4%

EUR millions

From assigned revenue
7
 12
 27
3 078
 1
0
 1
0
0
0
 21
3 140

Appropriations carried over
Carry-overs by decision
8
0
0
 178
0
0
0
0
0
0
0
 178

Total
9=7+8
 12
 27
3 256
 1
0
 1
0
0
0
 21
3 318

%
10=9/1
0.6%
4.4%
2.1%
0.2%
0.2%
0.4%
0.0%
0.0%
0.0%
2.7%
2�1%

EUR millions

Total

%

Institution

Appropriations lapsing

from carry-overs

Assigned 
revenue 

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data Protection Supervisor
European External Action Service
Total

From the year’s 
budget approps
11
 15
 71
 702
 13
 11
 8
 3
0
0
 10
 833

12
0
0
0
0
0
0
0
0
0
0
0

13 14=11+12+13
 15
 71
 702
 13
 11
 8
 3
0
0
 10
 833

0
0
0
0
0
0
0
0
0
0
0

15=14/1
0.8%
11.8%
0.5%
3.6%
7.6%
5.7%
2.9%
1.8%
4.9%
1.3%
0�5%

Consolidated annual accounts of the European Union 2013Payment appropriations

Institution

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data protection Supervisor
European External Action Service
Total

Institution

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data protection Supervisor
European External Action Service
Total

Institution

European Parliament
European Council and Council
Commission
Court of Justice
Court of Auditors
Economic & Social Committee
Committee of the Regions
Ombudsman
European Data protection Supervisor
European External Action Service
Total

Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

131

Payment 
appro-
priations 
authorised

1
2 189
 651
148 964
 375
 156
 142
 98
 10
 9
 868
153 461

Commitments made

EUR millions

From the 
year’s approps

From 
carry-overs

From assigned 
revenue

Total

%

2
1 458
 416
139 908
 326
 121
 114
 78
 9
 6
 446
142 883

3
 286
 39
 477
 15
 11
 7
 7
 1
0
 59
 902

4 5=2+3+4
1 770
 496
144 766
 342
 132
 125
 87
 10
 7
 735
4 684 148 469

 25
 41
4 381
 1
0
 3
 2
0
0
 229

6=5/1
80.9%
76.3%
97.2%
91.2%
84.7%
87.7%
88.9%
91.9%
81.5%
84.7%
96�7%

Automatic 
carry overs
7
 278
 48
 490
 16
 11
 8
 7
 1
 1
 52
 911

Appropriations carried over
From assigned 
revenue
9
 107
 28
3 128
 1
0
 1
0
0
0
 61
3 327

Carry overs by 
decision
8
0
0
 419
0
0
0
0
0
0
0
 419

Appropriations lapsing

From carry overs

Assigned 
revenue 

EUR millions

Total

%

10=7+8+9
 385
 76
4 037
 17
 11
 9
 7
 1
 1
 113
4 657

11=10/1
17.6%
11.7%
2.7%
4.5%
7.3%
6.2%
7.2%
6.0%
9.3%
13.0%
3�0%

EUR millions

Total

%

From 
year’s appropr�
12
 15
 71
 107
 13
 11
 8
 3
0
0
 10
 238

13
 19
 7
 54
 3
 2
 1
 1
0
0
 9
 97

14 15=12+13+14
 34
 78
 161
 16
 12
 9
 4
0
 1
 20
 335

0
0
0
0
0
0
0
0
0
0
0

16=15/1
1.5%
12.0%
0.1%
4.2%
8.0%
6.1%
3.8%
2.1%
9.3%
2.3%
0�2%

132

4.3 

 AGENCIES INCOME: BUDGET FORECASTS, ENTITLEMENTS 
AND AMOUNTS RECEIVED

Amounts 
received

Outstanding

Agency

European Agency for the Cooperation of Energy 
Regulators
European Asylum Support Office
European Aviation Safety Agency
Frontex
European Centre for the Development of Vocational 
Training
European Police College
European Chemicals Agency
European Centre for Disease prevention and control
European Monitoring Centre for Drugs and Drug Addiction
European Banking Authority
European Insurance and Occupational Pensions Authority
European Environment Agency
European Police office
European Securities and Markets Authority
Community Fisheries Control Agency
European Food Safety Authority
European Institute for Gender Equality
European GNSS supervisory authority
Fusion for Energy
Eurojust
EU. LISA
European Maritime Safety Agency
Office For Harmonisation in the Internal Market
European Medicines Agency
European Network and Information Security Agency
European Regulators for Electronic Communications office
European Union Agency for Fundamental Rights
European Railway Agency
European Agency for Safety and Health at Work
European Institute of Innovation and Technology
Translation Centre for the Bodies of the EU
European Training Foundation
Community Plant Variety Office
European Foundation for the Improvement of Living and 
Working Conditions
Education, Audiovisual & Culture Executive Agency
Executive Agency for Competitiveness and Innovation
European Research Council Executive Agency
Research Executive Agency 
Executive Agency for Health and Consumers
Trans-European Transport Network Executive Agency

Forecasted 
Income 
budget
 12

Entitle-
ments 
established
 12

 11
 151
 94
 19

 8
 99
 58
 16
 26
 19
 49
 83
 28
 9
 76
 7
 14
 432
 32
 34
 57
 418
 252
 10
 4
 22
 26
 15
 99
 52
 20
 14
 21

 10
 125
 92
 18

 9
 98
 59
 16
 26
 18
 63
 83
 30
 9
 76
 8
 54
 432
 32
 19
 58
 189
 269
 10
 4
 22
 26
 16
 97
 54
 22
 13
 21

 12

 10
 125
 92
 18

 9
 98
 59
 16
 26
 18
 63
 83
 30
 9
 76
 8
 54
 432
 32
 19
 56
 189
 240
 9
 4
 22
 26
 16
 97
 50
 22
 13
 21

 51
 16
 40
 47
 7
 10
2 457

 52
 16
 40
 47
 7
 10
2 260

 52
 16
 40
 47
 7
 10
2 224

EUR millions
Funding 
Commission 
Policy Area
06

18
06
18
15

18
02
17
18
12
12
07
18
12
11
17
04
06
08
18
18
06
12
02
09
09
18
06
04
15
15
15
17
04

15
06
08
08
17
06

0

0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
 2
0
 29
0
0
0
0
0
0
 4
0
0
0

0
0
0
0
0
0
 37

Type of revenue

Commission Subsidy
Fee income
Other income

Forecasted income 
budget
1 349
 569
 539
2 457

Entitlements 
established
1 370
 591
 299
2 260

Amounts 
received
1 370
 564
 290
2 224

EUR millions

Outstanding

 1
 27
 9
 37

Consolidated annual accounts of the European Union 2013Agg r egat ed  rep or ts  on the  i mple me ntati o n  of  the  b ud get  and  e xp l anato r y  note s

133

4.4  COMMITMENT & PAYMENT APPROPRIATIONS BY AGENCY

Agency

European Agency for the Cooperation of Energy 
Regulators
European Asylum Support Office
European Aviation Safety Agency
Frontex
European Centre for the Development of Vocational 
Training
European Police College
European Chemicals Agency
European Centre for Disease prevention and control
European Monitoring Centre for Drugs and Drug 
Addiction
European Banking Authority
European Insurance and Occupational Pensions 
Authority
European Environment Agency
European Police office
European Securities and Markets Authority
Community Fisheries Control Agency
European Food Safety Authority
European Institute for Gender Equality
European GNSS supervisory authority
Fusion for Energy
Eurojust
EU.LISA
European Maritime Safety Agency
Office for Harmonisation in the Internal Market
European Medicines Agency
European Network & Information Security Agency
European Regulators for Electronic Communications 
office
European Union Agency for Fundamental Rights
European Railway Agency
European Agency for Safety & Health at Work
European Institute of Innovation and Technology
Translation Centre for the Bodies of the EU
European Training Foundation
Community Plant Variety Office
European Foundation for the Improvement of Living 
and Working Conditions
Education, Audiovisual & Culture Executive Agency
Executive Agency for Competitiveness and 
Innovation
European Research Council Exec. Agency
Research Executive Agency 
Executive Agency for Health & Consumers
Trans-European Transport Network Executive Agency
Total

Commitment appropriations
Commitments 
made
 12

Appropri-
ations
 12

Carried 
over
0

 12
 169
 95
 20

 9
 108
 59
 17

 26
 19

 72
 84
 28
 9
 79
 8
 94
1 297
 34
 61
 62
 418
 252
 10
 4

 22
 26
 17
 142
 52
 22
 16
 21

 51
 16

 40
 47
 7
 10
3 546

 10
 135
 92
 20

 8
 106
 54
 16

 23
 18

 54
 82
 26
 9
 78
 7
 81
1 297
 33
 61
 59
 209
 243
 9
 3

 22
 25
 15
 138
 44
 22
 14
 21

 50
 16

 39
 46
 7
 10
3 215

0
 32
0
0

0
0
0
0

0
0

 17
0
0
0
0
0
 13
0
0
0
 2
0
0
 1
0

0
0
 2
 1
0
0
0
0

0
0

0
0
0
0
 70

EUR millions

Payment appropriations

Appropri-
ations
 14

Payments 
made
 8

Carried 
over
 5

 12
 180
 116
 21

 10
 123
 70
 17

 33
 22

 76
 100
 32
 11
 85
 10
 75
 439
 37
 38
 59
 37
 292
 10
 4

 26
 28
 21
 106
 56
 23
 15
 25

 58
 18

 11
 125
 79
 19

 9
 106
 53
 16

 25
 16

 47
 87
 24
 9
 77
 8
 26
 393
 32
 19
 53
 201
 249
 9
 3

 20
 25
 14
 102
 44
 21
 13
 20

 50
 15

 1
 52
 32
 2

 1
 14
 11
 1

 4
 5

 27
 10
 6
 1
 7
 2
 49
 23
 5
 7
 3
 38
 33
 1
0

 7
 2
 6
 2
 3
 2
0
 5

 5
 1

 42
 50
 8
 11
2 410

 39
 46
 7
 10
2 130

 2
 3
 1
 1
 381

134

Type of revenue

Commission Subsidy
Fee income
Other income
Total

Forecasted income 
budget
1 349
 569
 539
2 457

Entitlements 
established
1 370
 591
 299
2 260

Amounts 
received
1 370
 564
 290
2 224

EUR millions

Outstanding

 1
 27
 9
 37

Type of expenditure

Staff

Administrative expenses

Operational expenses

Total

Commitment appropriations

Payment appropriations

Appropri-
ations
 875

Commit-
ments made
 844

Carried 
over
 1

Appropri-
ations
 796

Payments 
made
 838

Carried 
over
 16

 350

2 322

3 546

 343

2 028

3 215

 1

 68

 70

 351

1 262

2 410

 335

 957

2 130

 83

 282

 381

4.5  BUDGET RESULT INCLUDING AGENCIES

Revenue for the financial year

Payments against current year appropriations

Payment appropriations carried over to year N+1

Cancellation of unused appropriations carried over 
from year N-1

Exchange differences for the year 

EUROPEAN 
UNION

149 504

(147 567)

(1 329)

 437

 (42)

1 002

Elimination of 
subsidies to 
agencies
(1 370)

1 370

0

0

0

0

AGENCIES

2 224

(1 909)

 (381)

 107

0

 41

EUR millions

TOTAL

150 358

(148 106)

(1 710)

 543

 (42)

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.

Consolidated annual accounts of the European Union 2013HOW TO OBTAIN EU PUBLICATIONS

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doi:10.2761/51250