Consolidated annual accounts of the European Union : financial year 2013 : key information.
Date: 2014-10-13
Institutions: Directorate-General for Budget
Subjects: Community budget, consolidated account, financial year, implementation of the budget, public accounting, public finance

ISSN 2363-1708

Consolidated Annual Accounts 

of the European Union 
Financial year 2013 

Key information 

Main messages

The European Union (EU) annual accounts comprise both the finan­
cial  statements  of  the  EU  (based  on  International  Public  Sector 
 Accounting Standards) and the results of the implementation of the 
EU budget during the year (cash basis).

The financial year 2013, the last year of the 2007–13 programming 
period, has been another year marked by a very high execution of 
the budget. The value of the assets held by the EU remained sta­
ble at EUR 155 billion in 2013. Since the financial support mech­
anisms  currently  managed  by  the  EU  no  longer  provide  new  loan 
facility agreements, the level of long­term loans was reduced from 
EUR 57.4 billion to EUR 54.3 billion in 2013 as repayments started 
to be made. The level of long­term advance payments (pre­financ­
ing) was reduced by EUR 6.4 billion to EUR 38 billion in 2013. The 
reduction of long­term assets was compensated by an increase of 
short­term pre­financing of EUR 8 billion to EUR 21 billion in 2013 
due to the fact that the Structural Fund programmes entered into the 
final phase of the 2007–13 programming period.

Fixed assets 
4 %

Inventories
0 %

Assets
2013:
EUR 155 
billion

Prepaid  
expenses 
5 %

Other investments and 
financial assets 
6 %
Cash and cash 
equivalents 
6 %

Receivables and  
recoverables
9 %

Financial 
support
loans 
37 %

Pre-financing
33 %

EUR 46 billion of negative net assets 
The excess of liabilities over assets does not mean that the EU institu­
tions are bankrupt, it rather means that it will be funded by future annual 
budgets. Many expenses are recognised under accrual accounting rules 
in 2013 although they may be actually paid in 2014 and funded by 
using the budget of 2014. The inclusion in the accounts of these liabil­
ities coupled with the fact that the corresponding amounts are financed 
by future budgets results in liabilities greatly exceeding assets at year­
end. The most significant amounts to be highlighted are the European 
Agricultural  Guarantee  Fund  (EAGF)  activities  (paid  in  2014)  and  the 
employee benefits.

Total liabilities of the EU: EUR 201 billion
EUR 92.6 billion of short­term liabilities primarily represent payables in 
the area of agriculture and rural development (EUR 46 billion) and pay­
ables in the area of cohesion (European Social Fund, European Regional 
Development Fund and Cohesion Fund — EUR 25 billion). These are pay­
ment obligations towards beneficiaries some of which could not be paid 
by the EU by year­end as payment appropriations set by the budget au­
thority were not sufficient to cover commitment appropriations entered 
into. The EU is one of very few public sector entities to fully recognise its 
liabilities regarding employee benefits (primarily pension rights acquired 
by Commissioners, Members of the European Parliament (MEPs) and 
staff) and this accounts for EUR 46.8 billion of long­term liabilities, with 
no corresponding pension fund assets since the schemes are unfunded 
(the pension payments are guaranteed by the Member States).

Accrued charges and 
deferred income 
28 %

Liabilities
2013:
EUR 201 
billion

Financial support
liabilities 
29 %

 ▶ Negative net assets in billion EUR

Employee 
benefits
23 %

Payables
18 %

Provisions
1 %

Other liabilities
1 %

250

200

150

100

50

0

2013

2012

2011

billion EUR

Current assets
Non-current assets

Current liabilities
Non-current liabilities

C O N S O L I D A T E D   A N N U A L   A C C O U N T S   O F   T H E   E U R O P E A N   U N I O N   | F I N A N C I A L   Y E A R   2 0 1 3

EUR – 4 billion accruals-based economic result

 ▶ 2013 income and expenses in billion EUR

Other operating
revenue 8 

Own resources 
revenue 
140 

billion EUR

Other expenses 5
Administrative
expenses  9 

Operating
expenses
139 

s
e
s
n
e
p
x
e
3
1
0
2

e
m
o
c
n
I

e
m
o
c
n

i

3
1
0
2

3
1
0
2

160

140

120

100

80

60

40

20

0

Operating expenses
Operating  expenses  cover  the  various  headings  of  the  financial 
framework. The majority of the expenses incurred in 2013 fall under 
shared  management  involving  the  delegation  of  tasks  to  Member 
States, covering the following areas: agriculture and rural develop­
ment (EUR 59 billion), regional development and cohesion (EUR 49 bil­ 
lion), employment and social affairs (EUR 12 billion), research and 
communication network, content and technology (EUR 6 billion) and 
external  relations  (EUR  3  billion).  The  overall  increase  in  operating 
expenses is driven by the advancement of the projects in the area 
of regional development at the end of the 2007–13 programming 
period. 

 ▶ Operating expenses by policy area in %

GNI resources 110 
Customs duties 15 
VAT resources 14 
Other 2 

Shared management 120  
Direct centralised management  9 
Indirect centralised management 5 
Joint management 2
Decentralised management 1
Other operating management 2 

Agriculture
43 %

The  consolidated  annual  accounts  of  the  EU  comprise  more  than 
50 institutions, agencies and other bodies with the European Com­
mission having the main operational activities.

 ▶ Consolidated financial statements: assets by entity in %

95 %

European Commission

5 %

Regional policy
35 %

Employment
9 %

External policies 4 %

Other 3 %

Research 4 %

Education and culture 1 %

Other consolidated entities

Other internal policies 1 %

Implementation of the EU budget

In the initial adopted EU budget, signed by the President of the Euro­
pean Parliament on 12 December 2012, the amount of payment ap­
propriations was EUR 133 billion and the amount to be financed by 
own resources totalled EUR 131 billion. During 2013, nine amending 
budgets were adopted. Taking them into account, the final budgeted 
revenue for 2013 amounted to EUR 144 billion. This was financed by 
own resources totalling EUR 140 billion (thus EUR 9 billion more than 
initially forecasted) and the remainder by other revenue. As far as the 
own resources result is concerned, the collection of traditional own 
resources was close to the forecasted amounts.

 ▶ Budget result in billion EUR

billion EUR

4.5

Payment  appropriations  were  finally  set  at  EUR  133  billion,  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 correspond to 0.99 % of the 
 Union's GNI and left a margin of EUR 11.24 billion below the financial 
framework ceiling. The total implementation of final budget payment 
 appropriations was EUR 143 billion. This is EUR 8 billion more than 
in  2012  but  also  EUR  7  billion  more  than  the  financial  framework 
ceiling for 2014. The total increase to the initial budgeted payment 
appropriations, introduced via amending budgets amounted to EUR 
11.6 billion. Confronted with the heavy pressure of payment claims 
and the backlog of outstanding claims from 2012, the Budget Authority 
adopted increases of EUR 11.2 billion in payment appropriations in 
two steps. 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).

 ▶ Comparison of budget and actual amounts in billion EUR

2.2

Revenue

Expenditure

1.5

1.0

1.0

144  144 

133 

133 

2009 

2010

2011

2012

2013

billion EUR

150 

149 

Initial budget

Final budget

Actual

5.0

4.0 

3.0

2.0 

1.0 

0.0

 
 
 
K E Y   I N F O R M A T I O N                                                         

Budget implementation
The 2013 budget result of EUR 1 billion is returned to the Mem­
ber States during 2014 through deduction of their contributions 
due  for  that  year.  The  budget  surplus  of  EUR  1  billion  results 
essentially  from  fines  revenue  that  was  higher  than  foreseen.  
The  financial  year  2013  was  the  last  year  of  the  2007–13 
programming  period.  The  initial  budget  for  all  institutions  set 
commitment  appropriations  at  EUR  151  billion,  represent­
ing  an  increase  of  1.7  %  compared  to  the  final  2012  budget. 

This  was  a  reduction  of  EUR 0.16  billion  compared  to  the  draft 
budget,  and  left  a  margin  of  EUR  2.45  billion  below  the  ceiling  
of the multiannual financial framework. For commitments, the final 
budget appropriations, and hence the political targets set, were 
fully implemented (99.7 % excluding the un­mobilised reserves). 
The  2013  budget  was  again  under  pressure  due  to  significant 
amounts of unpaid payment claims from 2012 and the  mounting 
requests  for  reimbursements,  which  led  to  an  increase  in  the 
backlog of unpaid payment claims at year­end of EUR 23 billion.

From the budget surplus to the accounting deficit 
The budgetary surplus amounted to 
EUR 1 billion at 31 December 2013, 
compared to an accruals­based result 
(deficit) of EUR – 4.3 billion. Budgetary 
accounting records expenses when they are 
paid and revenues when they are received. 
Accrual accounting links expenses and 
revenues to the financial year in which they 

arise, irrespective of the date of payment. 
Consequently, the main differences are due 
to the fact that under accrual accounting, 
the EU needs to recognise future payment 
obligations entered into as expenses 
that are not yet shown in the budgetary 
accounts. The 2013 budget did not have 
sufficient payment appropriations to 

reimburse all the cost claims received 
from Member States. So the main factors 
were increased future payment obligations 
shown under payables for agriculture and 
rural development and future payment 
obligations for pension rights acquired  
by Commissioners, MEPs and staff.

Financial support activities

The  EU  operates  financial  support  activities  to  preserve  financial 
 stability  in  Europe  and  to  grant  financial  assistance  to  Member  
States in financial difficulties. In this context, the EU borrows money 
on the capital markets or with financial institutions which is lent then 
under the same conditions (back­to­back) to the Member States con­
cerned. The two main programmes operated by the European Com­
mission,  acting  on  behalf  of  the  EU,  are  the  balance  of  payments 
(BOP)  assistance  and  the  European  Financial  Stabilisation  Mecha­
nism (EFSM). 

The EFSM will no longer engage in new financing programmes or enter 
into new loan facility agreements as the European Stability Mechanism 
(ESM), the permanent stability mechanism of the EU outside the EU 
budget, has assumed the tasks of the EFSM. No new loans have been 
disbursed under BOP in 2013 and the assistance programmes under 
BOP expired at the end of March 2013 for all three Member States 
(Latvia, Hungary and Romania).

 ▶ Loans outstanding at 31 December 2013 by Member States in 

 ▶ Table in billions EUR

billion EUR:

EFSM: Portugal
22..1

EFSM: Ireland
21.7

BOP: Latvia
2.9

BOP: Hungary
3.5

BOP: Romania
5.0

EFSM

BOP

Loans

Granted

Disbursed

Still available

Portugal

Ireland

Total

Latvia Hungary (*) Romania Total

26.0

22.1

  3.9

22.5

21.7

  0.8

48.5

43.8

  4.7

3.1

2.9

0.0

6.5

5.5

0.0

8.4

5.0

0.0

18.0

13.4

  0.0

(*) EUR 2 billion already repaid.

Advance payments (Pre-financing) 

Pre­financing  is  an  essential  instrument  for  the  implementation  of 
the EU budget. Pre­financing is a payment intended to provide the 
beneficiary  with  a  cash  advance  so  that  the  beneficiary  is  able  to 
implement  a  specific  programme.  In  subsequent  periods  the  ben­
eficiary  has  to  report  eligible  expenditures  incurred  to  the  EU;  if  it 
does not declare eligible expenditure, it has the obligation to return 
the funds to the EU. The total pre­financing shown on the balance 
sheet amounts to EUR 51.2 billion of which EUR 50.9 billion relate to 
European Commission activities. Some 73 % of the European Com­
mission’s pre­financing is implemented via the shared management 
mode which means that the implementation of the budget is dele­
gated to Member States.

 ▶ European Commission pre-financing by management mode 

Shared management
73 %

Joint
management
     3 %

Decentralised
management
 2 %
Direct centralised
management 11 %

Indirect centralised management 11 %

K
V
-
A
K
-
1
4
-
0
0
1
-
E
N
N

-

 ▶The majority of expenditure under shared management 

mode covers agricultural spending and structural actions. The 
most significant non­current pre­financing amounts relate to 
structural actions: the Regional Development Fund (ERDF) 
and Cohesion Fund (CF) (EUR 19.6 billion), the European 
Social Fund (ESF) (EUR 5.6 billion), the European Agricultural 
Fund for Rural Development (EAFRD) (EUR 5.2 billion) and the 
European Fisheries Fund (EFF) (EUR 0.6 billion).

 ▶ Shared management by programme

EFF
2 %

EAFRD
17 %

ESF
18 %

ERDF and CF
63 %

Protection of the EU budget ― Focus on shared management

An important consideration in implementing the EU budget is the need 
to ensure the proper prevention or detection and subsequent correction 
of errors, irregularities and fraud. 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. Pre­
ventive mechanisms also exist at the level of the European Commission 
in its role of supervisory body.

Where  errors  or  irregularities  are  detected  and/or  required  control 
measures are not taken by Member States, the European Commis­
sion may decide to impose a financial correction. The figures present­
ed in the consolidated annual accounts of the EU (note 6) demon­
strate  that  the  result  of  the  multiannual  preventive  and  corrective 
activities  undertaken  by  the  European  Commission  is  that  the  EU 
budget is adequately protected from expenditure incurred in breach 
of applicable law.

Financial  corrections  and  recoveries  implemented  in  a  given  year 
are  primarily  dependent  on  the  level  of  irregularities  identified  in 
the  previous  years.  Given  the  multiannual  character  of  the  control 
framework  and  the  complexity  of  the  corrective  mechanisms  and 
procedures, the implementation can only happen over time. In 2013, 
a total of EUR 3.3 billion of financial corrections and recoveries (rep­
resenting 2.2 % of all budget payments) were implemented, mostly 
relating to irregularities in the previous years.

 ▶ Financial corrections and recoveries implemented  

in 2013 in million EUR

Financial corrections

Recoveries

900

800

700

600

500

400

300

200

100

0

EAGF

Rural 
development

ERDF

Cohesion 
Fund

ESF

Other

Under shared management in the area of agriculture and cohesion 
policy, Member States (and not the Commission) are obliged to iden­
tify errors and irregularities and to recover amounts unduly paid in 
accordance with national rules and procedures plus the late payment 
interest where it is applicable.

Find out more about the EU financial programming  
and budget by visiting our website regularly:  
http://ec.europa.eu/budget
If you want to be informed about any of our publications and 
get the latest publication news, please subscribe by sending 
an email to: BUDG-budget-inbox@ec.europa.eu

Follow us on:
 ▶ Facebook:  

https://www.facebook.com/EUBudget

 ▶ Twitter:  

https://twitter.com/EU_Budget/

 ▶ Google+: http://goo.gl/wXZrq 

ISBN 978-92-79-38882-8 

doi:10.2761/51631

CONSOLIDATED ANNUAL ACCOUNTS OF THE EUROPEAN UNION