REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS 2018 Annual Management and Performance Report for the EU Budget
Date: 2019-06-25
Institutions: European Commission, Secretariat-General
Subjects: EU expenditure, EU financing, EU programme, activity report, financial control, financial year, general budget (EU), publication of accounts

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.8.2019 COM(2019) 299 final/2  CORRIGENDUM This document corrects document COM(2019) 299 final of 25.6.2019 Concerns only the English version. Correction of typographical errors. The text shall read as follows: REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS       2018 Annual Management and Performance Report for the EU Budget  
 
 
EN 

  EN 

 
 
 
Table of contents 

FOREWORD ............................................................................................................................................................................. 3 

EXECUTIVE SUMMARY ........................................................................................................................................................ 7 

INTRODUCTION .................................................................................................................................................................. 21 

SECTION 1 — PERFORMANCE AND RESULTS ........................................................................................................... 22 

1.  A result-oriented EU budget .................................................................................................................................................................. 23 

2.  Competitiveness for growth and jobs (budget heading 1A) ............................................................................................. 32 

3.  Economic, social and territorial cohesion (budget heading 1B) ...................................................................................... 68 

4.  Sustainable growth: natural resources (budget heading 2) .............................................................................................. 81 

5.  Security and citizenship (budget heading 3) ............................................................................................................................... 97 

6.  Global Europe (budget heading 4) .................................................................................................................................................. 116 

7.  Special instruments ................................................................................................................................................................................. 140 

SECTION 2 — INTERNAL CONTROL AND FINANCIAL MANAGEMENT .............................................................. 144 

1.  The EU budget is well-managed ...................................................................................................................................................... 144 

2.  Control systems are cost-effective ................................................................................................................................................ 149 

3.  Financial corrections and recoveries show that the multiannual control cycle protects the 

EU budget ....................................................................................................................................................................................................... 160 

4.  The Commission's anti-fraud strategy has been updated .............................................................................................. 165 

5.  Management provides reasonable assurance and the financial impact of reservations is limited ..... 168 

6.  Assurance obtained through the work of the Internal Audit Service ........................................................................ 174 

7.  Summary of conclusions on the work carried out by the Audit Progress Committee ................................... 176 

8.  External audit and discharge: Learning from the past to improve the future .................................................... 179 

9.  Organisational management ............................................................................................................................................................. 181 

ANNEXES 

1 

 
 
 
 
 
 
 
Foreword

It  is  my  pleasure  to  present 
Annual 
the 
2018 
Management 
and 
Performance  Report  for 
the  EU  Budget.  The  report 
provides  an  overview  of  the 
performance,  management 
and  protection  of  the  EU 
budget.  It  explains  how  the  EU  budget  supports  the 
EU  political  priorities  and  describes  both  the  results 
achieved and the role of the Commission in ensuring 
the highest standards of financial management. This 
report  is  part  of  the  Commission’s  integrated 
financial  and  accountability  reporting  package. 
It 
financial 
regulation  and  is  an  essential  part  of  our  highly 
developed system of financial accountability.  

fulfils  our  obligations  under 

the 

Despite  its  relatively  modest  size,  the  EU  budget 
makes  a  big  difference  for  millions  of  Europeans.  It 
complements national budgets and supports political 
priorities in areas where it has real value and where 
it  can  deliver  results  in  the  most  efficient  way.  My 
guiding  principle  is  that  the  EU  budget  should  focus 
on  areas  where  it  can  have  a  bigger  impact  than 
public  spending  at  national  level.  For  instance,  no 
Member 
large 
infrastructures  or  research  projects  that  have  the 
required  scale  to  compete  with  global  players  such 
as  China  or  the  United  States.  Some  challenges  the 
EU  faces  are  global.  Terrorism,  organised  crime, 
climate change, natural disasters or epidemics do not 
have borders. These challenges are best tackled on a 
pan-European level with the help of the EU budget. 

finance 

alone 

State 

can 

But the EU budget, even if it proved to be flexible, is 
limited  in  size.  Therefore,  decision-making  needs  to 
be  more  informed  and  more  evidence-based  than 
ever,  so  that  the  money  is  allocated  where  it  is  the 
most  needed.  In  this  report,  we  describe  the  many 
ways  in  which  the  EU  budget  contributed  to  the 
achievement of our common goals in 2018.  

investing 

The  focus  of  2018  was  on  strengthening  the 
economic  recovery  by 
in  key  areas 
promoting  job  creation.  The  European  Fund  for 
Strategic Investments, the Connecting Europe Facility 
and  the  European  Structural  and  Investment  Funds 
all  had  a  major  role  to  play  in  this  process.  I  invite 
you  to  discover  the  stories  behind  many  EU 
investments 
portal 
the 
(https://europa.eu/investeu).  The  EU  budget  also 
offered strong support in other priority areas such as 
the  EU's  comprehensive  approach  to  migration,  the 
security  union,  cutting-edge  research,  the  EU's 
it  also  helped  achieving 
external  action,  while 
crosscutting policy objectives such as climate action 
and biodiversity. 

‘InvestEU’ 

on 

This  report  also  sets  out  the  steps  we  are  taking  to 
ensure that the EU budget is managed in accordance 
with  the  highest  standards  of  sound  financial 
the 
management. 
Commission 
political 
responsibility  for  the  management  of  the  EU 
budget in 2018.  

Through 
takes 

this 
overall 

report, 

Commission 

carefully  monitors 

The 
the 
implementation  of  the  EU  budget  on  the  ground.  If 
Member  States  or  final  beneficiaries  are  found  to 
have  spent  EU  money  incorrectly,  the  Commission 
takes  immediate  steps  to  correct  these  errors  and 
recover  the  funds  as  necessary.  The  Commission 
estimates  that,  after  corrections  and  recoveries,  the 
remaining level of error for the 2018 expenditure will 
be under 1%, well below the materiality threshold.  

2018  was  a  continuation  of  the  very  significant 
progress  we have made in recent years on financial 
management. The EU's systems to detect and correct 
errors and combat fraud are mature and robust. This 
has  been  recognised  by  the  European  Court  of 
Auditors. We will remain vigilant and will continue to 
ensure that the EU budget is adequately protected in 
future  years.  This  is  particularly  important  in  the 
context  of  an 
increasingly  challenging  political 
environment.  Reporting  consistently  and  effectively 
increases the accountability of EU spending, and not 
only  for  the  purposes  of  sheer  legal  compliance.  It 
helps  to  engage  with  citizens  and  with  other 
stakeholders,  and  to  restore  their  confidence  and 
trust in the European Union.  

2018 was also the year where the Commission made 
its  proposals  for  the  future  multiannual  financial 
framework,  in  May  and  June  2018.  .  An  extensive 
spending  review (1)  was  organised,  analysing  the 
performance of all programmes. My approach was to 
use  EU  added-value  as  a  core  criterion  to  underpin 
all  future  spending,  boosting  funding  for  new 
priorities,  modernising 
programmes, 
simplifying  and  streamlining  where  possible  and 
giving  the  Union  a  more  flexible  budget.  I  believe 
that the Commission has proposed a modern budget 
for  a  union  that  protects,  empowers  and  defends, 
and  which 
is  balanced  and  realistic.  A  timely 
agreement  on  the  future  framework  would  confirm 
the  shared  commitment  of  the  EU  institutions  to 
making the very most of every euro invested through 
the EU budget.  

existing 

Günther H. Oettinger  
Commissioner for Budget and Human 
Resources

(1) 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/ 
?uri=CELEX:52018SC0171&from=EN  

3 

 
 
                                                        
  
 
 
 
 
 
EXECUTIVE 
SUMMARY 

 
 
 
 
EXECUTIVE SUMMARY 

Executive summary 

The Annual Management and Performance Report for the EU Budget presents the latest information on the 
results  achieved  with  the  EU  budget  (Section 1),  and  on  how  the  EU  budget  is  managed  and  protected 
(Section 2). 

Section 1 is structured by budget heading. It explains how the EU’s financial programmes have contributed to 
the EU’s political priorities. It also summarises the latest evaluation results on  how these programmes have 
performed. 

2018 was the fifth year of the current multiannual financial framework, which runs from 2014 to 2020. Due 
to the late adoption of the multiannual financial framework, delays were experienced at the beginning of the 
period.  Now, the EU’s financial programmes are fully operational. They offer strong and tangible support to 
the EU’s political priorities in a variety of areas.  

Budget heading 1A — Boosting jobs, growth and investment 

When the Juncker Commission took office in the aftermath of the economic and financial crisis, it promised to 
get more people into work. Together with Member States it has delivered on that promise. More Europeans 
are in work than ever before, with 240,7 million people in employment. More than 12 million of those jobs 
have been created since the start of this Commission. Youth unemployment is at its lowest level since 2008, 
although  it  is  still  too  high  in  many  parts  of  the  EU.  The  EU  budget  has  been  instrumental  in  these 
achievements and continues to offer a vital source of investment across Europe. 

More than 12 million jobs have been created since the start of the Juncker Commission. 
Youth unemployment decreased from 24% in 2014 to 14% in December 2018.  

The priority for the EU budget in 2018 was to build on the economic recovery, in particular by giving a further 
boost to investment. Investment has picked up significantly thanks to more than EUR 408 billion (2) worth 
of investment triggered by the European Fund for Strategic Investments. This fund, launched by the 
Commission together with the European Investment Bank Group (3) in 2015, attracts private funding in areas 
such  as  transport,  energy,  health  care,  small  and  medium-sized  enterprises  as  well  as  information  and 
communication  technologies.  In  this  way  it  amplifies  the  impact  of  the  EU  budget.  The  lifetime  of  the 
European  Fund  for  Strategic  Investments  was  extended  from  mid-2018  until  the  end  of  2020  with  a  new 
investment target of EUR 500 billion (4). It is expected that this plan will help create an estimated 1.4 million 
new  jobs  by  2020,  while  the  EU’s  gross  domestic  product  will  be  boosted  by  an  estimated  1.3%. 
Thanks  to  these  investments,  a  further  11 million  households  enjoy  high-speed  internet  access,  more  than 
4 million  households  use  energy  from  renewable  sources,  and  30 million  Europeans  benefit  from  better 
health care. 

(2) 

(3) 
(4) 

Investments since the launch of the European Fund for Strategic investments in 2016. The total amount of investments triggered 
by the fund amounted to EUR 370 billion as per 31 December 2018, and EUR 408 billion as per 13 June 2019. 
The European Investment Bank Group is composed of the European Investment Bank and the European Investment Fund. 
In 2016, the initial plan foresaw triggering EUR 315 billion of additional investments. 

7 

                                                        
EXECUTIVE SUMMARY 

As per 31 December 2018, the European Fund for 
Strategic Investments has mobilised over 
EUR 370 billion in investment across Europe since 
2015, significantly more than the initial target of 
EUR 315 billion and is on track to reach the 
increased 2020 target of EUR 500 billion. 

The European Fund for Strategic Investments has 
helped finance the building of half a million 
affordable homes, improve health-care services 
for 30 million Europeans, upgrade rail and urban 
infrastructure for 95 million passengers and 
support access to finance for more than 280 000 
small and medium-sized enterprises. 

Strategic  investments  have  also  boosted  economic  growth  and  competitiveness  by  financing  key 
transport,  energy  or  telecommunications  infrastructure.  These  investments  focus  on  areas  where  the  EU 
enables  a  greater  impact  than  public  spending  at  national  level.  The  Connecting  Europe  Facility  plays  an 
important role in developing such infrastructures, which also prepare  the ground for a less carbon-intensive 
EU  energy  network.  In  2018,  this  facility  made  available  EUR 1.4 billion  in  EU  grants,  to  be  combined  with 
financing from the European Fund for Strategic Investments and other sources.  

The Connecting Europe Facility partially funds a new tunnel under the 18 km-wide Fehmarn Strait, between 
Rødby in Denmark and Puttgarden in Germany. Travel time by car between Copenhagen and Hamburg will 
be reduced by around 1 hour, and by 2 hours for rail freight transport. 

The EU budget is also delivering thanks to space programmes such as Galileo, Copernicus and EGNOS. No 
single  Member  State  acting  alone  could  have  put  26  satellites  into  orbit,  benefiting  500 million (5)  users 
worldwide  by  the  end  of  2018.  In  2018,  four  additional  new  Galileo  satellites  were  launched  for  better 
monitoring  of  oceans,  land  and  the  atmosphere.  EU  space  signals  and  data  is  transforming  our  lives  with 
services  such  as  enhanced  navigation,  precision  farming,  crop  monitoring,  responding  to  natural  disasters, 
saving lives at sea, search and rescue of  people equipped with distress  beacons, and monitoring of  vessels 
and oil spills. 

At the end of 2018, 315 airports in almost all EU countries are using the European Geostationary 
Navigation Overlay Service, making landing in difficult weather conditions safer and avoiding delays and 
re-routing. 

From April 2018, Galileo is integrated into every 
new car type sold in Europe, supporting the eCall 
emergency-response system. 

Copernicus has provided emergency maps for 
80% of the floods in Europe. This helped the 
national emergency services with better overview 
of the situation and to be more effective during 
rescue operations. 

2018  also  marked  a  new  chapter  in  European  defence  cooperation  with  the  European  Defence  Fund.  In 
2018,  EUR 40 million  has  been  allocated  to  collaborative  research  in  innovative  defence  technologies  and 
products. The Commission has adopted  the biennial work programmes to co-finance joint defence capability 
development projects in 2019-2020 with an EU contribution of EUR 500 million. 

The EU is investing (6) EUR 35 million into the Ocean2020 research project. This project brings together 
42 partners from 15 EU Member States to support maritime surveillance missions at sea by integrating 
drones and unmanned submarines into fleet operations. 

(5) 
(6) 

700 million users by mid May 2018.  
The starting date is 1 April 2018. The duration is 36 months.  

8 

 
 
 
 
 
                                                        
EXECUTIVE SUMMARY 

Supporting cutting-edge research and innovation 

The  EU  budget  continued  to  underpin  the  EU’s  commitment  to  supporting  cutting-edge  research  and 
innovation,  focusing  on  cross-country  collaboration, 
industrial  relevance  and  economies  of  scale. 
Horizon 2020, the EU framework programme for research and innovation, is the world’s largest transnational 
research-funding programme. It is also the biggest EU research and innovation programme ever, with 
nearly EUR 80 billion of funding available over 7 years (7). In 2018, calls for proposals worth EUR 10 billion 
were launched for Horizon 2020. 

Using Horizon 2020 funding, the Joint Research Centre has developed and operates the only worldwide 
automatic tsunami alert system, which it also operates. It can quickly calculate the estimated wave height 
and travel time and automatically send an alert message through the global disaster alerts and 
coordination system. 

Horizon 2020 provides a common strategic framework for the EU’s research and innovation funding. It is key 
to ensuring that the EU continues to produce world-class science and technology. It helps to remove barriers 
to innovation and makes it easier for the public and private sectors to work together in delivering solutions to 
major societal  challenges.  EU  support  for  research  and innovation  stimulates cooperation  between  research 
teams  across  countries and  between  disciplines  which  is vital  to  making  breakthrough  discoveries.  It  allows 
the  EU  to  deliver  on  priorities  such  as  the  Paris  Agreement  on  climate  change (8).  Horizon  2020  has 
contributed directly to the overall objective of boosting Europe’s industrial leadership and competitiveness. It 
has been particularly successful in stimulating innovation by small and medium-sized enterprises. The overall 
target of 20% participation has even been surpassed (9). 

The European High-Performance Computing Joint 
Undertaking began operations in November 2018. 
It will pool EU and participating countries’ 
resources to build in Europe a world-class 
supercomputing and data infrastructure and a 
competitive innovation ecosystem in relevant 
technologies and applications in Europe. 

Thanks to research and partial funding from 
Horizon 2020 done in 2018, a 45-year-old 
woman in Sweden underwent surgery to receive a 
permanent robotic hand, which she can use on a 
daily basis.  

Supporting young Europeans 

The  EU  budget  has  created  opportunities  to  study  and  travel  abroad  and  helped  young  unemployed 
people  to  find  work  or  enrol  in  training  to  increase  their  chances  of  finding  a  job.  Every  year,  more  than 
3.5 million young people registered under the Youth Guarantee receive an offer of employment, education, a 
traineeship  or  apprenticeship.  Since  2014,  in  total  more  than  14 million  have  been  benefiting  from  this 
scheme.  

Erasmus+ is one of the main ways for Europeans to experience European identity in all its diversity. In 2018, 
Erasmus+ enabled around 800 000 teachers, lecturers, trainers, education staff and youth workers to acquire 
new  skills abroad  and  boost  their future  employability.  The  flagship  programme  demonstrated  its  flexibility 
with its support for setting-up of ‘European Universitites’ and the Erasmus+ virtual exchanges. 

(7) 
(8) 
(9) 

2014-2020.  
https://ec.europa.eu/clima/policies/international/negotiations/paris_en 
24%, which is beyond the target of 20% participation in Horizon 2020 by small and medium-sized enterprises. 

9 

 
                                                        
EXECUTIVE SUMMARY 

Moreover,  the  Commission  launched  a  pilot  initiative,  DiscoverEU (10),  which  gives 18-year-old  young  people 
the  opportunity  to  travel  around  Europe,  learn  from  other  cultures  and  explore  their  European  identity.  The 
Commission intends to develop DiscoverEU further and has therefore included it in its proposals for the next 
Eramus program. 

The  European  Solidarity  Corps (11)programme  got  its  own  rules  and  budget  and  enabled  a  large  number  of 
young people to help; explore, learn and develop, through activities like  helping socially deprived, taking care 
of the environment or reconstructing and bringing hope to communities after a natural disaster. 

Since its start in 1987, more than 10 million 
people have participated in Erasmus. 

Between July and October 2018 around 15 000 
young people were able to explore Europe by rail 
with a DiscoverEU travel pass. Another 14 500 
have been selected in the November 2018 
application round. 

By the end of December 2018, around 100 000 civic-minded young people had registered to join the 
European Solidarity Corps. Almost 11 000 of them had supported individuals and communities in need 
across Europe, mostly through volunteering activities.  

The  EU  budget’s  contribution  to  implementing  the  Youth  Guarantee  has  been  substantial,  by  creating 
opportunities for young people to study and travel abroad and by helping them find work or access training to 
increase their chances of finding a job. 

Since its launch (12), more than 3.5 million young people registered under the Youth Guarantee have 
received an offer of employment, continued education, a traineeship or an apprenticeship each year.  

Budget heading 1B — Driving job creation, sustainable growth and innovation 
through cohesion policy 

Cohesion policy, with a budget of EUR 352 billion (for 2014-2020), almost a third of the total EU budget, aims 
to  reduce  disparities and support  the  economic,  social  and  territorial  cohesion  of  the  EU.  The  powerful 
contribution of this policy is evidenced by the strong catching-up of less-developed Member Sates and regions 
with  the  rest  of  the  EU  in  terms  of  productivity  and  gross  domestic  product  per  head.  The  funds  directly 
support the delivery of key EU priorities and the implementation of country-specific recommendations in the 
context of the European Semester, as well as ensure the necessary investment conditions through the follow-
up of ex ante conditions set for the 2014-2020 programmes. 

EUR 1 of cohesion policy investments made in the period 2007-2013 is expected to generate EUR 2.74 of 
additional gross domestic product by 2023. During the same period, around 1.3 million jobs were created. 

The  EU  budget  continued  to  support  Member  States  and  regions  in  tackling  new  and  persistent  challenges, 
such as harnessing globalisation, tackling unemployment, addressing industrial change, embracing innovation 
and digitalisation, reskilling people, managing migration in the long run and fighting climate change, including 
the transition to less-carbon intensive economy and transports.  

(10) 
(11) 
(12) 

https://europa.eu/youth/discovereu_en 
https://europa.eu/youth/solidarity_en 
The Youth Guarantee is a political commitment taken by Member States in April 2013.  

10 

 
 
 
 
 
 
                                                        
EXECUTIVE SUMMARY 

EU investment in transport focussed on removing bottlenecks by helping the repair and improvement of 
7 500 km of old roads and the building of 3 100 km new roads (projects selected up to the end of 2018). 

Through cohesion policy investments, public 
buildings use 5.2 terrawatt hours per year less 
energy than they did. In addition, 748 km of new 
or improved tram and metro lines and  close to 7 
500 km of new or upgraded railway lines. 

By the end of 2017, over 15 million people 
benefited from support from the European Social 
Fund to find better job opportunities and develop 
their skills, more than 1.7 million unemployed 
people found a job and over 2 million people 
gained new qualifications. 

Budget heading 2 — The EU budget helps modernise the EU agricultural sector, 
to ensure safe, high-quality food, and create sustainable agriculture and rural 
development 

The  common  agricultural  policy has  helped  to  achieve  balanced  territorial  development  and  reduce  the 
income gap between the agricultural sector and other sectors; and between Member States and regions. The 
policy  also  helps  to  keep  the  EU’s  vital  food  production  sustainable.  Direct  payments  boost  income  and 
provide relative income stability to farmers facing significant price and production volatility.  

The  EU  budget  provides  the  necessary  means  for  resilient,  sustainable  and  competitive  agriculture. 
Some 6.5 million farmers benefited from direct payments with this support constituting 38% of their farming 
income. 

Since 2014, the European Agricultural Fund for Rural Development helped to modernise the agricultural 
holdings of more than 51 400 young farmers, helped to train more than 1 million participants, supported 
organic farming on close to 16 million hectares and invested over EUR 255 million in renewable-energy 
production. 

The  European  Maritime  and  Fisheries  Fund  supports  environmentally  sustainable,  resource-efficient, 
innovative, competitive and knowledge-based fisheries and aquaculture. These efforts allow the EU 
to remain an international leader in sustainable ocean management. 

The EU is a global front-runner in sustainability and climate policies 

As  part  of  its  commitment  to  the  fight  against  climate  change,  the  EU  has  integrated  EUR  32  billion 
spending on climate action across all EU programmes, in particular cohesion  policy, energy, transport, 
research and innovation and the common agricultural policy, as well as the EU’s development policy, making 
the EU budget a key driver of sustainability. This represents 20.7% of the 2018 budget. The latest estimate is 
that it will be EUR 210 billion (19.7%) for the entire programming period. 

Between  2014  and  2020,  the  European  Regional  Development  Fund  and  Cohesion  Fund  are  investing 
EUR 54.8 billion (13) targeting climate-related goals. These investments support the shift towards a low-carbon 
economy by promoting the production and distribution of energy derived from renewable sources, promoting 

(13) 

Interactive data is available on https://cohesiondata.ec.europa.eu/stories/s/a8jn-38y8 

11 

 
 
 
 
  
                                                        
EXECUTIVE SUMMARY 

energy  efficiency,  implementing  smart  distribution  systems  and  research  and  innovation  in  low-carbon 
technologies;  investing  in  adaptation  to  climate  change,  promoting  investments  to  address  specific  risks, 
ensuring disaster resilience and developing disaster management systems. 

Projects supported by the European Regional Development Fund and by the Cohesion fund enable the 
renovation of housing for 875 000 families who will benefit from reduced energy use and connecting 
3.3 million additional energy users to smart grids. Projects also supported additional capacity to produce 
renewable energy (7 670 megawatts). 

In  2018,  a  total  of  EUR 522 million  was  allocated  to  the  LIFE  programme.  Through  this  programme,  the  EU 
budget  supports  environmental  and  nature  conservation  projects  and  climate  action.  This  includes  major 
investment  in  projects  that  will  enable  more  plastic  to  be  reused.  Turning  this  waste  into  high-quality  raw 
materials for the car, construction and packaging industries is one  of the ways in which LIFE gives practical 
support to the goals of the European strategy for plastics in a circular economy. 

Projects supported by the LIFE programme helped to shift towards a resource-efficient, circular, low-carbon 
and climate-resilient economy; to halt and reverse biodiversity loss; to tackle the degradation of 
ecosystems by improving the quality of the environment, including air, water and soil; and to improve 
environmental and climate governance at all levels. 

Budget heading 3 — The EU budget is a vital part of the EU’s comprehensive 
approach to migration policy 

The  EU  budget  supported  the  continued  comprehensive  European  response  to  migration  challenges  and the 
management of the EU’s external borders. In 2018, the EU’s comprehensive approach to migration continued 
to  operate  on  all  fronts:  deeper  cooperation  with  partner  countries;  better-managed  external  borders;  and 
more effective and operational tools to protect our borders and manage migration within the EU in a spirit of 
solidarity and responsibility. Dedicated instruments such as the Asylum, Migration and Integration Fund played 
an  important  role  for  immediate  responses  to  migration  issues  alongside  targeted  support  from  cohesion 
policy for the longer-term integration of migrants and the EU’s external instruments.  Work on the European 
agenda on migration made a positive contribution to replacing unsafe and uncontrolled migration with safe, 
orderly and regular migration. 

Under the ongoing EU resettlement scheme, 20 Member States have pledged to resettle more than 50 000 
persons  by  October  2019.  At  year-end  2018,  over  24  000    of  these  pledges  have  already  materialised, 
providing persons with shelter in the EU. 

Following the 2015 peak in arrivals to the EU, 
migration flows are now back to below pre-crisis 
levels. 
Irregular border crossings into the EU fell to 
150 100 in 2018. This is the lowest figure in 
5 years. 

Since 2015, legal migration channels to the EU 
increased for people in need of international 
protection. EU resettlement programmes have 
offered safe and legal pathways to almost 
50 000 people (as per 31 December 2018). 

12 

 
 
 
 
EXECUTIVE SUMMARY 

The 2016 EU-Turkey statement and the facility for refugees in Turkey remains of paramount 
importance in reducing irregular and dangerous crossings to the Greek islands from the Turkish mainland, 
saving lives at sea and promoting the resettlement of Syrians in need of international protection. The EU 
has supported Turkey in its efforts to provide shelter and support for more than 4 million registered Syrian 
refugees. By the end of 2018, humanitarian assistance had helped 1.5 million of the most vulnerable 
refugees through the emergency social safety net, a social assistance safety net scheme, and supported 
over 410 000 students in attending school (under the conditional cash transfer for education programme). 
A further 600 000 children have been helped to integrate into the Turkish school system. Thanks to the 
facility for refugees in Turkey, 136 new schools have been built, 410 000 refugee children are now 
attending school and 60 000 students have joined catch-up classes. 178 health-care centres are now 
operational, four million primary health-care consultations have been supported and 650 000 child 
refugees have been vaccinated (14). 

As well as in Turkey, the EU has provided substantial humanitarian support to internally displaced persons in 
side Syria as well as refugees and host communities in Jordan and Lebanon, as well as helping in Iraq and 
Egypt. Overall, the EU  Regional Trust Fund in Response to the Syrian Crisis supported some 2 million Syrian 
refugees and hosting communities in 2018. 

Financed by the EU budget, the European Border and Coast Guard Agency with its extended mandate has 
significantly strengthened its presence at the EU’s external borders. The aim is to support the Member States 
in their border-management activities and jointly implement integrated border management at EU level. 

In 2018, the European Border and Coast Guard deployed altogether around 11 000 border guards to assist 
the front line Member States. This made it possible to rescue 37 000 migrants, catch almost 1 200 people 
smugglers and coordinate/organise the return of almost 14 000 migrants. In addition, the Fund for Asylum, 
Migration and Integration enabled the voluntary return of almost 39 500 persons (15).  

The EU budget continues to help make the EU a safer place to live and work 

Security threats have intensified and diversified in Europe. They come in the form of terrorist attacks and new 
types  of  organised  crime,  as  well  as  cybercrime.  To  protect  the  public  against  these  threats,  the  EU  has 
provided  funding  and  supported  cooperation,  for  instance,  to  fight  money  laundering,  intercept  and  seize 
counterfeit products and combat disinformation campaigns. 

The Connecting Europe Facility set up a voluntary cooperation platform to strengthen preparedness and 
response to cyberattacks. By doing so, the EU is contributing to an EU-wide solution to a threat that does 
not respect national borders. 

The  EU  has  shown  solidarity  within  its  borders  by  coordinating  and  financing  disaster-relief  efforts, 
supporting farmers affected by drought or employees affected by massive corporate restructuring. In light of 
the difficulties farmers faced during the summer drought, higher advanced payments were provided to help 
farmers feed their animals. 

Information concerns achievements since 2016 up to December 2018.  

(14) 
(15)   Data source: 2018 Annual implementation reports. The 2018 figure include all Member States except Greece, for which the 2018 

information was not available yet.  

13 

 
                                                        
EXECUTIVE SUMMARY 

In 2018, EUR 4.5 million from the European 
Globalisation Adjustment Fund helped 730 
displaced workers in the Portuguese clothing 
sector. 

Since 2003, the EU was engaged in 163 official 
missions and deployed 560 experts to protect 
people around the globe. In 2018, a record EU 
civil-protection operation helped Sweden fight 
forest fires: over 360 firefighters, seven planes, 
six helicopters and 67 vehicles were mobilised. 

Budget heading 4 — The EU budget has helped the EU become a stronger 
global actor 

The  EU  budget  enabled  the  Union  to  keep  its  focus  on  investing  in  the  sustainability  and  resilience  of  our 
partners,  in  particular  through  the  European  Neighbourhood  Instrument  and  Instrument  for  Pre-Accession 
Assistance. The EU is helping neighbouring countries to further develop stable democratic institutions and, at 
the same time, become more prosperous. This helped to achieve stabitlity at Europe’s borders. 

In 2018, the EU provided also leadership and support on the Iran nuclear deal (16), the Paris climate-change 
agreement,  the  UN  sustainable  development  goals,  new  trade  agreements  with  a  strong  sustainable 
development component, cooperation with the African Union (17) and relations with the United Nations.  

Together  with  its  Member  States,  the  EU  is  the  world’s  biggest  donor  of  humanitarian  aid.  This 
allows the EU to provide life-saving support to natural disasters and man-made conflicts worldwide. 

In 2018 more than EUR 1.4 billion was spent on 
humanitarian aid in more than 90 countries. A 
significant part was spent on supporting conflict-
affected populations in Syria and refugees in 
neighbouring countries. 

In 2018 another EUR 15 million was committed 
to help create the necessary conditions for the 
voluntary, safe and dignified return of Rohingya 
refugees who have fled Myanmar/Burma to 
Bangladesh (18). 

Different instruments in the area of development cooperation support the EU in its commitment to deliver on 
the 2030 agenda for sustainable development in line with the European consensus on development (19). 
The EU seeks to target funds to countries most in need. It also proposed a paradigm shift in relations between 
the EU and Africa towards building a true and fair partnership focused on mutual economic interest and fully 
in line with Africa’s agenda 2063 (20) and flagship initiatives such as the African continental free trade area. 

As  part  of  the  external  investment  plan  for  Europe,  in  2018  the  EU  budget  supported  the  mobilisation  of 
finance  into  Africa  and  the  European  Neighbourhood (21).  For  that  purpose,  the  European  Fund  for 
Sustainable Development is used to bring more private investments. In 2018, the Commission signed the first 
guarantee agreement (Nasira risk-sharing facility). This EU agreement of up to EUR 75 million is expected to 
mobilise investments for entrepreneurs in sub-Saharan Africa and the European Neighbourhood. It is expected 
to  help  create  up  to  800 000  jobs  and  benefit  those  who  struggle  to  access  affordable  loans,  such  as 
internally displaced people, refugees, returnees, women and young people. 

(16) 
(17) 
(18) 
(19) 
(20) 
(21) 

https://eeas.europa.eu/headquarters/headquarters-homepage_en/32286/Nuclear%20Agreement 
https://au.int 
http://europa.eu/rapid/press-release_IP-18-6653_en.htm 
https://ec.europa.eu/europeaid/policies/european-development-policy/european-consensus-development_en 
https://au.int/en/agenda2063/overview 
The European Neighbourhood comprises the EU’s closest eastern and southern neighbours. To the south: Algeria, Egypt, Israel, 
Jordan, Lebanon, Libya, Morocco, Palestine*, Syria and Tunisia and to the east: Armenia, Azerbaijan, Belarus, Georgia, Moldova and 
Ukraine. (* This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual 
positions of the Member States on this issue.) 

14 

 
 
                                                        
EXECUTIVE SUMMARY 

The Commission gives the highest priority to ensuring that the EU budget is 
well-managed and protected against errors and fraud 

The  Commission  strives  to  achieve  the  highest  standards  in  financial  management  in  terms  of 
effectiveness, efficiency and economy. It also seeks to ensure that audits and checks (‘controls’) are 
cost-effective. This is the focus of Section 2 of this report. 

The  Commission  is  responsible  for  ensuring  that  EU  funds  are  properly  spent,  regardless  of  whether  these 
funds  are  implemented  directly  by  the  Commission  departments  or  by  implementing  partners.  71%  of 
expenditure is executed by Member State authorities under shared management, and 8% through entrusted 
entities under indirect management.  

To fulfil its responsibilities, the Commission has put in place an effective assurance and accountability model 
as  well  as  a  robust  internal  control  framework.  Within  this  framework  —  where  applicable  in  collaboration 
with  Member  States  and  entrusted  entities  (based  on  their  obligations  to  protect  the  EU  budget)  —  the 
Commission  departments  take  measures  to  prevent  errors,  irregularities  and  fraud;  and,  when  these  occur, 
they take action to remedy the situation. In addition, the European Anti-Fraud Office is mandated to conduct 
independent investigations into fraud and corruption involving EU funds and to develop EU policies to counter 
fraud. 

2018  also  saw  the  adoption  of  the  new  financial  regulation,  which  brings  in  particular  significant 
simplification of financial rules for beneficiaries.  

The risk to the legality and regularity of financial transactions is below 2% 

The  Commission’s  objective  for  the  ‘risk  at  payment’  affecting  EU  revenues  and  expenditure,  which  is 
estimated after preventive controls have taken place but before corrective measures have been applied, is to 
stay below 2% — which it achieved again in 2018. On an overall basis, the ‘risk at payment’ is estimated to 
be  1.7%  of  the  total  relevant  2018  expenditure.  Departments  are  undertaking  action  for  those 
segments for which the risk at payment is above 2%. 

The multiannual nature of the EU’s financial programmes make it possible to correct errors even years after 
the payments were made, until the closure of the programmes. The departments have estimated the overall 
future corrections to be 0.9% of total relevant 2018 expenditure. 

During 2018, the Commission effectively clawed back EUR 3.2 billion. These financial corrections and 

recoveries are essential preventive and corrective measures protecting the EU budget. 

The  Commission’s  aim  in  managing  the  EU  budget  is  to  ensure  that,  once  a  programme  is  closed  and  all 
verifications  have  been  carried  out,  the  remaining  ‘risk  at  closure’  is  very  low.  Overall,  the  Commission 
estimates this to be only 0.8% of 2018 total relevant expenditure — i.e. below 1%.  

For the second year in a row, in 2018 the European Court of Auditors gave a qualified rather than a 
negative opinion on the legality and regularity of payments  under the 2017 EU budget. This confirms that 
significant progress has been made and that is a clean bill of health regarding a substantial part of the EU 
budget.  

15 

 
 
EXECUTIVE SUMMARY 

Stepping up the fight against fraud 

The Commission has a firm and long-standing line of zero tolerance to fraud. The Commission’s revised and 
strengthened  anti-fraud  strategy  provides  a  robust  policy  framework  for  the  prevention,  detection, 
investigation and response to fraud, and contributes to the good functioning of the Commission departments 
when  protecting  the  financial  interests  of  the  EU.  The  revised  anti-fraud  strategy  will  help  ensure  that 
Commission departments are fully prepared for the implementation of the 2021-2027 multiannual financial 
framework.  

The  new  strategy  takes  into  account  important  developments  in  EU  anti-fraud  legislation  (such  as  the 
establishment of the European Public Prosecutor’s Office) as well as recent findings by the European Court of 
Auditors  on  fraud  risk  management  in  EU  spending.  The  adoption  of  the  revised  strategy  will  improve 
further the fight against fraud.  

The proposals for the new financial programmes have also been subject to fraud  proofing by the European 
Anti-Fraud Office. The new 2018 financial regulation has strengthened the treatment of conflicts of interest, 
and the Commission has made important proposals to protect the EU budget from generalised deficiencies in 
the rule of law in the Member States, including conditioning the continuation of EU payments to the respect of 
the  rule  of  law  principles.  The  early  detection  and  exclusion  system  has  been  further  enhanced.  These 
measures will protect the EU budget even more effectively in the coming years.  

Management provides reasonable assurance and the Commission takes 
political responsibility for the management of the EU budget 

Based  on  the  assurance-building  blocks  that  support  their  declaration,  every  authorising  officer  by 
delegation  provided  reasonable  assurance  that  (1)  the  information  contained  in  their  annual  activity 
report  gives  a  true  and  fair  view;  (2)  the  resources  assigned  to  their  activities  have  been  used  for  their 
intended  purpose  and  (3)  the  control  procedures  in  place  give  the  necessary  guarantees  concerning  the 
legality  and  regularity  of  the  underlying  transactions  —  if  needed  qualified  by  (a)  reservation(s)  for  full 
transparency and further action. 

40 reservations were made — two more than last year. For every reservation, an action plan is in place 
to  address  the  underlying  weaknesses  and  mitigate  the  related  risks.  Half  of  the  reservations  concern 
legacy programmes for 2007-2013 and have very limited financial impact. 

On the basis of the declarations of assurance by the Commission’s authorising officers by delegation, the 
College of Commissioners takes political responsibility for the management of the EU budget. 

A new long-term budget for an EU that protects, empowers and defends 

In parallel to the budget implementation work, 2018 was also the year to kick-start the pocess towards a new 
multiannual  financial  framework  for  the  European  Union.  In  May  2018,  the  Commission  presented  its 
proposals for a new, modern long-term budget for the EU, covering the period 2021-2027.  

The  proposals  are  designed  to  deliver  on  the  political  priorities  agreed  by  leaders  in  Bratislava  and  Rome. 
Under these proposals, funding would be stepped up in a range of areas vital to Europe’s future, including the 
coordinated  European  response  to  the  challenges  of  migration,  the  fight  against  terrorism  and  organised 
crime,  digital  transformation,  climate  action,  programmes  for  young  people  and  research  and  innovation, 
while making sure that traditional policies supporting the key union objective of solidarity are modernised and 
retain a meaningful level of funding, for all Member States and regions when it comes to cohesion policy. 

16 

EXECUTIVE SUMMARY 

The  Commission’s  proposals  are  based  on  a  spending  review,  a  comprehensive  assessment  of  the 
lessons  learned  from  current  and  previous  programmes.  This  made  it  possible  for  the  Commission  to 
propose essential modernisation features: 

 

 
 

 

 

the  strong  focus on  European  added  value  and the  need  to  provide  adequate  support  for  new  and 
pressing priorities such as research and innovation, the digital economy, young people, migration and 
border  management,  security,  defence  and  external  action;  and  a  strengthened  emphasis  on 
sustainability including a more ambitious goal for climate mainstreaming;  
the streamlined and more transparent structure of the future budget;  
the radical reduction in the number of programmes and the creation of new integrated programmes 
in  areas  like  investing  in  people,  the  single  market,  strategic  investments,  rights  and  values  and 
external actions, and the increased focus on synergies between instruments;  
the simplification of funding rules to reduce red tape for beneficiaries and managing authorities, and 
a greater focus on performance and results; and  
a more flexible budget to be able react rapidly in a fast-changing world.  

Agreement  was  reached  by  the  Eurogroup  on  the  features  of  a  budgetary  instrument  for  convergence  and 
competitiveness for the euro area. This will promote cohesion within the Union by strengthening the resilience 
of  the  Economic  and  Monetary  Union.  It  is  also  widely  accepted  that  the  new  mechanism  to  ensure  that 
generalised deficiencies as regards the rule of law do not put the budget at risk will be an essential feature of 
an agreement on the future multiannual financial framework. Work has also progressed on the Commission’s 
proposals to modernise the revenue side of the EU budget.Securing an agreement on the future framework is 
a high priority for the months ahead, while continuing to work on maximising the contribution of the current 
financial programmes to the EU’s prosperity and security. 

Strengthening the Commission’s corporate governance 

In November 2018, the Commission adopted a set of targeted measures to strengthen corporate governance. 
This  reform  strengthens  the  Commission’s  well-established  and  effective  model  of  financial  accountability, 
based  on  a  clear  division  of  responsibility  between  the  political,  corporate  and  departmental  levels.  The 
centrepiece  of  this  reform  is  a  rationalisation  of  corporate  governance  bodies  under  the  overall 
authority of the senior-level Corporate Management Board, chaired by the Secretary-General. The Corporate 
Management  Board  will  provide  oversight  and  strategic  guidance  in  areas  including  human  resource 
allocation,  risk  management,  strategic  planning  and  programming,  data  protection,  security  and  business 
continuity,  corporate  communication  and  anti-fraud  policy.  This  reform  also  simplifies  the  information-
technology governance  and  security  landscape,  strengthens  corporate  risk  management  and 
clarifies the role of the Audit Progress Committee.  

17 

 
 
2018 ANNUAL  
MANAGEMENT AND  
PERFORMANCE 
REPORT 

 
 
 
 
2018 Annual Management and Performance Report 

Introduction 

The 2018 Annual Management and Performance Report for the EU Budget is the Commission’s main input to 
the  annual  discharge (22)  procedure  by  which  the  European  Parliament  and  the  Council  scrutinise  the 
implementation of the EU budget. The Commission attaches great importance to ensuring that the EU budget 
is managed responsibly  and  correctly, and to working  with all  parties involved to  make sure that it delivers 
tangible results on the ground. 

The report presents an overview of the latest information on the performance of the budget. It also contains 
detailed reporting on issues related to the management and protection of the EU budget. This report has the 
following two main sections. 

Section 1 describes, with examples, how the EU budget supports the  EU’s political priorities. It provides the 
latest available data on results achieved up to the end of 2018. This reporting draws on information from the 
2018 annual activity reports produced by all Commission departments, and other sources such as programme 
statements, evaluation reports, studies and implementation reports on EU programmes. The central question 
of this section is whether the EU budget is being put to the best possible use to deliver tangible results for all 
Europeans.  The  Commission  cannot  ensure  this  on  its  own  —  it  is  a  joint  responsibility  with  the  Member 
States, regions, non-governmental organisations, beneficiaries and all those involved in implementing the EU 
budget.  This  section  incorporates  the  evaluation (23)  of  the  EU’s  finances  based  on  the  results  achieved. 
Further performance information is available in the programme statements and the programme performance 
overview published by the Commission together with the draft annual budget. 

Section 2 reports on developments in relation to internal control, financial management and the protection of 
the  EU  budget.  This  section  is  also  based  on  the  annual  activity  reports  produced  by  each  Commission 
department, in which the internal control environment and related issues are described in detail. Where issues 
were encountered in the course of the year, the report describes how Commission departments have tackled 
them. This section summarises information on:  

  managing legality and regularity risks;  
  managing the cost-effectiveness of controls and revising anti-fraud strategies; 
 
 

the protection of the EU budget; and 
the management assurance provided to the College of Commissioners.  

The management assurance received from all departments and the assurance obtained through internal audit 
work form the basis for the report’s overall conclusion. This conclusion enables the Commission, by adopting 
the report, to take overall political responsibility for the management of the 2018 EU budget. 

The 2018 Annual Management and Performance Report for the EU budget is part of the broader package of 
integrated financial and accountability reporting (24). This also includes the annual accounts (25), a long-term 
forecast of future inflows and outflows (26) covering the next 5 years, the report on internal audits (27) and the 
report on the follow-up (28) to the discharge. 

(22) 

(23) 
(24) 
(25) 
(26) 
(27) 
(28) 

The annual discharge procedure is the procedure through which the European Parliament and the Council give their final approval 
of the budget implementation for a specific year and hold the Commission politically accountable for the implementation of the EU 
budget. https://ec.europa.eu/info/about-european-commission/eu-budget/how-it-works/annual-lifecycle/assessment/parliaments-
approval_en 
Article 318 of the Treaty on the Functioning of the European Union. 
Article 247 of the Financial Regulation. 
Article 246 of the Financial Regulation. 
Article 247(2) of the Financial Regulation. 
Article 118(8) of the Financial Regulation. 
Article 261(3) of the Financial Regulation. 

21 

                                                        
2018 Annual Management and Performance Report 

Section 1 
Performance and results 

Generating  added  value  from  every  euro  spent  is  of  key  importance  to  the  Commission.  President  Juncker 
set  the tone at the beginning of his mandate: ‘It is not enough to allocate money wisely. We will have to do 
more, with less. We need to get the best out of the budget and spend money smartly. […] People want us to 
achieve results. They also want to know how we spend the tax payer’s money.’ (29) 

The  EU  budget  focuses  on  areas  where  pooling  resources  to  tackle  common  challenges  for  all 
Europeans can deliver results that could not be achieved as effectively or efficiently by Member 
States  acting  alone.  This  applies  in  areas  as  diverse  as  cross-border  infrastructure,  external  border 
management, large-scale space projects and pan-European research. The focus on EU added value is at the 
heart of the Commission's proposals for the 2021-2027 multiannual financial framework.  

This section begins with an overview of the EU budget and its performance framework. This is followed by a 
summary of how the current and future long-term budget contributes to the political agenda for the EU set 
out by leaders in Bratislava, Rome and Sibiu, as well as to international priorities such as climate targets and 
the UN sustainable development goals.  

The section then presents the latest information on results achieved with the EU budget up until the end of 
2018. This information is structured around the headings in the current multiannual financial framework. The 
report also describes how these programmes contribute to the political priorities of the Juncker Commission. 
The type of data reported depends on the level of maturity of the programmes, ranging from input data to 
the results of spending from the early part of this period. Final evaluations on the impact of the programmes 
are not yet available, hence definitive reporting on performance will not be possible until later on. The report 
covers areas where performance has fallen short of expectations or where shortcomings have been identified 
in  programme  design  by  evaluations  and  audit  work.  This  information  is  used  to  inform  implementation 
decisions  on  the  current  financial  programmes  and  to  inform  the  legislators  shaping  the  future  long-term 
budget. 

(29) 

Speech by President Juncker at the 'EU Budget focused on Results' conference, http://europa.eu/rapid/press-release_SPEECH-15-
5696_en.htm 

22 

                                                        
2018 Annual Management and Performance Report 

A result-oriented EU budget  

The EU budget 

The EU budget is a key instrument  in the implementation of European policies and priorities. Unlike national 
budgets,  the  EU  budget  is  mainly  focused  on  supporting  strategic  investments  over  the  medium  to  longer 
term and on using its leverage to catalyse investment from other public and private sources. It complements 
national budgets to address common challenges faced by the Member States and creating opportunities for 
the EU as a whole. The EU's financial programmes are managed in some cases directly by the Commission for 
example  in  the  area  of  research  or  together  with  the  Member  States  (shared  management),  such  as  in 
cohesion policy. Some two thirds of the EU budget is managed through shared management. 

The  EU  uses  innovative  financial  instruments  as a  smart  way  to  deploy  EU  budgetary  resources.  Innovative 
financial instruments attract funding from other public or private investors for economically viable projects in 
areas  where  there  are  market  failures  or  investment  gaps.  Examples  include  sectors  with  high  economic 
growth or innovative business activities. The fact that the EU invests risk capital in a certain fund or covers 
part of the risk associated with a certain type of projects can reassure other investors and encourage them to 
invest alongside the EU. The loan-guarantee facility and the equity facility for growth under the programme 
for the competitiveness of enterprises and small and medium-sized enterprises are prime examples of such 
financial instruments. Financial instruments are also used under other EU programmes, such as Horizon 2020, 
the  EU  programme  for  employment  and  social  innovation,  the  Creative  Europe  programme,  the  Connecting 
Europe Facility and under the EU’s external policy programmes. 

The performance framework for the EU budget 

A robust performance framework for the EU budget is a prerequisite for result-oriented and well-managed EU 
programmes.  For  the  2014-2020  multiannual  financial  framework,  performance  frameworks  have  been 
included as a new, compulsory feature in the legal basis of all financial programmes. This has resulted in a 
stronger  focus  on  results  across  the  budget.  These  frameworks  entail  the  setting  of  clear  and  measurable 
objectives and indicators as well as the necessary monitoring, reporting and evaluation arrangements.  

The indicators in these frameworks, together with other sources of qualitative and quantitative performance 
information  such  as  evaluations,  provide  a  sound  basis  for  assessing  programme  performance  and  with  it 
progress  towards  the  agreed  objectives.  They  also  help  anticipate  and  resolve  problems  in  programme 
implementation when they arise. 

During the early years of a programme’s implementation, performance information is based on inputs (i.e. the 
financial allocation to a particular programme) and, gradually, on outputs (i.e. the direct deliverables from a 
given project.) This type of information gives a good initial indication of how and where the EU budget is being 
spent.  As  a  programme  is  implemented,  information  on  the  results  and  to  a  lesser  extent  the  longer-term 
impact of spending will become available.  

To make the European structural and investment funds (ESIF) more performance oriented, a mechanism with 
a  performance  reserve  has  been  foreseen.  This  reserve  will  be  released  in  2019  to  programmes  that  had 
achieved their predefined milestones by the end of 2018.  In the case of programmes and priorities that had 
not achieved their milestones, resources will be reallocated to other priorities.  

In  addition  to  the  performance  framework,  audits  conducted  by  internal  and  external  auditors  also  help 
improve  the  performance  of  programmes,  as  well  as  the  efficiency  and  effectiveness  of  the  operations, 
management systems and procedures of the bodies and institutions that manage EU funds.  Audit work has 
also  helped  the  Commission  to  improve  the  quality  of  its  performance  reporting.  Recent  recommendations 
from the European Court of Auditors have led to more balanced reporting in the annual activity reports, with 
more attention given to challenges encountered, to a stronger focus on the reliability and quality of data, and 
clearer explanations of how data on performance has been used to improve performance. 

23 

2018 Annual Management and Performance Report 

Proposals for a new, modern and focused long-term budget, tightly geared to 
the political priorities  

The  Commission  services conducted  a  comprehensive  spending  review  of  the  EU  budget  in  2017  and 2018 
setting  out  the  evidence  and  the  analytical  underpinning  for  the  Commission’s  proposals  for  the  future 
multiannual  financial  framework  and  the  accompanying  sectorial  programmes.  The  review  was  designed  to 
identify  the  features  of  current  programmes  that  have  proven  their  worth  and  should  be  replicated  or 
amplified in the future financial programmes. It also identified the areas where reform was needed to make 
full use of the potential of the EU budget. These were: i) focus on EU added value; ii) streamlining the budget 
and  exploiting  synergies  between  programmes;  iii)  simplification  and  sound  financial  management;  iv) 
flexibility and the ability to respond to crises; v) focus on performance; and vi) coherence with main political 
objectives and values.  

In  these  proposals,  the  Commission  increasinlgy  focused  on  the  European  added  value  of  EU  spending.  The 
proposals also include measures to improve the overall performance framework, for example by streamlining 
the  number  of  programmes  and  improving  how  they  work  together,  creating  more  flexibility  and  using  a 
smaller number of higher quality indicators to monitor and report on programme performance. 

The  EU  budget  reflects  the  EU’s  commonly  agreed  priorities  and  shows  how  they  can  be  delivered.  The 
political agenda set out by leaders in Bratislava and Rome is the roadmap for the future long-term budget, 
which the Commission proposed (30) in May 2018 and which covers the period 2021-2027.  

The proposals modernise the budget by providing a significant boost to funding in several key strategic areas. 
From  innovation  to  the  digital  economy,  from  training  and  employment  for  young  people  to  climate  action 
and the  environment,  from  migration  and border management  to  security, defence  and external  action,  the 
budget will invest where it really counts. 

The next long-term budget should also be simpler and more transparent so that stakeholders can make the 
most out of it. The European Parliament and the Council as well as beneficiaries, large and small, have asked 
for this and the Commission has been listening and proposed a radically simplified budget. 

The key features of the next EU budget are: 

More funding for 
priority areas 

A new mechanism to 
protect the EU budget 
from financial risks 
linked to the rule of 
law 

A strong focus on 
European added 
value and on 
performance 

Less red tape for 
beneficiaries 

A more flexible and 
agile budget with a 
clearer and leaner 
architecture 

The EU budget and the Europe 2020 strategy  

The  current  long-term  budget  contributes  to  the  Europe  2020  strategy  for  smart,  sustainable  and 
inclusive  growth.  The  targets  are  a  shared  responsibility  of  the  EU  and  its  Member  States,  and  their 
achievement requires the combination of multiple policy tools, including the EU and national budgets. 

The  Commission  uses  nine  indicators  to  monitor  the  Europe  2020  headline  targets (31).  Information  on 
progress  is  updated  regularly  and  published  on  Eurostat’s  website.  The  table  below  presents  the  latest 
available data for these indicators.  

(30) 
(31) 

https://ec.europa.eu/commission/publications/factsheets-long-term-budget-proposals_en 
https://ec.europa.eu/eurostat/web/europe-2020-indicators 

24 

 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Member  States  are  making  progress  towards  the  goals  they  set  9 years  ago  in  the  Europe  2020  strategy. 
Overall, the EU is nearing its targets on education, energy, climate and employment. 14 Member States have 
already  achieved  their  national  targets  of  reducing  early-school  leaving  and  in  increasing  the  share  of  the 
population  with  tertiary  education.  11  Member  States  have  already  achieved  a  share  of  renewable  energy 
that corresponds to their national target for 2020. The EU target of  75% employment  by 2020 is on track, 
assuming the current trend continues, and seven Member States have already achieved their national goals. 
This is a remarkable achievement given the severe impact of the crisis on employment. However, the number 
of people at risk of poverty or social exclusion peaked in 2012 but has since fallen to around pre-crisis levels. 
As a result, the target is unlikely to be met in 2020. Likewise, the goal of 3% of gross domestic product value 
as investment in research and development is far off and will require major efforts if it is to be met. 

The contribution to Europe 2020 should not be confined within the limits to a single programme. It should be 
seen as a mutually reinforced contribution of the EU budget as a whole. Overall, it is estimated that 59% of 
the EU budget commitments in 2018 were linked to the Europe 2020 strategy. 

Europe 2020 targets for the EU 

2010 data 

Latest available 
data 

In 2020, based 
on recent 
trends 

1. Increasing the employment rate of the population 
aged 20-64 to at least 75%  

2. Increasing combined public and private investment in 
research and development to 3% of gross domestic 
product  

68.6% 

73.5% (Q3 2018) 

1.93% 

2.07% (2017) 

3a. Reducing greenhouse gas emissions by at least 20% 
compared to 1990 levels  

14.2% reduction 

22% reduction 

3b. Increasing the share of renewable energy in final 
energy consumption to 20%  

12.5% 

17.5% (2017) 

3c. Moving towards a 20% target in energy 
efficiency (32) 

4a. Reducing the rate of early leavers from education 
and training (ages 18-24) to less than 10%  

4b. Increasing the share of the population aged 30-34 
having completed tertiary education to at least 40%  

5. Lifting at least 20 million people out of the risk of 
poverty and social exclusion  

5.3% (2017) 

11.8% (distance 
to 2020 target 
for primary 
energy 
consumption) 

13.9% 

10.6% (2017) 

33.8% 

39.9% (2017) 

1.4 million 
increase 
(compared to the 
2008 base year) 

5.2 million 
decrease 
(compared to the 
2008 base year) 
in 2017 

Target likely to be 
met 

Target unlikely to 
be met 

Target likely to be 
met 

Target likely to be 
met 

Target likely to be 
met 

Target likely to be 
met 

Target likely to be 
met 

Target unlikely to 
be met 

Table: Progress towards Europe 2020 targets.  
Source: COM(2019) 150 final, 27 February 2019. 

Crosscutting spending on climate action and biodiversity 

The EU budget is also an important tool for achieving crosscutting policy objectives such as climate action and 
biodiversity.  To  respond to  challenges and investment  needs related  to  climate  change, the  EU  has decided 
that at least 20% of its budget for 2014-2020 — as much as EUR 200 billion over the whole period — 

(32)   A 20% increase in energy efficiency in 2020 implies an EU wide primary energy consumption of no more than 1 483 Mtoe 

compared to baseline projections of 1 854 million tonnes of oil equivalent. At the end of 2017, the EU stood at 1 561 million 
tonnes of oil equivalent, only 5.3% above 2020 target for primary energy consumption.  

25 

 
                                                        
2018 Annual Management and Performance Report 

should be spent on climate change-related action. This approach is called  ‘climate mainstreaming’.  To 
achieve  this  result,  mitigation  and  adaptation  actions  are  being  integrated  into  all  major  EU  spending 
programmes,  in  particular  regional  development  and  the  Cohesion  Fund,  energy,  transport,  research  and 
innovation, the common agricultural policy and the EU’s development policy. The estimates for climate-related 
expenditures are monitored on an annual basis with ‘EU climate markers’ adapted from the Organisation for 
Economic Co-operation and Development’s ‘Rio markers’. In 2018, the amount was more than EUR 32 billion, 
20.7% (33)  of  the  2018  budget.  The  total  cumulative  amount  for  climate  mainstreaming  was  more  than 
EUR 141 billion by the end of 2018. The latest estimate (34) is that it will be EUR 210 billion (19.7%) for the 
entire programming period. 

Chart: Mainstreaming of climate action in 2018. All amounts in the chart are in EUR million.  
Source: European Commission. 

The  EU  is  also  making  a  concerted  effort  to  support  biodiversity.  The  related  expenditure  was  more  than 
EUR 13 billion, 8.5% (35) of the 2018 budget. These funds aim to limit and reverse the decline of biodiversity 
in the EU, making an important contribution to the Europe 2020 sustainable growth objectives. 

The EU budget and the UN sustainable development goals 

The sustainable development goals are the blueprint to achieve a better and more sustainable future for all. 
They  address  the  global  challenges  we  face,  including  those  related  to  poverty,  inequality,  climate, 
environmental  degradation,  prosperity,  peace  and  justice.  The  UN  adopted  these  goals  in  September 
2015  as  part  of  its  2030  agenda  for  sustainable  development.  This  agenda  gave  a  new  impetus  to 
global efforts to achieve sustainable development.  

The EU has played an important role in shaping the 2030 agenda through public consultations, dialogue with 
its  partners  and  in-depth  research.  The  EU  is  committed  to  playing  an  active  role  in  maximising  progress 

(33) 

(34) 
(35) 

In the calculation of the percentage of climate mainstreaming, the Commission uses the voted budget for 2018 of the European 
Commission (EUR 157 billion) as denominator.   
Statement of Estimates of the European Commission for the financial year 2020, SEC(2019) 250, June 2019 
In the calculation of the percentage of expenditure for biodiversity, the Commission uses the voted budget for 2018 of the 
European Commission (EUR 157 billion) as denominator.   

26 

 
                                                        
2018 Annual Management and Performance Report 

towards  the  sustainable  development  goals,  as  outlined  in  its  communication (36)  on  the  ‘Next  steps  for  a 
sustainable European future’. The sustainable development goals are firmly anchored in the European treaties 
and mainstreamed in all its programmes, sectoral policies and initiatives. 

Each  year  the  EU  continues  its  efforts  via  its  policy  and  regulatory  instruments  to  pursue  the  sustainable 
development  goals  and  plays  a  key  role  in  supporting,  coordinating  and  complementing  Member  States’ 
policies, also in financial terms, via the EU budget.  

The  2018  programme  statements  highlighted  in  particular  the  most  recent  and  relevant  initiatives 
contributing  to  the  sustainable  development  goals,  although  often  in  an  indirect  and  non-quantifiable  way. 
These elements are provided for information purposes and do not constitute the official reporting on the EU 
budget contribution towards the sustainable development goals. As the goals are interlinked, many EU actions 
can contribute to several of them.  

The 2018 EU budget 

2018 was the fifth year of implementation of the multiannual financial framework  2014-2020. Two specific 
priorities were formulated for the 2018 budget. One was a European response to the new challenges deriving 
from  the  complex  geopolitical  environment,  from  migration  management  to  the  protection  of  the  EU's 
external borders and the security of its citizens. The other  was strategic investment and sustainable growth, 
to support economic cohesion, and create jobs, in particular for young people’. (37) More detailed information 
on the progress made by programmes on specific indicators and objectives can be found in the programmes’ 
performance  overview (38),  which  is  an  extract  of  the  programme  statements  attached  to  the  draft 
budget. 

Chart: The 2018 EU budget, commitment appropriations, per budget heading. All amounts in EUR million. 
Source: European Commission. 

(36) 

(37) 
(38) 

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and 
the Committee of the Regions — Next steps for a sustainable European future — European action for sustainability, COM(2016) 
739, 22.11.2016. 
See Statement of Estimates of the European Commission for the financial year 2018, p. 7. 
Programmes' Performance Overview, EU budget 2014-2020, Draft Budget 2020, COM(2019) 400 – June 2019, 
https://ec.europa.eu/info/sites/info/files/about_the_european_commission/eu_budget/ppo_db2020.pdf 

27 

                                                        
2018 Annual Management and Performance Report 

In  2018,  the  total  amount  of  commitments implemented  from the  EU  budget,  including  amending  budgets, 
amounted  to  EUR 160 billion (39).  Around  half  of  this  (50%  or  EUR  77.5  billion)  was  allocated  to  heading  1 
‘Smart  and  inclusive  growth’  split  between  heading  1A  ‘Competitiveness  for  growth  and  jobs’  (28%)  and 
heading 1B ‘Economic, social and territorial cohesion’ (72%). heading 2 ‘Sustainable growth: natural resources’ 
was  the  second  largest  area  of  the  budget  with  EUR 58.8 billion,  accounting  for  37%.  EUR 3.5 billion  was 
allocated to budget heading 3 ‘security and citizenship’, including on reinforcing the external borders of the EU 
and addressing the refugee crisis and irregular migration. EUR 10.4 billion was allocated to actions outside the 
EU and EUR 9.5 billion was spent on the administration of the EU institutions. 

In 2018, six draft amending budgets were adopted. Apart from the standard adjustments on the revenue side, 
two draft amending budgets were adopted for the mobilisation of the European Solidarity Fund.  This report 
describes  the  many  instances  where  this  fund  supports  EU  countries  struck  by  natural  disasters  and  helps 
them recover quickly. 

Further adjustments  were  needed  for  the  EU  budget  contribution  to  the  facility  for  refugees in  Turkey.  This 
included  cancelling  the  reserve  related  to  the  support  to  Turkey  from  the  Instrument  for  Pre-Accession 
Assistance,  and  strengthening  the  European  Neighbourhood  Instrument  to  fund  additional  actions,  for 
example linked to the central Mediterranean migratory route. 

(39) 

Commitments from 2018, excluding carry-overs and assigned revenues as well as  the amounts for the European Globalisation 
Adjustment Fund and the EU Solidarity Fund. All implemented commitment appropriations amounted to EUR 173 billion (see 
consolidated annual accounts) 

28 

 
 
                                                        
2018 Annual Management and Performance Report 

The EU budget helps turn political priorities into a reality. Therefore, the EU is directing money to 
where the needs are. The 2018 EU budget, a budget for all, created more jobs, more growth and 
more investments. 

E.g. EUR 59 billion to farmers, fisheries, 
climate and biodiversity. 

E.g. EUR 2 billion to the European Fund for 
Strategic Investments, the nucleus of the 
Juncker plan. 

E.g. EUR 78 billion — almost half of the funds — 
towards boosting the European economy, 
employment and competitiveness. 

EUR 
160  
billion  
in 2018 

E.g. more than EUR 2 billion for young people 
for the Erasmus+ programme and for the 
youth employment initiative so they receive 
support and better opportunities to find jobs. 
This helps strengthening solidarity in our 
Member States. 

E.g. EUR 354 million to improve the 
competitiveness of small and medium-sized 
enterprises. 

E.g. EUR 11.2 billion research and innovation 
funding through the Horizon 2020 programme.  

E.g. EUR 55.5 billion to boosting growth, job 
creation and convergence in all Member States 
and regions via cohesion policy. 

E.g. EUR 40 million in funding for collaborative research and innovative defence technologies and 
products as a first step towards a European Defence Fund. 

E.g. EUR 3.5 billion was dedicated to security and citizenship, including to managing migration and 
tracking security challenges.  

29 

 
 
 
 
2018 Annual Management and Performance Report 

List of programmes covered in this report 

Horizon 2020 ..................................................................................................................................................................................................................... 33 

Euratom ................................................................................................................................................................................................................................. 36 

ITER .......................................................................................................................................................................................................................................... 37 

European Fund for Strategic Investments ....................................................................................................................................................... 38 

Connecting Europe Facility ........................................................................................................................................................................................ 42 

Competitiveness of Enterprises and small and medium-sized enterprises ............................................................................... 46 

ERASMUS+ ........................................................................................................................................................................................................................... 48 

European Solidarity Corps.......................................................................................................................................................................................... 52 

Employment and social innovation (EaSI) ....................................................................................................................................................... 54 

Space (Copernicus, Galileo and the European Geostationary Navigation Overlay Service) ............................................. 57 

European Defence Industrial Development Programme ........................................................................................................................ 60 

Customs 2020................................................................................................................................................................................................................... 62 

Fiscalis 2020 ...................................................................................................................................................................................................................... 63 

Hercule III ............................................................................................................................................................................................................................. 64 

Pericles 2020 ..................................................................................................................................................................................................................... 64 

Anti-fraud information system  ............................................................................................................................................................................. 64 

ISA2 — Interoperability solutions and common frameworks for European public administration, businesses and 
citizens ................................................................................................................................................................................................................................... 65 

European statistical programme ........................................................................................................................................................................... 66 

Nuclear-decommissioning assistance programmes in Bulgaria, Slovakia and Lithuania ................................................. 66 

European Regional Development Fund and Cohesion Fund ................................................................................................................. 71 

European Social Fund ................................................................................................................................................................................................... 76 

Fund for European Aid to the Most Deprived ................................................................................................................................................ 79 

European Agricultural Guarantee Fund ............................................................................................................................................................. 82 

European Agricultural Fund for Rural Development ................................................................................................................................. 86 

European Maritime and Fisheries Fund ............................................................................................................................................................. 89 

Regional fisheries management organisations and fisheries agreements ................................................................................ 92 

LIFE — programme for the environment and climate action .............................................................................................................. 93 

Asylum, Migration and Integration Fund .......................................................................................................................................................... 99 

Internal Security Fund ............................................................................................................................................................................................... 102 

Health programme ...................................................................................................................................................................................................... 105 

Food and feed ................................................................................................................................................................................................................ 107 

Consumer Programme .............................................................................................................................................................................................. 108 

Creative Europe ............................................................................................................................................................................................................. 109 

Rights, equality and citizenship programme ............................................................................................................................................... 111 

Justice programme ..................................................................................................................................................................................................... 112 

Europe for Citizens Programme .......................................................................................................................................................................... 113 

EU Civil Protection Mechanism ............................................................................................................................................................................ 114 

Instrument for Pre-Accession Assistance ..................................................................................................................................................... 117 

European Neighbourhood Instrument ............................................................................................................................................................. 120 

30 

2018 Annual Management and Performance Report 

Development Cooperation Instrument (DCI) ............................................................................................................................................... 123 

European Fund for Sustainable Development (EFSD) ........................................................................................................................... 126 

EU humanitarian-aid programme ...................................................................................................................................................................... 127 

EU aid volunteers initiative .................................................................................................................................................................................... 129 

European Instrument for Democracy and Human Rights ................................................................................................................... 129 

Common Foreign and Security Policy .............................................................................................................................................................. 131 

Instrument contributing to Stability and Peace ........................................................................................................................................ 132 

Partnership Instrument for Cooperation with Third Countries ......................................................................................................... 134 

Cooperation with Greenland .................................................................................................................................................................................. 134 

Support for the Turkish Cypriot community ................................................................................................................................................ 135 

Instrument for Nuclear Safety Cooperation ................................................................................................................................................ 135 

Facility for refugees in Turkey ............................................................................................................................................................................. 136 

Guarantee Fund for External Action ................................................................................................................................................................. 137 

EU Civil Protection Mechanism ............................................................................................................................................................................ 138 

Emergency aid reserve ............................................................................................................................................................................................. 140 

Flexibility instrument.................................................................................................................................................................................................. 140 

EU Solidarity Fund ....................................................................................................................................................................................................... 140 

European Globalisation Adjustment Fund .................................................................................................................................................... 142 

31 

 
 
 
2018 Annual Management and Performance Report 

Competitiveness for growth and jobs 
(budget heading 1A) 

When  President  Juncker  set  out  his  political  guidelines  at  the  start  of  his  mandate  he  said  that  ‘My  first 
priority as Commission President will be to strengthen Europe’s competitiveness and to stimulate investment 
for the purposes of job creation.’ The Commission has delivered on its promise to get more people into work. 
More Europeans are in work than ever before, with 12.4 million new jobs created since 2014, unemployment 
down to 6.8%, and youth unemployment (14%) back to its 2008 level. Investment has almost returned to pre-
crisis levels and public finances have improved in terms of debt and deficit levels.  

The  EU  budget  has  been  instrumental  in  these  achievements  and  is  a  vital  source  of  investment  across 
Europe.  EUR 22 billion  was  allocated  to  the  programmes  on  competitiveness  for  growth  and  jobs 
(commitments in heading 1A) in 2018, representing almost 14% of total annual budget expenditure.  

This report first covers the programmes for research and innovation (Horizon 2020 framework programme, 
Euratom and ITER). This is followed by the programmes targeting strategic investments (European Fund for 
Strategic  Investments,  the  Connecting  Europe  Facility  for  developing  trans-European  networks  in  transport, 
energy and the  digital sector) and the  programmes  that  support the single market (competitiveness, anti-
fraud,  fiscal  coordination).  The  Erasmus+,  programme  for  education,  training,  youth  and  sport  enabled 
around  600 000  young  people  and  190 000  members  of  staff  from  educational  institutions  and  youth 
organisations to participate in learning activities. 

Chart: Main programmes financed in 2018 under heading 1A, Competitiveness for growth and jobs. All amounts in EUR million. The 
category ‘other programmes’ includes among other nuclear safety and decommissioning, customs, Fiscalis and anti-fraud, energy 
projects to aid economic recovery (EERP) decentralised agencies, Other actions and programmes, Pilot projects and preparatory actions, 
Actions financed under the prerogatives of the Commission and specific competences conferred to the Commission. 
Source: European Commission. 

Europe’s future prosperity depends on the investment decisions taken today. In view of the next multiannual 
financial  framework,  the  Commission  has  proposed  to  step  up  investment  in  key  areas  such  as  research, 
strategic infrastructure and digital transformation. 

32 

 
2018 Annual Management and Performance Report 

The programmes under this budget heading contribute mainly to the Juncker Commission priorities of ‘jobs, 
growth and investment’, ‘digital single market’, ‘energy union and climate’ and ‘a deeper and fairer economic 
and monetary union’. Improving competitiveness and boosting sustainable jobs and growth are core of 
the discussions on the strategic agenda for the future.  

Horizon 2020 

Programme objectives 

Horizon 2020, the EU framework programme for research and innovation, is the world’s largest transnational 
research-funding programme. It is also the biggest EU  research and innovation programme ever with nearly 
EUR 80 billion  of  funding  available  over  7 years  (2014  to  2020).  In  addition,  Horizon 2020  has  leveraged 
approximately EUR 13 billion of private funds and has mobilised EUR 29.6 billion via debt financing. 

The  programme  plays  a  central  role  in  providing  a  common  strategic  framework  for  the  EU’s  research  and 
innovation funding. Its goal is to ensure Europe produces world-class science and technology, to remove barriers to 
innovation and to make it easier for the public and private sectors to work together in delivering solutions to major 
challenges that our society faces. EU support for research and innovation adds value by encouraging cooperation 
between  research  teams  across  countries  and  disciplines,  which  is  vital  in  making  breakthrough  discoveries.  It 
allows the EU to deliver on priorities such as the Paris Agreement on climate change. 

The general objective of this programme is to build a society and an economy based on knowledge and innovation 
across the whole EU while contributing to sustainable development. The specific objectives are the following. 

Generating excellent science and 
widening participation 

Boosting Europe’s industrial 
leadership 

Tackling societal challenges 

Promoting science with and for 
society 

Implementation and latest achievements 

By  the  end  of  2018,  679  Horizon 2020  calls  for  proposals  had  been  concluded.  Beneficiaries  responded 
massively  to  these  calls  and  submitted  almost  192 000  eligible  proposals,  requesting  a  total  EU  financial 
contribution of EUR 290 billion. Out of these, 23 250 proposals were retained for funding, bringing the overall 
success rate of eligible full proposals in the first  5 years to 12%. A total of 21 599 grant agreements were 
signed by the end of December 2018, with a budget allocation of EUR 39 billion in EU funding. This allocation 
is expected to grow even more as some of the grants from the 2018 calls will be signed in 2019. 

New planets have 
been discovered 

Major progress 
has been made in 
cancer treatment 

1.6 million Ebola 
vaccine doses are 
now available 

A battery has 
been developed 
which is 100 
times more 
powerful than the 
ordinary 

New techniques 
to store energy 
based on 
hydrogen fuel 
cells are being 
tested in our 
cities 

33 

 
 
 
 
 
 
 
 
 
2018 Annual Management and Performance Report 

The programme’s impact ultimately depends on the dissemination and exploitation of research and innovation 
data and results. This is why the work programme has been further fine-tuned to increase the availability of 
such data and results.  Initiatives to  boost  marketable innovations have  also  been introduced in  2018, most 
notably the introduction of the European Innovation Council pilot, with a budget of EUR 2.7 billion. 

Thousands of Horizon 2020 projects have a direct tangible impact 

Quantum technologies 

Quantum technologies  use  the  properties of  quantum effects  —  the  interactions  of  molecules,  atoms and 
even smaller particles known as quantum objects — to create practical applications in many different fields. 
The ‘quantum flagship’ was launched in October 2018. It is one of the most ambitious long-term and large-
scale research and innovation initiatives of the European Commission  and involves over 5 000 researchers. 
It  aims  to  place  Europe’s  research  at  the  forefront  of  the  second  quantum  revolution  and  kick-start  a 
competitive  European  industry  in  quantum  technologies,  bringing  transformative  advances  to  science, 
industry and society.  

Space technology 

Space  technology,  data  and  services  have  become  indispensable  in  the  daily  lives  of  Europeans  and  for 
Europe  to  pursue  its  strategic  interests.  Small,  light  satellites  are  crucial  for  improving  space-based 
connectivity,  internet  services  and  Earth  imaging  and  positioning.  This  is  why  the  EU  launched  a  EUR 10-
million  prize  for  an  innovative  and commercially  viable  solution  offering  low-cost  launch  services for  light 
satellites. The prize will contribute to the objectives of the Commission’s  space  strategy for Europe, which 
aims  at  reinforcing  Europe’s  autonomy  in  accessing  space  and  at  encouraging  the  development  of 
commercial markets for low-cost launch services. 

European public transport solutions 

By  2050,  two  thirds  of  the  world’s  population  will 
live  in  cities.  Road  traffic  pollution  is  a  major 
problem  in  many  cities  but  we  cannot  eliminate 
passenger vehicles altogether.  

is  an  EU 

Driverless  vehicles  will  change  our  lives,  just  as 
steam  trains  and  motor  cars  did  before  them. 
AVENUE 
funded  project  under 
Horizon 2020  that  started  on  1  May  2018.  The 
AVENUE  project  demonstrates 
the  economic, 
environmental  and social  potential  of  autonomous 
vehicles 
for  both  companies  and  public 
commuters  -  while  assessing  the  vehicle  road 
behaviour safety. 

- 

Photo: © European Union 

One  carbon-free  approach  being  tested  in  cities across Europe  is a  fleet  of  hydrogen  fuel  cell-powered 
buses. They are just like normal buses but are powered by electricity generated using fuel cell technology 
developed by industry with EU support. These cells only need hydrogen and air and emit harmless water 
vapour.  

The fuel cells and hydrogen joint undertaking has allocated considerable resources to the refinement of 
the  electrolysis  process,  with  the  result  that  Europe  is  now  a  world  leader  in  the  key  technology,  the 
proton exchange membrane. Now green hydrogen-production sites are setting up all over Europe. 

In Gothenburg, Sweden, project partners demonstrated the feasibility and potential of an ‘indoor’ bus stop, 
which provides a welcoming interior and shelter from the weather. This means that a specific destination 
like a library, hospital or shopping  centre could in the future act as a bus stop. Revolutionary changes in 
the design, operation and maintenance of buses will dramatically alter the way we use public transport. 

34 

 
 
 
  
 
 
2018 Annual Management and Performance Report 

First image of a black hole 

cooperation 

international 

The EU supported several years of research and an 
unprecedented 
of 
scientists  to  form  part  of  the  Event  Horizon 
Telescope  Consortium.  They  were  able  to  obtain 
the first image of a black hole using Event Horizon 
Telescope  observations.  The  image  shows  a  bright 
ring  formed  as  light  bends  in  the  intense  gravity 
around  a  black  hole  that  is  6.5 billion  times  more 
massive  than  the  Sun.  This  long-sought  image 
provides  the  strongest  evidence  to  date  of  the 
existence of supermassive black holes and opens a 
new  window  onto  the  study  of  black  holes,  their 
event horizons and gravity.  

Photo: © Event Horizon Telescope (EHT) Collaboration. Licensed 
under Creative Commons Attribution (CC-BY), 2018 

Assessment and evaluation 

The 2017 interim evaluation (40) highlighted that Horizon 2020 is a very attractive, relevant research-funding 
programme.  This  attractiveness  and  continued  relevance  has,  however,  resulted 
large-scale 
oversubscription.  The  evaluation  found  a  success  rate  of  only  11.6%  compared  to  18.5%  for  its 
predecessor, the Seventh Framework Programme. An additional EUR 62.4 billion would be needed to fund all 
proposals independently evaluated above the stringent quality threshold. The opportunity cost in terms of the 
waste  of  resources  for  applicants  submitting  high  quality  but  unsuccessful  projects  is  estimated  at 
EUR 636 million a year (41). 

in 

The  interim  evaluation  also  suggested  that  the  programme  could  be  further  simplified.  The  European 
Court  of  Auditors  acknowledged  in  its  Special  report  No 28/2018 (42)  that  Horizon 2020  has  made  great 
progress  in  terms  of  simplification  compared  to  the  Seventh  Framework  Programme.  The  administrative 
burden  on  those  applying  for  and  managing  research  grants  has  been  reduced  and  further  simplification 
suggestions  have  been  incorporated  into  the  new  Horizon  Europe  programme  proposal.  Simplifying  funding 
rules  under  the  new  multiannual  financial  framework  is  the  major  feature  of  the  new  generation  of 
programmes. For example through ‘lump-sum funding’, would allow for payment based on the achievement 
of agreed targets rather than based on eligible costs. This simplification will make administration more light 
and will lower the risk of error. This method was tested in pilot calls in 2018 and testing will continue in 2019.  

In 2018, the Commission proposed a policy package for the future  framework programme for research and 
innovation,  called  Horizon  Europe (43).  It  will  help  Europe  remain  at  the  forefront  of  global  research  and 
innovation.  As  highlighted  in  the  report (44)  of  the  High-Level  Group,  chaired  by  Pascal  Lamy,  investment  in 
research  will  allow  the  EU  to  compete  with  other  developed  and emerging  economies,  ensure  a  prosperous 
future for its citizens and preserve its unique social model. Building on the success of Horizon 2020, the new 
programme will continue to promote research excellence and strengthen the focus on innovation, for instance 
through the development of prototypes, intangible assets, knowledge and technology transfer.  

(40) 

(41) 

(42) 

(43) 

(44) 

Interim evaluation of Horizon 2020, SWD(2017) 221, 29.5.2017 — https://ec.europa.eu/info/research-and-
innovation/strategy/support-policy-making/support-eu-research-and-innovation-policy-making/evaluation-impact-assessment-and-
monitoring/horizon-2020_en 
In-depth interim evaluation of Horizon 2020, SWD(2017) 220, 29.5.2017 — 
https://ec.europa.eu/transparency/regdoc/rep/10102/2017/EN/SWD-2017-220-F1-EN-MAIN-PART-1.PDF 
European Court of Auditors, The majority of simplification measures brought into Horizon 2020 have made life easier for 
beneficiaries, but opportunities to improve still exist — Special report No 28/2018 — 
http://ec.europa.eu/research/participants/data/ref/h2020/other/events/2019-01-30/2_eca_en.pdf 
Proposal for a regulation of the European Parliament and of the Council establishing Horizon Europe — the framework programme 
for research and innovation, laying down its rules for participation and dissemination, COM(2018) 435 final, 7.6.2018.  
Investing in the European future we want — Report of the independent High-Level Group on maximising the impact of EU research 
and innovation programmes, European Research Council, 2017 — https://erc.europa.eu/content/investing-european-future-we-
want-report-independent-high-level-group-maximising-impact-eu 

35 

  
 
                                                        
2018 Annual Management and Performance Report 

A new European Innovation Council will provide a one-stop shop for high potential and disruptive innovators, 
aiming to make Europe a front-runner in market-creating innovation. 

Euratom 

Programme objectives  

Nuclear and ionising radiation technologies continue to play an important role, whether this concerns energy 
and  contributing  to  the  security  of  supply, the  use  of  radiation  in  medical and industrial  applications  or  the 
management of spent fuel and radioactive waste. Safe and secure use of these technologies is of paramount 
importance and research programmes help maintain the highest standards of safety, security and safeguards 
in  this  field.  The  Euratom  programme (45)  also  focuses  on  the  development  of  fusion  energy,  a  potentially 
inexhaustible and climate-friendly energy source. 

The programme operates through ‘indirect action’ funding to third parties and through ‘direct’ actions carried 
out by the Commission’s Joint Research Centre.  

Implementation and latest achievements 

Most of the fission projects selected are in the areas of nuclear safety (41%), research infrastructures (22%), 
waste management (15%) and radiation protection (13%).  

The development of a high-temperature superconductor won the 2016 Euratom Prize for Innovation in Fusion 
Research.  It  can  now  be  fabricated  in  7-metre  lengths.  It  has  also  been  cold  tested  at  liquid  nitrogen 
temperature and high current, i.e. under fusion conditions. 

The  Joint  Research  Centre  has  been  contributing  to  the  Collaborative  International  Evaluated  Library 
Organisation,  an  initiative  which  aims  at  the  worldwide  standardisation  of  evaluated  nuclear  data  for 
harmonised safety assessments in nuclear energy.  

Assessment and evaluation 

The  2017  interim  evaluation (46)  shows  that  a  key  part  of  the  European  added  value  of  Euratom  indirect 
actions is the EU’s ability to mobilise a wider pool of excellence, expertise and multi-disciplinarity in nuclear 
research  than  individual  Member  States  could.  Through  cooperative  research  and  innovation,  the  Euratom 
programme  also  enables  a  Europe-wide  approach  to  the  improvement  of  nuclear  safety  and  radiation 
protection in all areas of application. This complements the Euratom directives on nuclear safety, radioactive-
waste  management  and  basic  safety  standards  and  involves  demonstrable  scientific  and  technological 
progress in all areas that would not have been possible without a collaborative pan-European approach. The 
Euratom  programme  also  enables  a  much  more  broad-based  coordination  of  education  and  training 
throughout  Europe,  the  use  of  research  infrastructures  and  international  cooperation.  This  is  particular 
beneficial for smaller Member States, which can then take advantage of economies of scale afforded by the 
Europe-wide pooling effect.  

(45) 

(46) 

Council Regulation 1314/2013 of 16 December 2013 for the programme till 2018 and Council Regulation (Euratom) 
No 2018/1563 of 15 October 2018 for the period 2019-2020. 
Interim evaluation of indirect actions of the Euratom research and training programme 2014-2018 
https://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/panel_report_on_indirect_actions_of_
euratom_interim_evaluation_2014-2018.pdf  

36 

                                                        
2018 Annual Management and Performance Report 

Preparatory work for the future Euratom research and training programme included two evaluation studies, 
two high-level expert groups assisting the Commission, a public stakeholder consultation and contributions to 
the  Horizon  Europe  impact  assessment (47).  In  addressing  the  programme’s  shortcomings  identified  in  the 
evaluation,  the  proposal  for  the  new  Euratom  programme has  been  simplified  (through, for  example, a 
reduction in the number of objectives from 14 to four) and  synergies with Horizon Europe will be better 
exploited (e.g. in health research and the Marie Skłodowska-Curie actions). 

ITER 

Programme objectives  

ITER  is  one  of  the  most  ambitious  energy  projects  in  the  world  today.  The  project  was  brought  about 
through the collaboration of  seven parties: the EU, China, India, Japan, Korea, Russia and the United States. 
The aim is to build and operate an experimental fusion reactor which will be used to explore and demonstrate 
the  scientific  and  technological  feasibility  of  using  fusion  as  an  energy  source (48).  ITER  will  not  produce 
electricity as its purpose is more of an experimental nature: resolving critical scientific and technical issues in 
order to take fusion to the point where industrial applications can be designed. ITER is expected to be the first 
fusion device in the world that generates more power than is put into it and thus will be the proof of principle 
opening the way for the next step: a demonstration fusion power plant (49). 

Implementation and latest achievements (50) 

The  construction  of  ITER  started  in  2007.  The  EU  is responsible  for  45%  of  the  construction.  High-tech  and 
advanced civil-engineering industries are involved in its development. To date, over 700 contracts and grants 
have been awarded to companies, including small and medium-sized enterprises, in 24 countries, for a value 
of almost EUR 5 billion. 

Construction is now progressing visibly and steadily on-site and completion as of November 2018 is 
at 60%. The bioshield of the Tokamak building is complete and its scaffolding was removed in February 2018. 
At its base the construction of the crown, a vital component under Euratom’s responsibility, was completed on 
schedule  in  August.  Three  United  States-supplied  drain  tanks  and four Chinese-supplied  vapour  suppression 
tanks  were  installed  the  same  month.  The  first  vacuum  vessel  sector,  under  construction  in  Korea,  is  more 
than  80%  finished.  Russia  has  completed  its  production  of  a  poloidal  field  conductor  for  the  ITER  magnet 
system,  and  India  has  nearly  completed  fabrication  of  the  cryostat  lower  cylinder  and  base  on-site  in 
Cadarache. The manufacturing of toroidal field coil winding packs, as well as cold testing and insertion into 
precision-fabricated cases, is well advanced in Europe and Japan. Overall, substantial progress is being made 
for every major ITER component, system and structure (51). 

ITER  is  a  technologically  complex,  first-of-a-kind,  large-scale  international  project  and  as  such  it  has  faced 
significant  challenges  which  have  led  to  increased  costs  and  delays.  However,  the  progress  made  in  2018 
confirmed the robustness of the actions undertaken to address these issues (52). 

(47) 

Impact assessment accompanying the document, SWD(2018) 307 final, 7.6.2018 — https://ec.europa.eu/info/publications/horizon-
europe-impact-assessment-staff-working-document_en 
ITER agreement. OJ L 358, 16.12.2006, p. 62-80, https://eur-lex.europa.eu/legal-content/GA/TXT/?uri=CELEX:22006A1216(03)  
ITER programme statement, p. 1. 
ITER programme statement, pp. 1-2. 

(48) 
(49) 
(50) 
(51)  Directorate-General for Energy, 2018 Annual activity report, p. 28. 
(52)  Directorate-General for Energy, 2018 Annual activity report, p. 28. 

37 

                                                        
2018 Annual Management and Performance Report 

Assessment and evaluation 

The  recently  concluded  evaluation  of  ITER (53)  underlined  an  improvement  in  project  management. First,  the 
European  agency  in  charge  of  the  EU’s  contribution  to  ITER  (fusion  for  energy, or F4E)  improved  its  control 
and  monitoring  practices.  A  number  of  key  performance  indicators  measuring  project  progress  and  cost-
efficiency  are  now  being  closely  monitored (54).  Second,  the  so-called  staged  approach  is  one  of  the  most 
crucial parts of the management turnaround as it divides the work into four stages, each building towards a 
key goal. During each stage  of the project, only activities that are critical to achieving that stage’s goal are 
carried out (55). 

Under  the  next  multiannual  financial  framework,  the  EU  will  continue  its  support  of  ITER  through  F4E, 
ensuring that the disbursement of funding is based on performance and actual delivery on the ground. 

European Fund for Strategic Investments 

Programme objectives  

The  investment  plan  for  Europe,  also  known  as  ‘the  Juncker  Plan’,  launched  by  President  Jean-Claude 
Juncker in 2015, was a key response to the economic and financial crisis and its negative impact on the level 
of  investment  in  the  EU.  The  plan  remained  one  of  the  main  priorities  for  the  Commission  in  2018.  It  is 
composed of three pillars: the European Fund for Strategic Investments provides an EU guarantee to mobilise 
private  investment;  the  European  Investment  Advisory  Hub  and  the  European  Investment  Project  Portal 
provide  technical  assistance  and  greater  visibility  of  investment  opportunities.  The  third  pillar  aims  at 
improving the business environment by removing regulatory barriers to investment EU wide. 

The European Fund for Strategic Investments, also known as ‘the Juncker Fund’,  aims at mobilising by 
2020 EUR 500 billion (56) of additional public and private investment in strategic areas such as infrastructure, 
research  and  innovation,  education,  renewable  energy  and  energy  efficiency,  environment  as  well  as  risk 
finance  for  small  and  medium-sized  enterprises.  This  is  achieved  via  an  EU  budgetary  guarantee  to  the 
European Investment Bank Group, which allows them to increase the financing of projects with a higher-risk 
profile. The fund supports growth-enhancing investments, especially in the following areas:  

(53)  Midterm progress report in accordance with Article 5b of the Council Decision establishing the European joint undertaking for ITER 

(54) 

and the development of fusion energy and conferring advantages upon it, COM(2019) 147 final, 21.3.2019, pp. 20-21. 
Proposal for a Council decision amending Decision 2007/198/Euratom establishing the European joint undertaking for ITER and the 
development of fusion energy and conferring advantages upon it — Explanatory memorandum, COM(2018) 445 final, 7.6.2018, 
p. 4. 

(55)  Midterm progress report in accordance with Article 5b of the Council Decision establishing the European joint undertaking for ITER 

(56) 

and the development of fusion energy and conferring advantages upon it, COM(2019) 147 final, 21.3.2019, p 9. 
The initial goal set in 2015 was EUR 315 billion. On 1 January 2018, the regulation to extend and enhance the European Fund for 
Strategic Investments (European Fund for Strategic Investments 2.0) entered into force. It extends the fund’s lifetime to end-2020 
and raises its investment target to EUR 500 billion. It also aims, inter alia, at increasing the transparency of the investment 
decisions and providing more technical support. 

38 

 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Chart: investment by sector as of 15 May 2019. 
Source: European Investment Bank Group – http://www.eib.org/efsi/ 

Implementation and latest achievements  

By the end of 2018, the European Fund for Strategic Investments had successfully supported innovative and 
strategic  projects  and  had  helped  mobilise  more  than  EUR 370 billion (57)  of  private  and  public  investment. 
This already represents almost 75% of the target for 2020.  

In the infrastructure and  innovation window, the European Investment Bank has  approved 514 projects 
of  around  EUR 244.3 billion  in  investment  value,  with  financing  from  the  European  Investment  Bank 
guaranteed by the European Fund for Strategic Investments expected to amount to EUR 52.9 billion.  

In the small and medium-sized enterprises window, 517 operations have been approved by the European 
Investment Fund for a total investment value of EUR 131.2 billion. About 858 000 small and mid-caps in all 
Member  States  are  expected  to  benefit.  Out  of  the  1 031  approved  operations,  869  were  signed  in  all 
Member States. The European Fund for Strategic Investments is well on track to deliver on its objectives. 

The European Fund for Strategic Investments had an aggregate multiplier effect of 13.5 (58) of 2018, which 
means that every EUR 1 of the EU budget leverages EUR 14.96 of additional investment (calculation for the 
fund as a whole). 

(57)   The amount as per 15 May 2019 was EUR 399 billion and EUR 408 billion as per 13 June 2019. 
(58) 

Evaluation of the European Fund for Strategic Investments, of the European Investment Advisory Hub, and of the European 
Investment Project Portal, SWD(2018) 316 final, 6.6.2018, p. 55. 

39 

                                                                  
2018 Annual Management and Performance Report 

The  European  Fund  for  Strategic  Investments  has  also  played  an  important  role  in  channelling  investment 
towards  the  fulfilment  of  the  EU’s  strategic  objectives.  One  third  of  the  European  Fund’s  for  Strategic 
Investments total investments support small and medium-sized enterprises; 25% research and development; 
18%  support  energy  projects;  11%  digital  projects;  7%  transport  projects;  4%  social  infrastructure  and  4% 
environment and resource efficiency (59). 

Providing new facilities for patients in Poland (60)  

Hospitals  often  lack  funds  to  invest  in  improving  their  standard  of  health  care.  The  Kujawsko-Pomorskie 
Region was the first in Poland to get a loan for a public-sector project under the European Fund for Strategic 
Investments. By combining a EUR 57-million European Investment Bank loan with money from its own budget 
and  other  EU  financing,  the  region  is  extending  Toruń’s  Rydygier  hospital.  With  a  focus  on  research  and 
modern technology, this project will provide residents with a full range of treatments and access to the latest 
medical procedures. The number of beds for patients will double, rising from 551 to 1 059. The floor space 
will  increase  from  20 000 m2  to  more  than  50 000 m2,  and  57 000 m2  of  green  space  will  be  created.  The 
hospital  will  make  savings by  improved  efficiency  of  the  administration  and  by  introducing  environmentally 
friendly and energy-saving measures. The new parts of the hospital will open to patients in 2019.  

Upgrading energy networks in Italy (61) 

The European Investment Bank is lending Dolomiti Energia EUR 100 million to renew and develop its gas and 
electricity  distribution  networks.  The  financing  will  strengthen  and  maintain  hydroelectric  plants  in  the 
province of Trento in northern Italy, where Dolomiti Energia operates and employs 1 400 people.  

Connecting Europe Broadband Fund (62): broadband reaches less-populated areas of the EU (63)  

The Connecting Europe Broadband Fund is the first investment platform to invest in broadband infrastructure 
under  the  Juncker  plan.  The  fund  combines  financing  from  the  European  Investment  Bank,  the  Connecting 
Europe Facility, national promotional banks  and  private investors.  The new broadband fund will help the EU 
meet the target that all European households should have access to internet connections of 30 Megabits per 
second by 2020 and that all schools, transport hubs, main providers of public services and digitally intensive 
enterprises  should  have  access  to  internet  connections  of  1 Gigabit  per  second  by  2025  (European  Gigabit 
Society  objectives).  It  responds to  the  growing  demand  of  financing  of  smaller-scale, higher-risk broadband 
projects  across  Europe,  which  currently  do  not  have  access  to  EU  funds.  The  fund  aims  to  raise  EUR  500 
million for broadband investment by 2020 and is expected to unlock total investments of EUR 1.0-1.7 billion. 
The  fund’s first  project  was  signed  in  January  2019  to  deploy  high-quality  fibre-to-the-home  (FTTH),  open-
access  network  for  residential,  business  and  public  administration  in  the  rural  areas  of  the  Primorje-Gorski 
Kotar and Istria regions (Croatia) to cover over 135 000 locations.  

Assessment and evaluation 

Evidence from the 2018 evaluation suggests clear value added in terms of the European Fund for Strategic 
Investments responding to unmet investment needs and supporting the need for counter-cyclical investment. 

(59)  
(60) 

(61) 

(62) 

(63) 

Information as per 13 June 2019, source: European Investment Bank Group – http://www.eib.org/efsi/ 
European Commission, Juncker plan — State of play, 2019, p. 5 — https://ec.europa.eu/commission/sites/beta-
political/files/brochure-investment-plan-17x17-mar19_en.pdf 
European Commission, Juncker plan — State of play, 2019, p. 12 — https://ec.europa.eu/commission/sites/beta-
political/files/brochure-investment-plan-17x17-mar19_en.pdf 
As part of its Europe 2020 strategy, in 2010 the EU set three targets for broadband: by 2013, to bring basic broadband (up to 
30 Mbps) to all Europeans; by 2020, to provide all Europeans with fast broadband (over 30 Mbps); and by 2020, to ensure take-up 
by 50% or more of European households to ultra-fast broadband (over 100 Mbps). To support these objectives, the EU has 
implemented a series of policy and regulatory measures and has made some EUR 15 billion available to Member States in the 
period 2014-2020 through a variety of funding sources and types, including EUR 5.6 billion in loans from the European Investment 
Bank. A summary of the fund’s investment guidelines are available online on the European Commission’s Digital Single Market 
(DSM) webpage: https://ec.europa.eu/digital-single-market/en/news/connecting-europe-broadband-fund. 
European Commission, Juncker plan — State of play, 2019, p. 9 — https://ec.europa.eu/commission/sites/beta-
political/files/brochure-investment-plan-17x17-mar19_en.pdf 

40 

 
 
                                                        
2018 Annual Management and Performance Report 

From a political perspective, the fund has managed to shift the debate from austerity to investment support 
measures.  Based  on  operations  up  until  the  end of  2017,  the  European  Fund for  Strategic  Investments  has 
supported  more  than  750  000  jobs  with  the figure  set to  rise to  1.4  million  jobs  by  2020.  It  has 
increased gross domestic product in the EU by 0.6% and it is set to increase EU gross domestic product by 
1.3% by 2020. 

Although the overall picture has improved at a macro level, in terms of the scale of the financing gap and of 
the financing conditions (especially for small and medium-sized enterprises), there remain substantial and 
pressing  investment  needs.  Evidence  from  the  evaluation  suggests  that  persistent  market  gaps  holding 
back investment are still observed in different policy areas. The recent  acceleration of investment in the EU 
has  not  yet  managed  to  bring  investment  rates  up  to  historical  averages.  Moreover,  efforts  will  need  to 
continue  beyond  2020  to  bring  investment  back to  its  long-term  sustainable  trend  with  particular  focus  on 
current and emerging EU policy priorities. 

Among  the  shortcomings  highlighted  in  the  2018  evaluation is the  need  to  focus more  on  EU’s long-term 
climate  goals.  This  is  being  addressed  when  the  European  Fund  for  Strategic  Investments  was  extended  in 
2018.  A  minimum  40%  of  European  Fund  for  Strategic  Investments  infrastructure  and  innovation  window 
should contribute to climate action in line with the Paris Agreement. In addition, the Commission has used its 
representation in the  governance bodies of the European Investment Bank and  of the European Investment 
Fund and in steering committees for these instruments to ensure that the European Investment Bank and the 
European  Investment  Fund  adhere  closely  to  EU  policy  objectives  in  implementing  financial  instruments, 
including support for social entrepreneurship, the fight against youth unemployment, the fight against climate 
change, the fight against tax avoidance and the promotion of international tax good governance standards. 

In  the  past,  the  European  Fund  for  Strategic  Investments  supported  only  a  limited  number  of  cross-border 
projects which typically have a high EU value added dimension. Ensuring wide geographical coverage across 
the  EU  continues  to  be  important,  which  is  something  that  has  improved  over  the  years  of  the  fund’s 
operation. In terms of consistence, there is still scope for further improving the complementarity and mutual 
support between the fund’s three pillars as well as mitigating potential risks of competition between the fund 
and other EU financial instruments.  

In January 2019, the European Court of Auditors published a special report (No 03/2019) on the European 
Fund  for  Strategic  Investments.  Although  the  overall  conclusion  of  the  audit  is  that  the  fund  has  been 
effective in raising finance to support substantial additional investment in the EU, the Court also raised some 
concerns.  These  include  whether  some  fund  operations  have  replaced  other  European  Investment  Bank 
operations and EU financial instruments, and whether a part of the fund support went to projects that could 
have been financed from other sources, albeit on different terms. The Court also  emphasised the continuing 
need to ensure a balanced geographic spread of fund-supported investment. 

Under the multiannual financial framework package and building on the success of the Juncker plan and the 
European Fund for Strategic  Investments, the Commission has proposed a new initiative to mobilise private 
and  public  investment  for  the  2021-2027  period  —  the  InvestEU  programme.  The  new  programme  has 
introduced changes tackling issues raised by the European Court of Auditors in order to make EU funding for 
investment projects in Europe simpler, more efficient and more flexible. The InvestEU programme is to focus 
on  addressing  the  large  investment  gaps  in  key  areas  of  the  future  through  an  EU  budget  guarantee  of 
EUR 38 billion.  It  will  thus  further  boost  job  creation  and  support  investment  and  innovation  in  the  EU.  It  is 
expected to mobilise around EUR 650 billion of private and public investment across the EU by end-2027 and 
provide support through four policy windows: sustainable infrastructure, research, innovation and digitisation, 
small and medium-sized enterprises (SMEs), and social investment and skills. 

41 

2018 Annual Management and Performance Report 

Connecting Europe Facility  

Programme objectives  

In  order  to  stimulate  job  creation  and  boost  growth  rates,  the  EU  needs  an  up-to-date,  high-performance 
infrastructure  to  help  connect  and integrate  the  EU  and  all  its  regions  in  the  transport, telecommunications 
and  energy  sectors.  Such  connections  are  essential  for  the  free  movement  of  persons,  goods,  capital  and 
services.  

The  Connecting  Europe  Facility  therefore  supports  investment  in  transport,  energy  and  digital  infrastructure 
through the development of trans-European networks. These networks facilitate cross-border connections and 
interoperability, foster greater economic, social and territorial cohesion and contribute to a more competitive 
social market economy.  

The specific objectives of the Connecting Europe Facility are the following: 

Connecting Europe Facility — Transport 

  Removing  bottlenecks,  enhancing 

rail 

interoperability,  bridging 

missing links and, in particular, improving cross-border sections. 

 

Ensuring  sustainable and efficient transport  systems in the long run 
with a view to preparing for expected future transport flows as well 
as  enabling  all  modes  of  transport  to  be  decarbonised  through  the 
transition  to  innovative  low-carbon  and  energy-efficient  transport 
technologies while optimising safety. 

  Optimising  the  integration  and  interconnection  of  transport  modes 
and  enhancing  the  interoperability  of  transport  services,  while 
ensuring the accessibility of transport infrastructures. 

Connecting Europe Facility — Energy 

 

Increasing  competitiveness  by  promoting  the  further  integration  of 
the internal energy market and the interoperability of electricity and 
gas networks across borders. 

 

Enhancing the EU security of energy supply. 

  Contributing  to  sustainable  development  and  protection  of  the 
environment, inter alia, by the integration of energy from renewable 
sources  into  the  transmission  network  and  by  the  development  of 
smart energy networks and carbon dioxide networks. 

Connecting Europe Facility — Telecommunications 

  Contributing 

to 

interoperability, 

sustainable 
deployment,operation,  and  evolutive  maintenance  of  trans-European 
digital  service  infrastructures,  as  well  as  coordination  at  European 
level. 

connectivity, 

  Contributing to the efficient flow of private and public investments to 
stimulate deployment and modernisation of broadband networks with 
a  view  to  contributing  to  achieving  the  broadband  targets  of  the 
digital agenda for Europe. 

42 

 
 
 
 
2018 Annual Management and Performance Report 

Implementation and latest achievements 

The  Connecting  Europe  Facility  provides  support  for  the  development  of  the  Trans-European  Transport 
Network  completing  cross-border  connections,  bridging  missing  links  and  removing  bottlenecks.  Between 
2014 and 2018, 688 projects were selected for funding under the transport strand of the Connecting Europe 
Facility, providing EUR 22.8 billion EU funds leveraging an investment volume of EUR 48 billion.  In 2018, the 
Connecting Europe Facility provided EUR 1.7 billion funds leveraging an overall investment of almost EUR 7  
billion  for  88  transport  projects  focusing  on  Trans-European  Networks  (TEN).  In  addition,  a  specific  call  was 
launched  to  mobilise  funds  in  favour  of  transport  safety,  digitalisation  and  multimodality  with  EUR  450 
million funds available. 

The telecommunications strand of the Connecting Europe Facility enables the interoperability by deploying 
an  ecosystem  of  trusted  cross-border  digital  service  infrastructures  that  are  essential  to  trigger  the  digital 
transformation  of  the  Member  States.  In  terms  of  connectivity  the  Connecting  Europe  Facility  stimulates 
investemnt  for  deploying  and  modernising  broadband  networks,  and  provides  high-quality  local  wireless 
connectivity in local communitites (Wifi4EU). Digital service infrastructures facilitate cross-border interaction 
between public administrations, businesses and citisens in a wide range of areas such as cybersecurity, open 
data  and  e-health.The  work  programme  for  2018  supported  the  deployment,  operation  and  evolutive 
maintenance  of  16  digital  infrastructures,  building  on  the  investment  made  in  previous  years.  In  addition, 
three  new  building  blocks  were  added  to  the  Connecting  Europe  Facility  ecosystem,  namely  eArchiving,  the 
Context Broker, and big data Test Infrastructure (64). 

The  e-Identification  building  block  addresses  the  challenge  of  cross-border  recognition  of  nationally 
issued electronic identification documents. Once this is deployed in a Member State, the mutual recognition of 
such  national  identification  documents  becomes  possible  between  participating  Member States.  This  means 
that, for example, an EU citizen will be able to access a public service of another Member State using his or 
her own  national  means  of  identification.  In  2018, the  Connecting  Europe  Facility  is financing  an  ambitious 
project  laying  the  groundwork  for  the  actual  use  of  electronic  identification  documents  in  the  Netherlands, 
enabling EU citizens to prove their identity electronically with their nationally issued documents when seeking 
access to more than 200 public services in 90 municipalities. The solution is currently available for Austrian, 
German  and  Belgian  electronic  identification  documents  holders  and  should  progressively  be  extended  to 
other countries (65). 

2018  saw  the  completion  of  the  2017  Connecting  Europe  Facility  transport  blending  call  that  took  an 
innovative  approach,  making  available  a  total  indicative  budget  of  EUR 1.40 billion  of  EU  grants,  to  be 
combined with financing from the  European Fund for Strategic Investments, the European Investment Bank, 
national promotional banks or private-sector investors. Over EUR 250 million of co-funding will be dedicated 
to promoting alternative fuels in transport. These projects include: 

 

 

 

greening  the  maritime  transport  link  between  the  Swinoujscie  port  in  Poland  and  the  Ystad  port  in 
Sweden; 

deploying hydrogen public transport infrastructure in Denmark, Latvia and the United Kingdom; 

building  a  network  of  bio-liquefied  natural  gas  stations  on  roads  connecting  southern  Spain  and 
eastern Poland via Belgium, Germany, France and the Netherlands; 

 

electrifying urban and regional bus routes in Croatia, Italy, Slovenia and Slovakia (66). 

Under the blending call, the  project for  Zero Emission service network for public  transport connecting 
Amsterdam and Schiphol Amsterdam Airport was selected. This will contribute to increase multi-modality and 
shifting  consequently  from  fossil  to  alternative  fuels  in  the  Urban  Nodes  of  the  Trans-European  Transport 
Network around Amsterdam (North Sea - Baltic, North Sea - Mediterranean and Rhine — Alpine). 

Programme statement 2020 Connecting Europe Facility, p. 163. 
Programme statement 2020 Connecting Europe Facility, p. 163. 

(64) 
(65) 
(66)  Directorate-General for Mobility and Transport, 2018 Annual activity report, p. 34. 

43 

                                                        
2018 Annual Management and Performance Report 

The  multiannual  work  programmes  for  the  energy  strand  of  the  Connecting  Europe  Facility  between  2014 
and  2018  have  led  to  a  total  of  EUR 3.4 billion  allocated  to  122  actions  contributing  to  91  projects  of 
common interest (67). 

In 2018 the award for SuedOstLink was signed, one of the largest German energy infrastructure projects. The 
project consists of 580 kilometres of high-voltage cables laid fully underground. The power line will create an 
urgently  needed  link  between  the  wind  power  generated  in  the  north  of  Germany  and  the  consumption 
centres  in  the  south  of  the  country.  It  will  thus  ensure  better  integration  of  renewable  energies  as  well  as 
enhance the cross-border exchange of energy with neighbouring EU Member States. 

A grant of EUR 27 million has also been allocated to support the construction of a new 400 kV internal power 
line  between  Cernavoda  and  Stalpu  in  Romania,  which  will  contribute  to  increasing  the  interconnection 
capacity between Bulgaria and Romania and help integrate wind power from the Black Sea coast. 

Moreover,  a  grant  agreement  was  signed  to  support  the  introduction  of  natural  gas  in  Cyprus  through  the 
CyprusGas2EU project (EU support of EUR 101 million), which will end the current energy isolation of Cyprus, 
bringing diversification to a region mostly dominated by one single source of supply and helping to reduce air 
pollution and emissions by making it possible to switch from heavy fuel oil to gas for power generation. It will 
also improve energy security and price competitiveness (68). 

In 2018 a grant of EUR 578 million, the largest Connecting Europe Facility energy grant ever, was  awarded 
to  support  the  construction  of  the  Biscay  Gulf  France-Spain  interconnection.  The  new  electricity  link  will 
better integrate  the  Iberian  Peninsula  into  the  internal  electricity  market. The  project,  with  a  280-km-long 
off-shore  section,  incorporates  technologically  innovative  solutions  on  the  design  of  the  route  over  the 
Capbreton Canyon and the French land section, which is fully underground. This new link will nearly double 
it  from  2 800 megawatts  to 
the 
5 000 megawatts, and will bring Spain closer to the 10% interconnection target from its current level of 6%. 
Such a leap will allow for an enhanced incorporation of renewable energies, thus strongly contributing to the 
clean energy transition and to the EU’s related policy. 

interconnection  capacity  between  both  countries  — 

increasing 

FRANCE 

Cubnezais 
CONVERTER 
STATION 

80 km 
UNDERGROUND 
DIRECT CURRENT 
LINK 

280 km 
SUBMARINE  
DIRECT CURRENT 
LINK 

SPAIN 

Gatika 
CONVERTER 
STATION 

10 km 
AERIAL/ 
UNDERGROUND 
DIRECT  
CURRENT LINK 

The WiFi4EU initiative was announced by President Juncker in 2016 as part of the digital single market strategy, 
a  framework  including  new  measures  to  meet  Europeans'  growing  connectivity  needs  and  boost  Europe's 
competitiveness. The WiFi4EU initiative aims to provide high-quality internet access across the EU to citizens and 
visitors via free-of-charge Wi-Fi hotspots in public spaces such as parks, squares, administrations, libraries and 
health  centres.  Vouchers  worth  EUR  15 000  each  funded  by  the  European  Commission  will  be  awarded  to 
support  close  to  9 000  municipalities  across  the  EU,  Norway  and  Iceland  for  the  installation  of  the  Wi-Fi  hot 
spots in these centres of public life, using the services of Wi-Fi installation companies (69). 

The first WiFi4EU call for applications took place in November 2018, with over 13 000 municipalities applying 
from all across Europe and 2 800 vouchers awarded (70). 

(67) 
(68) 
(69) 
(70) 

Programme statement 2020 Connecting Europe Facility, p. 163. 
Programme statement 2018 Connecting Europe Facility, p. 7. 
Programme statement 2018 Connecting Europe Facility, p. 5. 
Programme statement 2018 Connecting Europe Facility, p. 5. 

44 

 
                                                        
2018 Annual Management and Performance Report 

Assessment and evaluation 

The  evaluation  of  the  Connecting  Europe  Facility (71)  found  that  bringing  together  transport,  energy  and 
telecommunications  under  a  common  funding  framework  has  allowed  for  economies  of  scale  at 
programme  level,  with  a  single  executive  agency  and  common  procedures.  At  project  level,  however,  the 
Connecting Europe Facility did not sufficiently succeed in bringing the expected synergies. 

The findings of the evaluation  have fed into the  proposal for the next Connecting Europe Facility by adding 
particular emphasis on simplification, enhanced flexibility and better monitoring of performance (72). 

The future challenges for the EU economy linked to the goals of decarbonisation and digitalisation will imply a 
growing  convergence  of  the  transport,  energy  and  digital  sectors.  Examples  of  synergy  areas  include 
connected  and  autonomous  mobility,  clean  mobility  based  on  alternative  fuels,  energy  storage  and  smart 
grids.  The  proposal  for  the  Connecting  Europe  Facility  after  2020 (73)  seeks  to  increase  these  synergies:  in 
order to promote projects encompassing more than one sector, incentives will include the possibility to apply 
the highest co-funding rate of the sectors concerned. In addition, it will be possible for each sector to accept 
ancillary  elements  pertaining  to  another  sector  as  eligible  costs,  for  instance  renewable-energy  generation 
within a transport project. In order to incentivise and prioritise cross-sectoral proposals, the synergy dimension 
of a proposed action will be assessed under the award criteria. Synergies will be implemented through joint 
work programmes and joint financing involving the three sectors. It is foreseen that certain activities currently 
undertaken under the Connecting Europe Facility for telecom will be taken forward in the context of the new 
digital Europe programme. 

(71) 

(72) 

(73) 

Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the 
Committee of the Regions on the midterm evaluation of the Connecting Europe Facility (CEF), COM(2018) 66 final, 14.2.2018, p. 9. 
Proposal for a regulation of the European Parliament and of the Council establishing the Connecting Europe Facility and repealing 
Regulations (EU) No 1316/2013 and (EU) No 283/2014, COM(2018) 438, 6.6.2018, pp. 8-9. 
Proposal for a regulation of the European Parliament and of the Council establishing the Connecting Europe Facility and repealing 
Regulations (EU) No 1316/2013 and (EU) No 283/2014, COM(2018) 438, 6.6.2018, p. 2. 

45 

                                                        
2018 Annual Management and Performance Report 

Competitiveness of Enterprises and small and medium-sized 
enterprises  

Programme objectives  

The  Programme  for  the  Competitiveness  of  Enterprises  and  small  and  medium-sized  enterprises 
encompasses actions to support small businesses via grants, financial instruments and support services.  

Small and medium-sized 
enterprises provide 85% of 
all new jobs 

2014-2020 
EUR 2.4 
billion 

Small and medium-sized 
enterprises represent 99% 
of all businesses 

Helping European businesses reach their full potential 

Access 
to finance 

Access 
to markets 

Improving business 
conditions 

Entrepreneurship 

Source: European Commission 

The programme is improving access to finance for small and medium-sized enterprises through two financial 
instruments, the loan-guarantee facility and the equity facility for growth. Both instruments are managed by 
the European Investment Fund and facilitate access to loans and equity finance for riskier small businesses, 
which otherwise would not have been able to get the financing they need. 

Implementation and latest achievements 

Since 2015 and as part of the investment plan for Europe, funding opportunities under the loan-guarantee 
facility  have  been  enhanced  with  the  support  of  the  European  Fund  for  Strategic  Investments.  The  initial 
front-loading  was  converted  in  2017  into  a  permanent  top-up  of  the  loan-guarantee  facility  budget  by 
EUR 550 million  from  the  European  Fund  for  Strategic  Investments.  This  enabled  making  available  in  2018 
much more financing to riskier, smaller companies, including start-ups, which find it hardest to access finance 
due to their perceived higher risk or lack of sufficient collateral. Throughout the course of 2018, the European 
Investment  Fund  signed  36  agreements  for  loan  guarantees  for  a  total  volume  of  EUR 387 million,  out  of 
which  33  agreements  were  jointly  backed  by  the  European  Fund  for  Strategic  Investments  and  the  loan-

46 

 
2018 Annual Management and Performance Report 

guarantee facility (74). These agreements, together with those signed in the previous years, allowed more than 
381 000 small businesses to receive over EUR 20 billion of financial support by the end of September 2018. 

Signing  agreements  for  the  equity  facility  for  growth  took  longer,  as  equity  entails  more  complex  due 
diligence  and fundraising  processes.  At  the  end of  2018  the  European  Investment  Fund  had  invested  in  14 
funds through the equity facility for growth for a total amount of EUR 163.5 million (75). Of these, five were 
multi-stage funds combined with the InnovFin Equity Facility for Early Stage (76) set up under Horizon 2020. 

The  Enterprise  Europe  Network  helps  small  European  companies  to  internationalise  through  advisory 
services  and  by  finding  business,  technology  and  innovation  partners  abroad.  The  network  services  are 
available  to  smaller  businesses  in  the  EU  and  countries  associated  with  the  programme  through  607 
intermediary organisations. In 2018 the network services helped an estimated 250 000 small and medium-
sized enterprises develop their business outside their home country and facilitated around 75 000 business 
cooperation  meetings  between  small  businesses,  resulting  in  2 611  international  partnership  agreements 
signed between them (77). The renewed network advisory support services helped  1 796 small and medium-
sized enterprises improve their competitiveness and innovation in 2018. Enterprise Europe Network scale-up 
advisers  were  put  in  place,  as  set  out  in  the  Commission’s  start-up  and  scale-up  initiative (78)  with  the 
implementation  of  a  specific  action  covering  56  EU  regions,  helping  scale-ups  overcome  the  barriers  to 
growth.  A  new  strategic  vision  for  the  Enterprise  Europe  Network  has  been  prepared  to  ensure  it  continues 
delivering services that address small company’s future needs. 

Small businesses value the network and its support: 89% of small and medium-sized enterprises expect their 
market situation to improve thanks to this support. Moreover, close to one in two feels its competitiveness will 
improve thanks to improvements in innovation achieved with network help. Nearly 6 out of 10 estimated that 
network services will help them preserve or create jobs. 

Erasmus for Young Entrepreneurs holds annual calls for proposals. In 2018, Erasmus for Young Entrepreneurs 
had already reached the level of 7 000 exchanges between new and experienced entrepreneurs across Europe 
since  the  start  of  the  programme (79).  In  order  to  test  the  geographical  extension  of  Erasmus  for  Young 
Entrepreneurs to new destinations outside Europe,  the implementation of  the  24-month Erasmus for Young 
Entrepreneurs Global pilot project started in April 2018.  

The  programme  for  the  competitiveness  of  enterprises  and  small  and  medium-sized  enterprises  also 
contributes  to  improving  the  framework  conditions  for  the  competitiveness  of  EU  enterprises  in  a 
number  of  ways.  In  the  context  of  the  ‘cluster  go’  international  initiative,  the  programme  enabled  the 
establishment of 25 EU cluster partnerships in 2018, supporting 134 clusters in Europe to go international for 
the benefit of their  small and medium-sized enterprises (80). This initiative encourages  participating  clusters 
and small companies to access global value chains and find strategic partners beyond Europe. Nine European 
strategic  cluster  partnerships  for  smart  specialisation  and  investments  were  set  up  in  2018.  These 
partnerships  gather  57  clusters  across  Europe  and  reach  out  to  over  6 000  small  and  medium-sized 
enterprises.  

The  European  cluster  collaboration  platform (81)  has  developed  into  a  leading  hub  for  facilitating  cluster 
collaboration  at  EU  and  global  level.  It  gathers  more  than  930  cluster  organisations,  reaching  out  to  about 
100 000 small businesses. With the facilitation of over 1 100 international matchmaking meetings between 

(74) 

(75) 

(76) 
(77) 

(78) 

Programme statement for the Programme for the competitiveness of enterprises and small and medium-sized enterprises 
(COSME), p. 2. 
Programme statement for the Programme for the competitiveness of enterprises and small and medium-sized enterprises 
(COSME), p. 2. 
http://www.eif.europa.eu/what_we_do/equity/single_eu_equity_instrument/innovfin-equity/index.htm 
Programme statement for the Programme for the competitiveness of enterprises and small and medium-sized enterprises 
(COSME), p. 3.. 
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and 
the Committee of the Regions — Europe’s next leaders: the start-up and scale-up initiative, COM(2016) 733 final, 22.11.2016 — 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2016%3A733%3AFIN 

(79)  Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, 2018 Annual activity report, p. 16. 
(80)  Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, 2018 Annual activity report, p. 18. 
(81) 

https://www.clustercollaboration.eu/eu-initiative/cluster-excellence-calls 

47 

                                                        
2018 Annual Management and Performance Report 

clusters  in  2018  where  the  European  cluster  collaboration  platform  took  part,  it  has  become  a  key  EU 
instrument in supporting the internationalisation of such enterprises.  

Assessment and evaluation 

A  study  evaluating  the  Programme  for  the  Competitiveness  of  Enterprises  and  small  and  medium-sized 
enterprises (82) found a strong alignment of the programme with the evolving needs of  small enterprises in 
Europe  and  a  high  relevance  for  the  public,  thanks  to  focus  on  fostering  employment  opportunities  and 
growth  creation.  The  EU  dimension  is  at  the  core  of  the  programme  and  is  critical  for  most  actions.  The 
programme  has  successfully  set  the  building  blocks  for  attaining  the  expected  results.  The  strength  of  the 
programme lies in the use of intermediary organisations (financial intermediaries, Enterprise Europe Network 
members,  intermediary  organisations  for  Erasmus  for  Young  Entrepreneurs  and  cluster  organisations).  The 
programme  uses  the  proximity  of  these  local  intermediaries  to  small  enterprises  and  facilitates  the 
integration of the programme services with services provided by these national and regional intermediaries. 
The feedback from beneficiaries is generally positive with a substantial majority reporting a good cost-benefit 
ratio of their participation. The European dimension is the added value of the programme. 

The study made proposals to improve shortcomings in the performance of the programme: the fragmentation 
of the budget into many small actions should be reduced to improve efficiency and cost-effectiveness; and 
availability of monitoring data should be provided  centrally to strategically guide implementation. There are 
no  major  overlaps  of  the  programme  activities  with  other  policy  initiatives,  both  at  EU  and  national  and 
regional  levels.  However,  for  some  actions,  synergies  and  complementarity  with  other  EU,  national  and 
regional actions could be improved. 

The  study  was  used  for  the  preparation  of  the  proposals  of  successor  programmes  for  the  post-2020 
multiannual  financial  framework.  The  Programme  for  the  Competitiveness  of  Enterprises  and  small  and 
medium-sized  enterprises  (except  for  the  financial  instruments)  will  be  integrated  into  a  new  programme 
called  the  single  market  programme (83).  The  new  programme  will  support  specific  types  of  actions  in  the 
areas  of  improved  competitiveness,  notably  of  small  and  medium-sized  enterprises,  standardisation, 
consumer  protection,  anti-money  laundering,  competition,  financial  reporting  and  auditing,  veterinary  and 
phytosanitary  measures  along  the  food  chain  and  European  statistics.  The  financial  instruments  from  the 
programme will be integrated into a new fund called InvestEU, bringing EU financing in the form of debt and 
equity under one roof. 

ERASMUS+ 

Programme objectives  

Erasmus+ is the EU’s flagship programme to support and strengthen  education, training, youth and sport in 
Europe. For three decades, Erasmus+ and its predecessors have been offering mobility opportunities to young 
people,  students  vocational  education  and  training  learners  and  adults  to  study,  train,  gain  experience  and 
volunteer  abroad,  in  Europe  or  beyond.  The  Erasmus+  programme  plays  an  important  role  in  supporting 
cooperation between universities, schools, vocational-training providers, youth and sport organisations 
, as well as learning opportunities for future teachers and professional development for teachers and school 
leaders.  The  programme  fosters  the  mobility  of  learners  and  staff  in  vocational  education  and  training,  as 
well  as  staff  in  the  adult  education  sector,  while  also  supporting  internationalisation  through  strategic 
partnerships  taking  forward  the  priorities  set  in  the  vocational  education  and  training  Riga  Conclusions  and 
the European agenda for adult learning. 

(82) 
(83) 

Interim evaluation of the COSME programme — Final Report. External support study for the COSME interim evaluation. 
Proposal for a regulation of the European Parliament and of the Council establishing the programme for single market, 
competitiveness of enterprises, including small and medium-sized enterprises, and European statistics and repealing Regulations 
(EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014, (EU) No 258/2014 and (EU) 2017/826, COM(2018) 441, 7.6.2018. 

48 

                                                        
2018 Annual Management and Performance Report 

Supporting education and training 

  Working towards a European Education Area by 2025. 

 

 

Improving  the  level  of  key  competencies  and  skills  for  a  more 
cohesive  society, 
learning  mobility  and 
cooperation with the world of work. 

in  particular  through 

improvements, 
Fostering  quality 
internationalisation of education and training institutions. 

innovation  excellence  and 

  Stimulating  innovative  policy  development,  policy  dialogue  and 
implementation,  and  the  exchange  of  knowledge  in  the  fields  of 
education, training and youth.  

  Raising awareness of the importance of lifelong learning area. 

  Supporting the international dimension of education and training.  

 

 

Youth 

 

 

Teaching and learning languages. 

Promoting  teaching  and  research  in  European  integration  through 
the Jean Monnet activities. 

Improving the level of key competencies and skills of young people, 
in  particular 
learning-mobility 
opportunities.  

increased  non-formal 

through 

Enhanced cooperation between organisations in the youth field. 

  Supporting  the  international  dimension  of  youth  activities  and  the 

role of youth workers and organisations. 

Sport 

 

Tackling cross-border threats to the integrity of sport. 

  Supporting good governance in sport and dual careers of athletes. 

 

Promoting voluntary activities in sport. 

49 

 
 
 
 
 
 
2018 Annual Management and Performance Report 

Implementation and latest achievements 

In 2018 emphasis was put, across all actions of the programme, on activities that support social inclusion and 
equity in education, training, youth and sport — in line with the Paris Declaration on promoting citizenship and 
the  common  values  of  freedom,  tolerance  and  non-discrimination  through  education,  and  with  the 
Commission’s action plan on the integration of third-country nationals.  

In 2018, ERASMUS+ demonstrated its flexibility in addressing specific policy priorities through different actions. 

800 000 

320 000 

13 000 

47 000 

55 000 

172 000 

Participants in 
higher-
education 
student 
mobility 
in 2018 

Participants for 
work-based 
mobility 
(December 
2018) 

Users of the 
electronic 
platform for 
lifelong 
learning 
(December 
2018) 

Downloads of 
Erasmus+ 
mobile phone 
app (December 
2018) 

Participants for 
vocational and 
educational 
training 
mobility in 
2018 

In 2018, people 
benefit from 
learning, 
working or 
volunteering 
abroad 
(10 million 
since the 
launch of the 
programme) 

In  the  field  of  higher  education,  in  2018  priority  was  given  to  enhancing  the  quality  and  relevance  of 
students’ knowledge and skills, better use of information and communications technology (ICT), improving the 
inclusiveness  of  higher  education  systems,  and  better  links  between  higher-education  institutions  and 
employers or social enterprises. More than 320 000 higher-education student mobilities took place in 2018.  

In the field of school education, priority was given to strengthening the profiles of the teaching professions, 
promoting  the  acquisition  of  key  competences,  e.g.  by  addressing  underachievement  in  the  basic  skills  of 
mathematics,  science  and  literacy  and  supporting  multilingual  classrooms.  Access  to  the  Erasmus+ 
programme for schools was  facilitated in 2018 by introducing a new form of school exchange  partnerships 
into the programme.  As a result, the number of awarded projects in the sector increased by 40%. Teachers 
can  also  join  the  eTwinning  community  do  collaborative  projects  with  classes  in  other  countries  to  follow 
online and face to face professional development opprotunities, and get recognition for their work. Since its 
inception  in  2005,  eTwinning  has  640  000  users  and  218  000  schools.  In  2018,  103  000  new  users 
registered and 14 000 projects were launched. 

As  regards  vocational  education  and  training,  Erasmus+  supports  the  development  of  business-education 
partnerships aimed at promoting work-based learning in all its forms, with special attention to apprenticeship, as 
well  as  the  development  of  joint  qualifications  and  curricula  responding  to  current  and  future  sectoral  skills 
needs.  Long-term  mobility  (between  3 months  and  12 months)  of  eligible  participants  has  been  promoted  by 
introducing the ErasmusPro (84) activity into the Erasmus+ programme as of 2018. Consequently, such mobility 
increased by more than 60% (average of 8 000 per year in the period 2014-2017, and almost 13 000 in 2018). 

Concerning  social  inclusion  and  equity,  the  Erasmus+  supports  actions  aimed  at  preventing  violent 
radicalisation  and  promoting  democratic  values,  fundamental  rights,  intercultural  understanding  and  active 
citizenship;  fostering  the  inclusion  of  disadvantaged  learners,  including  persons  with  a  migrant  background, 
while preventing and combating discriminatory practices. The sport strand has continued to support initiatives 
to tackle cross-border threats to the integrity of sport, such as doping, match fixing and violence, as well as 
all  kinds  of  intolerance  and  discrimination.  It  has  promoted  good  governance  in  sport  and  dual  careers  of 
athletes and voluntary activities in sport, together with social inclusion, including refugees and migrants.  

Furthermore, in the field of adult education, priority was given in 2018 to improving and extending the supply 
of high-quality learning opportunities tailored to the needs of individual low-skilled or low-qualified adults so 
that they acquire literacy, numeracy or digital skills, including through the validation of skills acquired through 

(84) 

https://europa.eu/youth/node/50165_en 

50 

                                                        
2018 Annual Management and Performance Report 

informal  and  non-formal  learning.  Extending  and  developing  educators’  competence  is  also  stressed  as  a 
priority for this sector.  

Adult learning: the Electronic Platform for Adult Learning in Europe, with more than 47 000 registered users 
(plus 38% within 1 year), showed a significant increase in users in 2018. This platform is a multilingual, open 
membership community of adult-learning professionals, including adult educators and trainers, guidance and 
support staff, researchers and academics, and policymakers.  

With regard to the international dimension, Erasmus+ continued to provide mobility opportunities for higher-
education staff, students, young people and youth workers between Europe and the rest of the world, with a 
particular  emphasis  on  supporting  further  development  of  the  European  Neighbourhood  region  (Western 
Balkans, Eastern Partnership (85) and southern Mediterranean). On 18 January 2018 the Commission adopted 
the  digital  education  action  plan (86),  which  covers  the  areas  of  formal  education  with  specific  actions  for 
school, vocational education and training, and higher education. The plan identifies three priorities to ensure 
that digital technologies are used purposefully to innovate and improve teaching and learning. The 11 actions 
of  the  plan  include  supporting  high-capacity  broadband  in  all  schools,  creating  a  Europe-wide  platform  for 
digital  higher  education  and  enhanced  cooperation,  and  providing  training  schemes  on  digital  and 
entrepreneurial skills and on raising awareness about online safety . 

The  Erasmus+  mobile  app  continued  to  serve  as  a  digital  one-stop  shop  that  guides  participants  and 
interested  young  people  to  find  everything  they  need  to  know  about  opportunities  to  go  abroad  with 
Erasmus+. The application provides information, tips, notifications and other services to help make organising 
their  periods  of  mobility  easier.  The  app  was  downloaded  and  installed  almost  30 000  times  during  2018, 
bringing the total number of downloads since its launch  (mid-2017) to  more than  55 000. Discussions also 
began  on  how  to  improve  and  broaden  the  range  of  online  services  for  students  undertaking  a  period  of 
cross-border learning mobility, including potentially enhancing the app as part of a larger online single point 
of entry for services for mobile students. 

The  role  models  initiative (87),  a  network  of  positive  role  models  supporting  the  prevention  of  radicalisation 
leading to violent extremism, is further rolled out by the participating Erasmus+ national agencies.  With the 
first piloting activities started in 2017, the initiative took a broader dimension throughout the course of 2018 
(e.g.  the  successful  launch  event  of  the  role  models  initiative  in  Italy  in  March  2018).  In  addition  to  this 
initiative  carried  out  by  the  Erasmus+  national  agencies,  the  Commission  is  promoting  the  role  models 
approach through an Erasmus+ social-inclusion call for proposals. 

The creativity and critical thinking in higher education initiative, launched at the beginning of 2018, aims  to 
internationally prototype and test an assessment tool to help faculties develop and assess the creative and 
critical-thinking skills of their students. Through Erasmus+ the Commission is financing the first phase of this 
project,  which  consists  in  involving  higher-education  staff  in  operationalising  creativity  and  critical  thinking 
and collecting examples of pedagogical tasks and student work to exemplify how students can demonstrate 
these skills in different settings. 

Assessment and evaluation 

The  midterm  evaluation  of  the  2014-2020  Erasmus+  programme (88),  which  assessed  the  progress  in  the 
implementation of the programme and the long-term impact of its predecessor programmes, showed that the 
current Erasmus+ delivers a unique package of outcomes in the field of education, training, youth and sport 
and  is  highly  valued  by  stakeholders  and  the  public.  It  highlighted  the  strong  European  added  value  of 
Erasmus+  and  its  predecessor  programmes.  Moreover,  it  highlighted  the  positive  effects  of  the  integrated 
nature of the programme covering learning in all its contexts.  

(85) 
(86) 
(87) 
(88) 

https://ec.europa.eu/neighbourhood-enlargement/neighbourhood/eastern-partnership_en 
https://ec.europa.eu/education/education-in-the-eu/digital-education-action-plan_en 
https://ec.europa.eu/education/resources-and-tools/document-library/role-models-promoting-common-values_en 
https://ec.europa.eu/transparency/regdoc/rep/1/2018/EN/COM-2018-50-F1-EN-MAIN-PART-1.PDF 

51 

 
                                                        
2018 Annual Management and Performance Report 

The  evaluation  indicated  some  areas  for  improvement,  in  particular:  in  terms  of  relevance,  the  evaluation 
pointed to the need  for Erasmus+ to better reach out to  those individuals who  have fewer opportunities, to 
facilitate the participation of smaller organisations to make the programme more inclusive  and to reinforce 
measures to foster the understanding of European integration and sense of belonging to Europe, in particular 
amongst  the  youngest  generations;  in  terms  of  effectiveness,  Erasmus+  should  reinforce  the  volume  of 
activities  in  sectors  showing  the  highest  performance  but  which  have,  until  now,  received  relatively  less 
funding, such as in the school, vocational education and training and youth sectors, which will also contribute 
to reinforcing the inclusion dimension of the programme; and in terms of efficiency, Erasmus+ should further 
simplify  the  procedures  of  application  and  reporting  in  order  to  reduce  the  administrative  burden  on 
beneficiaries, and should further optimise its online procedures.  

The  Court  of  Auditors,  in  its  special  report (89)  on  mobility  under  Erasmus+,  also  concluded  that  this 
programme is a well-known, successful EU brand. Erasmus+ plays a key role in building up learning mobility 
abroad and has a positive effect on participants’ attitudes towards the EU. The Court identified the innovative 
student  loan  guarantee  facility  as  an  area  for  improvement  and  also  recommended  better coverage  of  the 
programme objectives by indicators. 

These suggestions for improvement were considered by the Commission in the proposed successor programme 
Erasmus:  the  EU  programme  for  education,  training,  youth  and  sport (90)  in  the  context  of  the 
multiannual  financial  framework  2021-2027.  The  new  programme  will  focus  in  particular  on  stepping  up 
mobility and exchanges for all categories of learners, increasing efforts to reach out to learners who have fewer 
opportunities and increasing opportunities to cooperate, including for smaller organisations. The new programme 
will  seek  to  rationalise  and  refocus  certain  existing  actions.  For  example,  some  actions  will  be  specifically 
targeted towards activities that foster the development of competences in forward-looking fields; others will be 
aimed  at  fostering  innovation  in  education,  training,  youth  and  sport;  Jean  Monnet  activities  will  be  partially 
refocused to target broader groups of learners; the actions in the adult-learning sector will be reinforced. At the 
same time, the proposed programme reinforces the inclusive dimension of the programme by adapting certain 
existing actions and introducing new measures (such as short-term, group-mobility and virtual cooperation).  

Every euro that we invest in Erasmus+ is an investment in 
the future — in the future of a young person and of our 
European idea. I cannot imagine anything more worthy of our 
investment than these leaders of tomorrow. 

‘30 years of 'Erasmus’ exchanges abroad: Commission launches mobile application to mark anniversary’ — 
http://europa.eu/rapid/press-release_IP-17-1574_en.htm 

European Solidarity Corps 

Programme objectives  

President  Juncker  announced  the  European  Solidarity  Corps  in  his  2016  State  of  the  Union  speech.  The 
European Solidarity Corps offers young people between the ages of 18 and 30 the opportunity to take part in 
a wide range of solidarity activities across the EU, with the aim of creating 100 000 opportunities by the end 
of 2020. From December 2016 and until the adoption of the European Solidarity Corps regulation (91), eight 

(89) 

(90) 

(91) 

European Court of Auditors, Mobility under Erasmus+: Millions of participants and multi-faceted European added value, however 
performance measurement needs to be further improved — Special Report No 22/2018. 
Proposal for a regulation of the European Parliament and of the Council establishing ‘Erasmus: the Union programme for 
education, training, youth and sport and repealing Regulation (EU) No 1288/2013, COM(2018) 367 final, 30.5.2018. 
Regulation (EU) 2018/1475 of the European Parliament and of the Council of 2 October 2018 laying down the legal framework of 
the European Solidarity Corps and amending Regulation (EU) No 1288/2013, Regulation (EU) No 1293/2013 and Decision 
No 1313/2013/EU (OJ L 250, 4.10.2018, pp. 1-20). 

52 

 
 
                                                        
2018 Annual Management and Performance Report 

different programmes were  mobilised to  give young  people the  chance to take  part in a range of  solidarity 
activities  addressing  challenging  situations  across  the  EU.  Participation  not  only  benefits  young  people’s 
personal development, active involvement in society and employability, but  it also assists non-governmental 
organisations, public bodies and companies in their efforts to cope with societal and other challenges. As well 
as  offering  volunteering,  traineeships  and  jobs,  the  European  Solidarity  Corps  also  offers  participants  the 
opportunity to set up their own solidarity projects or to volunteer as a group.  

The  European  Solidarity  Corps  aims  to  strengthen  the  engagement  of  young  people  and  organisations  in 
solidarity activities. The corps is a means to help strengthen cohesion, solidarity and democracy in Europe and 
abroad  and  to  address  societal  and  humanitarian  challenges  on  the  ground,  with  particular  focus  on 
promoting social inclusion. 

Promoting solidarity as a value, through volunteering;, enhancing the engagement 
of young people and organisations. 

Contributing  to  strengthening  cohesion,  solidarity,  democracy  and  citizenship  in 
Europe. 

Responding to societal challenges and strengthening  communities, with particular 
effort to promote social inclusion. 

Implementation and latest achievements 

Since  December  2016,  the  Commission  has  been  focused  on  the  design  and  development  of  the  European 
Solidarity Corps as well as promotion and outreach to potential participants.  

Several key milestones were reached by the end of 2018, including the following: 

 

 

The regulation (92) establishing the European Solidarity Corps was adopted, providing the  corps with 
its own legal basis, facilitating the implementation of the programme and providing a self-standing 
budget. 

The first call for proposals of the corps in 2018 was a success, with over 1 400 submissions received 
by  organisations  that  host  or  support  the  solidarity  activities.  Out  of  these  submissions,  255 
proposals came from groups of young people registered in the  corps portal to implement solidarity 
projects. In total, the proposed activities could offer up to 13 000 opportunities for young people. 

  At  year-end  2018,  since  the  beginning  of  the  programme,  over  10 000  young  people  had  already 
started their activities and the number of young people registered on the portal (93) had passed 96 000, 
showing the high demand that will likely help fill all the opportunities offered by the programme. 

(92) 

(93) 

Regulation (EU) 2018/1475 of the European Parliament and of the Council of 2 October 2018 laying down the legal framework of 
the European Solidarity Corps and amending Regulation (EU) No 1288/2013, Regulation (EU) No 1293/2013 and Decision 
No 1313/2013/EU (OJ L 250, 4.10.2018, pp. 1-20). 
https://europa.eu/youth/solidarity_en 

53 

 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Géraldine Maitreyi Gupta is one of 
tens  of 
thousands  of  young 
Europeans to have volunteered for 
the European Solidarity Corps. The 
corps  received  the  ‘Innovation  in 
‘Civilisation’, 
Politics’  Prize 
awarded  by  the 
in 
Politics Institute in Vienna, Austria, 
on 17 November 2018. 

Innovation 

for 

Photo: © European Union  

Assessment and evaluation 

The  ex  ante  evaluation  of  the  corps (94)  indicated  a  need  for  the  EU  to  address  these  challenges  under  an 
extended  European  Solidarity  Corps.  In  particular,  given  the  initial  confusion  among  potential  participants 
about the role of the corps, concerning the underlying programmes and the differences from and consistency 
with the EU aid volunteers initiative.  

For  the  next  EU  budget  2021-2027,  the  Commission  presented  its  proposal  for  a  new  programme  for  the 
European Solidarity Corps (95), aiming to broaden the opportunities it offers. The new programme will create 
at  least  350 000  opportunities  for  young  people  to  support  communities  in  need  between  2021 
and  2027  through  volunteering,  traineeships  and  job  placements.  That  is  why  the  Commission 
proposed to reserve EUR 1.3 billion over seven years under the next long-term EU budget. 

The  proposal  builds  on  the  achievements  of  the  corps  in  its  first  years  of  existence  and  further  consolidates 
efforts to have one single-entry point for young people ready to engage in solidarity. In particular, the corps will 
also include volunteering activities in support of humanitarian-aid activities and operations in non-EU countries. 
This well-established EU scheme for humanitarian aid has so far operated under the name ‘EU aid volunteers’. 

Employment and social innovation (EaSI) 

Programme objectives  

The  employment  and  social  innovation  programme  promotes  high-quality  and  sustainable  employment, 
guaranteeing appropriate and decent social protection, combating social exclusion and poverty, and improving 
working conditions. It is built on three axes: support for the modernisation of employment and social policies 
(Progress),  job  mobility  (European  employment  services:  EURES),  and  access  to  microfinance  and  social 
entrepreneurship. 

The programme aims to achieve the following specific objectives: 

(94) 
(95) 

SWD(2018) 317 final https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018SC0317&from=EN 
COM(2018) 440 final https://eur-lex.europa.eu/resource.html?uri=cellar:f3d4ea2b-6e31-11e8-9483-
01aa75ed71a1.0002.03/DOC_1&format=PDF.  

54 

 
                                                        
2018 Annual Management and Performance Report 

Progress 

EURES 

microfinance and social 
entrepreneurship 

•  Transparent labour market 
information 

•  Better access to, and 
availability of, microfinance 

•  Effective provision of 
services for recruitment and 
placing of workers 

•  Better access to finance for 
social enterprises 

•  Stronger institutional 
capacity of microcredit 
providers 

•  Evidence-based EU policies 
and legislation 

•  Effective and inclusive 
information sharing, mutual 
learning and dialogue 

•  Testing of social and labour 
market policy innovations 

•  Greater capacities of 
national and EU 
organisations to develop, 
promote and support the 
implementation of EU 
policies 

In order to contribute to the achievements of: 

Stronger ownership of EU 
objectives 

Facilitation of policy 
reforms 

Modernisation and 
effective application of EU 
law 

Improved conditions for 
voluntary geographic 
mobility whilst enforcing 
workers' rights 

Increased access to finance 
for vulnerable persons, 
micro- and social 
enterprises 

Implementation and latest achievements (96)  

In  2018,  the  programme  financed  39  projects  through  seven  calls  for  proposals  with  a  budget  of  EUR 33 
million.  It  supported  studies  and  actions  on  labour  mobility,  the  electronic  exchange  of  social-security 
information  projects,  enhanced  cooperation  between  European  public  employment  services  and  other 
organisations  through  the  EURES  network,  and  the  deployment  of  targeted  mobility  schemes  (‘Your  first 
EURES  job’).  In  addition,  the  implementation  of  the  employment  and  social  innovation  guarantee  continued 
and, by the end of 2018, 76 microfinance and 25 social entrepreneurship operations had been signed in 29 
countries for a total of EUR 179 million. These operations are expected to unlock more than EUR 2 billion of 
financing for micro- and social enterprises.  

(a)  Under  the  Progress  axis,  there  was  further  development  in  2018  of  experiences  of  administrative 
cooperation  to  another  EU  Member  State  as  well  as  of  fostering  administrative  cooperation  between 
inspection authorities and social partners in the area of posting of workers. 

The ‘EU Post lab’ project focused on the construction sectors of Austria, Belgium, Bulgaria, Germany, Italy, 
Poland,  Portugal,  Romania,  Spain  and  Turkey.  The  project  identified  how  cooperation  between  inspection 
authorities and social partners can produce relevant data and information, which can be properly registered 
and  shared  at  national  and  transnational  level  with  a  view  to  reducing  the  administrative  burden  on 
employers while improving the protection of workers’ rights.  

(96) 

Programme statement 2018. 

55 

 
 
                                                        
2018 Annual Management and Performance Report 

Under  social  innovation,  the  support  focused  on  access  to  social  protection,  but  also  innovative  work-life 
balance strategies to facilitate reconciliation of professional and caring responsibilities. 

(b)  Under  the  EURES  axis,  due  to  the  improved  labour-market  context  in  Member  States,  the  use  of  the 
EURES job mobility portal has decreased since 2017 but still remains important (0.9 million visits every month 
in 2018). In 2017, there were 8 512 job placements following consultations with jobseekers as a result of the 
preparatory action ‘Your first EURES job’ and targeted mobility schemes (and an additional 1 204 placements 
in the first 6 months of 2018). According to the latest data provided by the EU single market scoreboard, on 
average, the amount of national vacancies shared on EURES in 2017 was 59%.  

‘Your first EURES job’ is an EU job mobility scheme helping young people between 18 and 35 to find a job, 
traineeship or apprenticeship opportunity in another EU country, Norway, Iceland, Lichtenstein or Switzerland 
and to help employers find qualified workforce. It aims to match young jobseekers with offers  of paid work 
across Europe.  

Number of jobseekers registered on EURES website 

287 850 

337 991 

▲ 17% 

Number of employers registered on EURES website 

10 726 

13 231 

▲ 23% 

2017 

2018 

Change 

(c)  Under  the  microfinance  and  social  entrepreneurship  axis,  by  the  end  of  2018,  101  operations  (76  for 
microfinance  and  25  for  social  entrepreneurship)  had  been  signed  in  29  countries  for  a  total  amount  of 
EUR 178.6 million (EUR 129.2 million for microfinance and EUR 49.4 million for social entrepreneurship). By late 
2016  the  budget  of  EUR 56 million  for  microfinance  of  the  initial  EU  programme  for  employment  and  social 
innovation had been fully absorbed. This consequently led to a EUR 100 million top-up from the European Fund 
for  Strategic  Investments  in  December  2017,  which  was  further  increased  by  an  additional  top-up  of 
EUR 200 million from the European Fund for Strategic Investments 2.0 in December 2018. In light of this, the 
initial  total  EU  budget  earmarked  for  the  EU  programme  for  employment  and  social  innovation  guarantee 
instrument  over  2014-2020  has  increased  from  EUR 96 million  to  EUR 396 million  for  both  microfinance  and 
social  entrepreneurship.  The  transactions  by  the  European  Investment  Fund  at  the  end  of  December  2018 
suggest  an  expected  leverage  effect  of  EU  contribution  between  5.5  and  30.4,  with  an  estimated  average 
leverage value of 12. This leverage effect is more than twice the minimum leverage effect set in the delegation 
agreement and suggests important gains in terms of effectiveness (improved results compared to those initially 
envisaged) and in terms of efficiency gains (higher leverage effect and more efficient use of EU contribution). 

Assessment and evaluation (97) 

The findings of the midterm evaluation confirm that the general and specific objectives of the EU programme 
for employment and social innovation continue to be relevant, in particular in light of the current challenging 
socioeconomic context characterised by the aftermath of the financial and economic crisis.  

The  programme  has  achieved  good-quality  outcomes,  yet  on  a  small  scale  given  its  limited  resources.  For 
instance, the scaling-up of projects is hindered by the lack of an  appropriate follow-up to ensure their long-
term sustainability.  

Even though the three axes (progress, EURES and microfinance and social-entremreneurship) seem to operate 
independently, some areas which could result in increased effectiveness (‘synergies’) have been identified. For 
example,  synergies  between  the  different  progress  projects  could  be  mentioned  but  also  between  projects 
related to progress and the microfinance/social entrepreneurship axes.  

(97) 

Programme statement 2018. 

56 

 
                                                        
2018 Annual Management and Performance Report 

The midterm evaluation highlighted a number of ways to improve the implementation of the employment and 
social innovation programme, especially through enhanced flexibility and through targeting groups in need of 
specific support, the simplification of procedures, improved internal consistence and linkages with other funds.  

For  this  purpose,  in  the  Commission’s  proposal  for  the  next  multiannual  financial  framework,  the  current 
programme  for  employment  and  social  innovation  is  integrated  into  the  European  Social  Fund+,  in  order  to 
address  the  fragmentation  of  funds  and  limited  potential  to  upscale.  Also  the  financial  instruments  currently 
funded under the third axis will be merged under the future InvestEU programme, including an enhanced ‘social 
window’. 

Space (Copernicus, Galileo and the European Geostationary 
Navigation Overlay Service) 

Objectives  

EU space policy supports many other policies and strategic priorities of the EU. For instance, it plays a crucial 
role in effectively tackling the challenges posed by climate change, sustainable development, border control, 
maritime surveillance and the security of citizens.  

Copernicus is the European system for monitoring the Earth. It offers six free-of-charge services to EU, national 
and regional institutions, as well as to the private sector, namely: the monitoring of the atmosphere, the marine 
environment,  land  and  climate  change  in  addition  to  emergency  management  and  security (98).  Copernicus 
provides information based on a system of satellites and in situ (99) infrastructure. The information provided by 
Copernicus can be used for a wide range of applications in a variety of areas, including urban-area management, 
sustainable  development  and  environmental  protection,  regional  and  local  planning,  agriculture,  forestry  and 
fisheries,  health,  civil-protection,  infrastructure,  transport  and  mobility,  as  well  as  tourism.  For  instance,  the 
Copernicus service for climate change provides information about the past, present and future climate, as well 
as tools to enable climate-change mitigation and adaptation strategies by policy makers and businesses. 

Galileo is the EU’s own global navigation satellite system, providing secure positioning, navigation and timing 
services. Galileo is used in used in mobile phones and car navigation as well as in critical applications such as 
the synchronisation of electricity grids or telecommunication networks.  

The  European  Geostationary  Navigation  Overlay  Service  (also  known  as  EGNOS)  is  a  regional  satellite 
navigation system (100). The system provides safety of life navigation services to aviation, maritime and land-
based  users  in  Europe.  More  than  80%  of  European  farmers  using  satellite  navigation  for  tractor  guidance 
related to spraying and harvesting of crops rely on it. 

The EU Space sector at a glance 
Space technology, data and services have become indispensable in people’s lives and play an essential 
strategic role for Europe. Europe has a world-leading space industry. 

(98) 

(99) 

Regulation (EU) No 377/2014 of the European Parliament and of the Council of 3 April 2014 establishing the Copernicus 
Programme and repealing Regulation (EU) No 911/2010 Text with European Economic Area relevance. 
The Copernicus Services rely on a combination of satellite data and environmental measurements, collected by data providers 
external to Copernicus, from ground-based, sea-borne or air-borne monitoring systems. This includes, for example, data from 
sensors placed on the banks of rivers, tall towers, carried on weather balloons or airplanes, pulled through the sea by ships, and 
drifting in the ocean on floats or buoys. These non-space data are collectively referred to as 'in situ' data. (source: 
https://insitu.copernicus.eu/about) 

(100)  Regulation (EU) No 1285/2013 of the European Parliament and of the Council of 11 December 2013 on the implementation and 

exploitation of European satellite navigation systems and repealing Council Regulation (EC) No 876/2002 and Regulation (EC) 
No 683/2008 of the European Parliament and of the Council. 

57 

 
                                                        
2018 Annual Management and Performance Report 

In 2018, the space 
sector employs over  
231 000 people. 

The sector’s value was 
estimated at EUR 53-62 
billion in 2017, the second 
highest in the world. 

A third of the world’s 
satellites are made in 
Europe.  

The sector keeps 
upgrading the family of 
European launchers with 
next generation 
Ariane 6 and Vega C. 

EU space data is transforming our lives with services such as: 

Responding to natural disasters: In 
2017, Copernicus maps showing the 
extent and magnitude of damage have 
helped rescue teams deal with forest 
fires (Italy, Spain, Greece, Portugal), 
earthquakes (Mexico), hurricanes 
(countries hit by hurricanes Harvey, 
Irma and Maria), and floods (Ireland, 
Germany), amongst others. 

Saving lives at sea: Copernicus 
supports the European Coast and 
Border Guard Agency’s missions in the 
Mediterranean, helping spot unsafe 
vessels and rescuing people. Galileo 
can be used on all the merchant 
vessels worldwide, bringing increased 
accuracy and more resilient positioning 
for safer navigation. 

Search and Rescue: A Galileo service 
that reduces the time it takes to detect 
a person equipped with a distress 
beacon to less than 10 minutes in a 
variety of locations including at sea, in 
mountains or deserts and in urban 
areas. It confirms to the person that 
help is on the way. 

Monitoring oil spills: The European 
Maritime Safety Agency (EMSA) uses 
Copernicus data for oil spill and vessel 
monitoring. 

Landing of airplanes: by the end of 
2018, 315 airports in almost all EU 
countries are using EGNOS, making 
landing more secure, thus avoiding 
delays and re-routing. 

Road safety: From April 2018, Galileo 
is integrated in every new car type sold 
in Europe, supporting the eCall 
emergency-response system from 
2019, it will be integrated in digital 
tachographs of lorries to ensure the 
respect of driving time rules and 
improve road safety. 

Agriculture: 80% of farmers using 
satellite navigation for precision 
farming are EGNOS users. And 
Copernicus data is used for crop 
monitoring and yield forecasting. 

Implementation and latest achievements 

The  overall  implementation  of  the  Copernicus  programme  is  in  line  with  the  expected  progress,  with  seven 
satellites in orbit and in operation, enabling the operation of the six Copernicus  services. The latest satellite 
launch was that of Sentinel 3B in April 2018.  

The Copernicus Climate Change Service has moved to its operational phase in summer 2018. It has become 
an important and recognised climate information resource for international bodies. The Copernicus Emergency 
Management  Service  was  activated  over  86  times  to  assist  authorities  in  relation  to  disasters,  such  as 
wildfires, storms, floods and volcanic eruptions, earthquakes, ground subsidence (101).  

(101)  Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, 2018 Annual activity report, p. 23. 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

The data and information access services were launched in June 2018 allowing better uptake of Copernicus 
data,  bringing  the  number  of  registered  users  to  more  than  200 000.  In  addition,  more  cooperation 
agreements  have  been  signed  with  non-EU  (‘third’)  countries  and  organisations  including  the  African  Union, 
Brazil, Chile, Columbia, India, Serbia, Ukraine and to promote the uptake of Copernicus globally (102). 

Galileo  is  operational  since  2016  and  has  since  been  providing  services  continously.  In  parallel,  the 
deployment of the Galileo space infrastructure is ongoing. Four satellites were successfully launched in July 
2018 bringing the total number of satellites in space to 26. To ensure the independent monitoring of Galileo 
services,  the  Galileo  Reference  Centre  started  to  operate  in  Noordwijk  (the  Netherlands).  The  Commercial 
Service  High  Accuracy  (so-called  High  Accuracy  Service)  will  offer a  20  cm positioning  accuracy  and  will  be 
provided  for  free  of  charge (103).  This  level  of  accuracy  is  crucial  for  the  development  of  emerging 
technologies  such  as  automated  connected  cars.  The  market  uptake  of  Galileo  and  of  the  European 
Geostationary  Navigation  Overlay  Service  boomed  in  2018  with  more  than  500 million  Galileo-enabled 
devices on the market as per 31 December 2018. Innovation is continuing, mid May 2019 already 714 million 
deviced were Galileo-enabled. 

Importantly, in November 2018 Galileo became the first non-United States global satellite navigation system 
to be allowed in the United States. The use of the EU’s Galileo in combination with the United States global 
positioning  system  (GPS) will  open  the  United  States  market  for  Galileo  and  improve  the  United  States 
consumer experience through improved availability, reliability and resiliency of these position, navigation, and 
timing services.  

Galileo  is  helping  to  save  lives.  Galileo’s  search-and-rescue  service  drastically  reduces  the  time  needed  to 
detect emergency distress beacons from up to 3 hours to just 10 minutes. As the location of the distress beacon 
locations is determined more accurately, people lost at sea or in the mountains can be rescued more quickly (104). 

Assessment and evaluation 

The  Copernicus  midterm  evaluation  confirmed  that  the  programme  is  delivering  on  its  objectives.  However, 
while the data  collected is of good quality, the evaluation showed the need to improve the  distribution and 
access  to  data  with  the  aim  of  increasing  user  uptake (105).  The  launch  of  the  data  and  information  access 
services  in  June  2018  as  well  as  the  extension  of  various  activities  to  maximise  the  use  of  Copernicus 
applications (including through the signing of international cooperation agreements) are aimed at addressing 
the challenges of access to data and user uptake . 

Galileo and the European Geostationary Navigation Overlay Services are progressing well in delivering on their 
objectives  according  to  the  midterm  evaluation (106).  However,  the  evaluation  identified  some  inefficiency 
issues linked to governance, given the number of actors involved and  because of differences in governance 
structures  and  work  organisation  between  deployment  and  exploitation.  The  evaluation  also  identified 
inefficiency linked to security governance. 

The proposal for a regulation of the EU space programme for the post-2020 multiannual financial framework 
aims to address these governance concerns (107) by clarifying the relations between the various stakeholders 
and  the  role  of  each  one  (i.e.  mainly  the  Member  States,  the  Commission  and  the  European  Space 
Agency (ESA)), and by establishing a unified system of governance for all the components of this programme). 
The legislation enhances the role of the former European Global Navigation Satellite System (GNSS) agency 
by expanding the scope of its tasks as regards security accreditation to include all the components of the  EU 
space  programme  and  market  update  activities.  The  new  regulation  also  specifies  and  standardises  the 
security framework for the EU space programme. 

(102)  Programme statement 2018 on Copernicus, pp. 2-3. 
(103)  Programme statement 2018 on Galileo and the European Geostationary Navigation Overlay Service (EGNOS), p. 2. 
(104)  Programme statement 2018 on Galileo and the European Geostationary Navigation Overlay Service (EGNOS), p. 4. 
(105)  SWD(2017) 347, http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52017SC0347 
(106)  SWD(2017) 346, http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52017SC0346 
(107)  Proposal for a Regulation of the European Parliament and of the Council establishing the space programme of the Union and the 
European Union Agency for the space programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013, (EU) No 
377/2014 and Decision 541/2014/EU, COM/2018/447. 

59 

                                                        
2018 Annual Management and Performance Report 

European Defence Industrial Development Programme  

I will continue to work day and night over the next months to 
see the European Defence Fund and Permanent Structured 
Cooperation in Defence become fully operational. 

President Jean-Claude Juncker, State of the Union 2018 

Programme objectives  

In  a  world  of  increasing  instability  and  cross-border  threats  to  our  security,  no  country  can  succeed  alone. 
That is why the Juncker Commission is making an unprecedented effort to protect and defend Europeans. The 
European Union cannot substitute Member States’ efforts in defence, but it can encourage their collaboration 
in developing and acquiring the technologies and equipment needed to address common security and defence 
challenges.  

On  18 July 2018  the  European  Defence  Industrial  Development  Programme  was  adopted  under  the  EU 
budget for 2019 and 2020. It supports the competitiveness and innovative capacity of the EU defence 
industry,  specifically  in  the  development  of  prototypes,  defence  equipment  and  technology  through  co-
financing from the EU budget. The programme is implemented directly by the Commission. 

The European  Defence Industrial Development Programme  helps creating a collaborative approach  between 
the  defence  industries  in  the  Member  States.  The  financial  contribution  of  the  EU  unlocks  development 
projects that otherwise would not have happened due to high financing needs or technological risks involved. 
The  programme  is  an  enabling  factor  leading  to  additional  collaborative  capability  development  projects  in 
key defence areas. 

Member States may, for example, jointly invest in developing drone technology or satellite communication, or 
they may bulk buy helicopters to reduce costs. Only collaborative projects will be eligible, and a proportion of 
the overall budget will be  earmarked for projects involving cross-border participation of small and medium-
sized enterprises. 

European cooperation in matters of defence makes economic sense. There is a strong case for the 
European added value of a European Defence Fund. 

 

 

 

 

 

 

Lack of cooperation between Member States in the field of defence is estimated to cost between EUR 25 
billion and EUR 100 billion every year. 

EUR 600 million per year could be saved if European armies shared infantry vehicles and EUR 500 million 
per year if they had one certification system for ammunition. 

There are 178 types of weapon systems in Europe, 30 in the United States. 

Thereare 20 different types of fighter planes in Europe, 6 in the United States. 

There are 17 different battle tank systems in Europe, 1 in the United States. 

In Europe, there are more types of helicopters than governments to buy them. 

60 

 
 
2018 Annual Management and Performance Report 

European Union 

United States 

Defence expenditure 

Total amount 

EUR 227 billion 

EUR 545 billion 

% of gross domestic product 

1.34 

3.3 

Investment per soldier 

EUR 27 639 

EUR 108 322 

Duplication of systems in use 

Number of types of weapon 
systems for categories covered 
in the study 

178 

Main battle tanks 

Destroyers/frigates 

Fighter planes 

17 

29 

20 

30 

1 

4 

6 

Source: NATO, International Institute for Strategic Studies, SIPRI, Munich Security Report 2017. 

Assessment and evaluation 

Defence-research cooperation is already materialising. The first EU grant agreements under the 2017 budget 
included  the  research  project  Ocean2020,  which  brought  together  42  partners  from  15  EU  Member  States 
and supports surveillance  missions  at  sea  and to  that  end will  integrate  drones and unmanned  submarines 
into fleet operations.  

An  ex  ante  evaluation (108)  accompanying  the  proposal  of  the  European  Defence  Industrial  Development 
Programme concluded that the European defence industry faces significant challenges linked to low investment 
in capability development projects, fragmentation and a lack of cooperation. The ex ante evaluation highlighted 
the need for an EU initiative  supporting the competitiveness and innovation capacity of the European defence 
technological and industrial base. This will strengthen European strategic autonomy and reduce dependencies for 
key defence capabilities. It showed that cooperation is an effective way to achieve this, since it is likely that in 
the long run no single European Member State can afford to maintain a full spectrum defence industry base and 
corresponding  defence  capabilities  on  its  own.  The  EU  can  make  a  substantive  contribution.  The  European 
Defence Industrial Development Programme will bring significant value added by incentivising collaboration 
and unlocking additional capability development projects. 

Building on the current programmes, namely the  European Defence Industrial Development Programme and 
the  Preparatory  Action  on  Defence  Research,  the  Commission  proposed  in  June  2018  a  fully-fledged 
European  Defence  Fund  worth  EUR  13  billion  under  the  next  EU  long-term  budget  to  cover  both  the 
research  and  capability  development  strands.  The  fund  will  support  competitive  and  collaborative  defence 
projects  throughout  the  entire  cycle  of  research  and  development  for  a  bigger  impact.  The  EU  will  directly 
finance  total  costs  during  the  research  phase,  in  particular  through  grants.  After  that  phase,  the  fund  will 
complement Member States’ investment by co-financing up to 20% of the costs for prototype development 
and up to 80% of ensuing certification and testing activities. The EU will not fund the acquisition phase, but 
the  Commission  can  offer  practical  support  to  Member  States  wishing  to  procure  jointly  products  and 
technology.  

(108)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52017SC0228 

61 

 
 
 
 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Customs 2020 

The  EU  customs  union  territory  is  governed  by  common  rules and  procedures  laid  down  in  the  EU  customs 
code (109). They require proper and uniform implementation and application across the EU. Moreover, customs 
policy  and  the  customs  administrations  need  to  constantly  adapt  to  modern  trade  realities  and  modern 
communication tools.  

Customs  2020  is  a  programme  to  facilitate  and  enhance  cooperation  between  national  customs 
administrations. This cooperation helps improving the administrative capacity of the customs authorities and 
strengthen the competitiveness of European businesses, for instance through reducing compliance costs and 
administrative  burden.  The  coopersation  also  increases  safety  and  security,  protects  citizens  and  the 
environment.  

The  EU  customs  code  is  a  milestone  in  modernising  EU  customs,  and  the  EU’s  Customs  2020  action 
programme is indispensable in supporting its implementation. 

The  key  exchange  network  is  the  highly  reliable  common  communication  network,  common  to  customs 
and  taxation  areas.  It  is  composed  of  112  internet  based  gateways  in  49  sites  located  in  33  different 
countries.  Over  the  years  of  the  customs  programme  iterations,  there  has  been  a  steady  increase  in  the 
number and  volume of  data  exchanged.  In  2017 alone, nearly 4.8 billion messages of 5.5 terabytes (TB) of 
volume  were  exchanged.  Over  11.2 million  transit  movements  took  place  through  the  new  computerised 
transit  system,  with  the  average  number  of  movements  released  per  business  day  reaching  over  44 000. 
5.1 million indirect export movements were recorded in the export control system and some 48 million entry 
summary  declarations  were  lodged  in  the  EU  through  the  import  control  system.  The  outreach  of  the 
programme  is  not  always  easy  to  measure  as  thousands  of  officials  and  businesses  use  the  information 
technology (IT) systems supported by Customs 2020 without realising where they come from. 

The  programme  supported  a  great  number  of  various  types  of  joint  action  as  well.  There  were  16 864 
project  groups  meetings,  1 897  workshops,  1 106  working  visits,  947  seminars,  203  join  communication 
actions,  180  capacity-building  and  supporting  actions  and  72  monitoring  activities  organised  across  all 
participating countries within the programme’s first 4 years in operation. 

In  2018,  the  Commission  carried  out  a  midterm  evaluation  of  the  Customs  2020  programme (110),  which 
confirmed  that  the  programme  is  working  well,  is  needed  and  adds  value.  Most  of  the  programme’s  joint 
actions, training and European Information Systems directly help customs administrations to get ready for the 
modern, well functioning Customs Union.  

The  European  Information  Systems  are  resource-intensive  but  bring  an  array  of  benefits  in  all  areas  of 
customs activities. The benefits include harmonisation of customs procedures, uniform implementation of the 
customs law, sharing of information and generating economies of scale, particularly through the centralised 
systems.  They  are  interconnected  and  interoperable  and  vastly  used  in  the  day-to-day  customs  operations. 
Their  importance  in  pursuing  modernisation  of  customs  towards  a  paperless  environment  was  found 
invaluable and the IT architecture as a whole unmatched and unreproducible at national level. 

Customs  2020  programme  fosters  cooperation  and builds trust  between  customs  administrations  and their 
officials.  Training  activities  are  also  conducive  to  shared  understanding,  alignment  of  interpretations  of  the 
customs provisions, standardisation of terminology and ultimately more uniformity into application of the EU 
law across the Member States. 

The  midterm  evaluation  of  the  programme  identified  nevertheless  some  room  for  improvement  in  certain 
areas, such as the simplifying the Performance Measurement Framework or increasing the interoperability of 
some IT systems. 

(109)  Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs 

Code. 

(110)  Mid-term evaluation of the Customs 2020 programme — Final report SWD(2019)14.  

62 

                                                        
2018 Annual Management and Performance Report 

The  Commission  proposed  to  continue  the  programme  post-2020.  Customs  cooperations  and  capacity 
building would be clustered around human-networking and competency-building actions, on the one hand, and 
information  technology  capacity-building  actions,  on  the  other  hand.  As  with  the  current  iteration  of  the 
programme, the vast majority of the proposed budget will be spent on IT capacity-building actions, continuing 
the  approach  based  on  an  IT-architecture  model  where  European  electronic  systems  are  made  of  a 
combination of common and national components. This model has been favoured above the fully centralised 
architecture, leaving the Member States some flexibility in designing the national-end applications, taking into 
account their preferences, requirements and constraints.  

Fiscalis 2020 

The Fiscalis 2020 programme is one of the key measures to support the implementation of European Union 
taxation  policy.  It  provides  a  framework  to  improve  the  proper  functioning  of  the  taxation  systems  in  the 
single  market  through  enhanced  cooperation  between  participating  countries,  their  tax  authorities  and 
officials. The participating countries are made up of the EU Member States and  the countries negotiating to 
join the EU (‘candidate countries’) and potential candidate countries (111). Due to the programme’s design and 
objectives, the vast majority of funding goes into the development and operation of the IT systems (around 
75%), followed by the organisation of the joint action, studies and training activities. 

The  Commision  carried  out  the  midterm  evaluation  of  the  Fiscalis  2020  programme  during  the  course  of 
2018, assessing its achievements for the first 4 years of operation (112).  

It  confirmed  that  the  programme  is  working  well,  is  needed  and  adds  value.  Fiscalis  2020  has  played  an 
integral  role  in  reinforcing  cooperation  between  tax  authorities  in  the  EU  Member  States  and  other 
participating countries, through its three main types of activities (joint actions, European Information Systems 
and  training).  The  programme  has  provided  the  framework  and  technological  means  necessary  to  work 
together and share information; thus, implementing EU tax law and fighting tax evasion, fraud and aggressive 
tax  planning  in  an  increasingly  mobile  Europe.  Contributions  were  most  pronounced  in  the  areas of  fighting 
tax fraud/evasion in the areas of  value added tax and excise (for  information technology such as the  mini-
one-stop-shop, eforms or vies-on-web). 

The  information  systems  supported  by  the  Fiscalis  programme  have  led  to  substantial,  if  hard  to  quantify, 
cost  savings  for  national  administrations  in  the  form  of  reduced  spending  on  information  technology  and 
human  resources.  Centrally  developed  systems  are  cheaper  to  develop  and  implement  than  28  individual 
national systems. They also avoid costs relating to interoperability between countries. Where systems are split 
between EU and national components, the programme ensures interconnectivity and efficient coexistence. 

In terms of functionality, major European Information Systems like the Excise Movement and Control System 
and  the  Mini-One-Stop-Shop  have  also  been  referred  to  by  several  interviewees  as  ‘revolutionary’  in  their 
fields, leading to completely new possibilities for monitoring, sharing of information and prevention of fraud. 
Secondary benefits include new opportunities for big data analysis for e.g. compliance risk management. The 
expansion  of  the  Mini-One-Stop-Shop  in  the  next  programme  (to  cover  physical  products)  is  expected  to 
generate especially big benefits for tax collection and the facilitation of trade.  

(111)  http://ec.europa.eu/environment/enlarg/candidates.htm  
(112)  Mid-term evaluation of the Fiscalis 2020 programme — Final report, SWD(2019)15. 

63 

                                                        
2018 Annual Management and Performance Report 

Hercule III  

Hercule III is a programme (113) that helps EU countries to combat irregularities, fraud and corruption affecting 
the  EU  budget.  The  programme  aims  to  protect  the  EU’s  financial  interests  and  consequently  protect 
taxpayers’  money  and  enhance  the  competitiveness  of  the  EU  economy.  The  programme  also  finances 
practical  projects,  such  as  the  purchase  by  national  authorities  of  x-ray  scanners,  sniffer  dogs  and  other 
detection and investigation equipment to stamp out smuggling and other criminal activities.  

A  key  domain  is  combating  tobacco  smuggling  which  remains  a  major  concern,  accounting  for  estimated 
annual losses of at least EUR 10 billion to national and EU budgets. Helping to fund x-ray scanners and other 
technical equipment in harbours and airports, for example, aims to boost national authorities' capacity to fight 
smuggling. Hercule III also finances  the sharing of best practices on issues such as preventing  corruption in 
procurement  procedures.  Another  facet  is  anti-fraud  training,  including  training  aimed  at  boosting  and 
updating the digital forensic and analyst skills of law-enforcement staff. 

The  midterm  Commission  evaluation (114)  demonstrated  that  the  Hercule  III  programme  has largely  fulfilled 
its  mission.  The  evaluation  revealed  the  overall  efficiency  and  effectiveness  of  the  programme  for  both 
training actions and technical assistance activities. The stakeholders reported that the programme has been 
efficiently implemented while effectively addressing the Member States' needs.  

The  introduction  of  the  electronic  submission  and  processing  of  grant  applications  is  an  important 
development  which  has  considerably  shortened  the  time  for  notifying  applicants  about  the  outcome  of  the 
evaluation procedure. 

The  new  EU  Anti-Fraud  Programme  (2021-2027)  aims  at  continuing  and  strengthening  the  support  to 
Member States in their fight against fraud, irregularities and corruption affecting the EU budget. 

Pericles 2020  

Pericles  2020  funds  staff  exchanges,  seminars,  training  and  studies  for  law-enforcement  and  judicial 
authorities,  banks  and  others  involved  in  preventing  and  combating  euro  banknote  and  coin  counterfeiting. 
Actions  can  take  place  within  the  euro  area,  in  EU  countries  outside  the  euro  area  and  in  third  countries 
representing  a  counterfeiting  hub.  Funding  is  used  for:  (i)  the  provision  of  grants  to  competent  national 
authorities  (CNAs)  interested  in  implementing  actions  (‘CNA-implemented  actions’);  and  (ii)  the  financing  of 
actions implemented directly by the European Commission (‘direct actions’). The annual distributions vary, but 
around 70% of the annual budget is commonly allocated to competent national authority (CNA)-implemented 
actions and 30% to direct actions.  

In 2018, the programme funded 11 projects; eight originated from the competent national authorities of euro 
area Member States, while three were initiatives of the Commission.  

Anti-fraud information system (115) 

The anti-fraud information system sets out and funds a set of anti-fraud information-technology applications 
operated  by  the  European  Commission.  These  ensure  the  timely  and  secure  exchange  of  fraud-related 
information  between  the  national  and  the  EU  competent  administrations.  It  encompasses  two  major  areas: 
the mutual assistance in customs and the management of irregularities. The system is supported by a portal, 
which is a single and common infrastructure for the delivery of these services to more than 8 000 registered 
end-users in more than 1 200 competent services from Member States, partner third countries, international 

(113)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32014R0250  
(114)  COM(2018) 3, https://ec.europa.eu/anti-fraud/sites/antifraud/files/commission_report_mid_term_evaluation_hercule_iii_en.pdf  
(115)  European Anti-fraud Office, 2018 Annual activity report, p.24. 

64 

                                                        
2018 Annual Management and Performance Report 

organisations,  Commission  services  and  other  EU  institutions.  The  portal  enables  substantial  economies  of 
scale and mutual benefits in the development, maintenance and operations of such a wide and diverse set of 
IT services and tools. 

The  anti-fraud  information  system  also  includes a  system for  managing  irregularities.  It  gave  assistance  to 
the European Commission and Member States in the fight against customs fraud and  the administration of 
the expenditure part of the EU budget.  

For  example,  in  2018,  the  anti-fraud  information  system  supported  mutual-assistance  activities  including 
joint  customs  operations  co-organised  by  the  European  Anti-Fraud  Office  (OLAF)  and  the  European  Union 
Border  Assistance  Mission  to  Moldova  and  Ukraine,  or  organised  by  Member  States  or  Europol  with  the 
support  of  European  Anti-Fraud  Office  (OLAF).  Throughout  2018,  five  joint  customs  operations  were  co-
organised  or  supported  under  the  system.  Modules  of  the  system  were  used  for  the  secure  exchange  of 
information  in  these  joint  customs  operations.  The  number  of  active  customs  fraud  cases  for  which 
information is available in the mutual-assistance databases of the system in 2018 was 18 340, an increase 
of 2016 cases in comparison to the previous year. Under the next multiannual financial framework, the anti-
fraud information system will be integrated in the future anti-fraud programme. 

The future programme will strengthen and streamline the existing union support to the efforts to protect the 
EU's  financial  interests  and  for  mutual  administrative  assistance  in  customs  matters,  as  well  as  exploit 
synergies and create flexibility between various existing actions (116). 

ISA2 — Interoperability solutions and common frameworks for 
European public administration, businesses and citizens 

Coordination  issues  hamper  cross-border  and  cross-sectorial  interoperability.  They  arise  mostly  due  to  the 
institutional  complexity,  with  multiple  layers  of  governance  and  differences  between  national  public 
administrations  from  various  Member  States,  and  regional,  local  public  administrations  within  the  Member 
States.  The  ISA2  programme  for  interoperability  solutions  and  common  frameworks  for  European  public 
administration,  businesses  and  citizens  supports  the  development  of  digital  solutions  that  enable  public 
administrations, businesses and the public to benefit from interoperable cross-border and cross-sector public 
services. 

The programme is part of a wider policy framework related to the digitalisation of public administrations in 
the  EU.  It  develops  interoperability  solutions  either  autonomously  or  to  complement  and  support  other  EU 
initiatives.  It  also  promotes  and  maintains  the  European  interoperability  framework  in  cooperation  with  the 
Member  States  and  the  Commission.  The  2018  rolling  work  programme  consisted  of  53  actions,  having 
evolved from managing 39 actions in its first year of operation, and 43 actions in 2017. The programme has 
so far been implemented efficiently with close to all the actions progressing as planned at the end of 2018.  

The preliminary findings of the interim evaluation confirm the programme’s relevance and effectiveness and 
the  fact  that  the  programme’s  implementation  is  on  track (117).  The  programme  has  contributed  to 
enhancing  cross-border  interoperability  in  the  EU.  By  way  of  example,  it  raises  the  awareness  about 
interoperability across EU Member States and helps put the topic on national agendas. It also brings people 
together, creating networks and helping national organisations meet their counterparts in different countries, 
thus facilitating exchanges between Member States in the field of interoperability. 

These  external  factors  are  considered  when  selecting  new  actions  for  ISA2  yearly  work  programmes.  In  the 
context of the next multiannual financial framework, ISA2 will be succeeded by the digital Europe programme, 
which will enlarge the scope of intervention and leverage synergies with actions from the current Connecting 
Europe Facility and Horizon 2020 programmes. 

(116)  Proposal for a Regulation establishing the EU Anti-Fraud Programme, COM(2018)386, p 2. 
(117)  The Commission Report announcing the interim evaluation’s final results will be available later this year (third quarter of 2019). 

65 

                                                        
2018 Annual Management and Performance Report 

European statistical programme  

The European statistical programme as laid down in Regulation (EU) 99/2013 (118) provides the framework 
for the development, production and dissemination of European statistics for the period 2013-2020. 
The  statistics  produced  within  the  framework  of  the  programme  are  indispensable  for  EU  decision-making 
and for the measurement of the performance and impact of key initiatives such as the investment plan for 
Europe, the European Pillar of Social Rights, or the energy union. 

The European statistical programme is designed to provide quality statistical information in a timely manner 
while  keeping  a  balance  between  the  economic,  social  and  environmental  fields.  It  serves  the  needs  of  the 
wide range of users of European statistics, including decision-makers, researchers, businesses and the public 
in general, in a cost-effective manner without unnecessary duplication of effort.  

A  second  midterm  evaluation  of  the  European  statistical  programme  2013-2020  was  performed  in  2018, 
covering the years 2015-2017. The evaluation indicates that the programme is run efficiently, that it provides 
clear EU added value and is consistent both internally and externally with other initiatives aiming at producing 
statistics.  The  results  also  show  that  the  European  statistical  programme  has  contributed  and  continues  to 
contribute to satisfy the user needs and to the design and monitoring of policies but more is needed. Eurostat 
and the European statistical system are modernising the statistical production processes to respond to such 
needs  while  taking  advantage  of  new  technologies.  Under  the  next  multiannual  financial  framework,  these 
activities will be integrated in the new single market programme, while preserving the necessary professional 
independence  in  the  delivery  of  European  statistics.  The  integration  of  different  single  market-related 
instruments  centrally  managed  by  the  Commission  into  one  programme  will  reduce  overlaps,  increase 
synergies  and  facilitate  communication  and  networking  with  all  of  the  various  stakeholder  groups.  Such  a 
consolidation of activities provides higher value for money and cost-efficiency. 

Nuclear-decommissioning assistance programmes in Bulgaria, 
Slovakia and Lithuania 

Bulgaria,  Lithuania  and  Slovakia  agreed  as  part  of  their  accession  to  the  EU  to  close  and  decommission  a 
number of first-generation nuclear power reactors power plants (eight units at three different sites: Kozloduy, 
Ignalina and Bohunice, respectively) before the end of their envisaged operational lifetime. Given the financial 
burden  the  process  would  entail  and  acknowledging  the  long-term  nature  of  the  decommissioning  of  the 
nuclear power plants, the EU committed to providing financial assistance to the three countries.  

In Bulgaria (119) the programme has seen important waste-management infrastructures become operational. 
In  2018,  in  particular,  a  facility  for  high-performance  volume  reduction  of  radioactive  waste  entered  into 
service. The operational feedback will be of high interest to other organisations that treat radioactive waste in 
the EU as they are confronted with similar challenges. 

In Slovakia (120), there was significant progress in 2018 notably as regards decontamination and dismantling 
both  in  turbine  halls  and  auxiliary  buildings  (demolition  of  four  cooling  towers)  and  in  the  reactor  building 
(decontamination  of  the  spent-fuel  pools  and  other  tanks).  The  demolition  of  the  cooling  towers  attracted 
widespread  public  attention  and  was  a  visible  demonstration  of  the  site's  progress  towards  clean-up.  The 
decontamination  in  the  reactor  building  has  greatly  contributed  to  reducing  the  radiation  exposure  of  the 
personnel concerned.  

(118)  Regulation (EU) 99/2013 of the European Parliament and of the Council of 15 January 2013 on the European statistical 

programme 2013-17, as last amended by Regulation (EU) 2017/1951 of 25 October 2017 amending Regulation (EU) No 99/2013 
on the European statistical programme 2013-17, by extending it to 2020. 

(119)  Programme statement 2018 Nuclear-decommissioning assistance programme in Bulgaria and Slovakia, p 1. 
(120)  Programme statement 2018 Nuclear-decommissioning assistance programme in Bulgaria and Slovakia, p. 2. 

66 

                                                        
2018 Annual Management and Performance Report 

In  Lithuania (121),  a  second  reactor  was  fully  defueled  in  February  2018,  months  ahead  of  schedule.  Two 
reactors are now defueled. By 31 December 2018, more than 50% of spent-fuel assemblies had been safely 
loaded into casks and put into storage meaning the level of radiological hazard and risk to the general public 
have substantially decreased.  

A very important aspect, as highlighted also by the evaluation finalised in 2018 (122), is the additional value 
the nuclear-decommissioning assistance programme brings in terms of building up knowledge and expertise. 
This  has  helped  the  three  countries  concerned.  For  example,  Slovakia  helped  Bulgaria  to  draft  the 
specifications  for  the  call  for  tender  in  support  of  the  preparation  of  the  reactor  building  for  the 
decontamination of the primary circuit, after having successfully completed the decontamination of their own 
primary circuit (123). The knowledge is also important, given the non-negligible number of nuclear power plants 
across the EU that will require decommissioning in the future.  

In  its  proposal  for  the  multiannual  financial  framework, the  Commission  included  support  to  continue  these 
activities.  

(121)  Programme statement 2018 Nuclear-decommissioning assistance programme in Lithuania, p. 1. 
(122)  Nuclear-decommissioning assistance programme evaluation, SWD(2018) 344. 
(123)  Programme statement 2018 Nuclear-decommissioning assistance programme in Bulgaria and Slovakia, p. 1. 

67 

                                                        
2018 Annual Management and Performance Report 

Economic, social and territorial cohesion 
(budget heading 1B) 

In 2018, EUR 55.5 billion was allocated to the programmes under heading 1B, representing 35% of the total 
EU budget for the year. This heading covers the youth employment initiative, the Fund for European Aid to the 
Most Deprived and three funds that work together to support cohesion across all EU Member States (124): 

 

 

 

the European Regional Development Fund (ERDF) 

the European Social Fund (ESF) 

the Cohesion Fund.  

Chart: Main programmes financed in 2018 (commitment appropriations) under heading 1B, Economic, social and territorial cohesion. The 
category ‘other programmes’ includes among other outermost and sparsely populated regions, technical assistance, Contribution to the 
Connecting Europe Facility (CEF), Pilot projects and preparatory actions  
Source: European Commission. 

Cohesion  policy  contributes  to  the  economic,  social  and  territorial  cohesion  of  the  EU  by  reducing  the 
economic and social disparities that still exist between its regions and countries. This policy is one of the EU’s 
most  important  sources  of  investment,  contributing  to  the  delivery  of  the  Europe  2020  objectives  by 
supporting  growth  and  job  creation  at  EU  level  and  structural  reforms  at  national  level.  The  funds  are 
complemented  by  the  European  Fund  for  Strategic  Investments,  which  leverages  public  and  private 
investment, supports structural reforms and improves access to funding.  

(124)  Performance information for the budget heading 1B covers predominantly the year 2017 as 2018 infomation only becomes 

available from Member States in 2019 after the publication of this report, 

68 

 
                                                        
2018 Annual Management and Performance Report 

Cohesion policy supports the completion of the digital single market and the energy union and, by investing in 
energy, environment, climate and sustainable transport, makes a significant contribution to Europe’s transition 
to a low-carbon economy. Cohesion policy also contributes to the development of the internal market, to the 
comprehensive  approach  to  migration  policy,  and  to  the  implementation  of  the  European  Pillar  of  Social 
Rights. This is achieved for example by moderating the effects of poverty and the social exclusion of people 
who find themselves in situations of severe deprivation and by supporting (youth) employment.  

Despite having started more slowly than in the 2007-2013 period, the rate of project selection in 
the  current  programming  period  has  now  caught  up.  By  December  2018,  the  European  Regional 
Development  Fund,  the  Cohesion  Fund,  the  European  Social  Fund  and  the  youth  employment  initiative  had 
selected more than  1 million projects for support all over Europe, amounting to EUR 362 billion of the total 
financing available for the period. This level of project selection over 2014-2018 is comparable to the same 
timeframe of the 2007-2013 period.  

69 

 
 
 
2018 Annual Management and Performance Report 

European  Regional  Development  Fund  and 
Cohesion  Fund  investments  support  all  EU 
regions 

By giving them the means to succeed in a globalised economy  

 

Cohesion policy funds have helped create 1.3 million jobs in the EU over the last 10 years and 
over 8.9 million people have gained new qualification (a).  

  Over 43 000 companies cooperating with research institutions have received funding. 

  More than 284 000 jobs are created thanks to support to small businesses. 

 

90 000 start-ups received funding. 

By helping them embrace the digital revolution 

 

Some 7 800 projects were selected to support the connected digital single market,  
corresponding to EUR 10.3 billion of total investment (EU plus national co-financing). 

By investing in education and health 

 

Cohesion policy invests in social infrastructure: 

— 

— 

1.8 million children benefit from new or modernised schools and childcare facilities. 

51 million people have access to improved health-care services. 

By connecting territories and reducing distances 

  More than 2 700 km of reconstructed railway lines and close to 7 500 km of reconstructed 

roads, as well as 3 100 km of new roads. 

 

Cities such as Warsaw, Sofia and Bucharest will have modern metro systems thanks to cohesion 
policy investments. 

By protecting their environment and using resources wisely 

18 million people in Europe by forest fire protection measures. 
7 million hectares of habitat benefit from conservation measures. 
8.5 million people in Europe benefit from an improved drinking water supply. 

  More than 36 million people in Europe are covered by flood protection measures. 
 
 
 
  More than 14.5 million people in Europe have access to improved wastewater treatment. 
 

Actions financed by the Cohesion Fund deliver an estimated annual decrease in greenhouse emissions of 9.7 
million tonnes of CO2 equivalent and an improved energy consumption classification for 330 000 households. 

Note: Figures, except (a) represent the expected impact from the 2014-2020 Cohesion Policy projects that 

started to receive support before 31 December 2018.  

70 

 
 
 
 
 
2018 Annual Management and Performance Report 

Sources: Opendata platform on European Structural and Investment Funds (https://cohesiondata.ec.europa.eu/ ); 2018 Annual Activity 
Report of the Directorate-General for Regional and Urban Policy; 7th Report on economic, social and territorial cohesion; common 
indicator and annual implementation reports. 

71 

 
2018 Annual Management and Performance Report 

European Regional Development Fund and Cohesion Fund 

Programme objectives  

The  European  Regional  Development  Fund  and  the  Cohesion  Fund  are  two  of  the  EU’s  main  investment 
instruments, delivering a critical mass of investment in EU priority areas. They provide strong support for the 
implementation  of  the  country-specific  recommendations  issued  to  Member  States  in  the  context  of  the 
European  Semester  for  economic  policy  coordination.  The  2014-2020  programmes  were  the  first 
programmes  to  be  explicitly 
linked  to  the  European  Semester  annual.  Relevant  country-specific 
recommendations  (CSRs)  were  notably  a  focal  point  for  effective  programming  and  are  reflected  in  the 
adopted  partnership agreements and ongoing programmes, which  currently provide an impetus for Member 
States  to  implement  structural  changes  and  policy  reforms  through  investment  targeting  structural 
weaknesses and growth bottlenecks. The funds played an important role in countering the immediate effects 
of the economic and financial crisis, as well as strengthening the structural potential of Europe’s regions for 
the longer term. The investment priorities for 2014-2020 are the following.  

Strengthening research, 
technological development and 
innovation 

Enhancing the competitiveness of 
small and medium-sized 
enterprises  

Promoting climate-change 
adaptation, risk prevention and 
management 

Promoting sustainable transport 
and removing bottlenecks in key 
network infrastructures 

Promoting social inclusion, 
combating poverty and any 
discrimination 

Enhancing institutional capacity of 
public authorities and 
stakeholders and efficient public 
administration 

Enhancing access to and use and 
quality of information and 
communications technology (ICT) 

Supporting the shift towards a 
low-carbon economy in all sectors 

Preserving and protecting the 
environment and promoting 
resource efficiency 

Promoting sustainable and quality 
employment and supporting 
labour mobility 

Investing in education, training 
and vocational training for skills 
and lifelong learning 

Implementation and latest achievements 

Cohesion  policy,  representing  almost  a  third  of  the  total  EU  budget,  has  been  a  major  source  of  public 
investment in many Member States during and after the crisis providing, for example,  almost 9% of general 
government capital expenditure on average in the EU-28 and 41% (125) in the EU-13 Member States in 2015-

(125)  European Commission, Seventh report on economic, social and territorial cohesion, page 176-177 

https://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion7/7cr.pdf 

72 

 
 
 
 
 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

2017 (126). Cohesion policy also plays a key role in supporting the achievement of the Juncker Commission's 
priorities  and  contributing  to  solidarity  and  unity  in  Europe.  Investments  in  one  country  create  positive 
spillovers in (around 0.12% of GDP (127) in non-cohesion countries.  

Cohesion  policy  will  be  responsible  for  nearly  EUR  1  trillion  of  additional  GDP  by  2023.  The  policy  has 
benefited the economies of all EU Member States and supported them during difficult economic times. 

EUR 346.5 BILLION 

Invested in 2007-2013  > 

Estimated return of nearly EUR 1 trillion of  
additional gross domestic product by 2023 

Lasting impact in all Member States: over 4% in Bulgaria, 
Cyprus, Czechia, Estonia, Hungary, Latvia, Lithuania, Malta, 
Poland, Romania, Slovakia and Slovenia (128).  

Five years into the 2014-2020 funding period, the implementation of cohesion policy programmes continues 
at full speed, with EUR 270 billion already allocated to projects in Member States by December 2018, which is 
almost  77%  of  the  funds’  total  financial  allocation.  This  represents  more  than  290  thousand  projects. 
EUR 80 billion  remains  to  be  allocated  to  projects,  with  full  completion  of  investment  by  2023  when  the 
funding period will close. This represents further acceleration compared to the results registered at the end of 
2017, which stood at 55% of total funding allocated to projects. More importantly, this trend slightly exceeds 
the one of the last programming period (dotted line in the following chart) and anticipates a sustained pace of 
implementation in the second half of the programming period. 

Chart: Project selection: comparison period 2007-2013 with the current period. Calculation based on total (EU plus national) cost of 
selected projects. Year N represents 2007 for the 2007-2013 programmes and 2014 for the 2014-2020 programmes.  
Source: European Commission. 

(126)  Bulgaria, Croatia, Cyprus, Czechia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. 
(127)  For the 2007-13 programmes; but similar levels can be expected for the 2014-2020 programmes. 
(128)  2007-2013 ex post evaluation 

73 

 
 
                                                        
2018 Annual Management and Performance Report 

Investments in research and innovation have continued to progress at a significant pace in 2018, showing 
good  performance  across  most  Member  States.  At  the  end  of  2018,  over  50  000  specific  research  and 
innovation  projects  have  been  selected,  representing  73%  of  the  total  amount  planned.  Since  2014,  more 
than  15  200  researchers  have  benefited  from  improved  research  infrastructure  and  7 000  enterprises  are 
cooperating with research centres across the EU. As a result of projects implemented so far, more than 3 200 
new products have been introduced onto the market by businesses that have benefited from the funding. 

The  European  Regional  Development  Fund  and  the  Cohesion  Fund  help  businesses  to  increase  their 
competitiveness, develop new products, find new  markets and create new jobs, with  particular emphasis on 
innovation and high growth firms and programmes aimed at supporting the innovative capacity of small and 
medium-sized  enterprises.  The  wide  range  of  support  on  offer to  small  and  medium-sized  enterprises  is 
also crucial to achieving a deeper and fairer internal market with a solid industrial base.  By the end of 2018, 
an  estimated  88%  of  the  total  amount  has  been  allocated  to  over  95 000  projects  to  improve  the 
competiveness of small and medium-sized enterprises.  

Cohesion  policy  is  the  largest  EU  financing  source  for  modernising  the  European  transport  system  and 
adapting it to new challenges. Support for the TEN-T rail and road network plays a prominent role, as well as 
investments in sustainable urban mobility, which will make the daily commute  cleaner, faster and safer for 
Europe’s citizens. By the end of 2018, around 2 500 projects allocated to network infrastructure projects were 
supported. 

the 

With  the  support  of  the  European 
Regional  Development  Fund,  a  major 
stretch  of 
‘cycle  highway’ 
between  Antwerp  and  Brussels  was 
finalised  in  2018.  The  cycle  highway 
offers  a 
convenient 
safe  and 
alternative  for  commuters.  It  is  a 
sustainable  response  to  congestion 
the 
contributing 
challenges 
decarbonisation of transport. 

to 

Photo: © European Union 

A  substantial  share  of  funding  is  devoted  to  improving  the  business  environment  and  supporting 
entrepreneurship.  For  instance,  more  than  90 000  start-ups  are  supported.  An  important  aspect  is  to 
facilitate access to finance; since the beginning of the programming period, EUR 2.7 billion has been invested 
using the leverage effect of financial instruments. 

Croatia — ESIF Venture Capital Fund to support innovative start-ups 

Croatia set up the ‘ESIF Venture Capital Fund’ in June 2018 — the first Venture Capital instrument supported 
by  European  Regional  Development  Fund.  Thanks  to  EUR  35  million  from  the  Operational  Programme 
Competitiveness  and  cohesion  2014-2020,  the  fund  will  invest  into  risk  capital  funds  targeting  local  small 
and  medium-sized  enterprises  with  high  growth  potential,  allowing  them  to  scale  up  and  compete  globally. 
The ESIF Venture Capital Fund will target in particular earlier stage investments and will offer a fully-fledged 
acceleration programme. It adds a new element to the successful portfolio of debt instruments supported by 
the  European  Regional  Development  Fund  and  will  contribute  to  developing  a  sound  and  dynamic  start-up 
ecosystem in the country.  

This is a good example of how cohesion policy invests in jobs and growth, in line with the investment plan for 
Europe. At least 50 seed stage and 15 start-up stage companies will receive vital support. The instrument is 
also  expected  to  have  strong  spill-over  effects  in  terms  of  business  angels,  entrepreneurial  workshops  and 
corporates  and  a  strong  pipeline  leading  to  a  much  more  pronounced  interest  of  regional  venture  capital 
funds to invest in Croatia. 

74 

 
2018 Annual Management and Performance Report 

Significant  progress  has  also  been  made  in  the  area  of  environmental  protection  and  promotion  of 
resource  efficiency,  where  12 500  projects  were  supported  by  the  end  of  2018.  Even  though  such 
investments  have  a  long  lifecycle,  many  results  have  already  been  achieved.  Millions  of  citizens  are  now 
protected against natural disasters such as floods and fires. Hundrends of thousands of citizens benefit from 
facilities that  improve  water supply  and water treatment.  Implementation  varies across and within  Member 
States.  Progress  remains  a  bit  slower  as  regards  the  objectives  linked  to  the  increase  of  waste-recycling 
capacity and rehabilitation of land, as projects selected so far cover only a modest fraction of the expected 
target. This is notably due to the lengthy planning procedures for such projects.  

The European Regional Development Fund is the main investment tool for the  digitalisation of the public 
sector  and  of  small  and  medium-sized  enterprises  and  for  the  roll-out  of  broadband.  Its  aim  is  to 
achieve efficiency gains thanks to e-government solutions, smart energy and transport solutions by delivering 
tailored support on the ground and matching local needs and opportunities. By the end of 2018, some 7 800 
projects  were  selected  on  the  ground  to  support  the  achievement  of  a  connected  digital  single  market, 
representing  63%  of  the  total  planned.  While  notable  progress  has  been  registered  across  several  Member 
States  in  2018,  some  difficulties have  slowed  down  the  implementation  of  broadband  projects  in  the  early 
stages  of  implementation  in  certain  countries  (such  as  difficulties  in  mapping  of  intervention  areas  and 
selection  of  beneficiaries,  state  aid  issues).  In  response  to  these  difficulties,  targeted  actions  aimed  at 
improving the administrative capacity of programme authorities in this area continue to be implemented.  

Appropriate  follow-up  to  the  action  plan  on  rural  broadband (129)  was  ensured,  with  country  visits  (Bulgaria, 
Croatia,  Czechia,  Romania,  Slovakia)  for  which  also  requests  for  reprogramming  were  examined  and 
bottleneck  in  implementation  discussed.  Among  other  initiatives,  the  work  of  the  network  of  Broadband 
Competence  Offices  across  Member  States,  supported  by  a  Brussels-based  facility,  has  started  to  bring 
positive  outcomes.  Through  single  points  of  contact  within  the  Member  States,  this  network  provides 
information  and/or  advice  to  any  public  authority  wishing  to  roll-out  high-speed  broadband,  as  well  as  any 
potential  broadband  project  promoter  enquiring  about  the  EU/national/regional  funding  available  for 
broadband.  All  these  actions  are  expected  to  help  improve  the  digital  performance  of  regions  and  Member 
States,  thus  positively  contributing  to  the  attainment  of  the  target  set  for  the  impact  indicator  capturing 
digital competitiveness of Member States.  

Strengthening of digital strategic governance in Member States in Italy 

A ‘digital divide’, or uneven distribution, in the access to and use of information technologies exists between 
the Italian regions (especially in southern Italy) and the rest of Europe. Italy has adopted a strategy for digital 
growth, which intends to: guarantee broadband internet coverage (of at least 30 Mbps) to the entire Italian 
population; provide offices, public buildings and 85% of private households with a very high connection (of at 
least  100 Mbps)  and  bring  high-speed  broadband  to  the  industrial  areas.  EUR 2.6 billion  in  investments  are 
committed to projects supporting digital growth in 2014-2020. 

Achieving  an  energy  union  will  ensure  security, affordability  and sustainability  of energy  supply  in  Europe, 
while  also  making  the  EU  less  dependent  on  the  international  market  and  external  sources  of  energy  raw 
materials.  Cohesion  policy  is  the  biggest  EU  investment  source  in  making  the  energy  union  happen  on  the 
ground and supporting EU’s regions and cities in their path for reaching the EU 2020 and 2030 climate and 
energy targets and achieving a socially fair transition.  

Hungary – Support for Hungary’s largest power plant 

The first solar power plant under the 2018-2019 photovoltaic project of the MVM Group has been built in the 
vicinity of Felsőzsolca and Onga on nearly 45 hectares, thanks to a total investment of around EUR 28 million, 
provided  by  European  Regional  Development  Fund  and  the  national  budget.  It  has  started  generating 
electricity  as the  unit  with  the  largest  installed  capacity  in  Hungary  –  20  megawatts.  The  Felsőzsolca  Solar 
Power Plant is the first to start electricity generation among 110 solar units planned. 

(129)  https://enrd.ec.europa.eu/action-plan-rural-broadband_en 

75 

 
                                                        
2018 Annual Management and Performance Report 

Netherlands - Upscaling of Solar Photovoltaic Power for rental tenants.  

This  project  facilitates  the  large-scale  installation  of  solar  photovoltaic  systems  on  rented  accommodation. 
The consortium of market parties aims at removing existing bottlenecks while ensuring that the huge demand 
for  solar  panels  among  rental  tenants  can  be  met.  The  integrated  cooperation  between  experienced  and 
expert  market  parties  supplemented  by  external  specialists,  facilitates  the  large-scale  rollout  of  solar 
photovoltaic  power  for  rental  tenants.  The  installation  of  the  solar  photovoltaic  systems,  initially  in  8  500 
homes,  rising  to  30  000  homes  over  the  next  few  years,  will  create  many  employment  opportunities. 
Furthermore,  businesses  responsible  for  the  fitting  and  installation  of  the  phtovoltaic  power  panels, 
converters and cable work will also grow. 

Cohesion policy is also the main EU funding source on disaster-risk management. Over 25 000 projects in 
the area of low-carbon economy have been selected and either will be or are already being implemented on 
the ground. For investments targeting climate-related goals, nearly 2 500 projects have been selected. 

Measures  supported  by  the  European  Regional  Development  Fund  are  addressing  the  needs  created  by  the 
exceptional flow of migrants to Europe by focusing on support for reception and the effective integration of 
legal  migrants and  asylum seekers  in  the  field  of  employment,  social  inclusion  and  education.  A  significant 
contribution towards these objectives results from  support for small and medium-sized enterprises, through 
which  business  support  services  reach  all  potential  entrepreneurs,  including  those  from  more  vulnerable 
groups  such  as  migrants,  with  the  aim  to  make  the  EU  in  its  entirety  stronger  and  more  cohesive.  Project 
selection rate in the area of social inclusion exceeds 60% at the end of 2018, with close to 8 000 projects 
already selected and being implemented. 

Assessment and evaluation 

The evaluation of the predecessor programmes (130) found that regions and countries in the EU benefit from 
the cohesion funds owing both to direct effects (via the investment) and indirect effects (via increased trade).  

The  evaluation  found  that  support  to  small  and  medium  enterprises  has  high  potential  impact,  provided  it 
focuses more on helping dynamic firms to grow, on smart specialisation strategies and on facilitating regions 
to move up the economic chain, rather than trying to maintain the ‘old’ economy of the past. Additionally, high 
value  added  contributions  are  evidenced  in  themes  such  as  the  low-carbon  economy,  sustainable  urban 
development  and  regional  cooperation.  This  feedback  has  been  taken  on  board  in  the  Commission 
proposal (131)  for  the  next  multiannual  financial  framework,  which  maintains  thematic  concentration  with 
priorities  to  support  innovation,  the  digital  economy  and  small  businesses,  as  well  as  the  low-carbon  and 
circular economy. 

The  evaluation  also  concluded  that  the  most  effective  strategy  to  attract  large  enterprises  is  not  through 
financial  incentives  but  by  improving  local  conditions  such  as  the  local  business  environment.  Airport 
investments  have  tended  to  perform  poorly,  except  in  the  outermost  regions  where  there  is  a  benefit.  The 
proposal  for  the  next  multiannual  financial  framework,  contains  a  list  of  excluded  activities  such  as  direct 
support to large enterprises, airport infrastructure and some waste-management operations such as landfills.  

It  was  also  found  that  financial  instruments  have  the  potential  to  be  a  more  efficient  means  of  funding 
investment in some policy areas, but there were delays in implementation and obstacles to their widespread 
use. These issues were addressed in the Commission proposal for a common provisions regulation (132) for the 
post-2020  period  as  it  provides  for  flexibility  and  responsiveness  to  future  needs,  for  instance  by 

(130)  Ex post evaluation of the European Regional Development Fund and Cohesion Fund 2007-13, SWD(2016) 318 final 

https://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2013/wp1_swd_report_en.pdf 

(131)  Proposal for a regulation of the European Parliament and of the Council on the European Regional Development Fund and on the 
Cohesion Fund, COM(2018)372 final — https://ec.europa.eu/commission/sites/beta-political/files/budget-may2018-erdf-cohesion-
funds-regulation_en.pdf 

(132)  Proposal for a Regulation of the European Parliament and of the Council laying down common provision on the European Regional 
Development Fund, the European Social Fund Plus, the Cohesion Fund, and the European Maritime and Fisheries Fund and financial 
rules for those and for the Asylum and Migration Fund, the Internal Security Fund and the Border Management and Visa 
Instrument, COM(2018)375 final — https://ec.europa.eu/commission/sites/beta-political/files/budget-may2018-common-
provisions_en.pdf  

76 

                                                        
2018 Annual Management and Performance Report 

enabling small transfers of resources without operational programme modification. Additionally, operational 
programme  allocations  are  set  out  for  the  first  5 years  and  then  for  the  last  2 years  are  allocated  on  the 
basis  of  a  review.  The  implementation  of  financial  instruments  is  simplified,  aligning  many  of  the  relevant 
provisions with those of grants. 

The evaluation found that management, control and audit systems were complex. This caused administrative 
uncertainty  and  delays  in  implementation.  A  recent  study (133)  requested  by  the  Commission  identified 
substantial administrative costs which are estimated at 2.2% of total eliglible costs for the European Regional 
Development  Fund  and  1.8%  for  the  Cohesion  Fund  (overall  figure  is  4%  for  the  European  Structural  and 
Investment  Funds  in  general).  The  Commission  is  learning  from  this  and  the  proposal  for  the  future 
programmes includes many measures to simplify and reduce administrative burden. Greater use of simplified 
cost options and payments based on conditions could substantially reduce total administrative costs. Certain 
rules  for  major  projects  and  revenue  generating  investments  are  eliminated.  Additionally,  a  more 
proportionate approach to controls and audits will bring a major reduction in the number of verifications and 
the audit burden for low-risk operational programmes.  

The European Court of Auditors reported (134) that the Commission implemented various measures aimed 
at  increasing  the  focus  on  results  in  the  2014-2020  period;  it  welcomed  the  improvements,  but  also 
highlighted  weaknesses in the quality of monitoring the information related to spending on cohesion  policy. 
The  Court  noted  that  monitoring  information  remains  mostly  output-oriented  and  recommended  that  the 
Commission set out common result indicators for the European Regional Development Fund. In response, the 
Commission  proposal (135)  for  the  funds  for  2021-2027  maintains  and  refines  the  common  set  of  output 
indicators, while adding for the first time a common set of result indicators, for the performance frameworks 
which  are  to  be  established  by  Member  States  for  the  monitoring,  reporting  and  evaluation  of  programme 
performance.  The  proposal  would  enable  results  to  be  reported  regularly  updated  on  the  Open  Data 
Platform (136)  and  comparison  across  programmes  and  Member  States,  which  will  feed  into  performance 
assessment and evaluations.  

The link of the programmes with the European Semester is strengthened for the period 2021-2027. As part 
of  the  2019  European  Semester  cycle,  the  Commission  provided  tailored  country-specific  analysis  of 
investment  needs  and  bottlenecks  to  investments,  taking  into  account  relevant  regional  and  territorial 
disparities.  Based  on  these  analytical  elements  and  taking  into  account  cohesion  policy  objectives,  country-
specific investment guidance were developed and summarised in  an annex to the country reports (Annex D). 
This annex provides the basis for the dialogue between Member States and the Commission services in view 
of the programming of the cohesion policy funds for 2021-2027. 

European Social Fund 

Programme objectives 

Making  Europe  cohesive,  resilient  and  competitive  in  the  future  means  investing  in  its  people  now:  in  their 
education and training, skills and employability and in their potential to create businesses and to innovate, as 
well as in their health and their broader living conditions. Investing in people and building a fairer and more 
social EU have been among the main priorities of the current Commission from the very start.  

The European Social Fund is the EU’s main instrument for supporting jobs, helping people to get better jobs, 
ensuring  fairer  job  opportunities  for  all  and  supporting  upskilling  and  reskilling.  It  has  a  direct  link  to  the 

(133)  New assessment of ESIF administrative costs and burden, 

https://ec.europa.eu/regional_policy/en/information/publications/studies/2018/new-assessment-of-esif-administrative-costs-and-
burden  

(134)  European Court of Auditors, Selection and monitoring for European Regional Development Fund and European Social Fund projects 

in the 2014-2020 period are still mainly outputs-oriented — Special report No 21/2018, 
https://www.eca.europa.eu/lists/ecadocuments/sr18_21/sr_project_performance_en.pdf  

(135)  COM(2018)372 final https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD%3A2018%3A283%3AFIN 
(136)  https://cohesiondata.ec.europa.eu 

77 

                                                        
2018 Annual Management and Performance Report 

priorities and headline targets of the  Europe 2020 strategy in terms of employment, education and poverty 
and is a key tool to deliver on the principles and rights enshrined in the European pillar of social rights. The 
thematic objectives are the following. 

Promoting sustainable and quality 
employment and supporting 
labour mobility 

Promoting social inclusion, 
combating poverty and any 
discrimination 

Investing in education, training 
and vocational training for skills 
and lifelong learning 

Target youth unemployment for 
persons under the age of 25 not 
in employment, education or 
training 

Enhancing institutional capacity of 
public authorities and 
stakeholders and efficient public 
administration 

Implementation and latest achievements (137) 

By  end  2017,  the  European  Social  Fund  and  the  youth  employment  initiative  had  supported  15.3 million 
people, of whom 7.9 million were unemployed and 4.9 million were inactive. By then, Member States 
had declared that 2.4 million young people had already benefited from the youth employment initiative. 
Amongst all participants, 1.4 million were in employment, 1.9 million have gained a qualification and 870 000 
participants  were  in  education  or  training  thanks  to  the  European  Social  Fund  or  the  youth  employment 
initiative support. 

Investments from the European Social Fund and the youth employment initiative are the main source of EU-
level  support  to  structural  reforms  in  Member  States,  especially  in  areas  related  to  the  reform  of  public 
employment  services,  activation  measures,  the  development  of  individualised  integrated  pathways  for 
employment,  the  set-up  and  implementation  of  dual  vocational  education  and  training,  apprenticeship 
measures or investment in (child)care aimed at increasing female participation in the labour market. 

Making full use of the European Social Fund (138) 

With a budget of EUR 86.4 billion for 2014-2020, the European Social Fund is one the key EU instruments to 
support  the  implementation  of  the  country-specific  recommendations.  The  operational  programmes  directly 
contribute  to  promoting  sustainable  and  high-quality  employment,  social  inclusion,  investment  in  education 
and  training  and  institutional  capacity  building.  The  youth  employment  initiative  is  a  dedicated  instrument 
with a budget of EUR 8.8 billion, half of which comes from the European Social Fund. The youth employment 
initiative targets young people not in employment, education or training, in the EU regions having the highest 
youth unemployment rates in 2012, providing them with job and training opportunities 

(137)  Directorate-General Employment, Social Affairs and Inclusion, Annual activity report 2018, p.48. 
(138)  Draft joint employment report from the Commission and the Council accompanying the communication from the Commission on 

the annual growth survey 2019, COM(2018) 761 final, 21.11.2018, pp. 85-86, 114. 

78 

 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Between 2014 and 2017, over 15 million participants benefited from the European Social Fund and the youth 
employment initiative support, including almost 3 million long-term unemployed persons (17%). Young people 
below  25 years  of  age  (42%  of  total  participants)  and  low-skilled  people  with  primary  or  lower  secondary 
education  (44%  of  total  participants)  are  key  target  groups  of  these  interventions.  Implementation,  which 
showed a sharp acceleration in 2017, should continue steadily in the coming years. 

Over 2.4 million people were supported by the youth employment initiative between 2014 and 2017, out of which: 

  780 000 young people were in education/training and gaining a qualification or in employment, including 

self-employment, upon leaving; 

  550 000  young  people  received  an  offer  of  employment,  continued  education,  apprenticeship  or 

traineeship.  

The fact that the number of European Social Fund and youth employment initiative participants has doubled 
since end-2016 indicates a sharp acceleration in the implementation of projects on the ground.  

Member States are stepping up their outreach efforts, making services more accessible to young 
people and ensuring a better identification of those in need.  

In Finland, the one-stop guidance centres for youth (Ohjaamo, originally operating under the European Social 
Fund) were made permanent and will receive extensive financial support, aiming to reach a total of 10 000 
young  people.  Youth  employment  agencies  are  being  rolled  out  across  Germany.  Cyprus  has  launched  an 
outreach  project  supported  by  the  Ministry  of  Education  in  cooperation  with  the  Ministry  of  Labour and  the 
Cyprus Youth Board, aiming to reach out to 4 000 inactive people who are not in employment, education or 
training and to provide them with activation support through counselling and tailor-made training. In Croatia, 
a  system  for  mapping  eligible  participants  has  been  in  place  since  November  2017,  with  the  aim  of 
identifying the non-registered ones and their characteristics to better target measures to this group. 

In  a  number  of  Member  States,  the  European  Social  Fund  supports  capacity  building  and 
structural reforms (139). For instance,  

in  Latvia,  the  European  Social  Fund  supports  the  strengthening  of  social  dialogue.  The  goal  is  to  develop  a 
legal framework facilitating social dialogue in different sectors.  

In Spain, the fund supported the strategy for integration into the labour market. Similarly, the European Social 
Fund  is  currently  investing  resources  in  the  support  of  the  ‘apprenticeship  contract’  both  in  training 
programmes  and  in  alleviating  companies’  social-security  contributions.  The  apprenticeship  contract  is  also 
one of the offers under the Spanish Youth Guarantee, especially aimed at young people without any previous 
qualification or with a very low overall qualification.  

In Czechia, the European Social Fund and the European Regional Development Fund provided a considerable 
boost to the allocation for childcare facilities (approximately EUR 220 million across all Czech European Social 
Fund and European Regional Development Fund programmes, i.e. almost tripling). The demand for services on 
the  ground  has  since  been  confirmed  by  a  significant  interest  of  applicants.  Legislative  changes  were 
introduced to enlarge the requirements for opening a preschool education entity and enable employers to set 
up kindergartens. So far, more than 9 000 kindergarten places have been created. 

In Portugal, the European Social Fund supports the institutional capacity building of social partners in view of 
their  important  role  in  the  modernisation  of  active  labour-market  policies  and  vocational  education  and 
training. 

(139) 

Impact assessment accompanying the document — Proposal for a regulation of the European Parliament and the Council on the 
European Social Fund Plus (ESF+) — Proposal for a regulation of the European Parliament and the Council on the European 
Globalisation Adjustment Fund (EGF), SWD(2018) 289 final, 30.5.2018, p. 9. 

79 

 
                                                        
2018 Annual Management and Performance Report 

Assessment and evaluation (140) 

Member  States  completed  164  European  Social  Fund  and  multifund  evaluations  related  to  the  2014-2020 
period  by  mid-2018.  These  evaluations  assess  both  the  process  and  the  implementation  of  the  Fund.  The 
Commission  launched  four  thematic  evaluations  in  2018  (on  support  to  youth  employment,  on  support  to 
employment and mobility, on support to education and training and on support to social inclusion). 

In 2018, the Commission prepared the impact assessment and the proposal for the European Social Fund Plus 
2021-2027 (ESF+). Some key areas identified for improvement were (141) as follows. 

  Better policy alignment with the EU-level policy priorities and economic governance in the context of 

the European Semester.  

 

The  2014-2020  result  orientation  was  strengthened  but  has  so  far  not  proved  to  be  a  sufficient 
performance incentive for Member States.  

  Despite some progress the management and delivery of the fund remains too complex and the shift 
from a logic based on inputs towards one based on results, while it has improved in 2014-2020, has 
not fully taken place.  

 

The  youth  employment  initiative:  its  financial  management  procedures  (being  funded  from  two 
funding sources — the youth employment initiative and European Social Fund allocations) as well as 
its additional reporting requirements (common indicators of the European Social Fund and the youth 
employment initiative result indicators) are perceived by beneficiaries and implementing authorities 
as  increasing  the  administrative  burden.  Focus  for  further  improvement  should  relate  to  better 
involve more the young people who are furthest away from education, training and employment as 
well  as to  increase  the  overall  quality  of  the  job and  training  offers  funded  by  the  initiative  in  the 
context of Youth Guarantee schemes. 

On  30 May  2018,  the  Commission  adopted  a  proposal  for  the  European  Social  Fund  Plus (142).  Within  the 
broader framework of the European Structural and Investment Funds, this fund will make it possible to better 
focus  support  on  the  challenges  identified  in  the  European  Semester.  In  this  context,  European  Social  Fund 
Plus will merge the: 

 

 

 

 

European Social Fund and the youth employment initiative 

Fund for European Aid to the Most Deprived 

EU programme for Employment and Social Innovation 

EU Health programme. 

Fund for European Aid to the Most Deprived  

Programme objectives  

The Fund for European Aid to the Most Deprived supports EU Member States’ actions to provide assistance to 
the most deprived. This includes food, clothing and other essential items for personal use.  

This fund aims to alleviate the worst forms of poverty in the EU such as food deprivation, homelessness and 
child poverty. It is implemented under shared management, with simplified rules and reduced administrative 
requirements as compared with the European Social Fund. The allocation for the Fund for European Aid to the 
Most Deprived for 2014-2020 amounts to almost EUR 3.8 billion.  

(140)  Programme statement 2018, p. 3. 
(141)  SWD(2018) 289 final, 30.5.2018, Annex 3. 
(142)  COM(2018) 761 final, 21.11.2018, p. 86. 

80 

                                                        
2018 Annual Management and Performance Report 

Implementation and latest achievements (143) 

 

In 2017, the Fund for European Aid to the Most Deprived supported 12.9 million people.  

  About  half  of  the  end  recipients  are  estimated  to  be  women,  30%  are  children  aged  15  or  below  and 
about  10%  are  migrants,  participants  with  a  foreign  background  or  persons  belonging  to  a  minority 
(including marginalised communities such as Roma).  

 

Social-inclusion support reached more than 36 000 persons. 

  Over  1.3 million  tonnes  of  food  were  distributed  cumulatively  during  the  period  2014-2017,  and  circa 

370 000 tonnes alone (i.e. approximately 30%) in 2017. 

The monetary value of material support distributed until 2017 reached EUR 19.5 million. Compared to 2016, 
the monetary value of basic material assistance increased by 25%. 

Assessment and evaluation  

The results of the 2018 midterm evaluation (144) show that the Fund for European Aid to the Most Deprived 
has  a  notable  volume  effect  in  nearly  each  Member  State.  The  supported  food,  material  aid  and  social-
inclusion measures make a difference to the most deprived, including those who may be otherwise left out by 
mainstream social assistance or who need immediate support.  

Networking and knowledge sharing between institutions, partner organisations and social services, as well as 
across different partner organisations played an important role  in disseminating good practices. This was in 
particular the case for non-financial assistance to the most-deprived persons. 

The midterm evaluation identified a number of weaknesses in the implementation of the Fund for European Aid 
to  the  Most  Deprived.  Erroneous  interpretations  of  the  EU  regulatory  framework  or  of  national  requirements 
resulted  sometimes in (a) delays in the start-up  phase of  the programme; (b) administrative obstacles  mostly 
linked  to  national  procurement  policies  and  to  additional  requirements;  (c)  lengthy  documentation  procedures 
and instructions; and (d) excessive procedures for the certification of end recipients.  

Similarly, setting a narrow list of eligibility criteria for the end-beneficiaries has the disadvantage of excluding 
those who do not have access to the social system and does not permit promptly responding to emergencies.  

The Court of Auditors found (145) that the Fund for European Aid to the Most Deprived contributes to Member 
States’  approaches  to  alleviating  poverty  and  contains  innovative  social-inclusion  measures,  but  it  could  be 
better targeted to the most in need and there could be more focus on social inclusion instead of on basic food 
and material assistance. 

On 30 May 2018, the Commission proposed a European Social Fund Plus, in which the Fund for European Aid 
to the Most Deprived will be merged with the European Social Fund. This will allow for an easier combination 
of  provisions  of  food/material  assistance  with  support  for  social  inclusion  and  active  measures.  It  will  help 
create  synergies,  thus  further  strengthening  the  social-inclusion  dimension  of  the  support  and  providing  an 
integrated pathway out of poverty. It will also help address the current shortfall identified in evaluations as 
the  absence  of  a  common  strategic  approach  sometimes  stands  in  the  way  of  a  seamless  transition  by 
vulnerable participants from projects fuded by that fund to European Social Fund projects. 

(143)  Programme statement 2018, p. 1. 
(144)  https://publications.europa.eu/en/publication-detail/-/publication/0e03aa7b-025f-11e8-b8f5-01aa75ed71a1 
(145)  European Court of Auditors, FEAD-Fund for European Aid to the Most Deprived: Valuable support but its contribution to reducing 

poverty is not yet established — Special report No 05/2019.  

81 

                                                        
2018 Annual Management and Performance Report 

Sustainable growth: natural resources 
(budget heading 2) 

Through  the  common  agricultural  policy  (specifically  the  European  Agricultural  Guarantee  Fund  and  the 
European Agricultural Fund for Rural Development) and the maritime and fisheries policies (in particular through 
the  European  Maritime  and  Fisheries  Fund),  the  EU  budget  supported  viable  food  production,  the 
sustainable management of natural resources, climate action and balanced territorial development. 
Viable  food  production  helps  boosting  jobs,  growth  and  investment,  as  a  large  number  of  jobs  in  agriculture, 
together  with  food  processing,  food  retail  and  food  services,  depend  on  it.  Promoting  the  sustainable 
management  of  natural  resources  and  climate  actions  ensures  that  the  basis  for  agricultural  jobs  remains 
sustainable.  Fostering  a  balanced  territorial  development  of  rural  areas  also  contributes  to  growth,  jobs  and 
investment. Closing the digital divide between urban and rural areas is an important enabler for businesses to 
remain competitive in rural areas. Viable food production with high food-safety standards also plays an active 
role  in  a  balanced  and  progressive  trade  policy  to  harness  globalisation.  The  EU  also  plays  a  leading  role  in 
tackling the growing ocean challenges, not only at European level but also on an international scale. 

Chart: Main programmes financed in 2018 under heading 2, Sustainable growth: natural resources. All amounts in EUR million. The 
category ‘other programmes’ includes among other decentralised agencies, Other actions and measures, Pilot projects and preparatory 
actions, Actions financed under the prerogatives of the Commission and specific competences conferred to the Commission 
Source: European Commission. 

For  2018  EUR 58.8 billion  has  been  allocated  to  heading  2,  which  represents  37%  of  the  total  2018  EU 
budget.  Heading  2  covers  the  two  pillars  of  the  common  agricultural  policy:  Pillar  I  consists  of  the  market 
support  measures  and  the  direct  payments  financed  by  the  European  Agricultural  Guarantee  Fund;  Pillar  II 
comprises the rural development support financed by the European Agricultural Fund for Rural Development. 
The  heading  also  covers  the  European  Maritime  and  Fisheries  Fund  and  the  international  dimension  of  the 
common  fisheries  policy,  as  well  as  activities  in  the  fields  of  climate  and  environment  through  LIFE,  the 
programme for the environment and climate action (146).  

(146)  Performance information for the budget heading 2 covers predominantly the year 2017 for shared management programmes as 

2018 infomation only becomes available from Member States in 2019 after the finalisation of this report. 

82 

 
                                                        
2018 Annual Management and Performance Report 

European Agricultural Guarantee Fund 

Programme objectives 

The  European  Agricultural  Guarantee  Fund  encourages  smart,  sustainable  and  inclusive  growth,  helping  to 
achieve  the  common  agricultural  policy’s  objectives  of  viable  food  production,  sustainable  management  of 
natural resources (with climate action) and balanced territorial development. Direct payments provide a basic 
protection  of  farm  income  against  the  particular  shocks  to  which  agriculture  is  exposed  (notably  price  and 
weather related).The fund’s main specific objectives are the following: 

To improve the competitiveness 
of the agricultural sector and 
enhance its value share in the 
food chain 

To sustain farmers’ income 
stability by providing direct 
income support 

To contribute to the enhancement 
of the environmental performance 
of the common agricultural policy  

To foster market stability 

To promote a more market- 
oriented agriculture, by ensuring a 
significant level of decoupled 
income support 

To promote local agricultural 
production and to ensure a fair 
level of prices for commodities for 
direct consumption and for 
processing by local industries in 
the outermost regions 

Implementation and latest achievements 

Direct payments 

Around  6.5 million  farms,  covering  90%  of  farmed  land,  benefited  from  direct  payments.  In  2017 (147),  this 
support  constituted  38%  of  their  farming  income (148).  Since  the  last  common  agricultural  policy  reform  in 
2015,  direct  payments  have  been  better  targeted  thanks  to  different  payment  ‘layers’  addressing  the 
particular needs of young farmers, smaller farmers, specific sectors or regions in difficulties, as well 
as the environment and climate. These changes to the structure of the direct  payments system  — along 
with  redistribution  and  capping  possibilities  —  have  started  to  contribute  to  a  more  equitable  payment 
distribution.  The  stabilising  effect  of  direct  payments  is  supplemented  by  market  instruments,  which  now 
operate at a ‘safety net’ level instead of frequently steering the EU market as they once did. 

As  direct  payments  are  granted  per  hectare  of  eligible  area,  there  is  a  strong  correlation  between  the 
distribution  of  direct  payments  and  the  distribution  of  area  between  farmers.  This  results  in  larger  farms 
concentrating the largest amounts of support (149) and in a high number of very small beneficiaries, reflecting 
the high fragmentation of the farm sector in the EU and the relative contribution of these farm groups to the 
economics of the sector. For the financial year 2017, nearly 50% of the beneficiaries of direct payments had 
less than 5 hectares and covered less than 5% of the total area supported.  

(147)  Directorate-General Agriculture and Rural Development, Annual activity report 2018.  
(148)  Estimated on the basis of agricultural entrepreneurial income. 
(149)  Although to a lesser extent than for the land. 

83 

 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Number of farms 
(million) 

Farmland managed 
(million ha) 

Direct support 
(EUR billion) 

Small farms 
< 5 hectares 

Professional  
(family) farms 
5-250 hectares 

Big farms 
> 250 hectares 

3.19 
(49%) 

3.25 
(50%) 

0.08 
(1%) 

Chart: Distribution of EU direct support to EU farmers. 
Source: CATS control data (claim year 2016). 

7.4 
(5%) 

107.0 
(67%) 

44.3 
(28%) 

2.3 
(6%) 

29.3 
(71%) 

9.2 
(23%) 

The  2013  common  agricultural  policy  reform  allowed  redistributing  direct  payments  between 
beneficiaries,  notably  in  favour  of  the  small  and  medium-  sized  farms.  Member  States  must  reduce  by  at 
least 5% the receipts above EUR 150 000 which any beneficiary obtains from the basic payment scheme or 
the  single-area  payment  scheme.  They  may  even  cap  these  receipts  (nine  Member  States  have  decided  to 
apply a capping as from 2015). As an alternative, they can redistribute up to 30 % of their direct payments 
national allocation to the first hectares on every farm (‘redistributive payment’). In 2017, nine Member States 
have implemented this scheme, using between 0.5% and 15% of their total expenditure for direct payments.  

In addition, Member States must reduce the differences between per-hectare payment levels to beneficiaries 
on  their  respective  territories  (this  is  referred  to  as  ‘internal  convergence’).  There  is  also  a  provision  to 
gradually adjust the financial allocation per Member State in order to bring average levels of payments closer 
to one another between countries (‘external convergence’). Finally, an active farmer clause allows those who 
only have a marginal agricultural activity to be excluded from support.  

From the claim year 2018, the EU law called the ‘Omnibus regulation’ (150) helps to improve the functioning 
of the direct payment schemes concerned and to simplify their implementation. 

With  regard  to  the  greening  layer  in  direct  payments,  the  amendments  introduced  through  the  Omnibus 
regulation provide Member States with an option not to classify grassland as ‘permanent’ if ploughed within a 
period of 5 years in order to accommodate the diversity of agricultural systems across the EU. In 2018, eight 
Member States decided to apply this option. Certain additional flexibility for farmers came from streamlined 
exemptions  from  crop  diversification  or  ecological  focus  area  rules  for  farms  with  substantial  shares  of 
grasslands,  fallow  land,  leguminous crops or crops under  water.  In  turn,  new  types of  ecological  focus area 
broadened  the  choices  that  Member  States  may  offer  to  farmers  for  meeting  this  requirement.  In  2018, 
several Member States made use of them and included new types in their list of ecological focus area. As of 
2018,  80%  of  the  total  EU  agricultural  area  is  subject  to  at  least  one  greening  obligation.  As  part  of  the 
amended rules, a ban on the use of plant protection products was implemented in 2018 for the first time on 
ecological focus areas. 

(150)  Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) 
No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), (EU) 
No 1306/2013 on the financing, management and monitoring of the common agricultural policy, (EU) No 1307/2013 establishing 
rules for direct payments to farmers under support schemes within the framework of the common agricultural policy, (EU) 
No 1308/2013 establishing a common organisation of the markets in agricultural products and (EU) No 652/2014 laying down 
provisions for the management of expenditure relating to the food chain, animal health and animal welfare, and relating to plant 
health and plant reproductive material (OJ L 350, 29.12.2017, pp. 15-49). 

84 

 
 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

In  2018,  as  in  2017,  responding  to  the  consequences  of  the  exceptional  weather  conditions  in  several 
Member  States  (drought,  heavy  rainfalls,  snowfalls,  frost),  the  Commission  granted  derogations  to  certain 
greening  rules  (ecological  focus  area,  crop  diversification)  to  improve  the  situation  of  affected  farmers  in 
those states. In order to alleviate the effects of drought on the availability of fodder for livestock, 11 Member 
States (out of 13 authorised) applied derogations to some requirements for land lying fallow and catch crops. 
Based  on  information  received  for  the  2018  claim  year,  these  derogated  ecological  focus  areas  appear  to 
have to some extent supplemented the overall areas available for fodder production.  

As of 2018 (151), new EU law (152), together with the technical guidance provided by the Commission, enabled 
Member States to  take  advantage  of  freely  available  satellite  data  (the  Copernicus  programme)  to  monitor 
areas claimed for aid. Several Member States have decided to introduce ‘checks by monitoring’ for part of the 
aid schemes and/or areas as from 2019. The monitoring approach is expected to offer great potential for the 
simplification  of  administrative  and  control-related  tasks,  but  also  for  monitoring  the  performance  of  the 
common agricultural policy in a much wider sense. This approach is further pursued in the proposals for the 
common agricultural policy post-2020. 

Market-related expenditure (153) 

After  several  years  where  market  support  measures  in  the  fruit  and  vegetables  and  livestock  sectors  have 
helped  rebalance  the  sectors  concerned, substantial  market  stabilisation  was  achieved  in  2018, whereby 
the exceptional withdrawal measures in the fruit and vegetables sector were discontinued as of the middle of 
the year. 

By  end  of  2018,  99%  of  the  380 000  tonnes  of  skimmed  milk  powder  from  public  intervention  stock 
constituted  over the  years  2015  to  2017  had  been  sold  back onto  the  market (154), reflecting  the  improved 
situation  on  the  dairy  market.  European  agriculture  showed  its  resilience  after  the  recent  crises,  finding 
alternative domestic markets as well as abroad (in particular in Asia and the United States), as evidenced by 
the trade statistics.  

An overall price evolution meant that new market intervention measures were not required in 2018. 

Exceptional support measures were also adopted in 2018 to compensate farmers in France and Italy for 
the health and veterinary restrictions to address avian influenza.  

After  several  years  of  discussions  at  the  EU  level,  the  Commission  adopted  a  proposal  for  a  directive  on 
unfair  trading  practices.  The  directive  aims  at  protecting  vulnerable  suppliers  in  the  food  supply  chain, 
especially  farmers  and small  processors, from  unfair trade  practices by  more  powerful  buyers.  Limiting  the 
abuse  of  market  power along  the  chain,  it  contributes to  a  better functioning  food  chain  and enhances  the 
resilience of the EU agri-food sector.  

The  EU  school  fruit,  vegetables  and  milk  scheme,  bringing  together the  former school  fruit  and school 
milk schemes under a single legal framework, applied for the first time during the 2017/2018 school year. In 
In  October  2018,  the  Commission  hosted  a  meeting  with  representatives  from  EU  institutions,  national 
governments  and  other  public  and  private  bodies  (businesses,  trade  organisations,  environment  and  health 
non-governmental  organisations (NGOs),  civil  society)  to  take  stock  of  achievements,  learn  from  good 
practices and reflect on possible further improvements. It showed concrete examples of the enhanced health 
and  educational  dimension  of  the  reformed  scheme.  Around  20.3 million  children from  close  to  160  000 
schools (155) participated in the EU school fruit, vegetables and milk scheme in the 2017/2018 school year. 

(151)  Programme statement 2018. 
(152)  Commission Implementing Regulation (EU) 2018/746 of 18 May 2018 amending Implementing Regulation (EU) No 809/2014 as 

regards modification of single applications and payment claims and checks (OJ L 125, 22.5.2018, pp. 1-7). 

(153)  Programme statement 2018. 
(154)  Factsheet, Managing the EU dairy market 2014-2019. 
(155)  Source: Member States’ monitoring reports due by 31.1.2019.  

85 

                                                        
2018 Annual Management and Performance Report 

Assessment and evaluation  

The  support  study  for  the  evaluation  of  the  impact  of  common  agricultural  policy  measures  towards  the 
general objective of ‘viable food production’ (156) confirms that direct payments allow farmers to better cope 
with  the  negative  income  effects  caused  by  drops  in  agricultural  prices;  hence  why  they  contribute  to  the 
stability of farms income. However, even with the common agricultural policy’s direct support, a large share 
(74% in 2015) of farms does not reach the benchmark of an income per unit amount of labour equalling the 
average  national  labour  productivity.  The  study  observed  that  the  common  agricultural  policy  2014-2020 
allowed  efficiency  to  increase  by  better  targeting  support  to  the  farms  that  needed  it  most  (the  share  of 
farms with an income per unit of labour exceeding the average national labour productivity thanks to direct 
support decreased from 29% in 2013 to 26% in 2015). The decision of some Member States to distribute the 
resources  for  voluntary  coupled  support  to  a  high  number  of  sectors  limited  its  effectiveness/efficiency  in 
respect to its aim. According to the stakeholders’ analysis, in these cases voluntary coupled support failed its 
aim of supporting sectors undergoing certain difficulties and resulted in an extra and generalised income aid 
for  the  beneficiary  farms.  Market  measures  helped  to  limit  the  volatility  of  the  domestic  prices  of  most 
agricultural  products,  which  is  lower  than  that  of  international  prices.  The  existence  of  the  EU  market 
measures  seems  to  play  a  deterrent  role  in  the  adoption  of  speculative  activities.  The  share  of  imports  in 
internal consumption has progressively increased. On the international market, EU exports in value increased 
over the period of analysis. However, world trade increased at a higher rate. Nevertheless, the evolution of the 
EU’s  competitive  position  is  similar  to  that  of  its  main  trade  competitor  (United  States)  and,  in  2016,  the 
former maintained its second position behind the United States in the world exports of the products covered 
in the evaluation. 

In  2018  the  Court  of  Auditors assessed  a  new  basic  payment  scheme  for  farmers,  introduced  by  the  2013 
reform of the common agricultural  policy. The Court found that the scheme  was operationally on track, but 
that its impact on simplification, targeting and the convergence of aid levels was limited (157). 

The  support  study  for  the  evaluation  of  the  common  agricultural  policy  measures  applicable  in  the  wine 
sector (158)  found  that,  at  grower  level,  the  backing  provided  by  the  national  support  programmes  for  the 
restructuring and conversion of vineyards resulted in considerable mechanisation as well as a global increase 
in  the  cost-effectiveness  of  their  management.  At  producer  level,  the  programmes  —  in  particular  the 
investments  measure  —  contributed  to  the  improvement  of  the  EU  wine  producers’  competitiveness  and 
fostered vertical downstream integration. EU labelling rules favoured a level playing field and fair competition 
for  EU  competitors,  and  clear  information  for  consumers.  The  study  pointed  out  that  the  national  support 
programmes are generally consistent  with the EU environmental objectives but could have played a greater 
role  in  the  adaptation  of  the  EU  vineyards  to  climate  change  and  could  have  more  directly  fostered 
sustainability. It recommended to require Member States to better justify the strategic choices as regards the 
measures implemented and to better monitor the effects achieved by the different measures. 

The supporting study (159) for the evaluation of the greening layer in direct payments was issued at the end of 
2017  and  a  consecutive  Commission  staff  working  document  was  adopted  in  November  2018 (160).  This 
evaluation  concluded  that  the  overall  effects  of  the  greening  measures,  as  currently  applied,  on  farm 
management  practices  and  on  the  environment/climate  appear  to  be  fairly  limited,  although  there  are 
variations across the Member States. The greening measures do not appear to have had any significant effect 
on agricultural production or the economic viability of farms. The evaluation showed that more could be done 
by Member States as well as by farmers to fully deliver on greening; in addition more could also be done at 
EU level to simplify the scheme. Member States have significant flexibility in implementing the measures yet, 
in general, they do not use this flexibility to maximise the environmental and climate benefits. Decisions seem 

(156)  Evaluation staff working document to be finalised in 2019. 
(157)  European Court of Auditors, Basic Payment Scheme for farmers — operationally on track, but limited impact on simplification, 

targeting and the convergence of aid levels — Special report No 10/2018. 

(158)  Evaluation staff working document to be finalised in 2019. 
(159)  https://ec.europa.eu/agriculture/evaluation/market-and-income-reports/greening-of-direct-payments_en  
(160)  Commission staff working document — Executive summary of the evaluation of the Regulation (EU) No 1307/2013 of the 

European Parliament and of the Council on 17 December 2013 establishing rules for direct payments to farmers under support 
schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council 
Regulation (EC) No 73/2009 concerning the greening in direct payments, SWD(2018) 479 final, 22.11.2018. 

86 

                                                        
2018 Annual Management and Performance Report 

to  have  been  driven  rather  by  administrative  issues  and  agricultural  considerations,  including  wanting  to 
ensure minimal disturbance to farming practices.  

In  the  Commission  proposals  for  the  post-2020  common  agricultural  policy,  the  existing  greening 
requirements are integrated into a broader framework including a new conditions set (i.e. an improved system 
of obligations to be met by beneficiaries of area- and animal-based CAP payments) and responding inter alia 
to  three  specific  objectives:  contribute  to  climate-change  mitigation  and  adaptation,  foster  sustainable 
development and efficient management of natural resources, and contribute to the protection of biodiversity. 

Future  common  agricultural  policy  —  apart  from reinforcing  environmental  care  and  climate  action  —  aims 
also to strengthen the farm sector’s resilience and improve life in rural areas.  

European Agricultural Fund for Rural Development 

Programme objectives 

The  European  Agricultural  Fund  for  Rural  Development  finances  the  EU’s  contribution  to  rural  development 
programmes.  These  programmes  contribute  to  smart,  sustainable  and  inclusive  growth  in  the  EU  by 
supporting  farms,  food  and  forestry  sectors  and  other  entities  operating  in  rural  areas  such  as  non-
agricultural businesses, non-governmental organisations and local authorities.  

The fund is also an important tool to mitigate climate change and support the shift towards a low-carbon and 
climate-resilient  economy  by  helping  farmers  and  rural  businesses  to  reduce  greenhouse  gas  and 
ammonia emissions and adapt to the consequences of climate change. The fund pursues six specific 
priorities. 

Enhancing farm viability and 
competitiveness of all types of 
agriculture in all regions and 
promoting innovative farm 
technologies and sustainable 
management of forests 

Restoring, preserving and 
enhancing ecosystems related to 
agriculture and forestry 

Promoting social inclusion, 
poverty reduction and economic 
development in rural areas 

Fostering knowledge transfer and 
innovation in agriculture, forestry 
and rural areas 

Promoting food-chain 
organisation, including processing 
and marketing of agricultural 
products, animal welfare and risk 
management in agriculture 

Promoting resource eﬃciency and 
supporting the shift towards a 
low-carbon and climate-resilient 
economy in agriculture, food and 
forestry sectors 

87 

 
 
 
 
 
 
 
2018 Annual Management and Performance Report 

Implementation and latest achievements 

By  end  2018 (161),  total  rural  development  payments  from  the  EU  budget  to  Member  States  amounted  to 
EUR 36.5 billion (including pre-financing and interim payments),  which is 36% of the total commitments for 
the  period  2014-2020.  In  2018,  the  Member  States  submitted  their  third  annual  implementation  report 
covering the implementation until 31 December 2017 (162). 

The European Agricultural Fund for Rural Development supports solutions to  encourage entrepreneurship 
and  employment  in  farming  and  rural  businesses  and  improve  their  economic  viability  and 
resilience. By the end of 2017, more than 112 000 farm holdings received investment support to facilitate 
restructuring and modernisation and achieve productivity gains (25% of the target), and more than  49% of 
the budget allocated to start-up aid and support for investment in non-agriculture activities in rural areas was 
committed; 51 400 young farmers who bring new energy and have the potential to exploit the full benefits of 
technology  in  terms  of  increased  productivity  and  sustainability  received  support  for  setting  up  businesses; 
125 200  farm  holdings  received  support  in  the  form  of  risk-management  tools  to  reduce  the  uncertainty 
about the future that can compromise farmers’ competitiveness; and  60 327 farm holdings were helped to 
participate in quality schemes (163).  

In 2017 (164), the implementation status of measures that will significantly contribute to the environmental 
and climate objectives of the policy included the following: 

 

a total of 2.9 million hectares of agricultural and forest land was covered by management contracts 
contributing to carbon sequestration or conservation (72.5% of the target of 4 million hectares);  

  283 000 hectares  of  irrigated  land  had  switched  to  more  efficient  irrigation  systems  (22%  of  the 
target)  —  given  the  long  time  span  between  plans  and  the  investments  carried  out,  this is  well  on 
track; 

  14.8%  of  agricultural  land  and  0.34%  of  forest  areas  were  covered  by  management  contracts 

contributing to biodiversity — this is close to the targets of 18% and 2%, respectively. 

Support under the fund aims to improve access to information and communication technology services 
and infrastructure for 18 million rural citizens; this is done through 4 400 investment projects. By 2017, 
36%  of  funds  earmarked  for  improving  information  and  communication  technology  services  in  rural  areas 
were  allocated  to  projects  and  1 255 000  rural  residents  (7%  of  the  respective  target  value)  are  already 
benefiting from improved services (165). 

By  the  end  of  2017,  over  EUR 246 million  had  been  spent  under  the  European  Agricultural  Fund  for  Rural 
Development to address employment in agriculture and rural areas, to promote social inclusion, and to 
foster  lifelong  learning  and  vocational  training  in  agriculture  and  forestry.  More  than  1 million 
beneficiaries  received  vocational  training  in  agriculture,  almost  28%  of  the  target  for  the  period.  In  rural 
areas,  EU  rural  development  resources  support  local  development  strategies  promoting  social  inclusion, 
reducing  poverty  and  fostering  economic  development  under  the  leader  approach.  To  date,  59%  of  people 
living  in  rural  areas  (representing  about  113%  of  the  target)  are  covered  by  over  3 400  local  development 
strategies implemented by local action groups that benefited from 18% of the available public funds (166). 

Under the European Innovation Partnership for Agricultural  Productivity and Sustainability, almost 
900 operational groups (167) carrying forward innovative multi-actor projects to find a solution for a specific 
issue or developing a concrete opportunity  for the farming and foresty sectors  were active by end of 2018. 

(161)  Programme statement 2018. 
(162)  Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the 

Committee of the Regions — European Structural and Investment Funds 2014-2020 — 2018 summary report of the programme 
annual implementation reports covering implementation in 2014-2017, COM(2018) 816 final, 19.12.2018. 

(163)  COM(2018) 816 final, p. 7 Updated figures (Jan 2019). 
(164)  Programme statement 2018. 
(165)  COM(2018) 816 final, p. 6. 
(166)  COM(2018) 816 final, pp. 11-12. 
(167)  https://ec.europa.eu/eip/agriculture/en/publications/eip-agri-operational-groups-assessment-2018 

88 

                                                        
2018 Annual Management and Performance Report 

These  projects  hold  an  important  potential  to  create  innovative  solutions  to  make  farming  smarter,  more 
efficient and more sustainable. 

The  European  Innovation  Partnership  for  Agricultural  Productivity  and  Sustainability  — 
operational group project examples. 

BRIDE — Biodiversity regeneration in a dairying environment 

Intensively  managed  farmland  throughout  Ireland  has  had  relatively  low  participation  rates  in  agri-
environment  schemes.  The  biodiversity  regeneration  in  a  dairying  environment  project  is  an  innovative 
partnership based in the River Bride catchment of north-east County Cork, Ireland. The project aims to design 
and  implement  a  cost-effective,  results-based  approach  to  tackle  biodiversity  loss  in  dairy  farming  and  to 
improve national awareness of the available options to maintain and enhance farmland wildlife on intensively 
managed farmland without unduly affecting agricultural production. The partnership includes several partners 
(such  as  farmers,  advisers,  researchers,  small  and  medium-sized  enterprises,  public  bodies,  NGO)  and  the 
project is designed so that 65 farmers that are not formal partners are involved in order to adopt and test the 
proposed schemes at their farms. Farms that implement the measures are monitored at fixed moments (e.g. 
onset, midterm, end) during the project and are rewarded according to a results-based payment. At the onset, 
biodiversity was measured at farm level including birds, bats, pollinators and wildflower populations, among 
others.  

The  expected  outcome  is  an  increase  in  the  size  of  areas  where  biodiversity  is  managed  as  well  as  an 
improvement  in  the  overall  biodiversity  quality.  This  project  also  targets  the  development  of  a  biodiversity 
food  label,  which  will  be  particularly  relevant  for  the  industrial  stakeholders,  including  a  milk  farmer 
cooperative  and  a  meat  production  company,  that  are  partners  in  the  project.  As  regards  cross-regional 
collaboration, the project allowed being in touch with German farmers who are also dealing with biodiversity 
in  farming  practices.  An  exchange  of  practices  is  planned  with  similar  operational  groups  in  Germany  and 
Northern Ireland. 

SOCROSense — Soil- and crop-sensing technologies 

The aim of the Soil- and crop-sensing technologies project (Flanders, Belgium) is to support pioneer  farmers 
who have experience with the use of global positioning system close-sensing techniques, focused on soil and 
crop  sensors.  These  pioneer farms are  a  mixed  group  of  farmers, market  gardeners, tree  nursery  operators 
and agriculture contractors.  Together with actors  from research institutes and relevant business  companies, 
this group wants to create added value and develop a mid- to long-term vision for these sensors. The project 
studies  how  the  data  flow  of  different  sensors  can  be  combined  and  the  potential  of  global  positioning 
system sensor technology to steer the company crop management.  

Assessment and evaluation  

Of  the  operational  groups  that  were  approved  and  running  under  the  European  Innovation  Partnership  for 
Agricultural Productivity and Sustainability until April 2018 (612 in total), an assessment (168) was carried out 
in  2018.  This  assessment  focused  on  the  state  of  play  of  the  setting-up  and  implementation  of  the 
operational groups. The study confirmed the great interest in the partnership framework and instrument. Of 
the  groups  surveyed,  91%  were  positive  about  their  experience  and  would  recommend  other 
actors/organisations  to  become  involved  in  an  operational  group  project.  Operational  group  partners 
highlighted  that  such  projects  could  not  have  been  undertaken  with  other  national  or  European  funding 
frameworks. The groups focus on tackling farmers’ needs in a practical and collaborative way; they prove to 
be a unique, versatile and flexible framework to address various concrete bottom-up farmers’ challenges and 
needs. They also connect the farmer’s community with complementary external expertise to help solve these 
challenges jointly in a variety of partnership compositions. The different projects show that operational group 
partnerships  are  indeed  set  up  to  (co)develop  new  or  adapted  methods,  tools  or  solutions  that  are  directly 
applicable by farmers. These partnerships act as vehicles to connect to other (rural) innovation initiatives and 
actors. Even though the current funding framework cannot cover all of the costs, 90% of operational groups 
have  either  already  established  relations  with  organisations  outside  the  partnership  or  intend to  do  so.  The 
study  points to  the  need  to  better facilitate  this,  e.g.  by  more  structured  and accessible  information  on  the 

(168)  https://ec.europa.eu/eip/agriculture/en/publications/eip-agri-operational-groups-assessment-2018 

89 

                                                        
2018 Annual Management and Performance Report 

themes  and  approaches  of  operational  groups.  It  is  also  important  to  improve  the  communication  about 
operational groups in a timely and complete way. 

A study on risk management in EU agriculture has been carried out in 2017 and was published in 2018 (169) to 
shed  light  on  the  risks  farmers  are  confronted  with  and  to  better  understand  the  design  and  possible 
deployment  of  different  tools  that  can  address  these  risks.  The  study  finds  that  European  farmers  are 
exposed to different risks (e.g. weather, animal and plant health, market dynamics influencing perspectives of 
farm  income  and  viability),  heterogeneously  distributed  among  EU  Member  States.  At  the  same  time,  the 
overall  availability  and  uptake  of  analysed  risk  management  tools  in  the  EU  are  not  very  developed  with 
differences  among  tools,  sectors  and  countries  (e.g.  insurance  being  the  most  common  tool).  The  study 
underlines the need to  strengthen  relevant skills and capacities (both at administrative and farm level) and 
puts forward several recommendations, including the creation of a database to share information related to 
risk management in agriculture, to further support research and to promote risk management pilot actions. 

The  Court  of  Auditors  audit  examined  in  2018 (170)  three  new  methods  (called  simplified  cost  options)  of 
calculating  the  EU  financial  contribution  to  projects  and  activities  for  rural  development  projects.  It  has 
concluded that new options are simpler, but not focused on results. 

The  legislative  proposal  for  the  post-2020  common  agricultural  policy  take  into  account  the  main  lessons 
learnt from the current Rural Development period, reducing the level of prescription of the interventions and 
improving the synergies with the instruments of the CAP (i.e. direct payments and sectoral programmes). The 
new  CAP  Strategic  Plans  will  have  to  pay  a  specific  attention  to  attracting  young  farmers  and  will  also 
promote employment, growth, social inclusion and local development in rural areas. 

European Maritime and Fisheries Fund 

Programme objectives  

The European Maritime and Fisheries Fund (171) supports the conservation of marine biological resources 
and  helps  Member  States  to  attain  the  objectives  of  the  common  fisheries  policy.  The  fund  pursues  four 
specific priorities: 

Promoting competitive, 
environmentally sustainable, 
economically viable and socially 
responsible fisheries and 
aquaculture 

Promoting a balanced and 
inclusive territorial development 
of fisheries and aquaculture areas 

Fostering the implementation of 
the common fisheries policy 

Fostering the development and 
implementation of the EU’s 
Integrated Maritime policy in a 
manner complementary to 
cohesion policy and to the 
common fisheries policy 

(169)  https://ec.europa.eu/agriculture/external-studies/2017-risk-management-eu-agriculture_en 
(170)  Special Report 11/2018: New options for financing rural development projects: simpler but not focused on results, European Court 

of Auditors. 

(171)  Regulation (EU) No 508/2014 of the European Parliament and of the Council of 15 May 2014 on the European Maritime and 
Fisheries Fund and repealing Council Regulations (EC) No 2328/2003, (EC) No 861/2006, (EC) No 1198/2006 and (EC) 
No 791/2007 and Regulation (EU) No 1255/2011 of the European Parliament and of the Council 

90 

 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Implementation and latest achievements 

The  implementation  of  the  European  Maritime  and  Fisheries  Fund  in  2018  has  significantly  accelerated 
compared to previous years. Over 7 143 fishing vessels benefited (172) from the fund, 50% of which belonged 
to  the  small-scale  coastal  fishing  fleet.  The  support  provided  continues  to  promote  a  sustainable  balance 
between  fishing  fleets  and  resources  and  the  protection  of  marine  ecosystems.  The  fund  has  also 
supported better management of more than 100 000 km² of Natura 2000 areas, and almost 95 000 km² of 
other marine protected areas. 

The projects financed have a positive effect on the direct beneficiaries of the operations and have a multiplier 
effect along the production and supply chain and in related service industries. It is estimated that more than 
35 000 fishermen, their spouses/partners, and members of producer organisations, benefit from the support, 
as well as 33 000 other persons (such as employees of processing companies and port users). 

At the end of 2017 (173), more than 18 000 operations have been financed under the European Maritime and 
Fisheries Fund. More than half of those are designed to help small and medium-sized enterprises in fisheries 
and aquaculture become more competitive. More than one third are also designed to preserve and protect the 
marine environment, and to promote resource efficiency.  

Fresh fish from Vienna (174):  

Thanks  to  the  European  Maritime  and  Fisheries  Fund  you  can  now  buy  fresh  fish  and  vegetables  produced 
right in the Austrian capital city of Vienna. 

The  aquaponics  start-up,  established  in  2016  with  a  contribution  of  around  EUR 30 000  from  the  fund, 
combines  vegetable  farming  with  fish  farming  in  large  glasshouses  to  produce  aubergines,  tomatoes, 
cucumbers, peppers and chilli, as well as catfish and perch.  

The farm grows vegetables on about 400 m² and can produce up to 12 tonnes of fish a year. The nutrient-rich 
wastewater from the fish farm is fed to the plants, while the waste heat from the greenhouse is used to heat 
the fish system. 

In 2018, the Commission continued to focus its fisheries conservation policy on the objective of achieving 
maximum  sustainable  yield (175)  for  fish  stocks  by  2020  at  the  latest  and  reaching  sustainable  fleet 
performance. Higher and stable yields contribute to jobs, growth and investments in the EU. A clear correlation 
between fishing at maximum sustainable yield levels and economic returns and profitability for the fleets 
was again confirmed in the 2018 Annual economic fleet report (176). The report showed record-high net profits 
in 2016 (latest data available). With an estimated value of 16.9% of net profit margin for the average of the 
EU fleet, not only the interim milestone for 2017 has already been achieved (i.e. 9%) but also the target for 
2023  (10%).  The  stronger  economic  performance  of  the  EU  fishing  fleet  is  explained  mainly  by  the 
sustainable  exploitation  of  fish  stocks.  The  report  indicates  that  economic  performance  stagnates  where 
fleets depend on stocks that are still overfished or overexploited. Fleets that fish sustainably − ever growing 
in  numbers  −  see  clear  improvements  in  their  profitability.  The  sustainable  use  of  marine  resources  is  the 
basis for economic growth of the fleet. Lower fuel prices and higher average fish prices have also contributed 
to this strong economic performance. 

In  the  context  of  its  integrated  maritime  policy,  the  EU  is  implementing  its  agenda  for  better  international 
ocean  governance.  The  EU  continued  to  be  in  the  lead  in  advocating  and  rolling  out  sustainable  fisheries 
internationally.  Successful  negotiations  between  the  EU  and  China  resulted  in  the  EU-China  Ocean 

(172)  European Maritime and Fisheries Fund final programme statement, p.2. 
(173)  The latest data is made available by Member States on 31 May each year in their annual implementation reports. It corresponds to 

the state of implementation at the end of the preceding year.  

(174)  https://ec.europa.eu/fisheries/sites/fisheries/files/2019-fresh-fish-from-vienna_en.pdf 
(175)  Maximum Sustainable Yield means the highest theoretical equilibrium yield that can be continuously taken on average from a 
stock under existing average environmental conditions without significantly affecting the reproduction process (Article 4 of CFP 
Regulation 1380/2013). 

(176)  2018 Annual economic report on the EU fishing fleet (STECF 18-07), https://ec.europa.eu/jrc/en/publication/eur-scientific-and-

technical-research-reports/2018-annual-economic-report-eu-fishing-fleet-stecf-18-07 

91 

                                                        
2018 Annual Management and Performance Report 

Partnership, signed on 16 July 2018 at the EU-China Summit. It was the first Ocean Partnership of this kind, 
setting out a comprehensive framework for dialogue and cooperation on ocean issues of common interest.  

Tackling illegal, unreported, and unregulated (IUU) fishing 

Fishing is illegal if: 
  no authorisation 
  against conservation 
and management 
measures by RFMOs* 
  against national laws 

or international 
obligations 

Fishing is unreported 
if: 
  not reported, or the 

reporting contravenes 
international, RFMO 
or national laws and 
regulations 

Fishing is unregulated 
if: 
 

the fishing vessel has  
no nationality 
  fishing activities 

jeopardise fish stocks 

*  RFMOs: Regional fisheries management organisations. 
Source: Directorate-General Maritime Affairs and Fisheries Annual Activity Report 2018. 

The  new  agreement  to  prevent  unregulated  fishing  in  the  high  seas  of  the  central  Arctic  ocean, 
negotiated  by  the  Commission  and  approved  by  the  Council  on  behalf  of  the  EU  in  October  2018,  was  a 
historic landmark. It will prevent unregulated commercial fishing in the high seas portion of the central Arctic 
ocean, an area that is roughly 2.8 million km2 in size, about the size of the Mediterranean Sea, thus protecting 
the fragile Arctic ecosystem for future generations whilst promoting a sustainable development of the region.  

Assessment and evaluation 

The evaluation of the predecessor programme found that the objectives of the fund were reached to a 
large extent, but there was scope for improvement: it is necessary to strengthen the link between funding and 
policy objectives, to further enhance the sustainable exploitation of fisheries, improve the delivery system and 
to  better  focus  on  results.  The  current  period  2014-2020  programme  addresses  many  of  these  issues:  It 
brought  under  one  single  umbrella  all  the  different  funding  in  support  of  the  common  fisheries  policy 
objectives, including fishing and aquaculture that are environmentally, economically and socially sustainable. 
The  current  programme  also  introduced  a  new  performance  framework  focusing  on  the  achievement  of 
objectives,  set  milestones  and  targets.  The  evaluation  recommended  for  post-2020  to  improve  the  link 
between funding and the sustainable exploitation of fisheries. A more  strategic approach is also needed, to 
make  aquaculture  more  competitive,  with  increasing  production  and  to  take  better  account  of  the  specific 
challenges faced by small-scale coastal fisheries. 

As evaluations concluded that the current programme was still considered too complex and burdensome, the 
Commission proposed (177) for the next programming period a simplified architecture based on four priorities. 
They describe the scope of support of the fund in line with the objectives of the common fisheries policy, of 
the maritime  policy and of the international ocean governance actions. Prescriptive measures are no longer 
required; instead the different areas of support  under each priority are described,  providing flexibility in the 
new programme. This new architecture will optimise programme implementation towards policy objectives on 
the basis of performance and on the achievement of results. Member States would draw up their operational 
programme  indicating  the  most  appropriate  means  to  achieve  the  objectives  set  out  in  the  regulation.  The 
basic principle would be that anything that is not explicitly forbidden in the regulation would be allowed. There 
would  be  a  list  of  ‘no-go’  areas  in  fisheries  policy  so  as to  avoid  detrimental  impacts  in  terms  of  fisheries 
conservation  (e.g.  a  general  prohibition  of  investments  enhancing  fishing  capacity)  and  restrictions  for 
operating  costs  or  where  there  is  no  proven  market  failure.  This  represents  a  major  shift  from  current  and 
past funding rules.  

(177)  Proposal for a Regulation of the European Parliament and of the Council on the European Maritime and Fisheries Fund and 

repealing Regulation (EU) No 508/2014 of the European Parliament and of the Council, COM/2018/390 final. 

92 

 
                                                        
2018 Annual Management and Performance Report 

Regional fisheries management organisations and fisheries 
agreements 

Programmes objectives  

The  EU  promotes  the  sustainable  management  and  conservation  of  fisheries  resources  and  supports  the 
external action of the common fisheries policy in various regional fisheries management organisations (178) 
and international organisations, such as the International Seabed Authority and the International Tribunal for the 
Law of the Sea, which were set up by the United Nations Convention for the Law of the Sea. The Commission 
also  negotiates  and  implements  bilateral  sustainable  fisheries  partnership  agreements  between  the  EU 
and  non-EU  ‘third’  countries.  The  objective  is  to  put  in  place  a  regulatory  framework  for  the  EU  long-distance 
fishing  fleet,  while  ensuring  a  sustainable  exploitation  of  the  third  countries’  fisheries  resources.  These 
agreements allow EU fleets access to fish surplus stocks that are not being fished by the third countries’ local 
fleets and to provide sustainable food supply to the European citizens. 

Implementation and latest achievements 

In  2018,  the  Commission  continued  to  deliver  on  its  commitment  to  achieve  more  sustainable  fisheries 
worldwide.  The  midterm  target  of  conservation  measures  adopted  by  regional  fisheries  management 
organisations  in  line  with  scientific  advice  was  already  achieved  in  2017.  In  2018,  52  of  the  59  (88%) 
conservation  measures (179)  adopted  by  regional  fisheries  management  organisations  of  which  the  EU  is  a 
member, were in line with scientific advice.  

In 2018, negotiations for a fisheries agreement have taken place with a total of eight countries. They have 
been  successfully  completed,  which  allowed  the  renewal  of  the  agreement  protocol  with  Côte  d’Ivoire, 
Morocco, Cape Verde and Guinea-Bissau. Additionally, a new agreement and protocol have been agreed upon 
with Gambia. Furthermore there are ongoing negotiations with Sao Tome e Principe, Kiribati and Madagascar. 
Talks with Gabon and Mozambique for the renewal of the protocols with these countries have also started. 

Around  250  EU  vessels (180)  flagged  in  one  of  the  EU  Member  States  benefited  in  2018  from  a  fishing 
authorisation granted under a fisheries agreement, providing them access to third-country fishing stocks. At 
the  same  time,  these  bilateral  agreements  are  playing  an  essential  role  in  developing  the  partner country’s 
governance  of  the  fishing  sector  in  a  sustainable  manner  through  the  provision  of  sectoral  support.  In  the 
partner  countries,  sustainable  fisheries  partnership  agreements  encourage  improved  governance  and 
management of the local fisheries sector by supporting the monitoring, control and surveillance of national 
and  foreign  fleets’  activities.  They  also  provide  significant  funding  to  contribute  to  the  sustainable 
development of local fishing activities, and to the fight against illegal, unreported and unregulated fishing. 

In  ensuring  the  sustainable  exploitation  of  surplus  marine  biological  resources,  fisheries  agreements 
contributed to providing jobs and growth in the third countries and in the EU. An estimated 6 000 direct jobs 
and 9 000 indirect jobs (181) are created through sustainable fisheries partnership agreements, as 70% of the 
catches made in the context of fisheries agreements are processed in the partner country.  

Assessment and evaluation 

Evaluations were carried out in 2018 for the agreements with Cape Verde, the Ivory Coast and Madagascar. 
Their  results  were  taken  on  board  in  the  negotiations  for  the  renewal  of  the  respective  agreements  in  the 

(178)  Regional Fisheries Management Organisations are international bodies set up to ensure the conservation and sustainability of 
straddling and highly migratory fish stocks. They are the main vehicle for multilateral cooperation, providing a legal framework 
that can take into account the specific features and characteristics of each zone and species concerned.  

(179)  Directorate-General Maritime Affairs and Fisheries, Annual activity report 2018, p.26. 
(180)  Directorate-General Maritime Affairs and Fisheries, Annual activity report 2018, p.28. 
(181)  Programme statement 2018, p.2. 

93 

                                                        
2018 Annual Management and Performance Report 

following  areas:  the  level  of  fishing  opportunities  agreed  upon,  the  relevant  technical  provisions  applicable 
and the rules regarding the implementation and monitoring of the multiannual sectoral programmes.  

The European Court of Auditors reported (182) in 2015 that the fisheries partnership agreements are generally 
well-managed  by  the  Commission.  However,  it  concluded  that  there  are  still  areas  for  improvement  as 
regards  the  negotiation  process  and  the 
implementation  of  the  protocols  and  made  relevant 
recommendations.  In  2018,  the  Court  carried  out  a  follow-up  audit  to  verify  the  implementation  of  its 
recommendations. 

As part of the next EU budget framework for 2021-2027, the European Commission proposed an allocation 
for the international dimension of the common fisheries policy, including the compulsory contributions to the 
regional fisheries management organisations and other international organisations, as well as the sustainable 
fisheries partnership agreements.  

LIFE — programme for the environment and climate action 

Programme objectives  

LIFE (183) is the only EU programme exclusively dedicated to the environment, nature conservation and climate 
action, i.e. areas of growing concern for citizens. The programme finances a wide range of activities, ranging 
from  the  protection  of  biodiversity  to  the  support  to  circular  economy,  from  the  demonstration  of  new 
emission reduction technologies and process to the preparatory work for international negotiations, from 
the enforcement of environment and climate legislation to the reduction of negative impacts. The LIFE 
programme  also  serves  as  an  important  catalyst  for  developing  and  exchanging  best  practices  and 
knowledge.  

The  programme’s  role  is  to  build  up  and  improve  capacity,  speed  up  the  implementation  of  EU 
legislation, help private players, in particular businesses, to test small-scale technologies and solutions, 
and leverage other funds. The fund pursues six specific objectives. 

(182)  European Court of Auditors, Special Report No 11/2015, https://www.eca.europa.eu/lists/ecadocuments/sr15_11/sr_fisheries_en.pdf  
(183)  Regulation (EU) No 1293/2013 of the European Parliament and of the Council of 11 December 2013 on the establishment of a 

Programme for the Environment and Climate Action (LIFE) and repealing Regulation (EC) No 614/2007. 

94 

                                                        
2018 Annual Management and Performance Report 

Contribute to a greener and more 
resource-efficient economy and to 
the development and 
implementation of EU 
environmental policy and 
legislation (environment and 
resource efficiency priority area) 

Halt and reverse the biodiversity 
loss, support to the Natura 2000 
network and tackling the 
degradation of ecosystems 
(Biodiversity priority area) 

Reduction of EU greenhouse gas 
emissions and development and 
implementation of EU climate 
policy and legislation (climate-
change mitigation priority area) 

Increased resilience of the EU to 
climate change (climate-change 
adaptation priority area) 

Support better environmental 
governance and information at all 
levels (Environmental Governance 
and Information priority area) 

Support better climate 
governance and information at all 
levels (Climate Governance and 
Information priority area) 

Implementation and latest achievements 

Considering  that  the  average  duration  of  traditional  LIFE  projects  is  4-5 years,  only  very  few  projects  are 
finalised in 2018 (184), thus making it difficult to assess results at this early stage. The ongoing projects are 
contributing to the shift towards a resource-efficient, low-carbon and climate-resilient economy and 
to the protection of the environment including biodiversity and Natura 2000 by doing the following. 

 

Improving  the  conservation  status  of  186  wildlife  species  and  106  different  habitats  in  an  area 
comparable to Poland. 

  Reducing  CO2  emissions  of  about  13  million  tonnes  per  year  comparable  to  the  equivalent  CO2  of 

Lithuania in 2015. 

  Reducing  energy  consumption  of  about  1  000  000  megawatt  hours per  year,  which  represents the 

average annual electricity consumption of about 280 000 homes. 

  Reducing  the  amount  of  waste  not  managed  appropriately  by  around  1  million  tonnes/year.  This 

corresponds approximately to the total municipal waste of Slovenia in 2016. 

For  integrated  projects,  37  projects  were  financed  in  21  Member  States.  These  projects  support  Member 
State authorities to implement environmental and climate legislation to the fullest extent. They allow the use 
of  other  EU  funding  sources  as  well,  including  agricultural,  structural,  regional  and  research  funds;  national 
funds  and  private  sector  investment.  Integrated  projects  under  the  subprogramme  for  the  environment  are 
projects implementing environmental plans or strategies on a large territorial scale (regional, multi-regional, 
national or transnational scale). With a LIFE co-financing of EUR 367.8 million, the integrated projects should 
leverage EUR 9.2 billion in total from other EU, public and private sources. 

(184)  Programme statement 2018, p. 2. 

95 

 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Two pilot financial instruments have been introduced to test innovative approaches: 

Private  Finance  for  Energy  Efficiency supports  investment  to  implement  Member  States’  energy 
efficiency action plans through financial intermediaries. It is contributing to creating a new financial product in 
the  market  targeting  energy  efficiency  and  consequently  directly  contributing  to  the  decarbonisation  of  our 
economy. By the end of 2018, nine deals with banks in nine Member States were signed, resulting in loans at 
final recipients’ level for EUR 60 million.  

The  Natural  Capital  Financing  Facility supports  the  financing  of  loans  and  equity.  It  is  designed  to 
demonstrate  that  natural  capital  projects  can  generate  revenues  or  save  costs.  By  the  end  of  2018,  three 
Natural  Capital  Financing  Facility  operations  amounting  to  EUR  32.5  million  were  signed  with  beneficiaries 
from  Ireland,  Croatia  and  Greece,  supporting  sustainable  forestry  and  agriculture,  eco-tourism  and  the 
development of nature based solutions to land management, as well as rewilding activities. 

The ongoing projects are contributing to the shift towards a resource-efficient, low-carbon and climate-
resilient economy and to the protection of the environment including biodiversity and Natura 2000 
by, inter alia: (1) improving the conservation status of 186 wildlife species and 106 different habitats in an 
area comparable to Poland; (2) reducing CO2 emissions of about 13 million tonnes per year comparable to the 
equivalent  carbon  dioxide  of  Lithuania  in  2015;  (3)  reducing  energy  consumption  of  about  1 000 000 
megawatt  hours  per  year,  which  represents  the  average  annual  electricity  consumption  of  about  280 000 
homes;  (4)  reducing  the  amount  of  waste  not  appropriately  managed  by  around  1 million  tonnes/year.  This 
corresponds approximately to the total municipal waste of Slovenia in 2016. 

In  the  framework  of  the  LIFE  programme,  the  first-ever  EU  initiative  to  address  the  decline  of  wild 
pollinating insects was launched in 2018. The initiative sets strategic objectives and a set of actions to be 
taken by the EU and its Member States to address the decline of pollinators in the EU and contribute to global 
conservation efforts. 

Following the calls for proposals launched in 2014-2018 for traditional projects, about 5 000 proposals were 
received  leading  to  the  financing  of  588  grants:  455  financed  under  the  environment  subprogramme,  and 
133  under  the  climate  action  subprogramme.  Beneficiaries  range  from small  to  large  businesses  (40%  in 
total, out of which 35% are SMEs), to private non-commercial organisations (25%) and public bodies (35%).  

Assessment and evaluation 

The recent  midterm evaluation of LIFE (185) confirmed that  the current  programme is on track and that it is 
providing  a  contribution  to  the  Europe  2020  strategy.  Furthermore,  most  stakeholders  see  LIFE  as  being  a 
very important instrument for addressing environmental and climate priorities. 

However,  the  evaluation  also  identified  opportunities  to  further  enhance  the  programme’s  overall 
effectiveness, to improve consistency between the LIFE programme and other EU funds and to enhance the 
catalytic  role  of  the  programme.  Further opportunities for  improvements  concern  the  strategic  focus of  the 
programme as well as the increase of efficiency and simplify of the management of LIFE.  

While activities under the LIFE programme for 2014 to 2020 tackle certain problems directly on the ground, the 
programme's main impact is  indirect through its catalytic role: the support for  small-scale actions intended to 
initiate, expand or accelerate  sustainable production, distribution and  consumption  practices, and protection of 
natural capital, by: — facilitating the development and exchange of best practices and knowledge; — building up 
the  capacities  and  speeding  up  the  implementation  of  environmental  and  climate  legislation  and  policies  and 
facilitating a clean energy transition; — helping stakeholders to test small-scale technologies and solutions, and 
— mobilising funding from other sources to promote overall sustainable finance investments. 

This approach will be further pursued under the multiannual financial framework for the period 2021 to 2027. 

(185)  European Commission (2017) Report on the midterm evaluation of the programme for environment and climate; SWD(2017) 355 

final; Ecorys (2017) Support for an external and independent LIFE mid-term evaluation report. 

96 

                                                        
2018 Annual Management and Performance Report 

The  proposal  for  LIFE  for  after  2020 (186)  focuses  on  developing  and  implementing  innovative  ways  to 
respond  to  environment  and  climate  challenges  thereby  catalysing  changes  in  policy  development, 
implementation and enforcement. It will also ensure sufficient flexibility to address new and critical priorities 
as  they  emerge  during  the  programme’s  duration.  The  implementation  of  the  new  LIFE  programme  will  be 
made  easier  for  applicants  and  beneficiaries,  and  there  will  be  measures  to  achieve  a  more  balanced 
territorial coverage. 

This approach will be further pursued under the multiannual financial framework for the period 2021 to 2027. 

(186)  COM(2018) 385 final https://eur-lex.europa.eu/resource.html?uri=cellar:ad186f8e-6587-11e8-ab9c-

01aa75ed71a1.0001.02/DOC_1&format=PDF 

97 

                                                        
2018 Annual Management and Performance Report 

Security and Citizenship (budget 
heading 3) 

It  is  one  of  the  most  basic  and  universal  rights  to  feel  safe  and  secure.  The  Juncker  Commission  made 
security a top priority from day one. But over recent years security threats have evolved. EU Member States 
have  already  worked  together  to  ensure  an  effective  response  to  diverse  security  threats  —  including  new 
forms  of  terrorist  attacks,  radicalisation,  new  types  of  organised  crime  and  cybersecurity  threats.  They  will 
need to continue doing so in the future.  

Security  threats  know  no  borders  and are  becoming  increasingly  international.  The  complex  nature  of  these 
challenges is  such  that  no  Member State  can  or  should  be  made  to  meet  them on  its  own.  The  EU  budget 
supports Member States in their responsibilities and efforts. The programmes in heading 3 of the EU budget 
(EUR 3.  5 billion  representing  2%  of  the  total  2018  EU  budget  )  deal  with  key  political  challenges  such  as 
security,  asylum,  the  migration  and  integration  of  non-EU  (‘third’)-country  nationals,  health  and  consumer 
protection, as well as culture and dialogue with citizens. 

Chart: Main programmes financed in 2018 under heading 3, Security and citizenship. All amounts in EUR million. The category ‘other 
programmes’ includes among others consumer, Instrument for Emergency Support within the EU (IES), IT systems, justice, rights, equality 
and citizenship, EU Civil Protection Mechanism, Europe for Citizens, health, decentralised agencies, pilot projects and preparatory actions, 
actions financed under the prerogatives of the Commission and specific competences conferred to the Commission 
Source: European Commission 

The  challenges  of  migration  are  transnational  in  nature  and  cannot  be  adequately  addressed  by  Member 
States acting alone. In 2018 the EU’s comprehensive approach on migration continued to deliver tangible 
results,  with  a  focus  on  deepening  cooperation  with  partner  countries,  enhancing  protection  of  the  EU’s 
borders and better management of migratory flows in a spirit of solidarity and responsibility.  

The  European  agenda  on  migration  has  contributed  to  significantly  reducing  the  number  of  irregular 
arrivals notably in the central and eastern Mediterranean routes and reducing irregular border crossings into 
the EU to below the 2014 figures; it has provided immediate financial and operational assistance to frontline 
Member  States  and  direct  help  to  the  people  in  need;  it  has  increased  legal  pathways  and  supported  the 

98 

 
2018 Annual Management and Performance Report 

return  of 
agreements/arrangements. 

those  with  no 

right 

to  be 

in 

the  EU 

through 

the  negotiation  of 

readmission 

Just as importantly, the European Border and Coast Guard Agency (Frontex) deployed in 2018, 11 000 
border  guards  in  operation  to  help  patrol  the  Union’s  external  borders  mainly  in  Bulgaria,  Greece,  Italy  and 
Spain.  

Recognising  the  importance  of  this  support,  in  June  2018  Member  States  called  to  further  strengthen  the 
agency’s  role,  including  cooperation  with  countries  outside  the  EU,  through  increased  resources  and  an 
enhanced  mandate.  In  response,  the  Commission  presented  new  proposals  in  September  2018,  on  which 
agreement  was  reached  in  March  2019  to  scale  up  the  Agency  yet  further  and  reinforce  it  with  its  own 
equipment and a standing corps of 5 000 border guards as of 2021 and 10 000 by 2027 at the very latest, 
as well as a stronger mandate to carry out returns . In addition, the Commission has proposed a new founding 
regulation for the European Asylum Support Office (EASO), thus enlarging its mandate.  

Chart: Number of irregular border crossings detected at the EU’s external borders.  
Source: European Border and Coast Guard Agency (Frontex). 

The EU’s response to the migration crisis required a  swift and substantial action supported by the EU 
budget.  The  funding  initially  earmarked  for  security  and  migration  in  the  current  multiannual  financial 
framework  was  doubled  in  order  to  respond  to  the  scale  of  the  needs.  The  budget  played  a  key  role  in 
shaping the common response by providing funding for the management of arriving asylum seekers and 
migrants,  developing  search-and-rescue  capacities  to  save  lives,  managing  effective  returns  and  providing 
operational  support  to  the  Member  States  under  most  pressure.  Without  this  support,  the  unprecedented 
migratory crisis of 2015 would not have been effectively managed. 

On  18 March 2016,  EU  Heads  of  State  or  Government  of  the  EU  and  Turkey  agreed  on  the  EU-Turkey 
statement to end irregular migration flows from Turkey to the EU, ensure improved reception conditions for 
refugees in Turkey and open up organised, safe and legal channels to Europe for Syrian refugees. Two  and a 
half  year  later,  irregular  arrivals  to  the  Aegean  islands  remain  96% (187)  lower  than  the  period  before  the 
statement became operational, and the number of lives lost at sea has decreased substantially. At the end of 

(187)  Data source: Hellenic police 

99 

 
                                                        
2018 Annual Management and Performance Report 

2018, Member States had resettled 18 640 persons from Turkey under the  statement with the support from 
the Asylum Migration and Integration Fund. The EU has supported Turkey in its efforts to host refugees with 
the facility for refugees in Turkey. This facility is covered in heading 4, ‘global Europe’ (see analysis below).  

While  continuous efforts  need  to  be  made  by  all  sides and all  EU  Member States,  and still  more  returns  to 
Turkey are needed to alleviate the pressure on the Greek islands (188), the EU-Turkey statement has become 
an  important  element  of  the  EU’s  comprehensive  approach  on  migration.  The  effects  of  the  EU-Turkey 
statement were immediate. Thanks notably to the cooperation with the Turkish authorities, arrivals decreased 
significantly — showing clearly that the business model of smugglers exploiting migrants and refugees can be 
broken.  From  10  000  in  a  single  day  in  October  2015,  daily  crossings  from  Turkey  wend  down  to  an 
average (189) of around 88 during 2018.  

Asylum, Migration and Integration Fund 

Programme objectives  

Solidarity  and  the  fair  sharing  of  responsibilities  between  Member  States  is  at  the  heart  of  the  common 
asylum,  migration  and  external-borders  policies.  The  management  of  migratory  flows  and  security 
threats  cannot  be  dealt  with  by  the  Member  States  acting  alone.  The  Asylum,  Migration  and 
Integration  Fund (190)  facilitates  the  efficient  management  of  migration  flows  and  the  development  of  a 
common EU approach to asylum and migration.  

The fund pursues four specific objectives 

Asylum: strengthening and 
developing the Common European 
Asylum System by ensuring that 
EU legislation in this field is 
efficiently and uniformly applied. 

Legal migration and integration: 
supporting legal migration to EU 
Member States in line with the 
labour-market needs and 
promoting the effective 
integration of non-EU nationals. 

Return: enhancing fair and 
effective return strategies, which 
contribute to combating irregular 
migration, with an emphasis on 
the sustainability and 
effectiveness of the return 
process. 

Solidarity: making sure that the 
EU Member States most affected 
by migration and asylum flows 
can count on solidarity from other 
EU Member States. 

(188)  Between 21 March 2016, 1 806 migrants have been returned from Greece to Turkey under the EU-Turkey statement and 601 

under the Greece-Turkey bilateral protocol. 

(189)  Data source: Hellenic police 
(190)  Regulation (EU) No 516/2014 of the European Parliament and of the Council of 16 April 2014 establishing the Asylum, Migration 
and Integration Fund, amending Council Decision 2008/381/EC and repealing Decisions No 573/2007/EC and No 575/2007/EC of 
the European Parliament and of the Council and Council Decision 2007/435/EC.  

100 

 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Implementation and latest achievements 

The  financial  resources  mobilised  for  the  fund  over  the  2014-2020  period  amounted  to  a  total  of 
EUR 7.0 billion,  and  EUR 1 billion  in  emergency  funding.  In  the  context  of  solidarity  and  fair  burden  sharing 
with  the  most  affected  Member  States,  the  initial  budget  was  substantially  increased  through  top-ups  to 
support relocation and resettlement, integration and return (the resources provided were linked to the revision 
of the Dublin regulation). By the end of 2018 more than EUR 5 billion was already allocated under the Asylum, 
Migration and Integration Fund (191).  

The  Asylum,  Migration  and  Integration  Fund  continued  to  deliver  in  2018  across  all  the  four  specific 
objectives.  In  2018  the  total  number  of  irregular  border  crossings  detected  at  the  external  borders  was 
around  150 000,  a  25%  decrease  compared  to  2017  and  the  lowest  level  in  5  years.  The  total  number  of 
irregular crossings detected in 2018 was 92% below the total for 2015, the peak year of the migratory crisis. 

The  EU  also  provided  appropriate  reception  of  refugees.  Emergency  assistance  responded  to  immediate 
and basic needs, providing food, shelter and medical care for refugees and support to unaccompanied minors. 
The  capacity  of  the  asylum  services  has  been  strengthened  to  be  able  to  cope  with  the  large  number  of 
asylum applications. 

In  2018,  financial  assistance  to  Greece  contributed  to  improving  the  situation  in  the  hotspots  on  the 
Aegean  islands  and  more  broadly  in  the  country.  To  decongest  the  hotspots,  the  Asylum,  Migration  and 
Integration  Fund  supported  the  transfer  of  29 540  persons  to  the  mainland.  With  emergency  assistance, 
blankets, winter jackets and other winter supply kits was provided at reception facilities, and the presence of 
police personnel was covered as to increase security of migrants and staff. In 2018 the Commission and the 
European  Asylum  Support  Office  continued  to  support  the  functioning  of  the  Greek  asylum  service  and  the 
appeals  committees.  The  support  included  the  purchase  of  work  equipment  (IT  equipment  including  158 
workstations), a pool of interpreters, training for 300 staff members, and the deployment of 20 police officers 
to implement the action plan provided for in the EU-Turkey statement (192). Furthermore, several emergency-
assistance projects provided support to services and activities for minors:  

520 accommodation places were 
operational throughout the year. 

1 845 children were transported 
to state schools. 

784 benefited from 
accommodation and protection 
services. 

Source: Programme statement 2018, p. 3. 

For  Italy,  projects  focused  on  ensuring  effective  and  coordinated  psychosocial  protection  services  for  the 
benefit of unaccompanied minors in hotspots; providing accommodation and reception services for relocation 
candidates; supporting the asylum sections of immigration and border police offices; and carrying out assisted 
voluntary returns from Italy and reintegration in migrants’ home countries.  

Resettlement (193)  offers  safe  and legal  pathways  to  those  in  need  of international  protection.  From  2015 
until the end of 2018, different EU resettlement  schemes have helped over 48 700  of the most vulnerable 
find shelter in the EU. This includes almost 21 000 individuals, whom Member States resettled in 2018 (194) as 
part of a common pledge to resettle more than 50 000 persons in need of protection by the end of October 
2019 — the largest EU resettlement scheme to date. 

(191)  Report on budgetary and financial management of the European Commission for the financial year 2018, 29 March 2019. 
(192)  https://www.consilium.europa.eu/en/press/press-releases/2016/03/18/eu-turkey-statement 
(193)  https://ec.europa.eu/home-affairs/content/resettlement_en 
(194) 
In the period 9 December 2017-31 December 2018. 

101 

 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

The  relocation (195)  scheme  ended  in  2018.  Thanks  to  concerted  efforts  by  the  Member  States  and  other 
relevant  stakeholders,  by  the  end  of  2018,  34  709  persons  had  been  relocated  (12  710  from  Italy  and 
21 999  from  Greece),  which  represents  over  95%  of  all  eligible  and  registered  candidates  for  relocation  in 
Italy and Greece under the 2015 Council Decisions. Out of these, 1 556 persons were relocated in 2018.  

In  the  area  of  integration,  in  2018,  two million  third-country  nationals  were  assisted  through  integration 
measures  as  part  of  national,  local  and  regional  strategies,  reaching  a  cumulative  number  of  5.38 million 
covering the period 2014-2018. The actions consisted in education and training, including language training 
and  preparatory  actions  to  facilitate  access  to  the  labour  market.  Furthermore,  advice  and  assistance  were 
provided  in  the  area  of  housing,  means  of  subsistence  and  administrative  and  legal  guidance,  medical  and 
psychological care. 

In 2018, 39 500 (196) persons  (16 049 in the 2017) were voluntarily returned from the EU with support of 
the Asylum, Migration and Integration Fund. Out of the total number of returnees,  23 843 persons received 
pre- or post-return reintegration assistance co-financed by the fund. Some 9 260 employees benefited from 
capacity-building  training  in  return-related  topics.  To  ensure  the  compliance  of  removals  with  the  human 
rights and the dignity of the returnees, 3 510 removal operations were monitored with the financial support 
of the fund. These rates of voluntary return are still lower than those envisaged (197).To increase the overall 
return rate, there is an urgent need to work in parallel on the internal and external aspects of the migration 
policy,  by  improving  the  legal  framework  of  returns  and  increasing  the  number  of  readmission  agreements 
with  non-EU  (‘third’)  countries.  The  swift  adoption  of  the  proposal  to  revise  the  return  directive (198)  will 
improve and speed up the procedures, will reduce the possibilities of absconding and unauthorised secondary 
movements, and will contribute to return decisions turning into effective returns. 

Assessment and evaluation 

An evaluation (199) of the predecessor funds (200) and the interim evaluation (201) of the current fund concluded 
that, overall, the instruments have supported Member States to better implement the EU policies on asylum 
and  migration,  despite  diverse  national  needs.  The  funds  have  played  an  important  role  in  improving  the 
asylum systems and strengthening reception capacity in the Member States.  

The interim evaluation showed that, overall, the fund has been instrumental in handling the difficult situation 
related to migration challenges and has achieved significant simplification compared with its predecessors. A 
number of key crosscutting aspects identified as shortcomings by the evaluation of predecessor instruments 
have  been  addressed  with  the  Asylum,  Migration  and  Integration  Fund:  reducing  administrative  burden  by 
consolidating three funds into one; introducing a multiannual approach, developing an initial monitoring and 
evaluation  framework,  increasing  the  flexibility  of  the  allocation  mechanism  with  the  introduction  of  a 
considerable  allocation  for  emergency  assistance  and improving  the  solidarity-principle  engagement  among 
Member  States  for  resettlement  and  intra-EU  transfer  of  beneficiaries  of  international  protection.  Despite 
these  significant  improvements  applied  on  the  creation  of  the  Asylum,  Migration  and  Integration  Fund,  the 
interim  evaluation  still  identified  a  number  of  shortcomings  such  as  the  continued  need  to  increase  the 
flexibility both of the fund and of the funding-distribution system, to reduce the fragmentation of the national 
programmes  and  to  strengthen  the  consistency  (‘coherence’)  and  coordination  with  other  EU  funds.  In 
addition,  the  interim  evaluation  found  that  the  monitoring  and  evaluation  system  needed  further 
improvement by including better-defined indicators and simplified processes. 

(195)  https://ec.europa.eu/home-affairs/content/relocation_en 
(196)  Data source: 2018 Annual implementation reports. The 2018 figure includes all Member States except Greece. Greece has not yet 

provided its report. The figure for 2017 includes all Member States. 
(197)  A target of 340 698 voluntary returns by the end of 2020 was set.  
(198)  Directive 2008/115/EC of the European Parliament and of the Council of 16 December 2008 on common standards and procedures 

in Member States for returning illegally staying third-country nationals. 

(199)  Ex post evaluation reports for the period 2011 to 2013 of actions co-financed by the four funds under the framework programme 

'Solidarity and Management of Migration Flows', COM(2018) 456. 

(200)  The European Refugee Fund, the European Fund for the Integration of third-country nationals, the European Return Fund.  
(201)  SWD(2018) 339, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018SC0339 

102 

                                                        
2018 Annual Management and Performance Report 

We cannot continue to squabble to find ad hoc solutions each 
time a new ship arrives. Temporary solidarity is not good 
enough. We need lasting solidarity — today and 
forevermore. (202) 

President Jean-Claude Juncker 

The  Court  of  Auditors  has  announced  its  intention  to  also  look  at  the  issue  of  migration  and  how  it  is 
managed  by  the  EU (203).  In  particular,  the  audit  will  seek  to  determine  whether  EU  support  for  Greece  and 
Italy  achieved  its  objectives,  and  whether  the  asylum,  relocation  and  return  procedures  were  effective  and 
swift. 

The  Commission  took  full  account  of  the  findings  of  the  different  evaluations  in  the  proposal  for  a 
strengthened  Asylum  and  Migration  Fund  for  the  post-2020  multiannual  financial  framework (204).  In 
particular,  the  proposal  greatly  increases  the  flexibility  of  the  fund,  given  the  lessons  learnt  from  recent 
experience:  that  challenges in  the  area  of  migration  are  not  predictable  and that  geopolitical  developments 
can  have  direct  repercussions  on  migration  flows.  Concretely,  it  will  be  possible  to  reallocate  some  of  the 
funding available to address new or additional pressures on Member States by retaining the midterm review 
needs-assessment procedure (205). 

The proposal also includes a major boost to funding on the external aspects of migration. There will be 
increased scope for programmes to support action outside the EU. A substantial share will support the areas 
of return, readmission and reintegration, as well as operational cooperation with third-country partners. 

Internal Security Fund 

Programme objectives  

The  Internal  Security  Fund (206)  promotes  the  implementation  of  the  Internal  Security  Strategy,  law-
enforcement  cooperation  and  the  management  of  the  EU’s  external  borders.  The  fund  is  composed  of  two 
instruments: Internal Security Fund — Borders and Visa and Internal Security Fund — Police. The abolition of 
internal EU border controls (‘Schengen area’) makes it very necessary to ensure that the  external borders 
are effectively protected and must be accompanied by common measures for the effective control of the 
EU’s external  borders.  Some  Member  States bear  a  heavy  burden  due  to  their specific  geographic  situation 
and the length of the external EU border that they have to manage.  

(202)  President Jucker during the State of the Union address, September 2018. 
(203)  Audit preview: EU Migration management: Hotspots and beyond, 

https://www.eca.europa.eu/Lists/ECADocuments/AP19_MIGRATION/AP_MIGRATION_EN.pdf  

(204)  Proposal for a Regulation COM(2018) 471 of the European Parliament and of the Council establishing the Asylum and Migration 

Fund. 

(205)  The midterm review carried out for the current fund has led to the identification of funding gaps for a number of countries, leading 

to an additional EUR 175 million being made available in 2019. 

(206)  Regulation (EU) No 513/2014 of the European Parliament and of the Council of 16 April 2014 establishing, as part of the Internal 

Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis management 
and repealing Council Decision 2007/125/JHA (OJ L 150 of 20 May 2014). Regulation (EU) No 515/2014 of the European 
Parliament and of the Council of 16 April 2014 establishing, as part of the Internal Security Fund, the instrument for financial 
support for external borders and visa and repealing Decision No 574/2007/EC (OJ L 150 of 20 May 2014). 

103 

 
                                                        
2018 Annual Management and Performance Report 

The Internal Security Fund, under its components, pursues the following specific objectives 

Internal Security Fund — Police 

Fight against crime: crime 
prevention, combating cross-
border, serious and organised 
crime, including terrorism. 

Managing risk and crisis: 
enhancing the capacity of 
Member States and the EU for 
effectively managing security-
related risks and crises. 

Internal Security Borders and Visa Fund 

Visas: the effective processing of 
Schengen visas by supporting a 
common visa policy. 

Borders: achieving a uniform and 
high level of control of the EU 
external borders by supporting 
integrated border management. 

Implementation and latest achievements (207) 

The  resources  mobilised  for  the  Internal  Security  Fund  over  the  2014-2020  period  amounted  to 
EUR 3.9 billion, with  EUR 2.7 billion  for  borders  and visas and EUR 1.2 billion  for  police  cooperation.  Out  of 
the total amount, EUR 390.2 million was emergency funding.  

In  2018,  the  Internal  Security  Fund  —  police  continued  to  support  the  prevention  and  fight  against 
security-related  risks  and  crises  (including  terrorism),  in  order  to  ensure  a  high  level  of  security  in  the  EU. 
In 2018 the Member State-financed actions in this area reached a total of EUR 150 million EU funding, which 
is 55% higher than in 2017.  

Under  the  fund,  exchange  of  information  was  further  developed  in  2018  as  well  as  operations.  In 
2018,  413  joint-investigation  teams  and  the  European  Multidisciplinary  Platform  against  Criminal  Threats 
were established using fund support. In addition to this, as of 31 March 2019, 164 projects worked on crime 
prevention  and  69  projects  contributed  to  improving  law-enforcement-information  exchanges  related  to 
Europol systems: this is an increase of 13% compared to the number of similar projects reported in 2017. The 
Member States intensified training activities so that the number of law-enforcement staff trained on cross-
border-related topics in 2018 reached more than 27 526, an increase of 230% compared to 2017. 

In support of efforts to combat terrorist financing, the Internal Security Fund — police funded activities to 
counter  new  terrorist  ways  of  operating  and  to  support  the  development  of  collaborative  actions  and 
partnerships  between  public  authorities  and  private  entities.  Three  new  projects  were  selected  in  2018  for 
EUR 2.6 million of funding. The Internal Security Fund — police also supported with EUR 6 million the operation 
of the Radicalisation Awareness Network, which connects around 5 000 practitioners from the Member States. 
Moreover,  with  a  view  to  support  cities in  their efforts to  better protect  public  spaces,  the  Internal  Security 
Fund  —  police  funded  several  projects  led  by  cities  that  are  looking  at  innovative  ways  of  protecting  their 
inhabitants and public spaces. 

The  total  amount  of  EUR 234 million  EU  funding  was  spent  in  the  financial  year  2018  under  the  Internal 
Security Fund — borders and visas, which is 13% higher than in 2017. 

In 2018, in the framework of European Border Surveillance System — Eurosur (208), Member States spent 
a  total  amount  of  EUR 234 million  of  EU  funding,  allocated  to  the  national  programmes  from  the  Internal 

(207)  Directorate-General for Migration and Home Affairs, Annual activity report, 2018. 

104 

 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Security  Fund  —  borders  and  visas.  The  number  of  crossings  of  the  EU  external  borders  through  the 
automated  border  control  gates  (funded  by  borders  and  visas)  has  consistently  increased,  reaching  almost 
21 million crossings in 2018. 

Emergency assistance (209) 

the 

Internal 

Security 

Under 
Fund,  Greece 
implemented  an  emergency-assistance  project 
(EUR 7.1 million) 
reception-and-
for  additional 
identification-service  staff.  It  covered  the  presence 
of  Greek  national  (Hellenic)  police  personnel  in  the 
five  hotspots 
increase  the  security  of 
migrants and staff. 

to 

In 2018 Italy implemented projects (EU contribution 
EUR 62.9 million)  related  to  hotspots  and  other 
disembarkation areas. These projects included the 
procurement  of  equipment  for  border  checks, 
interpretation/intercultural  mediation  services,  as 
well  as  the  upgrading  and  running  of  border-
surveillance  assets.  Furthermore,  in  2018,  under 
additional 
emergency 
EUR 4.41 million was granted to Italy. 

assistance 

an 

Large-scale IT systems: In recent years the EU has been developing large-scale centralised IT information 
systems for collecting, processing and sharing information relevant to security, migration and external-border 
management. These systems are vital for security cooperation, as well as for the management of external 
borders and migration in the EU. 

 

 

 

 

The  Schengen  information  system  is  an  EU-wide,  large-scale  information  system  that  stores, 
alerts  and  provides  information  on  certain  categories  of  wanted  or  missing  persons  or  objects.  In 
2018 the system was consulted 6 billion times compared to 5 billion times in 2017. This reduces the 
chance  that  people  who  pose  a  security  threat,  including  returning  EU  nationals,  cross  borders 
unnoticed. 

The automated fingerprint identification system helps identify criminals and terrorists entering 
and moving across the Schengen area under false identities. 

in  2018 (210)  for  a  European  Travel  Information  and 
Two  regulations  were  adopted 
Authorisation  System  (ETIAS),  funded  under  the  Internal  Security  Fund.  The  system  will  gather 
information  on  all  persons  who  are  travelling  visa-free  to  Europe.  It  will  ensure  that  any  possible 
security and irregular migration concerns are identified before travel to the Schengen area. This will 
contribute  to  more  efficient  management  of  the  EU’s  external  borders,  improving  internal  EU 
security and facilitating better management of irregular migration. 

The development of the Entry/Exit System started end-2018 funded by the Internal Security Fund. 
The  system  will  modernise  EU  external-border  management  by  replacing  the  manual  stamping  of 
passports with the electronic recording of the identity data of non-EU nationals (as well as the time, 
date and place of their entry and exit). 

Assessment and evaluation 

The  midterm  evaluation (211)  confirmed  that  the  Internal  Security  Fund  responded  well  to  the  changing 
needs emerging as a consequence of the migration and security crisis and enabled the shifting of resources 
to the Member States affected. 

(208)  https://ec.europa.eu/home-affairs/what-we-do/policies/borders-and-visas/border-crossing/eurosur_en 
(209)  Examples in this box are selected from the Directorate-General for Migration and Home Affairs Annual activity report 2018. 
(210)  Regulation (EU) 2018/1240 of the European Parliament and of the Council of 12 September 2018 establishing a European Travel 
Information and Authorisation System (ETIAS) and amending Regulations (EU) No 1077/2011, (EU) No 515/2014, (EU) 2016/399, 
(EU) 2016/1624 and (EU) 2017/2226 and 2018/1241, OJ L 236; and Regulation (EU) 2018/1241 of the European Parliament and 
of the Council of 12 September 2018 amending Regulation (EU) 2016/794 for the purpose of establishing a European Travel 
Information and Authorisation System (ETIAS). 

(211)  COM (2018) 464, https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agenda-

migration/20180612_com-2018-464-report_en.pdf 

105 

                                                                                                                                                                             
2018 Annual Management and Performance Report 

The findings of the evaluation demonstrated the importance of the Internal Security Fund — borders and 
visas to ensure effective integrated border management through a more extended exchange of information 
and  cooperation,  including  with  the  European  Border  and  Coast  Guard  Agency.  This  helped  in  developing 
border-surveillance  and  border-management  IT  systems.  The  evaluation  pointed  out  that  the  Internal 
Security  Fund  —  police  was  essential  in  improving  the  capacity  of  Member  States  to  address  security 
threats which have a transnational dimension such as terrorism, organised crime and corruption. The fund has 
promoted  law-enforcement  cooperation  at  European  level  through  the  exchange  of  information  and 
dissemination of best practice, the establishing of transnational networks and projects and the participation 
of Member States in joint-investigation teams.  

The main lessons to be learnt from the evaluation relate to the need to increase the sustainability of the 
fund as the continuity of the actions relies to a large extent on the EU funding. Further measures should be 
taken  to  alleviate  the  administrative  burden  while  the  evaluation  and  monitoring  framework  could  be 
improved by better defining indicators, which should be in place right from the start. The reporting calendars 
should be synchronised with those of the Member States. Most Member States point to a need for additional 
guidance from the Commission on the implementation of the  fund. For the Internal Security Fund — borders 
and  visas,  greater  EU  added  value  could  have  been  expected  in  the  areas  of  consular  cooperation  and 
cooperation with non-EU countries. For the Internal Security Fund  — police, progress is still to be pursued in 
improving Member States’ ability to protect critical infrastructure, developing training schemes and exchange 
programmes,  and  to  take  action  with  non-EU  countries  and  international  organisations.  Member  States  are 
encouraged to improve the flexibility in the design of the national programmes and allocation of funding (212). 

The  Commission  took  full  account  of  the  findings  of  the  evaluation  in  the  proposal  for  a  strengthened 
Internal Security Fund (213). In particular, the  proposal includes a new set of objectives which will support 
Member  States  in  a  more  flexible  and  effective  way  to  deliver  on  priority  security  areas:  the  fight  against 
terrorism and radicalisation; serious and organised crime; cybercrime; and the protection of victims of crime. 
The  proposal  increases  the  flexibility  of  the  fund  by  reserving  a  substantial  part  of  funding  for  unforeseen 
security challenges, allowing for rapid response to emergencies and the channelling of funds to the Member 
States that need them most. As security is a global issue which depends on our actions beyond EU  borders 
and  a  crosscutting  issue  requiring  a  coordinated  EU  response,  the  improved  Fund  will  continue  to  support 
measures  in  non-EU  countries,  while  ensuring  full  complementarity  with  the  EU’s  internal  security  priorities 
and overall objectives in those countries. It will also work more effectively with other EU  funds, including the 
Cohesion  Policy  Funds  and  Horizon  Europe,  as  well  as  the  Integrated  Border  Management  Fund  and  the 
Asylum and Migration Fund to maximise the EU response to security challenges on all fronts. 

To ensure better and more-integrated management of the EU’s external borders, the current Borders and 
Visa  Fund  will  be  moved  from  the  Internal  Security  Fund  to  the  new  Integrated  Border 
Management Fund (214). The Integrated Border Management Fund will contribute to the further development 
of the common  visa policy and ensure European integrated border management at the EU external borders 
with  a  view  to  managing  the  efficient  crossing  of  the  EU  external  borders.  The  key  for  the  distribution  of 
funding will be flexibility. It will enable determining the right delivery mode and the themes to which funding 
should be allocated, while maintaining a critical mass of upfront funding for structural and large multiannual 
investments  in  line  with  Member States’  needs.  The  allocation  will  also take  fully  into  account  the  need  for 
Member States to focus investments on key EU priorities according to the body of EU law (the ‘Union acquis’). 

Health programme 

The aim of the Health Programme is to complement, support and add value to the policies of Member States 
in improving the  health of the public and reducing  health inequalities, encouraging innovation in health and 
increasing the sustainability of health systems. 

(212)  During the midterm review dialogues with the Member States, the Commission reassess their funding priorities and the 

corresponding allocations. An additional amount equal to EUR 158.6 million was added to the revised national programmes, under 
the Internal Security Fund — borders and visa, programme statement 2018. 

(213)  COM(2018) 472, https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1540391576418&uri=CELEX%3A52018PC0472  
(214)  COM(2018) 473, https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1540390917212&uri=CELEX%3A52018PC0473 

106 

                                                        
2018 Annual Management and Performance Report 

In 2018 a total of EUR 60.7 million was allocated to allow the EU to continue supporting Member State health 
activities.  The  budget  available  over the  2014-2020  period  amounts to  EUR 449.4 million (215).  In  2018  this 
covered: EUR 6.9 million for serious cross-border health threats; EUR 7.4 million for effective, accessible and 
resilient  health-care  systems (216);  EUR 22 million  for  increased  access  to  medical  expertise  and information 
for specific conditions. 

Six  joint  actions  were  signed  with  Member  States  in  2018:  on  (a)  health  inequalities,  (b)  the  innovative 
partnership  on  action  against  cancer,  (c)  vaccination,  (d) preparedness  and  action  at  points  of  entry  (air, 
maritime and ground crossings), (e) action supporting the eHealth network, and (f) health information towards 
a  sustainable  EU  health-information  system  supporting  country  knowledge,  health  research  and 
policymaking. (217) 

The  Joint  Action  on  Vaccination  (2018-2021)  involves  20  countries,  the  European  Centre  for  Disease 
Prevention  and  Control,  the  World  Health  Organisation,  industry  and  stakeholders.  The  joint  action  is 
coordinated  by  France's  national  institute  of  health  and  medical  research.  By  sharing  tools  for  stronger 
national responses to vaccination challenges, the joint action aims to spur long‐lasting European cooperation 
on vaccine‐preventable diseases. (218) 

Protecting health, saving lives 
EU cooperation against vaccine-preventable diseases 

Worldwide,  
vaccines prevent 

cases every year  { 

2.7 

million 
MEASLES 

2 

1 

million 
NEONATAL 
TETANUS 

million 
PERTUSSIS 

Source: European Commission. 

The 2019 implementation of the health programme, takes into account both the recommendations stemming 
from  the  ex  post  evaluation  of  the  2nd  health  programme  2008-2013,  as  well  as  those  resulting  from  the 
midterm  evaluation  of  the  3rd  health  programme, namely: improving  the  monitoring  of  the  programme  and 
ensuring  a  more  proactive  dissemination  of  the  results,  as  well  as  promoting  better  cross-Commission 
collaboration. 

For the 2021-2027 budgetary period, the Commission has proposed to integrate the health programme into a 
streamlined  comprehensive  European  Social  Fund+  programme (219).  The  programme  will  address  the 
resilience  and  effectiveness  of  health-care  systems  and  public-health  policies,  the  inequalities  in  access  to 
public  health  and  the  quality  of  health  care  among  Member  States,  as  well  as  the  protection  from  serious 
cross-border health threats.  

(215)  Programme statement 2018. 
(216)  Directorate-General Health and Food Safety, Annual activity report 2018. 
(217)  Programme statement 2018. 
(218)  Directorate-General Health and Food Safety, Annual activity report 2018. 
(219)  COM(2018) 382 final. 

107 

 
 
 
                                                        
2018 Annual Management and Performance Report 

Food and feed 

Programme objectives  

The aim of the food and feed programme is to contribute to a high level of health for humans, animals and 
plants along the food chain and in related areas, by preventing and eradicating diseases and pests and 
by  ensuring  a  high  level  of  protection  for  consumers  and  the  environment,  while  enhancing  the 
competitiveness of the EU food and feed industry and favouring the creation of jobs. 

Implementation and latest achievements (220) 

In 2018 a total of EUR 282.2 million (221) was allocated to allow the EU to continue its work on food and 
feed  safety.  The  budget  available  over  the  2014-2020  period  amounts  to  EUR 1  892 million (222).  These 
covered grants for Member States to eradicate animal disease (EUR 137.6 million), for veterinary emergency 
funds  (EUR 48.4 million),  to  ensure  plant  health  (EUR 15.6 million(223)),  and  for  other  support  measures 
(EUR 74.6 million) (224). 

The  programme  co-funded  139  national  veterinary  programmes  for  the  control  and  eradication  of  animal 
diseases  including  those  that  can  spread  to  humans.  For  example,  since  2014  African  swine  fever  (a 
devastating  disease  for  pigs  and  wild  boar)  has  been  spreading  from  non-EU  eastern  Europe  to  eastern-
bordering  EU  countries.  The  viral  disease  is  spread  by  wild  boar,  infected  pigs  or  infected  material  such  as 
vehicles  and  boots.  In  2018  nine  Member  States  had  EU-approved  national  programmes  in  place  for  the 
control and eradication of  African swine fever. A total of  EUR 13.7 million was  spent on those programmes. 
Emergency  measures  were  co-funded  with  EUR 36.1 million.  In  addition  two  neighbouring  non-EU  countries 
(Moldova)  and  Ukraine  were  supported  financially.  The  number  of  Member  States  detecting  infections 
increased from six to ten in 2018. 

The  programme  co-funded  24  national  plant-health-survey  programmes.  These  ensure  the  early  detection 
and eradication of pest outbreaks in plants. For example, the programme is financing measures against the 
plant  bacterium  Xylella  fastidiosa  that  is  infecting  olive  trees  and  stone  fruit (225).  Since  2017  the  EU 
contributes financially to the compensation of the owners for the value of the plants destroyed. 

The  programme  supports  the  enforcement  of  EU  food  and  feed  legislation  through  two  actions:  food 
inspectors  are  trained  via  the  'Better  Training  for  safer  food'  (160  classroom-based  training  courses  with 
more  than  500  participants  and around  6 500  participants  in  e-learning  courses)  and  national  enforcement 
laboratories  are  supported  by  46  European  reference  laboratories  (EUR 16.9 million).  These  reference 
laboratories  provide  technical  support  and  coordinated  assistance  to  the  EU  Member  States  in  carrying  out 
official food and feed audits (‘controls’).  Both actions  help to ensure uniform enforcement and eventually a 
level playing field in the single market. 

Assessment and evaluation 

The  midterm  evaluation  of  the  programme  fed  into  the  development  of  the  food  and  feed  strand  in  the 
proposal  for  a  single  market  programme (226).  The  food-chain  actions  supported  under  the  proposed 
programme,  such  as  veterinary  and  phytosanitary  measures  to  promote  a  high  level  of  animal  health  and 

(220)  Programme statement 2018. Amount of EUR 282.2 million includes EUR 4.5 million for European Chemicals Agency. 
(221)  Directorate-General Health and Food Safety, Annual activity report 2018.  
(222)  Programme statement 2018. 
(223)   Includes surveys and emergency measures 
(224)  Directorate-General Health and Food Safety, Annual activity report 2018. Amount of EUR 74.6 million includes two years of 

financing of EU reference laboratories. 

(225)  https://ec.europa.eu/food/plant/plant_health_biosecurity/legislation/emergency_measures/xylella-fastidiosa_en 
(226)  COM(2018) 441 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52018PC0441). 

108 

                                                        
2018 Annual Management and Performance Report 

welfare,  a  high  level  of  plant  health  and  to  prevent  animal-  and  plant-health  crises,  are  to  a  large  extent 
continuing the existing programme. 

A food and feed programme shortcoming identified in the midterm evaluation (227)and included in a Court of 
Auditors recommendation was a lack of indicators allowing for a cost-effectiveness assessment. 

In 2018 the Commission worked on developing and implementing a comprehensive set of cost-effectiveness 
indicators for the main spending areas covered by the food and feed programme. These will be applied in the 
ex post evaluation of the programme. They will also form the basis of the monitoring framework of the food 
and feed strand in the single market programme under the future multinnual financial framework.  

Consumer Programme 

The  Consumer  Programme (228)  supports  EU  consumer  policy  by  helping  the  public  to  fully  enjoy  their 
consumer  rights  and  actively  participate  in  the  single  market.  It  is  thus  supporting  growth,  innovation  and 
meeting the objectives of Europe 2020.  

Telecommunication and other digital-services websites sweep 

Under the Consumer Cooperation Network, the authorities of 21 EU Member States plus Norway and Iceland 
screened  207  websites  from  operators  offering  services  such  as  access  to  fixed  and  mobile  telephony, 
internet, audio and video streaming. 

The  screening  revealed  irregularities  and  two  thirds  of  the  websites  were  flagged  for  further  investigation. 
The  top  problem  was  the  absence  of  clear  information  on  complaints  handling.  Authorities  have  asked  the 
websites  concerned  to  bring  their  practices  in  line  with  EU  consumer  legislation.  Detailed  results  of  the 
screening can be found online 

(https://ec.europa.eu/info/sites/info/files/results_of_2017_-_telecommunication_sweep_0.pdf) 

The  preliminary  result  of  the  interim  evaluation (229)  concludes  that  the  Consumer  Programme  is  playing  a 
crucial role in underpinning EU consumer policy and delivering concrete benefits for European consumers and 
other  stakeholders.  Overall,  the  activities  funded  under  the  Consumer  Programme  2014-2020  achieved 
progress  towards  meeting  the  progra’me's  specific  objectives  in  the  areas  of  safety,  consumer  information 
and  education,  rights,  redress  and  enforcement,  and  brings  EU  added  value.  However,  the  evaluation  also 
identified  room  for  improvement  in  the  programme,  related  mainly  to  simplification  and  the  administrative 
burden (assessed as high  by the stakeholders). Also, the  programme decision-making  evidence-base uptake 
could  be  improved.  The  evaluation  concludes  that  in  the  future  the  progra’me's  ability  to  react  to  new 
challenges related to market developments, digitalisation and new policy demands should be strengthened. 

The evaluation results were reflected in the new proposal for a new  single market programme under the 
future multiannual financial framework, which includes a consumers strand, notably to empower and protect 
consumers. The new  programme will guarantee the enforcement of  consumer  rights, ensure a high level of 
consumer  protection  and  product  safety  and  assist  consumers  when  they  encounter  problems,  for  example 
when  shopping  online.  It  will  also  facilitate  consum’rs'  access  to  redress,  as  proposed  in  the  new  deal  for 
consumers (230).  By  supporting  activities  on  consumer  policy  the  future  single  market  programme  will  also 
develop mutual benefits with the Justice, Rights and Values Fund to ensure consumer laws are complied with. 

(227)  https://ec.europa.eu/transparency/regdoc/rep/1/2017/EN/COM-2017-546-F1-EN-MAIN-PART-1.PDF 
(228)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014R0254 
(229)  The midterm evaluation is finalised but the report is not yet adopted and published. 
(230)  http://europa.eu/rapid/press-release_IP-18-3041_en.htm  

109 

                                                        
2018 Annual Management and Performance Report 

Creative Europe 

Programme objectives  

Creative  Europe  is  the  European  Commiss’on's  framework  programme  for  supporting  Europe's  culture  and 
audiovisual  sectors.  The  programme  is  divided  into  two  sub-programmes,  Culture  and  MEDIA  and  a  cross-
sectoral strand. Its objectives are to promote cultural and linguistic diversity and enhance the competitiveness 
of these sectors, by building the capacity to operate at the transnational level through support to independent 
production  and distribution  companies in  the  audiovisual  field  as well  as a  wide  range  of  businesses in  the 
cultural field. 

Implementation and latest achievements 

MEDIA supports the strengthened regulatory framework enabling the cross-border circulation of works. New 
rules will contribute to a wider distribution of audiovisual works across the EU: the revised audiovisual media 
service  directive  reinforces the  obligations  of  on-demand  service  providers  to  promote  European  works; the 
regulation  on  cross-border  portability  of  online  content  services  allows  Europeans  to  enjoy  online  content 
services when travelling in the EU; the directive on online transmissions and retransmissions of radio and TV 
programmes; the new directive on copyright in the digital single market aims to ensure more cross-border and 
online access to copyright-protected content, in particular by facilitating the licensing of audiovisual and out-
of-commerce works. MEDIA accompanies this evolving regulatory framework by fostering collaboration across 
the value chain in order to support projects with high circulation potential.  

A major contribution to cultural cooperation at EU level, and a key achievement in 2018, was the adoption of 
a  New  European  agenda  for  culture (231).  The  new  agenda  aims  to  respond  to  the  social  and  economic 
challenges  the  EU  is  facing  by  using  culture  to  build  a  fairer,  more  inclusive  union  supporting  innovation, 
creativity  and  sustainable  jobs  and  growth.  The  new  agenda  sets  out  over  25  actions  across  five 
dimensions  (social,  economic,  external,  cultural  heritage,  digital4culture)  and  proposes  a  stronger 
involvement of Member States in policy collaboration and  the implementation of policy results through joint 
projects, including with international cultural organisations and national cultural institutes in third countries. 

In  2018,  a  total  of  5 290  applications  were  submitted  under  the  Creative  Europe  programme  (748  under 
Culture  and 4 542  under  MEDIA),  of  which  2 429  were  selected  for  funding  (234  for  Culture  and 2 195  for 
MEDIA). 

In  2018,  MEDIA  also  shared  stories  across  channels  by  reaching  122 million  people  through  cinema 
(55 million), TV (57 million), festivals and events (8.5 million) and video-on-demand (VOD) (1.82 million). 

MEDIA  makes an  essential  contribution  to  making  European  films  available  beyond their domestic  markets. 
Overall, MEDIA supported the theatrical release of 563 films across  borders in 2018.  Targeted support  was 
given  to  19  individual  films  for  distribution  across  an  average  of  25 territories,  through  a  consortia  of 
distributors, in order to promote cross-border access. 

Under  the  Culture  sub-programme,  in  2018,  support  resulted  in  132  European  cooperation  projects,  out  of 
which 29 related to a special cultural-heritage call as a contribution to the European Year of Cultural Heritage. 
These  projects  stress  Europe's  cultural  diversity,  and  bring  about  economic  benefits  to  small  and  medium-
sized enterprises and microbusinesses active in cultural sectors such as music, publishing and design. 
An  amendment  to  the  Work  Programme  adopted  in  April  2018  made  it  possible  to  fund  more  small 
cooperation  projects,  widening  participation  in  the  competition  for  the  European  Union  Prizes  for  Cultural 
Heritage  and  for  Literature,  increasing  capacity-building  action  for  future  European  Capitals  of  Culture, 
awarding  three  grants  to  the  United  Nations  Educational,  Scientific  and  Cultural  Organisation  (Unesco) 
international council on monuments and sites and to the Council of Europe to implement specific objectives of 

(231)  https://ec.europa.eu/culture/sites/culture/files/commission_communication_-_a_new_european_agenda_for_culture_2018.pdf 

110 

                                                        
2018 Annual Management and Performance Report 

the  European  Year  of  Cultural  Heritage,  and  launching  a  new  experimental  mobility  scheme  for  artists  and 
creative people. 

Under  the  cross-sectoral  strand,  the  cultural  and  creative  sectors'  guarantee  facility  is  an  innovative 
market-led  instrument  that  addresses  the  financing  gap  for  small  and  medium-size  enterprises  in  these 
sectors.  By  the  end of  the  third  quarter  of  2018, the  Facility  had  signed  11  guarantee  agreements  with  10 
financial  intermediaries  from  Belgium,  Czechia,  Spain,  France,  Italy,  Poland,  Portugal  and  Romania.  Overall 
over 630 loans were made under the scheme to final beneficiaries, of which 60% were from the audiovisual 
sector and 40% from other cultural sectors.  

Also,  additional  appropriations  to  the  2018  budget  made  it  possible  to  fund  a  cross-sectoral  project,  in  the 
context of the European Year of Cultural Heritage, to promote film heritage through the digitisation of classic 
films and the organising of screenings in venues reflecting the richness of European architecture. 

The  policy  project  ‘Cultural  and  Creative  Spaces  and  Cities’  started  in  November  2018  and  is  ongoing 
until March 2021. The project intends to provide support to cultural and creative spaces as well as to other 
players, in particular those at the local level. The wider context of creative hubs, cultural centres and the local 
context will also be explored to make better use of public spaces for social regeneration through culture, to 
better  connect  urban  development,  social  inclusion,  job  creation,  skills  development  as  well  as  innovation 
policies: creating a space for policy experimentation and for the support of new approaches, to test ideas on 
culture and the creative economy in the context of the collaborative economy. Cities and regional authorities 
will be actively involved in the project and the organising of a series of urban labs. 

Through  the  participation  of  third  countries  in  Creative  Europe,  the  Commission  has  strengthened  EU 
cultural  cooperation  in  particular  with  the  Western  Balkans  as  well  as  the  south  and  east  Neighbourhood, 
contributing to the fostering  of cultural diversity and the  supporting of cultural and creative industries. Two 
agreements  have  been  signed  for  the  participation  of  Armenia  and Kosovo (232)  in  Creative  Europe, bringing 
the number of third countries joining the programme to 13. The participation of all Western Balkans countries 
(Albania, North Macedonia, Kosovo, Montenegro, Serbia, Bosnia and Herzegovina) in Creative Europe allows for 
a strengthening of the EU-Western Balkans Strategy.  

Assessment and evaluation 

According to the midterm evaluation (233), overall, the Creative Europe programme has performed well, with a 
high  level  of  demand  and  participation  from  stakeholders.  The  Creative  Europe  programme  remains  highly 
relevant  and  addresses  ongoing  challenges  in  the  sector,  such  as  the  fragmentation  of  markets  and  their 
increasing digitisation. By supporting the circulation of diverse content the programme has also contributed to 
spreading and defending European values. Creative Europe was also found relevant to the changing priorities 
of the sectors, to the strategies pursued by the Member States and to EU policy priorities. However, despite 
positive  achievements,  the  programme  needs  to  do  more  to  to  support  the  cultural  and  creative  sectors  in 
fully  reaping  the  opportunities  that  the  digital  shift  presents,  taking  into  account  new  audience  and 
consumption  patterns and  how cultural and  creative works are  made,  produced, accessed and  monetised in 
the digital economy. 

For the next multiannual financial framework the Commission proposed to increase the funding for Creative 
Europe (234). The new programme builds on the achievements of the current programme whilst strengthening 
the  response  to  address  the  transformation  of  the  cultural  and  creative  sectors.  The  new  Creative  Europe 
programme intends to focus on the power of networks and cooperation to help scale up these sectors. It will 
offer  opportunities  for  beneficiaries  to  develop  technologically  and  artistically  innovative  European  trans-
border initiatives to exchange, co-create, co-produce, distribute and promote European works and make them 
accessible  to  a  wide  and  diverse  audience.  It  is  expected  that  it  will  intensify  innovation,  including  through 
cross-sectoral collaboration,  to make best  use of digital technology for creation and audience  development. 

(232)  This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the 

Kosovo declaration of independence. 

(233)  SWD(2018) 159 final https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=SWD:2018:159:FIN (p. 39). 
(234)  COM(2018) 366 final https://eur-lex.europa.eu/resource.html?uri=cellar:509e1bcb-63f0-11e8-ab9c-

01aa75ed71a1.0003.02/DOC_1&format=PDF 

111 

                                                        
2018 Annual Management and Performance Report 

The new programme would  also support the news media sector to promote a diverse and pluralistic media, 
strengthening  quality  journalism  and  fostering  media  literacy.  The  programme  implementation  will  also  be 
streamlined to increase cost-effectiveness and reduce administrative burden. 

Rights, equality and citizenship programme 

The Rights, Equality and Citizenship Programme (235) aims to contribute to the further development of an 
EU  where  equality  and  the  rights  of  persons,  as  enshrined  in  the  EU  treaties,  the  Charter  of  Fundamental 
Rights  and  the  international  human  rights  conventions,  are  promoted  and  effectively  implemented.  The 
programme  is  implemented  through  direct  management.  With  a  budget  of  EUR 62 million  in  2018,  the 
programme  financed  actions  of  public  authorities,  universities,  non-governmental  organisations  and  other 
organisations that support the Commission’s fundamental-rights policies.  

In 2018, the programme funded actions to combat discrimination and promote equality such as the EU 
platform  of  diversity  charters  and  its  2018  forum  ‘Diversity  in  Diverse  Europe’ (236).  To  promote  equality 
between  women  and  men,  the  programme  funded  a  campaign  on  ‘Closing  the  Gender  Pay  Gap’  on 
European Equal Pay Day. The programme also promoted political discussion on women's participation in the 
labour  market  and  on  the  future  priorities  for  the  work  on  gender  equality  by  financing  the  European 
conference  ‘Gender  Equality  &  YOU’  (October  2018,  Vienna).  On  the  protection  of  privacy  and  personal 
data, the programme helped to increase awareness of small and medium-sized enterprises, public authorities 
and  individuals  on  the  new  data  protection  rules (237)  through  an  online  guidance  toolkit  available  on  the 
Commission website in all EU languages in addition to brochures and factsheets. The programme is also the 
main  financial  pillar  of  the  Commission’s  policy  for  persons  with  disabilities  and  supports  the 
implementation of the UN Convention on the Rights of Persons with Disabilities and the European Disability 
Strategy. 

The  programme  also  supported  important  projects  in  the  area  of  preventing  and  combating  racism, 
xenophobia  and  other  forms  of  intolerance,  through  a  focus  on  specific  forms  of  intolerance  such  as 
anti-Semitism, anti-Muslim hatred, Afrophobia and anti-Black racism, homophobia and transphobia.  

Facing facts!  

‘Facing Facts!’ is a civil-society initiative that aims to improve the recognition and recording of (and responses 
to)  hate  crime  and  hate  speech  at  national  level  and  beyond,  by  working  across  civil  society  and  public 
authorities.  The  project  developed  a  series of  online  courses  on  identifying,  monitoring  and  countering  hate 
crime  and  hate  speech,  targeted  to  individual  activists,  civil-society  organisations,  law  enforcement  and 
governmental representatives. 

The  interim  evaluation (238)  concluded  that  overall  the  programme  achieved  improvements in  the  level  of 
knowledge of EU law and policies and of rights, values and principles underpinning the general objective of 
strengthening  equality  and  the  rights  of  persons.  The  evaluation  showed  that  the  performance  of  the 
programme overall is improved compared to its predecessor in terms of the focus of the activities and their 
efficiency.  However,  the  evaluation  also  identified  a  need  to  improve  such  as  to  focus  more  on  emerging 
needs e.g. e-violence, the revision of the monitoring indicators, the achievement of a more geographic balance 
among the beneficiaries and reducing the administrative burden (still perceived as high by the programme's 
stakeholders). 

As part of the post-2020 multiannual financial framework, the Commission proposed a new Justice, Rights 
and  Values  Fund (239).  This  fund 
includes  two  funding  programmes:  the  Rights  and  Values 

(235)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32013R1381 
(236)  https://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=634080 
(237)  General Data Protection Regulation (GDPR) entered into application in May 2018. 
(238)  Report COM/2018/508 on the interim evaluation of the implementation of the Rights, Equality and Citizenship Programme 2014-

2020. 

(239)  COM(2018) 383. 

112 

                                                        
2018 Annual Management and Performance Report 

Programme (240)  and  Justice  Programme (241).  With  this  proposal,  the  Commission  aims  to  protect  EU 
values,  rights  and  justice  in  people’s  day-to-day  lives.  The  programme  will  focus  primarily  on  people  and 
entities  contributing  to  making  our  common  values,  rights  and  rich  diversity  alive  and  vibrant,  with  the 
ultimate  objective  of  nurturing  and  sustaining  our  rights-based,  equal,  inclusive  and  democratic  society. 
Duplication of activities under this larger scale fund will be avoided, and resources may be shared between 
the Rights and Values Programme and the Justice Programme to develop mutual benefits while allowing for 
policy  specificities.  The  implementation  will  also  be  streamlined  to  increase  cost-effectiveness  and  reduce 
administrative burden. 

Justice programme 

The Justice Programme (242) contributes to the further development of a European area of justice based on 
mutual recognition and mutual trust. The programme promotes both equality between women and men and 
the rights of the child, including by means of child-friendly justice in the implementation of all of its actions. 
The programme activities comply with the prohibition of discrimination based on any of the grounds listed in 
Article 21 of the Charter of Fundamental Rights (243).  

The  outputs  of  the  Justice  Programme  in  2018 (244)  are  closely  linked  to  the  Commission’s  activity  on 
preparing,  supporting  and  ensuring  the  correct  implementation  of  an  important  number  of  EU  legal 
instruments in civil and criminal law, improving their enforcement-and-remedy capacities in Member States, 
and  ensuring  appropriate  cross-border  and  EU-level  cooperation.  For  instance,  funding  has  been  used  to 
support  the  application  of  the  European  Arrest  Warrant,  which,  with  over  10 000  cases  per  year,  is  the 
most  successful  EU  instrument  in  criminal  matters.  Also,  the  programme  finances  the  European  Judicial 
Network in civil and commercial matters, which aims to strengthen the cooperation between national judicial 
authorities.  By  improving  the  practical  application  and  implementation  of  EU  civil-justice  instruments,  the 
network contributes to building bridges and mutual trust among the Member States. The Justice Programme 
has  supported  conformity-check  studies  for  EU  legislation  transposed  in  the  EU  Member  States.  The 
programme also supported judicial training and networks (245). 

European e-justice portal  

The  Justice  Programme  finances  the  European  e-justice  portal (246).  This  is  a  joint  initiative  between  the 
Commission and the Council of the EU and provides multilingual informational content and electronic services, 
such as interconnections of national registers. Over time, the portal has evolved to offer increased and wider 
content, to become a one-stop shop for the public, businesses, legal professionals and the judiciary. The portal 
has  been  enhanced  with  a  large-scale  search  engine  for  European  and  national  case-law  and  now  allows 
decentralised lookups in Member State business and commercial registers. Progress has been made towards 
a complete revamp of the portal’s look and feel. In 2018, the number of visits by users — close to 3 million — 
showed more than a six-fold increase compared to the 2012 baseline. 

The  interim  evaluation  of  the  implementation  of  the  Justice  Programme  2014-2020  completed  in 
2018 (247) showed that the programme is sound and contributed to the achievement of a European area of 
justice, based on mutual recognition and mutual trust, in particular by promoting judicial cooperation in civil 
and criminal matters. The funding methods were found suitable for the objectives of the programme and the 
needs  of  the  target  groups.  The  programme  has  delivered  high  European  added  value.  The  evaluation  also 
identified  a  series of  shortcomings related  mainly  to  the narrow  scope  of  the  target  group, the  imbalanced 
geographical  distribution  of  beneficiaries  and  the  monitoring  indicators.  Stakeholders  perceived  the 

(240)  COM(2018) 383, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2018%3A383%3AREV1  
(241)  COM(2018) 384. 
(242)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32013R1382  
(243)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12012P%2FTXT 
(244)  Programme statement 2018. 
(245)  European judicial training network http://www.ejtn.eu/About-us 
(246)  https://e-justice.europa.eu/home.do?plang=en&action=home  
(247)  Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the 

Committee of the Regions on the interim evaluation of the implementation of the Justice Programme 2014-2020, COM/2018/507.  

113 

                                                        
2018 Annual Management and Performance Report 

administrative burden as high. The evaluation demonstrated that there is a need to enhance mutual benefits 
and collaboration with other EU initiatives.  

For the 2021-2027 period, the Commission proposed a new Justice Programme (248) which will form part of 
a  new  Justice,  Rights  and  Values  Fund  together  with  the  Rights  and  Values  Programme.  This  architecture 
takes into account the findings of the interim evaluation, for example, by tackling the fragmented nature and 
limited resources of current EU funding programmes dedicated to values, rights, citizenship and justice, which 
limits  the  EU’s  capacity  to  respond  to  existing  and  new  challenges  in  sustaining  open,  democratic  and 
inclusive societies in Europe.  

Europe for Citizens Programme 

The aim of the Europe for Citizens Programme (249) is to contribute to the public’s understanding of the EU, 
its history and diversity, and to foster European citizenship and improve conditions for civic and democratic 
participation  at  EU  level.  The  programme  plays  an  important  role  in  fostering  civic  participation  and  the 
democratic engagement of citizens. 

The  programme  is  implemented (250)  through  action  grants  and  operating  grants  to  European  civil-society 
organisations  and  think  tanks  active  in  the  thematic  areas  targeted  by  the  programme  and  by  local 
authorities.  The  programme  is  implemented  mainly  through  the  EU  Education,  Audiovisual  and  Culture 
Executive Agency (EACEA). 

The funding under the Europe for Citizens Programme,  EUR 185.5 million for the period 2014-2020 (251), 
contributes to the implementation of three strands. In 2018, out of 1 796 applications received, 417 projects 
were  selected  and  around  1 200 000  participants  were  expected  to  be  involved  in  the  activities  of  the 
programme. The programme was implemented altogether in 34 eligible participating countries.  

Strand  1.  Democratic  engagement  and  civic  participation,  supports  activities  that  develop  citizens’ 
understanding  of  the  EU  policymaking  process  and  promote  opportunities  for  societal  and  intercultural 
engagement  and  volunteering  at  EU  level.  In  2018,  255  town-twinning  projects,  35  networks  of  towns  and 
31 civil-society  projects  were  selected  for  support  and  24  civil-society  organisations  and  think  tanks  were 
financed through operating grants. 

Strand  2.  European  Remembrance,  supports  activities  that  encourage  discussion  (‘reflection’)  on  European 
cultural  diversity  and  on  common  values.  It  also  supports  activities  to  reflect  on  the  causes  of  totalitarian 
regimes  in  Europe's  modern  history  and  to  commemorate  the  victims  of  their  crimes.  A  total  of 
37 remembrance  projects  were  selected  for  support  and  six  remembrance  organisations  were  financed 
through operating grants. 

Strand  3.  Horizontal  Action  Valorisation,  aims  to  increase  learning  from  experience,  boost  transferabiity  of 
results and, as a consequence, increase lasting effects of the supported activities. 

(248)  COM(2018) 384, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2018%3A384%3AFIN 
(249)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ%3AJOL_2014_115_R_0002 
(250)  Programme statement 2018 and Directorate-General Migration and Home Affairs, Annual activity report 2018. 
(251)  Amounts as per legal basis. In the mean time, additional resources have been assigned to the Europe for Citizens programme.  

114 

 
                                                        
2018 Annual Management and Performance Report 

Information vs manipulation: how to stand up against propaganda? 

This  project  was  coordinated  by  the  Polish  Muzeum  Historii  Żydów  Polskich  POLIN (252)  and  addressed  high-
school students from Czechia, Hungary and Poland aiming to have them improve their knowledge and become 
both critically analytical of modern media and responsible citizens in a democratic society. The mechanisms 
of  persuasive  language  and  propaganda  were  examined,  based  on  specific  historical  events  of  1956  in 
Hungary and 1968 in the former Czechoslovakia and Poland. The students learned how to conduct their own 
media  projects,  participating  in  workshops  on  exhibition  design,  conducting  debates,  collecting  and 
documenting  oral  history,  conducting  social  research,  video  filming  and  editing.  In  a  final  gala  held  at  the 
POLIN Museum, they presented 10 creative school projects. 

This project  was  coordinated  by  the  Polish  Muzeum Historii  Żydów  Polskich  POLIN (253)  and addressed  high-
school students from Czechia, Hungary and Poland aiming to have them improve their knowledge and become 
both critically analytical of modern media and responsible citizens in a democratic society. The mechanisms 
of  persuasive  language  and  propaganda  were  examined,  based  on  specific  historical  events  of  1956  in 
Hungary and 1968 in the former Czechoslovakia and Poland. The students learned how to conduct their own 
media  projects,  participating  in  workshops  on  exhibition  design,  conducting  debates,  collecting  and 
documenting  oral  history,  conducting  social  research,  video  filming  and  editing.  In  a  final  gala  held  at  the 
POLIN Museum, they presented 10 creative school projects. 

The  interim  evaluation (254)  confirmed  the  programme’s  usefulness  in  promoting  civic  participation, 
strengthening the sense of belonging together and supporting mutual understanding. Its structure, with  three 
strands and a crosscutting measure on analysis, dissemination and use of project results, worked efficiently. 
The  operating  and  action  grants  helped  deliver  the  desired  outcomes.  Europe  for  Citizens  demonstrated  its 
added value at EU level both in its impact on participants and its role as a complement to other EU funding 
programmes  and  policy  initiatives  in  the  field  of  education,  culture  and  EU  citizenship.  The  evaluation 
identified room for improvement in strengthening the visibility, mutual benefits and collaboration with other 
existing EU programmes and revising the monitoring indicators. 

Under  the  2021-2027  multiannual  financial  framework,  the  Commission  presented  a  proposal  for  a 
regulation  establishing  the  Rights  and  Values  Programme  (2021-2027) (255),  which  brings  together 
the activities of the Europe for Citizens Programme and of the Rights, Equality and Citizenship Programme in 
a new common framework. These programmes are small instruments which cannot reach a critical mass and 
whose effectiveness is constrained by their relatively low budgets. Therefore, bringing them together means 
simplification, mutual benefits, collaboration, reinforcement and help to make them more effective. Support 
to  the  European  Citizens’  Initiative  is also  ensured  via  the  future  Rights  and  Values Programme.  The  Rights 
and Values Programme aims to protect and promote rights and values as enshrined in the EU treaties and to 
support open, democratic and inclusive societies. 

EU Civil Protection Mechanism  

The  aim  of  the  EU  Civil  Protection  Mechanism  is  to  support,  coordinate  and  supplement  the  disaster-
management-coordination  actions  of  the  Member  States  in  order  to  improve  the  systems  for  preventing, 
preparing  for  and  responding  to  natural  and  man-made  disasters.  Through  a  comprehensive  approach 
encompassing  disaster  prevention,  preparedness  and  response,  the  programme  aims  to  reduce  the  loss  of 
human life and to minimise environmental and material damage caused by disasters. 

Member States put  together  resources and experts into  a  voluntary  pool  and keep  them on  standby  for  EU 
civil-protection  missions.  The  teams  involved  need  to  meet  minimum  quality  criteria  and  undergo  a 
certification  process  to  ensure  quality  and  interoperability.  Trained  and  certified  response  capacities  and 

(252)  Museum of the History of Polish Jews https://www.polin.pl/en/about-museum 
(253)  Museum of the History of Polish Jews https://www.polin.pl/en/about-museum 
(254)  https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/citizenship-programme/docs/com-2018-170-f1-

report-from-commission-en-v4-p1-967238.pdf 

(255)  COM(2018) 383, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2018%3A383%3AREV1 

115 

                                                        
2018 Annual Management and Performance Report 

experts guarantee an effective response to disasters. The voluntary  pool also enables a shorter deployment 
time. 

In  2018  the  EU  Civil  Protection  Mechanism  was  activated  in  response  to  nine  emergencies  within  the 
European Union territory (256). Forest fires in southern Europe (but also in 2018 in northern Europe) resulted in 
significant  destruction  of  property  and  livelihoods  with  their  impact  on  the  economy  including  damage  to 
network infrastructure, businesses, agricultural and forestry activities. The EU Civil Protection Mechanism was 
activated five times to respond to forest fires in Greece, Latvia, Portugal and Sweden (257). 

Photos: © European Union 2018/Pavel Koubek 
Sweden: fighting forest fires. 
Source: Directorate-General for European Civil Protection and Humanitarian Aid Operations, 2018 Annual activity report, p. 30. 

The evaluation (258) of the EU Civil Protection Mechanism concluded that the addition of new capacities via the 
voluntary  pool  has  enhanced  the  overall  disaster  preparedness  at  EU  level  and  allowed  for  immediately 
deployable  response  resources  bringing  together  a  range  of  relief  teams,  experts  and  equipment  from 
participating states.  

In 2018 the European Parliament and the Council have reached an agreement on a proposal (259) to further 
strengthen the mechanism. The new legal framework (260) will bolster disaster response capacities at EU level 
particularly  by  establishing  an  additional  reserve  of  capacities  ‘rescEU’  to  respond  to  disasters.  Such 
capacities would include firefighting planes, as well as other means to respond to situations in which overall 
EU  capacities  are  insufficient  to  ensure  an  effective  response  (e.g.  for  medical  emergencies  or  chemical 
biological radiological and nuclear incidents).  

(256)  Programme statement Union Civil Protection Mechanism, p. 2. 
(257)  Directorate-General for European Civil Protection and Humanitarian Aid Operations, 2018 Annual activity report, p. 10. 
(258) 
(259)  Proposal for a Decision amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism, COM(2017)772. 
(260)  Decision (EU) 2019/420 amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism. 

Interim Evaluation of the Union Civil Protection Mechanism (2014-2016), SWD(2017)287. 

116 

 
 
 
                                                        
2018 Annual Management and Performance Report 

Global Europe (budget heading 4) 

Heading  4  of  the  financial  framework  covers  a  broad  spectrum  of  external  actions  such  as  development 
cooperation, pre-accession assistance and humanitarian aid.  

Chart: Main programmes financed in 2018 under heading 4, Global Europe. All amounts in EUR million. The category ‘other programmes’ 
includes among other macro-financial assistance (MFA), Guarantee Fund for External Actions, Union Civil Protection Mechanism, EU  aid 
volunteers  initiative  (EUAV),  European  Fund  for  Sustainable  Development  (EFSD),  Partnership  Instrument  (PI),  Instrument  for  Nuclear 
Safety  Cooperation  (INSC),  decentralised  agencies,  Other  actions  and  programmes,  Pilot  projects  and  preparatory  actions,  Actions 
financed under the prerogatives of the Commission and specific competences conferred to the Commission. 
Source: European Commission. 

EUR 10.4 billion of budget commitment appropriations (6 % of the total 2018 EU budget) is allocated to the 
Global  Europe  related  programmes.  EU  development  assistance  is  strengthened  by  the  European 
Development  Fund,  which  is  financed  not  from  the  EU  budget  but  through  direct  contributions  from  EU 
Member States.  

The European Union and its Member States continued to be the world's leading provider of official 
development assistance — EUR 74.4 billion in 2018. 

Chart: Contribution to the official development assistance 
Source: Organisation for Economic Co-operation and Development (OECD). Amounts include assistance provided by the Member States 
outside the EU budget 

117 

56.9%22.2%9.2%11.7%74 billion EUROTHERS 
 
2018 Annual Management and Performance Report 

Instrument for Pre-Accession Assistance 

Programme objectives  

Instrument  for  Pre-Accession  Assistance (261)  supports  candidate  countries  and  potential 
The 
candidates in adopting and implementing the  political, institutional, legal, administrative, social and 
economic  reforms  required  to  comply  with  EU  values  and  to  progressively  align  to  EU  rules,  standards, 
policies and practices with a view to EU membership. The instrument contributes to  stability, security and 
prosperity in the beneficiary countries (262). It provides beneficiary-country citizens with better opportunities 
and allows for the development of standards equal to those in the EU. Financial assistance is provided in five 
policy areas: (a) reforms in preparation for EU membership and related institution and capacity building, (b) 
socioeconomic  and  regional  development,  (c)  employment,  social  policies,  education,  promotion  of  gender 
equality  and  human-resources  development,  (d)  agriculture  and  rural  development,  and  (e)  regional  and 
territorial cooperation. 

Support for political reforms. 

Strengthening the ability of 
beneficiary countries to fulfil the 
EU membership obligations by 
supporting progressive alignment 
with, and adoption, 
implementation and enforcement 
of, the EU acquis. 

Support for economic, social and 
territorial development, with a 
view to smart, sustainable and 
inclusive growth. 

Strengthening regional integration 
and territorial cooperation 
involving the beneficiary 
countries, Member States and, 
where appropriate, third countries. 

Implementation and latest achievements 

The agenda of 2018 was marked by the adoption of a strategy for ‘A credible enlargement perspective 
for  and  enhanced  EU  engagement  with  the  Western  Balkans’ (263)  on  6 February 2018  aiming  to 
generate renewed reform momentum in the Western Balkans and better support preparations for successful 
accession  to  the  EU.  The  strategy  put  forward  a  comprehensive  action  plan  of  57  actions  based  on  six 
flagship initiatives to support the transformation of the Western Balkans: rule of law, security and migration, 
socioeconomic development, connectivity, digital agenda and reconciliation and good neighbourly relations. 

Progress was achieved in all flagship initiatives of the strategy throughout 2018. The actions undertaken 
by  the  Commission,  EU  agencies  and  EU  Member  States  to  take  the  strategy  forward  included:  enhanced 
political  dialogue  (high-level  meetings  and  visits),  tightening  cooperation  between  the  western  Balkan 
partners and various EU agencies, gearing up and reinforcing EU financing instruments (e.g. Western Balkans 
Investment  Framework  and  its  Guarantee  Fund),  opening  up  and  promoting  access  to  EU  programmes 
(Creative  Europe,  Connecting  Europe  Facility  or  the  Europe  for  Citizens),  reinforced  capacity  building  and 
refocusing the financial engagement under the Instrument for Pre-Accession Assistance.  

(261)  Regulation (EU) No 231/2014 of the European Parliament and of the Council of 11 March 2014 establishing an Instrument for Pre-

Accession Assistance (IPA II) https://ec.europa.eu/neighbourhood-
enlargement/sites/near/files/pdf/financial_assistance/ipa/2014/231-2014_ipa-2-reg.pdf 

(262)  Current beneficiaries are: Albania, Bosnia and Herzegovina, the North Macedonia, Kosovo*, Montenegro, Serbia and Turkey. (* This 

designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo 
declaration of independence.) 

(263)  COM(2018)65final. 

118 

 
 
 
 
                                                        
2018 Annual Management and Performance Report 

In  the  abovementioned  context,  improving  connectivity  within  the  Western  Balkans  and  between  the 
Western  Balkans  and  the  EU  is  a  key  factor  .  Continued  progress  has  been  achieved  on  the  connectivity 
agenda (264):  the  Instrument  for  Pre-Accession  Assistance  has  set  aside  up  to  EUR 1 billion  for  connectivity-
investment  projects  and  technical  assistance  for  the  2015-2020  period.  Following  the  Western  Balkans 
summits  (Vienna  2015,  Paris  2016,  Trieste  2017  and  Sofia/London  2018)  the  instrument  provided 
EUR 700 million  for  connectivity  projects  in  the  transport  and/or  energy  sector,  which  leveraged  overall 
investments  of  more  than  EUR 2.4 billion.  Special  emphasis  was  put  on  the  preparation  and  financing  of 
concrete regional infrastructure investment projects, and also  on the implementation of technical standards 
and  accompanying  reform  measures.  For  example,  aligning  and  simplifying  border-crossing  procedures, 
railway reforms, information systems, road-safety and maintenance schemes. Some of the expected results 
are  the  construction  or  upgrade  of:  450 km  of  electricity  transmission  lines  and  associated  substations, 
108 km  of  gas  pipeline,  320 km  of  railway  lines  and  connected  stations,  141 km  of  motorways,  two  cross-
border bridges as well as two ports. 

With  regard  to  migration,  the  number  of  irregular  migrants  in  the  Western  Balkans  was  significantly 
reduced,  but  smuggling  activities  remained  on  the  rise  and  new  sub-routes  emerged.  The  EU  continued  to 
provide financial support to the countries affected by migratory pressure along the Western Balkans route. 
The  Instrument  for  Pre-Accession  Assistance  allocated  funds  to  support  (in  particular)  Bosnia  and 
Herzegovina,  North  Macedonia  and  Serbia,  and  in  managing  the  migration  flow.  As  the  nature  of  the  crisis 
changed, the support focuses more on a structural approach in order to improve the conditions in the shelter 
centres. In parallel, the fight against smuggling and the improvement of the border controls are supported at 
regional level.  

Examples of concrete results in 2018 under the Instrument for Pre-Accession Assistance are as follows. 

The Svilaj bridge connecting Bosnia and Herzegovina with Croatia 

Construction works on the connection of the downstream bridge over the Sava River on Corridor Vc near Svilaj 
were  successfully  completed  at  the  end  of  February  2019.  The  new  cross-border  bridge  is  part  of  the  first 
connectivity  project  approved  under  the  connectivity  agenda  in  2015  and financed  via  the  Western  Balkans 
investment  of 
Investment  Framework.  The  EU  provided  EUR 25.1 million 
EUR 109.5 million via the Instrument for Pre-Accession Assistance. 

in  grants  for  the  total 

Supporting the reforms in the justice sector 

In Albania, the International Monitoring Operation (IMO) has been deployed by the Commission to oversee the 
re-evaluation of judges and prosecutors (‘vetting’). The core monitoring activities are carried out by a team of 
international observers (seven from EU Member States and one from the United States) who are engaged in 
every  step  of the  work  carried  out  by  the  domestic  vetting  institutions.  The  vetting  process  has  produced 
concrete results. Over 200 investigation dossiers have been processed and around 100 decisions have been 
taken.  On  average,  for  every  magistrate  confirmed  in  office,  one  is  dismissed  from  duty.  The  International 
Monitoring  Operation  has  guaranteed  a  crucial  external  and  independent  monitoring  of  the  vetting  process, 
thus helping to consolidate the overall credibility of this endeavour. 

(264)  See Connectivity agenda co-financing of investment projects in the Western Balkans 2018 https://ec.europa.eu/neighbourhood-

enlargement/sites/near/files/connectivity-agenda-2018-sofia-summit.pdf 

119 

 
 
 
                                                        
2018 Annual Management and Performance Report 

Regional housing programme  

In 2018 the EU contributed an additional EUR 40 million to the regional housing programme(265). This brings 
the  total  support  to  EUR  287  million,  of  which  the  EU  is  the  largest  donor,  with  EUR 234 million  —  or  over 
80% of all contributions.  

By  the  end  of  2018  the  regional  housing  programme  has  provided  12 000 people  in  need  with  quality, 
durable homes (close to 4 000 housing units). It has also given extra assistance, to improve the lives of these 
rehoused  people,  including  making  sure  they  can  access  services  (health,  education,  etc.)  and  benefit  from 
rights (pensions, allowances, documentation, etc.). In addition, the programme has supported over 30 000 jobs 
and  given  1 000  contracts  to  local  companies.  It  has  also  improved  the  skills  of  workers,  and  worked  with 
local businesses and local administrations to deliver better services.  

Assessment and evaluation 

During  2018  the  European  Commission  completed  two  thematic  evaluations,  covering  the  expansion  of  the 
EU to include new members (‘enlargement’) and the Neighbourhood region.  

The  evaluation  of  EU  support  for  security  sector  reform  in  enlargement  and  Neighbourhood  countries 
(concerning  the  period  2010-2016)  was  conducted  to  help  strengthen  democratic  accountability  and 
transparency and improve policy and practice through evidence-based learning. The evaluation confirmed that 
the  EU  achieved  positive  effects  through  its  promotion  of  EU  values  and  interests  in  the  enlargement  and 
Neighbourhood regions. The  evaluation identified policy recommendations aimed at enhancing the EU’s role 
as  a  strategic  player,  strengthening  national  ownership,  improving  the  effectiveness  of  funding  procedures, 
and achieving greater results. 

The  evaluation  of  EU  support  to  social  protection  in  external  action  (concerning  the  period  2007-2013) 
assessed to what extent this support contributed to achieving the objectives of EU cooperation in the area of 
social protection. It concluded that the EU should promote a broad strategic approach with more attention to 
sustainability,  should  consider  scaling  up  its  support  to  social  protection,  and  support  the  development  of 
appropriate monitoring and evaluation systems. 

The political priorities of the European Commission continue to be supported through the 2019 Instrument for 
Pre-Accession Assistance II interventions, in particular the fundamentals of enlargement such as rule of law 
and  democratic  governance,  economic  growth  and  jobs,  as  well  as  other  important  priorities  such  as  the 
connectivity agenda and security. The priorities stemming from the State of the Union and the priorities set in 
the  Western  Balkans  strategy (266)  of  February  2018  will  be  reflected  in  the  2019  and  2020  programmes. 
Following the adoption of the Western Balkans strategy, of the Sofia Declaration (267) and of the enlargement 
package,  stronger  focus  will  be  put  on  the  regional  dimension  of  competitiveness,  research  and  innovation 
and  to  the  measures  the  countries  need  to  adopt  with  a  view  to  setting  up  the  regional  economic  area. 
Support to education and employment also remains a priority with actions aimed at supporting the reform of 
the vocational-training systems, as well as employment and social services focusing on young people, women 
and vulnerable groups (including Roma). 

Continuity is to be ensured under the multiannual financial framework 2021-2027. The strong performance-
based element is maintained and simplified to facilitate monitoring and reporting and provide a real incentive 
to beneficiaries. 

(265)  The  Regional  Housing  Programme  is  a  joint  initiative  by  Bosnia  and  Herzegovina,  Croatia,  Montenegro  and  Serbia. 

http://regionalhousingprogramme.org/ 

(266)  https://ec.europa.eu/commission/news/strategy-western-balkans-2018-feb-06_en  
(267)  https://www.consilium.europa.eu/media/34776/sofia-declaration_en.pdf  

120 

                                                        
2018 Annual Management and Performance Report 

European Neighbourhood Instrument 

Programme objectives  

Establishing  an  area  of  shared  prosperity  and  good  neighbourliness  involving  the  EU  and  the  partner 
countries  by  developing  a  special  relationship  founded  on  cooperation,  peace  and  security,  mutual 
accountability and shared commitment to the universal values of democracy, the rule of law and respect for 
human rights under the Treaty on EU. 

The European Neighbourhood Instrument (268) is the main financial instrument for implementing the European 
Neighbourhood  Policy (269),  which  supports  political  and  economic  reforms  with  the  aim  of  creating  a 
space  of  stability,  security  and  prosperity  in  EU’s  direct  neighbourhood.  The  instrument  supports  key 
priorities in the bilateral relations between the EU and its neighbouring countries (270): democracy and rule of 
law, sustainable economic development, security and migration and mobility.  

Promoting human rights and 
fundamental freedoms, the rule 
of law, principles of equality and 
the fight against discrimination in 
all its forms. 

Creating conditions for the better 
organisation of legal migration 
and the fostering of well-
managed mobility of people. 

Promoting confidence building, 
good neighbourly relations and 
other measures contributing to 
security in all its forms and the 
prevention and settlement of 
conflicts. 

Achieving progressive integration 
into the EU internal market and 
enhanced sectoral and cross-
sectoral cooperation. 

Supporting smart, sustainable and 
inclusive development in all 
aspects. 

Enhancing sub-regional, regional 
and European Neighbourhood-
wide collaboration as well as 
cross-border cooperation. 

Implementation and latest achievements 

In  2018,  EUR 2.38  billion  was  committed  to  bilateral,  regional  and  cross-border  cooperation  programmes 
(including  projects  via  the  EU  Trust  Funds:  European  Union  Regional  Trust  Fund  in  response  to  the 
Syrian crisis, European Union Emergency Trust Fund for Africa and the Neighbourhood Investment 
Facility), responding to the challenges set out in the context of the Neighbourhood Policy.  

(268)  Regulation (EU) No 232/2014 of 11 March 2014 establishing a European Neighbourhood Instrument. 
(269)  Through its European Neighbourhood Policy (ENP), which has been revised in November 2015, the EU works with its southern and 
eastern neighbours to foster stabilisation, security and prosperity, in line with the Global Strategy for the European Union's Foreign 
and Security Policy. 

(270)  Partner countries are: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Syria, 

Palestine**, Tunisia and Ukraine. (** This designation shall not be construed as recognition of a State of Palestine and is without 
prejudice to the individual positions of the Member States on this issue.) 

121 

 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

In line with the revised European Neighbourhood Policy (271), stabilisation remains the main political objective 
in the Southern Neighbourhood. It is advancing through supporting economic growth, good governance, rule of 
law, compliance with human rights and through enhancing security and cooperating on migration and mobility 
with partner countries. 

The  instrument  proved  a  flexible  and  responsive  instrument  to  address  political  priorities  and  react  to 
protracted crises (refugee crisis, crises in Syria and Ukraine). 

The  European  Neighbourhood  Instrument  has  been  pivotal  in  the  EU  response  to  crises  in  the  Southern 
Neighbourhood. 

Through the European Neighbourhood Instrument, the EU has responded to the  Syrian crisis by supporting 
the broader needs of the Syrian population inside the country and in neighbouring Iraq, Jordan and Lebanon. 
Part of that funding has been channelled for implementation to the EU Regional Trust Fund in Response to the 
Syrian  Crisis.  As  of  30 September 2018,  more  than  1.9 million  individuals  were  being  supported  via  the 
different  projects.  This  data  is  based  on  the  first  40  projects  of  the  EU  Trust  Fund,  equalling  funding  of 
EUR 800 million.  The  EU  Trust  Fund  is  active  mainly  in  Iraq,  Jordan,  Lebanon  and  Turkey  and  tackles  the 
education, livelihood, health and water, sanitation and hygiene sectors. 

Education and protection-related actions show good progress. More than 200 000 children and young people 
now  have  access  to  basic  and  higher  education,  psychosocial  support  and  protection  against  gender-based 
violence.  The  total  results  so  far  for  the  education  sector  are  180 356  individuals  with  access  to  basic 
education; 12 646 teachers trained; 177 education facilities constructed or refurbished; 6 501 young people 
with access to higher and further education. 

The  European  Neighbourhood  Instrument  finances  EU  Regional  Trust  Funds together  with  other instruments 
such  as  the  Development  Cooperation  Instrument.  For  example  the  European  Union  Regional  Trust  Fund  in 
response to the Syrian crisis, which promotes a better livelihood for refugees and host communities, through 
better employability, increased financial capacity and better target-group productive capacities. Results in the 
livelihood  sector  have  so  far  reached  75 317  individuals  and  738  organisations,  namely  micro,  small  and 
medium-sized enterprises in the region. 

This  EU  Trust  Fund  provided  856 889  individuals  with  access  to  health  care,  3 838  health  personnel  with 
training  and 66  primary  health  centres  and  hospitals in  the  region  with  equipment  or  refurbishment. In  the 
water,  sanitation  and  hygiene  sector  the  EU  Trust  Fund benefited  59 944  people.  A  total  of  37  (of  128 
planned) water and wastewater facilities have been completed. 

As the  dedicated  instrument  to  address the  migration  crisis  in  EU  Neighbourhood,  the  north  of  Africa 
(EU Emergency Trust Fund for Africa (272)) has continued to increase its reach considerably with 10 new 
programmes approved over five countries for EUR 285 million in 2018, including contributions to two cross-
regional  programmes  and  the  expansion  of  ongoing  actions.  In  Libya  the  EU  increased  its  support  to  local 
governance and municipalities throughout 2018, bringing the overall EU contribution to Libyan municipalities 
to  more  than  EUR 100 million  in  2018,  with  49  municipalities  targeted  (this  represents  42%  of  all  Libyan 
municipalities). Activities are spread across the country, targeting different regions and concentrating on the 
capacity  building  of  municipal  authorities as well  as strengthening  relationships  between  municipal  players: 
both state and non-state players.  

The European Court of Auditors audited the EU Trust Fund for Africa and in its special report (273) concluded 
that the European Union Emergency Trust Fund for Africa is a flexible tool, but that its design should be more 
focused.  The  Court  of  Auditors  found  that  this  trust  fund  was  faster  in  launching  projects  compared  to 
traditional  instruments, and  that  it  has,  overall, managed  to  speed  up  project  implementation.  The  Court  of 
Auditors identified room for improvement in the quality of the objectives of the EU Trust Fund for Africa, the 
selection procedure for projects, the speed of implementation and the monitoring of the trust fund. 

(271)  Review of the European Neighbourhood Policy (JOIN(2015) 50 final, 18.11.2015). 
(272)  https://ec.europa.eu/trustfundforafrica/region/north-africa_en 
(273)  European Court of Auditors, European Union Emergency Trust Fund for Africa: Flexible but lacking focus, Special Report 32/2018. 

122 

                                                        
2018 Annual Management and Performance Report 

The EU remains a major partner for countries of the Eastern Partnership. The Eastern Partnership Summit 
in Brussels marked a new approach of this close partnership through the adoption of the  ‘20 Deliverables 
for 2020’ (274) setting jointly agreed goals for ongoing reforms in partner countries in four priority areas: a 
stronger economy, stronger governance, stronger connectivity and a stronger society.  

The European Neighbourhood Instrument achieved the following concrete results. 

  Since  the  launch  of  the  Eastern  Partnership  in  2009,  the  EU  has  supported  more  than  70 000 

enterprises, backed EUR 2 billion worth of loans, and created more than 28 000 jobs. 

 

 

Erasmus+  has  enabled  more  than  30 000  students  and  academic  staff  from  eastern  partner 
countries to study or teach in EU countries since 2009. In September 2018, the first European School 
outside EU borders opened and welcomed its first 30 students. Preparations are ongoing for a second 
year. 

‘EU4Business’  —  an  umbrella  initiative  covering  all  EU  support  for  small  and  medium-sized 
enterprises in the Eastern Partnership region — improves both access to finance and the small-and-
medium-sized-enterprise  environment  across  the  region.  With  an  active  portfolio  of  over 
EUR 260 million  of  EU  support  (complementary  to  other  forms  of  support),  EU4Business  has 
supported  more  than  57 000  small  and  medium-sized  enterprises  (another  50 000  companies  will 
receive further assistance in the years to come).  

  A  decision  on  extending  the  trans-European  transport  networks  to  the  Eastern  Neighbourhood  by 
2030  was  reached  in  2016  as  a  concrete  step  towards  better  connections  and  a  streamlined 
approach  to  infrastructure  investment.  This  decision  complements  reforms  in  the  sector  making 
transport more secure, safer and more environmentally friendly.  

  Over 300 municipalities, covering 20 million people in the eastern partner countries, signed up to the 
EU’s covenant of mayors. This will reduce CO2 emissions by almost 20 million tonnes by 2020, which 
is equivalent to planting almost 500 million trees. 

Assessment and evaluation 

According to the midterm evaluation (275), the European Neighbourhood Instrument is overall relevant and fit 
for purpose. It has allowed the EU to implement the reviewed Neighbourhood Policy. The instrument has also 
proven  its  capacity  to  respond  in  a  flexible  manner  to  the  multiple  crises  and  new  challenges  in  the 
Neighbourhood, in particular in Ukraine and Tunisia.  

In 2018, the Commission carried out an impact assessment (276) covering the whole external action heading 
‘Global Europe’ under the 2014-2020 multiannual financial framework. The impact assessment concluded in 
particular that most external instruments (aside from those with a very specific nature) would benefit from 
being integrated into one instrument, including the European Neighbourhood Instrument. A broad instrument 
would  provide  a  more  geographically  and  thematically  comprehensive  approach,  facilitating  the 
implementation of different policies in a trans-regional, multi-sectoral and global way. The EU could facilitate 
consistent responses and mutual benefit, breaking down thematic and geographic silos. 

In  that  context,  on  14 June 2018  the  Commission  adopted  a  proposal  establishing  the  Neighbourhood, 
Development  and  International  Cooperation  Instrument (277).  The  new  instrument  proposes  to  preserve  the 
core  specificities  of  the  special  partnership  with  the  European  Neighbourhood  Programme  partners,  while 
ensuring  greater  consistency,  mutual  benefit  (‘synergies’),  flexibility  and  simplification.  It  includes  a  chapter 
dedicated  to  the  Neighbourhood  region,  which  contains  specific  provisions  applicable  to  the  Eastern  and 
Southern  Neighbourhood.  These  specificities  and  key  principles  are  maintained  and  reinforced,  notably  the 
performance-based approach (‘more for more’) and the differentiation approach, thus providing incentives for 

(274)  https://ec.europa.eu/neighbourhood-enlargement/news_corner/news/eu-identifies-20-key-deliverables-2020-eastern-

partnership_en  

(275)  SWD(2017) 602 https://ec.europa.eu/europeaid/sites/devco/files/swd-mid-term-review-eni_en_0.pdf p. 32.  
(276)  SWD(2018) 337 http://ec.europa.eu/transparency/regdoc/rep/10102/2018/EN/SWD-2018-337-F1-EN-MAIN-PART-1.PDF  
(277)  COM(2018) 460 https://ec.europa.eu/commission/sites/beta-political/files/budget-may2018-neighbourhood-development-

international-regulation_en.pdf  

123 

                                                        
2018 Annual Management and Performance Report 

jointly  agreed  political  and  economic  reforms.  Cross-border  cooperation  between  EU  Member  States  and 
partner countries, both in the Eastern and Southern Neighbourhood is also proposed to continue in view of the 
very positive results so far achieved. 

Development Cooperation Instrument (DCI) 

Programme objectives  

The primary objective of the  Development Cooperation Instrument (278) is the reduction and, in the long 
term, the eradication of poverty and it contributes to the achievement of a range of objectives of EU external 
action,  in  particular;  fostering  sustainable  economic,  social  and  environmental  development  as  well  as 
promoting democracy, the rule of law, good governance and compliance with human rights; preserving peace 
and preventing conflict; improving the quality of the environment and the sustainable management of global 
natural  resources;  assisting  populations,  countries  and  regions  confronting  natural  or  man-made  disasters; 
and  promoting  an  international  system  based  on  stronger  multilateral  cooperation  and  good  global 
governance.  Through  the  Development  Cooperation  Instrument,  the  EU  also  aims  to  ensure  that  both  the 
positive  and  the  negative  impacts  of  migration  on  development  are  reflected  in  national  and  regional 
development strategies. It also provides assistance to countries wishing to strengthen migration governance 
in order to achieve development outcomes. 

The Development Cooperation Instrument covers all the developing countries except the countries eligible for 
funding under the Pre-Accession Instrument. It is made of three components: (1) the geographic programmes; 
(2)  the  thematic  programmes  which  finance  (2.1)  global  public  goods  and  support  (2.2)  civil-society 
organisations  and  local  authorities;  (3)  the  pan-African  programme,  which  funds  the  implementation  of  the 
joint Africa-EU strategy. 

Overarching objective: reduction, and in the long term, the eradication of poverty 

Fostering sustainable economic, 
social and environmental 
development. 

Consolidating and supporting 
democracy, the rule of law, good 
governance, human rights and 
the relevant principles of 
international law.  

Implementation and latest achievements 

In 2018, EUR 2.981 billion was allocated to the Development Cooperation Instrument. The resources allocated 
for  2014-2020  amount  to  EUR 19.661 billion (279).  The  programme  is  implemented  through  direct  (mainly 
grants) and indirect management in cooperation with international organisations, Member State agencies and 
beneficiary countries. 

EU  bilateral  aid  under  the  Development  Cooperation  Instrument  focused  increasingly  on  the  countries  that 
need it the most. Similar prioritisation is done at country level by focusing aid on a limited number of sectors 
in each partner country.  

(278)  Regulation (EU) No 233/2014 of the European Parliament and of the Council of 11 March 2014 establishing a financing instrument 

for development cooperation for the period 2014-2020. 

(279)  Programme statement 2018, p. 21. 

124 

 
 
                                                        
2018 Annual Management and Performance Report 

Challenges impacting the performance of development cooperation programmes (280) 

Throughout  2018's  complex  tenure,  several  crises  exacerbated  the  already-fragile  and  unstable  contexts 
which  affect  many  of  the  partner  countries.  A  large  number  of  partner  countries  remain  characterised  by 
fragility,  including  political  issues,  conflict,  corruption  and  weak  governments.  Crisis  situations,  political 
volatility and economic instability jeopardise programme implementation (especially in ‘sensitive’ sectors such 
as  human  rights  and  democracy,  migration  and  security),  making  resilience  actions  even  more  necessary. 
Continuous  shrinking  space  for  civic  society,  rule  of  law,  democracy  and  human  rights  compromise  results, 
while weakening our partners. Transnational issues, including terrorism and irregular migration, continued 
to evolve and become more important. Political and security crises and/or incidents impacted the work of EU 
delegations in several countries in 2018. All these underlying threats and demanding conditions represented 
major challenges for partner countries, for the cooperation programmes managed by the Commission and for 
the work of the EU delegations. 

EU delegations face particular challenges in recruiting experienced and qualified staff, resulting in several-
months-long  vacancies  that  are  difficult  to  manage,  especially  given  the  already  heavy  workload.  These 
difficulties in recruiting are especially amplified in countries under hardship or insecure conditions.  

Also, many of the regions are prone to climate-change-related disasters and stand particularly vulnerable 
to natural disasters and the adverse effects of climate change.  

EU Trust Fund Colombia 

In  Colombia,  support  for  peacebuilding  efforts  has been  a  central  feature  in  EU-Colombia  relations  for  the 
past 20 years and all parties recognise the EU as a key supporting actor in the Colombian Peace Agreement. 
Support is channelled mainly through the EU Trust Fund for Colombia, which contracted in 2018, a total of 
18 projects for EUR 59.5 million. All the projects focus on rural development in the poorest and most conflict-
affected regions, by reintegrating the ex-combatants; stimulating economic activity and productivity; and 
restoring the social fabric.  

EU Trust Fund for Africa 

The  EU  Trust  Fund  for  Africa  (EUTF)  aims  to  address  migration  and  forced  displacement,  and  boost 
socioeconomic  development,  contributing,  among  other  things,  to  the  creation  of  new,  decent  jobs  in  many 
African  partner  countries.  By  31 December 2018,  187  projects  worth  EUR  3 589.9  million  were  approved 
under  the  trust  fund,  in  the  Sahel  and  Lake  Chad,  Horn  of  Africa  and  the  north  of  Africa  regions.  The 
programme  focuses  on  supporting  high  levels  of  productive  and  decent  employment,  including  through 
vocational  education  and  training,  as  well  as  the  extension  of  social  protection  coverage  through  the 
establishment of nationally defined social protection systems and floors. 

Bêkou Trust Fund for the Central African Republic 

Operating  at  the  heart  of  the  humanitarian-development  nexus,  the  Bêkou  Trust  Fund  for  the  Central 
African Republic plays a unique role in promoting stabilisation and peace by creating jobs; providing basic 
services;  promotion  of  social  dialogue;  and  building  resilience  for  the  community.  With  more  than  694  000 
internally displaced people and 543 000 refugees in neighbouring countries, the safe return of civilians and 
their reintegration into the communities constitutes a cornerstone for peacebuilding processes in the Central 
African Republic. 

(280)  Directorate-General for International Cooperation and Development, Annual activity report 2018, p. 47. 

125 

                                                        
2018 Annual Management and Performance Report 

Vocational education and training toolbox  

Notable achievements in 2018, particularly with a focus on youth employability, include the launch of the 
vocational  education  and  training  toolbox,  a  facility  providing  advisory  services  to  strengthen  the  linkages 
between the vocational education and training system and industry in partner countries, thereby contributing 
to sustainable development goals 4 (quality education) and 8 (decent work and economic growth). This is an 
example of the more comprehensive approach to employment, as advocated in the communication (281) on a 
new Africa-Europe alliance for sustainable investment and jobs announced by President Juncker in September 
2018. 

The Global Climate Change Alliance Plus (282) 

The  Global  Climate  Change  Alliance  Plus (283)  is  an  EU  flagship  initiative  contributing  to  sustainable 
development  goal  number 13  (climate  action).  It  is  used  to  support  the  partner  countries  which  are  most 
vulnerable to climate change (mainly small  island developing states and least-developed countries) to build 
climate resilience. 

Chart: The Global Climate Change Alliance Plus — geographical distribution of projects since the inception of the programme (284). 
Source: 2018 Annual Activity Report, Directorate-General for International Cooperation and Development, p. 16. 

The new projects approved in 2018 encompass 10 country actions and a multi-country programme (the Local 
Climate Adaptive Living Facility), to improve local authorities’ access to climate finance. 

(281)  COM (2018) 643 final, http://ec.europa.eu/transparency/regdoc/rep/1/2018/FR/COM-2018-643-F1-FR-MAIN-PART-1.PDF  
(282)  Directorate-General for International Cooperation and Development, Annual activity report 2018, p. 16. 
(283)  http://www.gcca.eu 
(284)  Global  Climate  Change  Alliance  Plus  (GCCA+).  The  chart  shows  that  EU  support  largely  targets  least-developed  countries  (LDCs) 
and  small  island  developing  states  (SIDSs).  Those  countries  that  are  both,  an  LDC  and  a  SIDS,  are  counted  and  portrayed  in  a 
specific category as their vulnerability to climate change is even higher and in line with the Agenda 2030 principle to leave no one 
behind. 

126 

 
                                                        
2018 Annual Management and Performance Report 

Switch to Green (285) 

The Commission continued to support ‘Switch to Green’, the EU’s flagship action on green economy, to which the EU 
has allocated approximately EUR 300 million over the last 10 years. The recent evaluation (286) of EU cooperation 
on green economy reached positive conclusions on ‘Switch to Green’, noting in particular its ‘high impact in terms of 
uptake  of  sustainable  consumption  and  production  practices  and  increased  levels  of  investments  by  the  micro, 
small and medium-sized enterprises, contributing notably to the creation of green jobs’ (287). 

For African countries, there is a real economic interest in investing in solar energy. More solar energy in the 
energy mix will relieve public finances from the structural deficits of the public electricity supply companies. 
Successful  first  steps  have  been  taken  in  renewable  energy,  especially  in  West  Africa.  Grid  connected  solar 
energy  installations  and  wind  turbines,  currently  under  preparation,  built  or  in  operational  activity  will 
generate over 600 megawatts. 

In  2018,  the  33 megawattpeak  of  solar  power  plant  at  Zagtouli  (Burkina  Faso),  co-financed  by  the  EU, 
became fully operational. 

The EU is currently co-financing five other solar power plants in West Africa: Gorou Banda and Agadez (Niger), 
Defissol (Benin), Odienné (Côte d’Ivoire) and Bauchi (Nigeria). In total, EU funds are contributing to additional 
solar power production of 206 megawattpeak in West Africa. 

Assessment and evaluation 

The  evaluation (288)  of  the  Development  Cooperation  Instrument  at  its  midterm  review  considered  that  it 
remains  overall  relevant  and  fit  for  purpose.  It  is  broadly  in  line  with  new  policy  (e.g.  the  new  European 
Consensus  on  Development  and  the  2030  agenda  for  sustainable  development)  although  implementing 
certain  priorities  could  be  difficult  in  its  current  format.  The  evaluation  also  pointed  out  that  while  there  is 
some evidence of consistency between the Development Cooperation Instrument and other external financing 
instruments and with EU external-action policies, a more strategic approach is needed.  

This  concern  was  taken  into  consideration  in  2018  when  the  Commission  carried  out  an  impact  assessment 
covering the external action heading ‘Global Europe’ under the 2014-2020 multiannual financial framework. It 
was  assessed  that  streamlining  a  number  of  instruments  into  one  broad  instrument  would  provide  an 
opportunity to rationalise their management-and-oversight systems and so reduce the administrative burden for 
all  stakeholders.  Having  a  simplified  oversight  system  would  allow  the  relevant  institutions  to  have  a  better, 
more  comprehensive  view  of  the  EU’s  external  expenditure.  Under  the  2021-2027  multiannual  financial 
framework  the  European  Development  Fund  is  integrated  into  a  new  Neighbourhood,  Development  and 
International Cooperation Instrument (289) which responds to the objectives of the external action of the EU. 

European Fund for Sustainable Development (EFSD) 

The overall aim of the European Fund for Sustainable Development (290) is to contribute to the goals of 
the United Nations 2030 agenda for sustainable development, in particular poverty eradication, as well as to 
the  commitments  under  the  recently  revised  European  Neighbourhood  Policy.  By  supporting  investments  in 
Africa and the Neighbourhood, the European Fund for Sustainable Development also aims to address specific 
socioeconomic  root  causes  of  migration,  including  irregular  migration,  and  to  contribute  to  the  sustainable 
reintegration  of  migrants  returning  to  their  countries  of  origin  and  to  the  strengthening  of  transit  and  host 
communities.  

(285)  Directorate-General for International Cooperation and Development, Annual activity report 2018, p. 17. 
(286)  https://europa.eu/capacity4dev/public-environment-climate/documents/scp-evaluation-full-package-publications 
(287)  Directorate-General for International Cooperation and Development, Annual activity report 2018, p. 17 
(288)  SWD(2017) 600 final https://ec.europa.eu/europeaid/sites/devco/files/swd-mid-term-review-dci_en_0.pdf  
(289)  COM(2018) 460. 
(290)  Regulation (EU) No 2017/1601 of the European Parliament and of the Council of 26 September 2017 establishing the European 

Fund for Sustainable Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund. 

127 

                                                        
2018 Annual Management and Performance Report 

The  European  Fund  for  Sustainable  Development  Guarantee  will  cover  portfolios  of  investments  to  be 
implemented  by  eligible  counterparts  in  targeted  areas,  so-called  investment  windows.  A  first  set  of 
investment windows includes: sustainable energy and connectivity; micro, small and medium-sized enterprise 
financing;  sustainable  agriculture,  rural  development  and  agribusiness;  sustainable  cities  and  digital  for 
environment.  

By the end of 2018 (291) the first guarantee was signed with FMO (De Nederlandse Financieringsmaatschappij 
voor  Ontwikkelingslanden),  the  Dutch  development  bank,  for  the  Nasira (292)  risk-sharing  facility (293).  It  will 
use EUR 75 million of EU funds to leverage up to EUR 1 billion of investment for entrepreneurs in sub-Saharan 
Africa and the Neighbourhood. This is expected to create or support up to 800 000 jobs and benefit those who 
struggle to access affordable loans, such as internally displaced people, refugees, women and young people.  

The European Fund for Sustainable Development Guarantee helps to increase investment in partner countries 
which  require  it,  including  in  high-risk  areas  and  sectors.  It  has  experienced  a  promising  start (294).  In  that 
context,  the  proposal  for  a  Neighbourhood  Development  and  International  Cooperation  Instrument 
for  the  post-2020  multiannual  financial  framework  will  include  the  European  Fund  for  Sustainable 
Development+. Integrating the fund into the broad instrument is expected to simplify the legal framework and 
increase  the  efficiency  of  processes  and  operations.  It  would  improve  the  visibility  delivered  by  the  current 
fragmented instruments and facilitate better communication of impact and results. There would be a stronger 
policy alignment and complementarity of actions (295). 

EU humanitarian-aid programme  

Programme objectives  

The  humanitarian-aid  programme  aims  to  provide  relief  and  protection  to  populations  affected  by 
natural or man-made disasters. Given that together the EU and its Member States are the world's largest 
humanitarian-aid  donor,  they  play  a  central  role  in  tackling  humanitarian  challenges.  The  humanitarian-aid 
programme provides aid to the most vulnerable populations in countries in crisis, including ‘forgotten crises’ 
(crises with little media attention and poor coverage).  

Implementation and latest achievements 

In 2018 (296), the European Commission provided over EUR 1.4 billion (297) in aid to the most vulnerable people 
across more than 90 countries, reaching over 144 million beneficiaries (298). 

(291)  Directorate-General for International Cooperation and Development, Annual activity report 2018, p. 32. 
(292)  For more information on Nasira, please visit: www.nasira.info 
(293)  Nasira will address the high risks, both perceived and real, involved in lending to underserved entrepreneurs in countries 

neighbouring the EU and in Sub-Saharan Africa, many of whom have been forced to flee their homes. It will give them access to 
investment loans by offering local financial institutions, such as banks and microfinance institutions, portfolio guarantees 
containing loans to entrepreneurs. https://ec.europa.eu/europeaid/sites/devco/files/181213-eip-28-guarantees-brochure-final.pdf  

(294)  Reference to the current EFSD in the MFF proposal COM(2018) 460 final https://eur-

lex.europa.eu/resource.html?uri=cellar:d2c24540-6fb9-11e8-9483-01aa75ed71a1.0002.02/DOC_1&format=PDF page 7 

(295)  See SWD(2018) 337 final https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018SC0337&from=EN p24. 
(296)  Programme statement ECHO Humanitarian Aid, p. 2. 
(297)   In 2018, the EU budget provided EUR 1.4 billion in humanitarian aid (excluding European Development Fund and externally 

assigned revenue). Taking account also the external assigned revenue from Member States committed for the Facility for Refugees 
in Turkey, operations in Central and West Africa, the European Development Fund appropriations (EUR 45.6 million) as well as 
Emergency Support in the EU (EUR 199 million), the EU, in 2018, managed a total amount of EUR 1.6 billion for humanitarian aid. 
(298)  These statistical data are based on the aggregation of the estimated number of 'action beneficiaries' as declared by the partners 

implementing humanitarian projects funded by ECHO. One single individual beneficiary in need of humanitarian assistance can 
benefit from more than one humanitarian action and from more than one project. 

128 

                                                        
2018 Annual Management and Performance Report 

In  2018,  more  than  half  of  the  budget  for  humanitarian  aid  went  to  the  most  vulnerable  countries and  an 
additional 33.9% was allocated to ‘forgotten crises’. Of the contracts, 62% were issued within a very short 
timeframe  (11  days).  In  addition,  the  EU  is  committed  to  build  the  capacity  and  resilience  of  vulnerable 
communities and has put in place a resilience action plan for which 80 % of actions are on target (299). 

As an example of the EU's response to  major crises, the EU continues to deliver life-saving assistance and 
support  to  millions  of  people  across  Syria.  Aid  is  delivered  from  all  humanitarian  hubs,  including  across 
conflict  lines  and  border  crossings.  The  assistance  contributes  to  the  vital  delivery  of  food,  medicine, 
water  and  shelter  for  millions  of  Syrians  either directly  affected  or internally  displaced  by  the  conflict. In 
neighbouring Lebanon, EU funding has contributed to cash assistance for the most vulnerable refugees, life-
saving (‘secondary’) health care, non-formal education and shelter (including water, hygiene and sanitation) to 
improve the living conditions of the vulnerable families most affected by displacement. In Turkey and Jordan, 
the  EU  supports  the  most  vulnerable  refugees,  among  other  things  through  cash  assistance,  as  this  is 
considered the most cost-efficient and dignified method (300).  

The Yemen crisis (301) 

For  most  of  2018,  the  situation  in  Yemen  remained  characterised  by  ongoing  conflict,  directly  affecting 
civilians  and  with  blatant  violations  of  international  humanitarian  law.  Yemen  crisis  is  the  largest 
humanitarian crisis worldwide. At the end of 2018,  according to the UN, 22.2 million people were in need of 
humanitarian and/or protection assistance.  

During  2018, the  EU  made  significant  efforts  to  scale  up  its  response  to  the  Yemen  crisis,  reaching  a  total 
allocation  of  EUR 127.5 million.  With  these  funds,  the  EU  supports  life-saving  interventions  to  conflict-
affected  populations  and  to  people  affected  by  food  insecurity,  nutrition  and  health  crises.  Protection, 
logistics, education in emergency and advocacy are mainstreamed or supported by standalone projects. Over 
14 million vulnerable people were reached through this assistance. 

Assessment and evaluation 

The  comprehensive  evaluation  of  EU  humanitarian  aid  in  the  period  2012-2016 (302)  found  that  EU  aid 
positively contributed to saving lives, reducing morbidity and suffering as well as improving dignity of life of 
populations affected by disasters. The scale of funding dedicated to humanitarian-aid actions allowed the EU 
to have a real impact on the ground, addressing the needs of a significant number of beneficiaries across the 
world. In regions where the EU allocated only limited funding compared to its overall financial allocation, the 
evaluation showed that it was also able to have a positive impact by selecting projects with high leverage or 
multiplier-effect potential.  

The  evaluation  also  found however that  there  is scope  for  the  Commission  to  move  towards  increased  and 
more  strategic  cooperation  with  key  partners,  to  simplify  procedures  and  allow  for  a  more  linked-up, 
consistent  approach  to  humanitarian  aid,  especially  where  this  is  accompanied  by  a  move  towards 
multiannual  programming  and  funding.  In  parallel, the  Commission  will  continue  to  need  its  diverse  pool  of 
framework  partners,  including  those  which  are  relatively  small  or  medium  sized,  given  their  specific 
geographic  presence  and/or  sectoral  or  thematic  expertise (303).  The  EU  humanitarian-aid  programme  will 
continue providing emergency and life-saving assistance  under the next multiannual framework programme 
2021-2027 to people hit by man-made or natural disasters. 

(299)  Programme statement ECHO Humanitarian aid, p. 2. 
(300)  Programme statement ECHO Humanitarian aid, p. 2. 
(301)  Directorate-General for European Civil Protection and Humanitarian Aid Operations, 2018 Annual activity report, p. 19. 
(302)  Comprehensive evaluation of EU humanitarian aid in the period 2012-2016, SWD(2019) 3, p. 74. 
(303)  Comprehensive evaluation of EU humanitarian aid in the period 2012-2016, SWD(2019) 3, p. 80. 

129 

                                                        
2018 Annual Management and Performance Report 

EU aid volunteers initiative  

The  EU  aid  volunteers  initiative  brings  together  volunteers  and  organisations  from  different  countries, 
providing practical support to humanitarian-aid projects and contributing to strengthening the local capacity 
and resilience of disaster-affected communities.  

Humanitarian  disasters  have  dramatically  increased  the  pressure  on  humanitarian  organisations  and  more 
qualified people are needed. The EU  aid volunteers initiative gives European citizens a chance to show their 
solidarity  by  collaborating  in  humanitarian  projects  worldwide,  while  helping  organisations  to  cover  their 
specific staff needs.  

As of December 2018 the  EU aid volunteers initiative funded 728 sending and hosting  organisations (304). 
This  support  included  strengthening  their  capacity,  technical  assistance  and  managing  the  deployment  of 
volunteers to disaster-affected communities. 

To  support  the  implementation  of  this  programme,  a  platform  was  developed  (the  EU  aid  volunteers 
platform (305))  to  provide  a  space  for  the  publication  of  volunteering  vacancies,  a  discussion  forum  (for 
volunteers, volunteer-sending organisations and local host organisations) and the publication of stories from 
the field. It supports partnerships and collaboration between projects, houses the online volunteering activities 
and  allows  organisations  to  manage  the  learning  and  development,  the  mentoring  and  the  creation  of 
certificates for EU Aid volunteers (306). 

Under the next multiannual financial framework  (2021-2027) the EU aid volunteers initiative is expected to 
be  integrated  into  the  European  Solidarity  Corps (307), with  the  aim of  facilitating  the  engagement  of  young 
people in solidarity activities in Europe and abroad under a single EU instrument. This will seek mutual benefit  
and streamlining with other EU volunteering schemes, notably the European Solidarity Corps. The Commission 
will aim to provide more clarity for EU citizens (308) seeking volunteering opportunities inside and outside the 
EU. 

European Instrument for Democracy and Human Rights 

Programme objectives  

The European Instrument for Democracy and Human Rights (309) provides assistance to the development and 
consolidation  of  democracy  and  the  rule  of  law  and  of  compliance  with  all  human  rights  and 
fundamental freedoms.  The  programme  helps  civil  society  to  become  an  effective  force  for  political  reform 
and  defence  of  human  rights.  Building  on  its  key  strength  —  the  ability  to  operate  swiftly  —  the  European 
Instrument  for  Democracy  and  Human  Rights  is  able  to  focus  on  sensitive  political  issues  and  innovative 
approaches  and  to  cooperate  directly  with  local  civil-society  organisations  which  need  to  preserve  their 
independence  from  public  authorities,  providing  for  great  flexibility  and  increased  capacity  to  respond  to 
changing circumstances. 

The programme aims to enhance the protection, promotion, implementation and monitoring of human rights 
and  fundamental  freedoms,  mainly  through  support  to  relevant  civil-society  organisations,  human 
rights defenders and victims of repression and abuse. At the same time, the European Instrument for 
Democracy  and  Human  Rights  works  towards  consolidation  of  democracy  in  third  countries,  by 

(304)  Directorate-General European Civil Protection and Humanitarian Aid Operations, Annual activity report 2018, p. 37. 
(305)  https://webgate.ec.europa.eu/echo/eu-aid-volunteers_en  
(306)  Directorate-General European Civil Protection and Humanitarian Aid Operations, Annual activity report 2018, p. 37. 
(307)  COM(2018) 440. 
(308)  Participants in the EU aid volunteers initiative must be citizens of an EU Member State or long-term residents in the EU 

https://ec.europa.eu/echo/what/humanitarian-aid/eu-aid-volunteers_en 

(309)  Regulation (EU) No 235/2014 of the European Parliament and of the Council of 11 March 2014 establishing a financing instrument 

for democracy and human rights worldwide. 

130 

                                                        
2018 Annual Management and Performance Report 

enhancing participatory and representative democracy, strengthening the overall democratic cycle, the rule of 
law and improving the reliability of electoral processes. The European Instrument for Democracy and Human 
Rights views the human rights and democracy agendas as intrinsically interlinked.  

The  European  Instrument  for  Democracy  and  Human  Rights  is  intended  as  a  ‘niche’  instrument  particularly 
geared  towards  addressing  the  most  difficult  human  rights  situations  and  protecting  human  rights  and 
democracy  activists  at  risk,  supporting  some  of  the  selected  key  human  rights  players  and  processes,  and 
acting in areas where the EU has a special interest and offers added value (e.g. the fight against the death 
penalty, promoting sound electoral processes). 

Implementation and latest achievements 

In  2018,  a  total  of  EUR 188 million  was  allocated  to  promote  democracy  and  human  rights  from  a  total 
amount of EUR 1 333 million for the 2014-2020 programming period (310).  

Support to human rights defenders at risk 

ProtectDefenders.eu,  the  first  EU  comprehensive  human  rights-defenders  mechanism,  established  to 
protect  defenders  at  high  risk  and  who  are  facing  the  most  difficult  situations  worldwide.  This  mechanism 
was set up in 2015 and extended in 2018 with an unprecedented budget of EUR 19.95 million over 4 years. It 
brought together a consortium of 12 independent civil-society organisations specialised in human rights and 
democracy  protection  with  worldwide  coverage;  it  provides  emergency  support,  material  assistance, 
temporary relocation/sheltering, training support and capacity building to human rights defenders. 

Support to democracy 

'Supporting  Democracy'  (EUR 4.6 million)  programme,  under  the  umbrella  of  the  Democracy  Initiative, 
focuses on support to the EU delegations in the areas of civil-society participation in democratic processes.  

Achievements  so far include  the Citizen Observers Forum in 2016 bringing together 250  domestic observer 
organisations  from all  over the  world,  facilitating  peer-to-peer exchanges  and  promoting  the  declaration  of 
global  principles for  electoral  observers, training  domestic  observers  in  Afghanistan,  Democratic  Republic  of 
the  Congo,  Lebanon,  Madagascar,  Maldives,  and  the  launch  of  an  annual  worldwide  'EU4Democracy' 
campaign promoting EU support to democracy in partner countries.  

Support to targeted key players and processes 

‘Global campus for human rights and democracy’ (approximate contribution of EUR 5 million a year) is a 
unique global network of  more than 100 universities teaching and promoting human  rights and democracy. 
Supported  by  the  EU  from  its  outset,  the  Global  Campus  confers  masters  degrees  in  human  rights  and 
democracy on more than 150 students a year, covers seven regions in the world (311) and represents a beacon 
of excellence in human rights and democracy education.  

Continued support to the global alliance of national human rights institutions and its four regional networks 
(Africa, Europe, Asia and Latin America) of national human rights institutions (EU contribution EUR 3.75 million 
2019-2021)  is  strategic  and  timely:  the  advice  and  support  these  networks  provide  to  individual  national 
human  rights  institutions  in  core  mandate  areas  allow  for  a  more  strategic,  relevant  and  impactful 
engagement of national human rights institutions at global, regional and national levels. The 3-year targeted 
programme will be managed by the Danish institute for human rights as mandated by the global alliance of 
national  human  rights  institutions  and  will  build  on  the  results  of  the  previous  programme  which  ran  from 
2015-2018  which  provided  much-needed  training  and  capacity-building  opportunities,  exchange  and 
communication platforms, institutional development and rapid support for national human rights institutions 
in distress.  

(310)  Programme statement 2018, p. 6. 
(311)  https://www.eiuc.org 

131 

 
 
                                                        
2018 Annual Management and Performance Report 

Assessment and evaluation 

According to the midterm review (312), the European Instrument for Democracy and Human Rights (for 2014-
2017), has been successful in delivering on its objectives and has been an enabling, flexible and responsive 
instrument.  Its  key  added  values  have  been  the  independence  of  action  and  worldwide  coverage,  allowing 
interventions  in  the  most  difficult  country  situations  swiftly,  creating  synergies  and  complementarity  where 
other instruments and donors cannot or do not act. It has been able to address human rights and democracy 
challenges,  even  in  the  most  difficult  environments  —  confirming  that  the  European  Instrument  for 
Democracy and Human Rights remains more than ever relevant to the political priorities of the EU. 

The instrument is also judged generally efficient thanks to a relatively low level of administrative expenditure 
and  its  essential,  in-built  flexible  tools  (e.g.  direct  support  to  human  rights  defenders,  direct  small  grants, 
working with informal partners). 

While  it  has  limited  funds  compared  to  other  external  financing  instruments,  it  is  at  the  core  of  the  EU's 
values.  As  democracy  and  human  rights  are  being  put  under  greater  stress,  additional  funding  may  be 
needed. 

Under  the  next  multiannual  financial  framework,  the  democracy  and  human  rights  instrument  will  be 
integrated into the new proposed Neighbourhood, Development and International Cooperation Instrument (313). 
As part of the broad instrument, democracy and human rights actions potentially have greater access to un-
allocated  funds.  In  this  way,  boundaries  with  other  instruments  would  be  reduced  and  more-integrated 
programming approaches and consistence with country actions would be possible. 

Common Foreign and Security Policy  

Objectives  

The  European  Union’s  Common  Foreign  and  Security  Policy  operations  contribute  to  the  preservation  of 
peace, the prevention of conflicts and to the strengthening of international security.  

There are four types of actions under the Common Foreign and Security Policy. 

 

 

The conduct of civilian missions to promote stability and build resilience by strengthening the rule of 
law at the strategic and operational levels in fragile environments. 

The  work  of  the  European  Union’s  Special  Representatives  who  promote  the  EU’s  policies  and 
interests in troubled regions and countries and play an active role in efforts to consolidate peace, and 
to promote stability and the rule of law. 

  Operational actions (314) as well as support to the European Security and Defence College (315). 
 

Projects  to  combat  the  proliferation  of  weapons  of  mass  destruction  (including  their  delivery 
mechanisms)  and  to  combat  the  illicit  spread  and  trafficking  of  other  conventional  weapons, 
particularly through supporting multilateral activities. 

For the Common Foreign and Security Policy to be effective, the EU needs to be ready to respond rapidly and 
flexibly  to  emerging  threats  to  its  strategic  interests  and  as  such,  the  actions  cannot  be  programmed  in 
advance:  due  to  their  nature,  the  specific  actions  are  often  announced  at  short  notice  and  have  short 
implementation  periods  which  may  later  need  to  be  adapted,  prolonged  or  terminated,  according  to  the 
changing needs and priorities on the ground. 

(312)  SWD(2017) 604 final, https://ec.europa.eu/europeaid/sites/devco/files/swd-mid-term-review-eidhr_en_0.pdf 
(313)  COM(2018) 460. 
(314)  As included in the Treaty on the European Union (Article 28), https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A12016M028 

(315)  https://eeas.europa.eu/headquarters/headquarters-homepage/4369/european-security-and-defence-college-esdc_en 

132 

                                                        
2018 Annual Management and Performance Report 

Implementation and latest achievements 

In 2018, total commitments for Common Foreign and Security Policy actions amounted to EUR 369.9 million. 
In  the  period  2014  to  2018  there  were  13  different  civilian  missions  operating  at  different  stages  and  11 
active European Union Special Representatives (the one in Afghanistan finalised activities in 2018) (316).  

The EU Advisory Mission in Iraq, established in October 2017, is the most recently established civilian mission. 
The EU Advisory Mission has been: (i) providing advice and expertise to the Iraqi authorities at the strategic 
level  on  the  civilian  aspects  of  the  Iraqi  national  security  programme  and  associated  plans;  (ii)  assessing 
opportunities for further EU engagement and (iii) assisting the EU delegation in the coordination of the EU and 
Member State support. As part of the mission’s support to the Iraqi strategy on countering organised crime, its 
mandate also covers certain aspects of cultural-heritage protection. The mission's mandate was prolonged in 
October 2018 for another 18 months (317). 

In addition to this, the Common Foreign and Security Policy also supports projects to promote disarmament, 
non-proliferation of weapons of mass destruction and arms-export control. During the period 2014-
2018, 29 different non-proliferation and disarmament projects started and another 22 were completed (318). 

Assessment and evaluation 

The Common Foreign and Security Policy will remain one of the key instruments used to implement the global 
strategy for the EU’s Foreign and Security policy under the next multiannual financial framework. 

For the period after 2020, the High Representative of the Union for Foreign Affairs and Security Policy has, 
with Commission support, put forward a proposal for the European Peace Facility (319): an off-budget fund (not 
under  the  multiannual  financial  framework)  of  EUR 10.5  billion  over  a  7-year  period  coinciding  with  the 
timeframe of the next multiannual financial framework. The initiative is intended to enhance the EU’s ability 
to  finance  operational  actions under  the  Common  Foreign  and Security  Policy  that  have  military  or defence 
implications, and that therefore cannot be financed under the EU budget (320). 

It is proposed that the European Peace Facility do the following. 

 

Fund the common costs of EU military operations under the Common Security and Defence Policy. 

  Contribute to the financing of military peace-support operations led by other international players. 

 

Engage  in  broader  actions  aimed  at  supporting  partner  countries' armed  forces  with  infrastructure, 
equipment  or  military  assistance,  as  well  as  in  other  operational  actions  under  the  EU's  Common 
Foreign and Security Policy with military or defence implications, when so decided by the Council. 

Instrument contributing to Stability and Peace  

Programme objectives  

The Instrument contributing to Stability and Peace provides quick, short-term support in countries or regions 
where  a  crisis  is  emerging  or  unfolding.  It  also  provides  a  longer-term  support  to  conflict  prevention, 
peacebuilding  and  crisis-preparedness  activities  as  well  as  activities  addressing  global  and  trans-
regional threats and emerging threats. 

(316)  Programme statement Common Foreign and Security Policy, p. 2. 
(317)  Programme statement Common Foreign and Security Policy, p. 4. 
(318)  Programme statement Common Foreign and Security Policy, p. 2. 
(319)  Proposal of the High Representative of the Union for Foreign Affairs and Security Policy, with the support of the Commission, to the 

Council for a Council Decision establishing a European Peace Facility. 

(320)  https://eeas.europa.eu/headquarters/headquarters-homepage/46331/new-european-peace-facility-worth-%E2%82%AC105-billion-

bolster-international-security_en 

133 

                                                        
2018 Annual Management and Performance Report 

Implementation and latest achievements 

In  2018,  the  EU  continued  to  respond  to  crises  in  Europe,  Africa,  the  Middle  East,  Asia  and  the  Americas 
through  the  Instrument  contributing  to  Stability  and  Peace (321).  A  total  of  EUR 360 million  was 
committed of which EUR 254.1 million under the short-term crisis-response component and EUR 33.7 million 
under  the  structural  peacebuilding  component.  The  EUR 254.1 million  was  dedicated  to  the  response  and 
prevention  of  crises  worldwide,  responding  directly  to  EU  political  priorities,  and  covered  different  thematic 
areas, including stabilisation and security reform, mediation, dialogue and confidence building, elections and 
political transition, as well as counter terrorism and preventing violent extremism (322).  

In 2018, the Instrument contributing to Stability and Peace launched its first EU-funded project in the 
north-eastern  part  of  Syria  in  areas  liberated  from  Daesh  by  the  Global  Coalition.  The  mine-action  project 
(EUR 10 million)  aims  to  improve  physical  safety  conditions  and  to  facilitate  access  to  land  and 
infrastructure  —  including  through  mine-risk  education  for  returnees,  displaced  people  and  host 
communities.  It  represents  the  first  EU  non-humanitarian  intervention  in  the  area  since  the  conflict 
started (323). 

The Central African Republic  remains of significant concern to the EU. During 2018, the instrument devoted 
EUR 40.5 million in additional funding to sustain the EU engagement in the country. The funding provided new 
and  sustained  impetus  to  the  peace  process,  which  was  on  the  verge  of  collapse  at  the  end  of  2017, 
nurturing  hopes  for  a  negotiated  ceasefire  and  a  comprehensive  political  agreement,  which  at  the  end  of 
2018 gave reason for cautious hope (324). 

Furthermore,  2018  was  the  first  year  of  implementation  of  capacity  building  in  support  of  security  and 
development  (CBSD)  actions  ,  in  particular  where  there  is  a  major  threat  to  the  functioning  of  state 
institutions.  Eight  such  actions  have  been  launched  in  Mali,  the  Central  African  Republic,  Somalia  and 
Lebanon (325).  

Assessment and evaluation 

The evaluation (326) concluded that the instrument delivers on its objectives. When it comes to crisis-response 
measures,  the  evaluation  found  that  this  component  has  delivered  on  its  commitments,  yielded  important 
outcomes and is responsive  and flexible given the fast-evolving  peace and security  context. The instrument 
allowed the EU to make important contributions to address threats to international and EU peace and security 
by addressing both existing  and emerging global threats. It has offered opportunities for a broader political 
exchange platform on key security-policy issues with beneficiary governments and institutional partners. 

The  evaluation  underlined  that  the  capacity  for  the  EU  to  react  quickly  to  the  unforeseen  events  and  to 
address  key  security  issues  globally  must  be  further  strengthened  in  any  future  external-action 
instruments (327). Consequently, the Commission is proposing under the next multiannual financial framework 
to bring together several external-action instruments to provide a comprehensive approach in an integrated 
neighbourhood,  development  and  international  cooperation  instrument (328)  providing,  amongst  other  things, 
flexibility to target resources to where they are most needed in changing international situations (329). 

(321)  Programme statement Instrument contributing to Stability and Peace, p. 2. 
(322)  Service for Foreign Policy Instruments, Annual activity report. 2018, p. 25. 
(323)  Programme statement Instrument contributing to Stability and Peace, p. 3. 
(324)  Programme statement Instrument contributing to Stability and Peace, p.3. 
(325)  Programme statement Instrument contributing to Stability and Peace, p.2. 
(326)  Midterm evaluation of the Instrument contributing to stability and peace, SWD(2017)607. 
(327)  Midterm evaluation of the Instrument contributing to stability and peace, SWD(2017)607, p. 22. 
(328)  Proposal for a Regulation establishing the Neighbourhood, Development and International Cooperation Instrument, COM(2018) 

460. 

(329)  Proposal for a Regulation establishing the Neighbourhood, Development and International Cooperation Instrument, COM(2018) 

460, p. 2. 

134 

                                                        
2018 Annual Management and Performance Report 

Partnership Instrument for Cooperation with Third Countries  

The Partnership Instrument for Cooperation with Third Countries is the first instrument specifically aimed at 
promoting  the  EU's  strategic  interests  worldwide  by  consolidating  its  external  strategies,  policies  and 
actions . The instrument has four main objectives: 

 

 

 

 

offering policy support and responding to global challenges; 

projecting the international dimension of Europe 2020; 

enhancing  market  access  and  boosting  trade,  investment  and  business  opportunities  for  EU 
companies; 

promoting public diplomacy and academic cooperation. 

The  EU  has  numerous  international  agreements  with  partner  countries  all  over  the  world,  which  gives  it 
influence in many fields of international relations. By combining the weight of all Member States acting within 
common policies and strategies, the EU has the critical weight to respond to global challenges (330).  

The  budget  allocated 
EUR 126.9 million (331). The funded activities can be divided into three main categories: 

for  actions  under 

the  Partnership 

Instrument 

in  2018  amounted 

to 

 

 

 

exchanges, events, knowledge sharing; 

expertise, technical assistance; 

promotion, outreach, engagement (332). 

The  evaluation  support  study (333)  found  evidence  that  the  Partnership  Instrument  played  an  often-critical 
enabling role through both strengthening and opening up areas for cooperation and dialogue between the EU 
and  third  countries.  The  evaluation  of  the  instrument (334)  found  that  it  has  an  impact  on  policy/political 
processes  in  partner  countries  in  line  with  EU  interests  and  that  it  has  contributed  to  developing  mutually 
beneficial relationships with these countries (335).  

The  Partnership  Instrument  will  be  integrated  into  a  new  neighbourhood,  development  and  international 
cooperation instrument (336) under the next multiannual financial framework ensuring greater consistency and 
efficiency in supporting EU’s external policies. 

Cooperation with Greenland 

In  2014 (337),  the  Commission  agreed  a  ‘Programming  document  for  the  sustainable  development  of 
Greenland 2014-2020’ with the government of Greenland. 

The  objective  of  this  programme  is  to  contribute  to  a  higher  standard  of  living  through  improved 
education,  skills development  and knowledge.  This will  ensure  Greenland’s  continuous economic  progress in 
the  increasingly  globalised  world  economy  through  a  critical  mass  of  qualified  people  and  a  competitive 
workforce. Increased productivity in the working-age population will reduce the growing pressure on the public 
finances resulting from the growing share of elderly people. Furthermore, a highly educated and skilled labour 

(330)  Programme statement Partnership Instrument, p. 1. 
(331)  Programme statement Partnership Instrument, p. 2. 
(332)  Programme statement Partnership Instrument, p. 2. 
(333)  External Evaluation of the Partnership Instrument (2014-mid-2017), p. 48.  
(334)  Mid-term evaluation of the Partnership Instrument for cooperation with third countries, SWD(2017)608.  
(335)  Service for Foreign Policy Instruments, 2018 Annual activity report, p. 46. 
(336)  Proposal for a Regulation establishing the Neighbourhood, Development and International Cooperation Instrument, COM(2018) 

460. 

(337)  Signed on 28 October 2014 following the Council Decision 2014/137/EU of 14 March 2014 on relations between the European 

Union on the one hand, and Greenland and the Kingdom of Denmark on the other. 

135 

                                                        
2018 Annual Management and Performance Report 

force  will  reduce  the  economic  dependence  on  certain  sectors  and  is  a  prerequisite  for  development  and 
inclusive growth in emerging sectors. 

EU  cooperation  with  overseas  countries  and  territories,  including  Greenland,  will  continue  under  the  next 
multiannual  financial  framework (338)  in  synergy  with  the  actions  carried  out  under  the  Neighbourhood, 
Development and International Cooperation instrument. 

Instrument of financial support for encouraging the economic 
development of the Turkish Cypriot community 

This instrument facilitates the reunification of Cyprus by encouraging (a) economic development of the 
Turkish Cypriot community, (b) the economic integration of the island (c) improving contact between the two 
communities  and  with  the  EU  and  (d)  the  preparation  for  the  EU  body  of  laws  following  a  comprehensive 
political settlement of the Cyprus issue. 

The  Commission  encountered  some  difficulties  when  implementing (339)  this  programme.  Examples  are  the 
internationally non-recognised status of the beneficiary (Turkish Cypriot community), poor absorption capacity 
of funds and disputes with contractors. Despite this, in 2018, major infrastructure works mostly contracted in 
2009  have  been  completed.  Further  infrastructure  investments,  with  a  strong  environmental  and  bi-
communal  focus, are  going  to  be  implemented.  Continued  support  is provided  for  strengthening  the  private 
sector and labour-market measures, with an emphasis on innovation and increasing employability. Likewise, 
concrete  measures  have  been  put  in  place  aimed  at  eradicating  animal  disease  and  improving  food-safety 
standards.  

An evaluation of the aid programme provided during the period 2013-2018 is currently ongoing and due to 
be finalised by the end of 2019. 

The  programme  is  intended  to  continue  under  the  next  multiannual  financial  framework  programme  to 
facilitate  the  reunification  of  Cyprus  by  encouraging  the  economic  development  of  the  Turkish  Cypriot 
community. 

Instrument for Nuclear Safety Cooperation 

The  Instrument  for  Nuclear  Safety  Cooperation (340)  contributes  to  the  promotion  of  the  implementation  of 
international treaties and conventions as well as the adoption of the highest safety standards complementing 
work  inside  the  EU.  It  also  exports  the  acquis  communautaire  (‘Union  acquis’)  worldwide  and  promotes 
nuclear-safety  cooperation.  The  Instrument  for  Nuclear  Safety  Cooperation  is  the  only  specific  tool  of  the 
European  Union  addressing  nuclear-safety  issues  in  partner  countries,  complementing  other  external 
financing  instruments,  for  example  as  part  of  the  Neighbourhood  Policy.  It  covers  cooperation  in  nuclear 
safeguards which is essential to the global non-proliferation policy.  

One of the key achievements is related to safe management of radioactive waste. A major milestone, to 
make the Chernobyl site environmentally stable and safe, was met on 29 November 2016 by sliding the new 
safe-confinement structure over the nuclear reactor destroyed in April 1986. The new safe confinement is a 
giant  arch-shaped  structure  that  covers  the  damaged  Chernobyl  Unit  4  in  order  to  prevent  any  further 
radioactive  release. The  new  safe  confinement  also  contains  the  remotely  operated  equipment  for  ultimate 
removal  of  the  damaged  reactor  and  radioactive  material.  This  important  milestone  in  the  project  was 
achieved thanks to the joint effort of the European Union, Ukraine, the European Bank for Reconstruction and 
Development,  and  the  international  community.  The  total  project  cost  is  in  the  order  of  EUR 1.5 billion,  to 
which the EU contributed more than EUR 430 million (under the technical assistance programme stimulating 

(338)  COM(2018) 461. 
(339)  Programme statement on Turkish Cypriots Financial Aid, p. 2. 
(340)  Council Regulation (Euratom) No 237/2014 of 13 December 2013 establishing an Instrument for Nuclear Safety Cooperation. 

136 

                                                        
2018 Annual Management and Performance Report 

partnerships  between  the  EU  and  the  Commonwealth  of  Independent  States  and  Georgia  (Tacis) (341) 
(EUR 210 million) and Nuclear Safety Cooperation (EUR 220 million) programmes).  

The  Commission  proposed  to  establish  a  European  Instrument  for  Nuclear  Safety,  within  the  multiannual 
financial  framework  2021-2027,  complementing  the  Neighbourhood,  Development  and  International 
Cooperation Instrument on the basis of the Euratom Treaty (342).  

Facility for refugees in Turkey 

Turkey currently hosts close to 4 million refugees and the EU is committed to assist Turkey in dealing with 
this challenge. The EU facility for refugees in Turkey, managing a total of EUR 6 billion (EUR 3 billion for 
2016-2017  and  EUR 3 billion  for  2018-2019),  provides  for  a  joint  coordination  mechanism,  designed  to 
ensure  that  the  needs  of  refugees  and  host  communities  in  Turkey  are  addressed  in  a  comprehensive  and 
coordinated  manner.  The  main  focus  areas  are  humanitarian  assistance,  education,  health,  municipal 
infrastructure  and  socioeconomic  support.  The  facility  channels financing  contributions from the  EU  budget, 
mainly  the  humanitarian-aid  programme  and  the  Instrument  for  Pre-Accession  Assistance,  as  well  as 
contributions from Member States.  

The  2016-2017  EUR 3 billion  allocation  was  fully  contracted  with  72  projects  rolled  out,  showing  tangible 
results. In education a EUR 300 million grant has been implemented in cooperation with the Turkish ministry 
of national education. It has supported the integration of Syrian children into the Turkish education system by 
providing  access  to  education  to  over  600 000  children.  This  support  continues  also  under  the  second 
tranche and a new project with the ministry of national education was signed, worth EUR 400 million. 

The facility has delivered EUR 300 million in aid to ensure refugees can access  health-care services. Over 
4 million primary health-care consultations were carried out and over 500 000 Syrian refugee children were 
vaccinated.  Furthermore,  143  migrant  health  centres  are  now  operational  with  over  2 000  staff  employed. 
The  facility  will  continue  to  provide  assistance  in  health,  education,  municipal  infrastructure  and 
socioeconomic  support,  with  a  special  focus  on  creating  livelihood  opportunities  for  refugees  in  Turkey. 
1.5 million  of  the  most  vulnerable  refugees are  provided  with  monthly  cash  transfers  under  the  emergency 
social safety net (343). 

1.5 million recipients of the 
emergency social safety net  
to cover basic needs 

470 000 children attending school 
and their families received support 
through the conditional cash transfer 
for education programme 

4 500 Turkish language teachers 
employed in 23 provinces have 
provided language training to over 
400 000 children  

136 new schools are currently being 
constructed to respond to education 
needs 

Over 1.2 million ante-natal 
consultations delivered 

Over 60 000 students have benefited 
from catch-up and back-up classes 

More than 635 000 Syrian refugee 
children have access to education 

Almost 67 500 children benefited 
from school transportation 

(341)  http://europa.eu/rapid/press-release_MEMO-92-54_en.htm 
(342)  COM(2018) 462. 
(343)  https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/frit_factsheet.pdf 

137 

 
 
 
 
 
 
 
 
                                                        
 
 
 
 
 
 
 
 
2018 Annual Management and Performance Report 

The EU’s engagement with Turkey has also helped reduce irregular and unsafe border crossings into the EU 
and to cut the number of lives lost at sea.  

The  Court  of  Auditors in  its  special  report  on  the  facility for  refugees for  Turkey (344)  examined  whether  the 
facility effectively supported the refugees in Turkey, focused on the management of the first tranche of the 
facility  and  results  achieved  in  the  area  of  humanitarian  support.  The  Court  found  that  this  facility  rapidly 
mobilised needed resources to provide a swift response to the refugee crisis. However, it did not fully achieve 
its objective of coordinating this response effectively. 

Guarantee Fund for External Action  

Lending  operations  covered  by  the  External  Guarantee  Fund  relate  to  three  different  instruments;  the 
external lending mandate, which benefits from a guarantee from the EU budget to the European Investment 
Bank;  Euratom  external  lending;  and  EU  macro-financial  assistance  loans  to  third  countries.  The  fund  is 
provisioned from the EU budget and has to be maintained at a certain percentage (the target rate is currently 
9%) of the outstanding amount of the loans and loans guaranteed. 

Macro-Financial  Assistance (345)  programmes (346)  provide  financial  support  to  partner  countries  which 
experience a balance of payments crisis and are under an International Monetary Fund programme. This takes 
mainly the form of medium- and long-term loans, sometimes combined with grants. The objective of macro-
financial  assistance  is  to  restore  a  sustainable  external  financial  situation,  while  encouraging  economic 
adjustments  and  structural  reforms.  Disbursements  are  tied  to  the  fulfilment  of  specific  policy  conditions 
(listed  in  the  Memorandum  of  Understanding  and  mutually  agreed  with  the  beneficiary  country),  and 
successful reviews. 

In 2018, the Commission presented two new legislative proposals for macro-financial assistance operations, 
which  were  adopted  by  the  Parliament  and  Council  in  2018.  These  are  Georgia  II  (EUR 45 million,  including 
EUR 10 million in grants) and Ukraine IV (EUR 1 billion in loans).  In both cases, the disbursement of the first 
tranche took place in a single transaction in December 2018: Georgia II (EUR 15 million) and Ukraine IV (EUR 
500 million).  

The  objective  of  the  external  lending  mandate  of  the  European  Investment  Bank  is  to  support  private-
sector  development  in  targeted  third  countries,  the  development  of  social  and  economic  infrastructure, 
climate-change  mitigation  and  adaptation,  and  long-term  economic  resilience  in  relation  to  migration.  In 
2018, for a total amount of EUR 4.5 billion projects were signed by the European Investment Bank.  

The  ex  post  evaluation  reports  on  macro-financial  assistance (347)  and the  midterm  review  on  the  European 
Investment  Bank  external  lending  mandate (348)  concluded  that  the  external  financing  instruments  were, 
overall, fit for  purpose and that positive trends were emerging in  relation to the achievement of objectives. 
The reports show that more resources are needed for external financing instruments because they have been 
stretched to their financial limit.  

In response to this midterm review, as well as the sharp increase in the number of people trying to migrate to 
Europe illegally, the Commission proposed an external investment plan to tackle the root causes of migration 
from  countries neighbouring the European  Union,  consisting of a  European  Fund for Sustainable  Development 

(344) 

‘The facility for refugees in Turkey: helpful support, but improvements needed to deliver more value for money’, Special Report 
No 27/2018; https://www.eca.europa.eu/Lists/ECADocuments/SR18_27/SR_TRF_EN.pdf 

(345)  See more details on macro-financial assistance https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-
coordination/international-economic-relations/macro-financial-assistance-mfa-non-eu-partner-countries_en#documents 
(346)  Each macro-financial assistance programme is based on an ad hoc Legislative Decision (usually co-decision by the European 

Parliament and Council under the ordinary legislative procedure). The grants are financed from the EU budget. 

(347)  All ex post evaluations are available on the Directorate-General Economic and Financial Affairs website: 

https://ec.europa.eu/info/evaluation-reports-economic-and-financial-affairs-policies-and-spending-activities_en 

(348)  Report from the Commission to the European Parliament and the Council on the mid-term review of the application of the Decision 
No 466/2014/EU as regards the EU guarantee to the European Investment Bank against losses under financing operations 
supporting investment projects outside the Union, COM(2016) 584 final, 14 September 2016. 

138 

                                                        
2018 Annual Management and Performance Report 

and  quantitative  and  qualitative  changes  to  the  external  lending  mandate.  For  the  next  multiannual  financial 
framework the Commission will further build on that. The new European Fund for Sustainable Development Plus, 
should constitute an integrated financial package supplying financing capacity in the form of grants, budgetary 
guarantees  and  financial  instruments  worldwide.  It  should  support  the  external  investment  plan  and  combine 
blending  and  budgetary  guarantee  operations  covered  by  the  External-Action  Guarantee,  including  those 
covering  sovereign  risks  associated  with  lending  operations,  previously  carried  out  under  the  external  lending 
mandate  to  the  European  Investment  Bank.  Given  its  role  under  the  treaties  and  its  experience  over  the  last 
decades  in  supporting  EU  policies,  the  European  Investment  Bank  should  remain  a  natural  partner  for  the 
Commission for the implementation of operations under the External-Action Guarantee. 

EU Civil Protection Mechanism  

The  aim  of  the  EU  Civil  Protection  Mechanism  is  to  support,  coordinate  and  supplement  the  disaster-
management-coordination  actions  of  the  Member  States  in  order  to  improve  the  systems  for  preventing, 
preparing  for  and  responding  to  natural  and  man-made  disasters.  Through  a  comprehensive  approach 
encompassing  disaster  prevention,  preparedness  and  response,  the  programme  aims  to  reduce  the  loss  of 
human  life  and  to  minimise  environmental  and  material  damage  caused  by  disasters.  Member  States  put 
together resources and experts into a voluntary pool and keep them on standby for EU civil-protection missions.  

EU Civil Protection Mechanism response in 2018 
17 participating states have contributed to 20 emergencies 

Assets and expertise 

Material assistance 

500+ firefighters 

1 728 shelter kits 

30 EU Civil Protection Mechanism (EUCPM) 
experts 

9 Emergency-response-coordination-centre 
(ERCC) liaison officers 

Tents/shelter for 8 500 people 

2.2 million water-purification tablets 

11 firefighting planes 

24 million litres of water dropped 

6 firefighting helicopters 

76 power generators 

2 water-purification modules 

2 million litres of purified water 

2 isolation shuttle buses for Ebola 

13 containers and modules 

In  2018  there  were  11  requests  for  assistance  from  outside  the  EU  for  sudden-onset  and  large-scale 
emergencies.  The  mechanism  facilitated  assistance  and  experts  to  Bangladesh,  Colombia,  the  Democratic 
Republic of the Congo, Guatemala, India, Nigeria, Indonesia and Papua New Guinea (349). 

(349)  Directorate-General for European Civil Protection and Humanitarian Aid Operations, 2018 Annual activity report, p. 30. 

139 

 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

EU Civil Protection Mechanism — requests for assistance in 2018. 

Bangladesh  
Preparedness & prevention  November 
Bulgaria  
Marine pollution  
Colombia  
Environmental accident  

April, May 

August 

Democratic Republic of the Congo  
Civil unrest  
Epidemic  
France  
Marine pollution  

May 
May, August 

October 

Greece  
Forest fires  

Guatemala  
Volcano    
India  
Floods  

July 

June 

September 

Indonesia  
Earthquake  
Latvia  
Forest fires  
Nigeria  
Floods  
Papua New Guinea  
Earthquake  

Portugal  
Preparedness & prevention   
Forest fires  
Romania  
Medical    
Sweden  
Forest fires  

October 

July 

September 

February 

April 
August 

March 

June, July 

Sources: ECHO, the geographic information system of the Commission (GISCO). 

Outside the EU Civil Protection Mechanism can fill important emergency gaps in cases where it is not possible 
to  fully  deploy  humanitarian  assistance  and/or  where  specific  technical  expertise  or  assets  are  needed.  In 
addition,  the  assessments  carried  out  by  civil-protection  experts  deployed  under  the  EU  Civil  Protection 
Mechanism can usefully participate in wider disaster-recovery frameworks. 

It is important for the EU Civil Protection Mechanism to find the right balance between being a framework of 
mutual  assistance  between  European  countries  in  the  aftermath  of  natural  and  man-made  disasters  and 
evolving  towards  a  more  complex  instrument  capable  of  addressing  crises  of  a  multiple  nature  and  with  a 
global  reach (350).  To  this  end,  the  mechanism  has  been  strengthened (351)  to  ensure  better  coordination 
between EU intervention and the United Nations actions.  

Interim Evaluation of the Union Civil Protection Mechanism (2014-2016), SWD(2017) 0287, p 19. 

(350) 
(351)  Decision (EU) 2019/420 amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism, Art 16(2). 

140 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
2018 Annual Management and Performance Report 

Special instruments  

The  special  instruments  are  designed  to  make  the  financial  framework  more  flexible.  They  include  the 
emergercy  aid  reserve,  the  Flexibility  Instrument,  the  EU  Solidarity  Fund  and  the  European  Globalisation 
Adjustment Fund.  

Emergency aid reserve 

In  2018, the  emergency  aid  reserve  was  mobilised  with  EUR 372.2 million  to  finance  humanitarian  and 
civilian crisis management and protection operations in third countries. It  was used for example to fund the 
provisioning of medicines, food and protection for Venezuelan people affected by the crisis there. The reserve 
was also used to provide funding for health care, nutrition and food security, sanitation and water in Rohingya 
refugee camps in Bangladesh. 

Under  the  new  multiannual  financial  framework  the  emergency  aid  reserve  will  continue  addressing 
extraordinary situations that cannot be tackled by the emergency funding within specific programmes when a 
crisis occurs. Its scope will be extended so that the reserve can also be used for emergencies within one of 
the Member States. 

Flexibility instrument 

The Flexibility Instrument provides funding for clearly identified expenditure that cannot be covered by the 
EU  budget  without  exceeding  the  maximum  annual  amount  for  expenditure  set  out  in  the  multiannual 
financial  framework.  In  2018  it  was  mobilised  with  EUR 837.2 million  mainly  to  finance  immediate 
budgetary measures to address the ongoing challenges of migration, refugee inflows and security threats and 
to provide financing of the extension of the Structural Reforms Support Programme.  

For  the  next  multiannual  financial  framework  the  Commission  proposes  to  streamline  the  procedures  for 
mobilising these instruments, and to increase the size of the Flexibility Instrument. 

EU Solidarity Fund  

Programme objectives  

Solidarity is one of the core values of the EU and a guiding principle of the European integration process. The 
European Union Solidarity Fund, set up in 2002, is one of the most concrete demonstrations of solidarity to 
Member States and to countries negotiating their accession to the EU. The fund can be used in the event of 
major  national  or  regional  natural  disasters  (earthquakes,  floods,  droughts,  forest  fires,  storms,  etc.)  to 
finance  emergency  measures  from  day  one  of  the  disaster,  such  as  restoration  to  working  order  of  basic 
infrastructure, providing temporary accommodation, funding rescue services to help the population affected, 
securing of preventive infrastructure and cleaning-up operations.  

Implementation and latest achievements 

Since  the  EU  Solidarity  Fund  was  set  up  in  2002,  support  has  been  given  in  response  to  more  than  80 
disasters  —  including  floods,  forest  fires,  earthquakes,  storms  and  drought.  Emergency  and  recovery 
operations  in  24  countries  have  received  aid  from  the  EU  Solidarity  Fund.  This  represents  more  than 
EUR 5 billion. 

141 

2018 Annual Management and Performance Report 

In 2018 the EU Solidarity Fund continued to offer vital support, adding to the financial relief but also a clear 
and tangible sign of the European solidarity to the populations affected.  

EUR 46.5m 
France 

EUR 49.2m 
Portugal 

EUR 3.2m 
Spain 

EUR 3.8m 
Greece 

EUR 12.3m 
Poland 

For the regions of Saint 
Martin and Guadalupe, 
affected by hurricanes 
Irma and Maria 

EUR 16.9m 
Lithuania 

Following the 2017  
rainfall and floods 

Following the summer forest fires  
in October 2017 

Following the 
earthquake in 2017 

After the August 2017 
storms and rainfalls 

EUR 2.3m 
Bulgaria 

EUR 17.7m 
Latvia 

After the storms and floods  
of October 2017 

After the flooding disaster  
that took place in 2017 

Total EUR 151.9 million 

In 2018, a total amount of  EUR 152 million (352) was  granted to eight Member States, in order to allow 
them to finance emergency and recovery operations in the area of basic infrastructure, assistance to the 
population,  provisional  housing,  protection  of  cultural  heritage  and  cleaning-up  operations.  The  support 
provided in 2018 was mainly for natural disasters which occurred in the previous year. Such were the cases 
of  the  hurricanes  Irma  and  Maria  in  the  overseas  regions  of  France,  Saint  Martin  and  Guadalupe,,  the 
earthquakes in Lesbos and Kos in Greece, the floodings in Latvia and Lithuania and the forest fires in Portugal 
and Spain. 

In  2018  the  Commission  received  the  following  four  applications  for  support:  flooding  in  Burgas  (Bulgaria), 
which occurred at the end of 2017; ongoing drought in Cyprus; flooding in the north-east region of Romania 
during the summer months and extreme weather events during October/November throughout Italy. Bulgaria 
received financial contribution amounting to EUR 2.3 million in November 2018. The assessment of the three 
other cases is continued into 2019. 

Support  from  the  Solidarity  Fund  helps  to  increase  the  Member  States’  and  regions’  resilience  and 
preparedness to address the consequences of natural disasters.  

Assessment and evaluation 

The Commission carried out its first evaluation of the EU Solidarity Fund (353) covering the period 2002-
2017  and  concluded  that  the  fund  fulfils  its  mission  effectively  and  that  it  is  valued  in  its  readiness  to 
intervene with additional financial resources. The fund was also found to promote further learning in national 
public administrations in the area of disaster-risk management. The evaluation found that the integration of 
disaster-risk  management  in  the  national  systems  is  likely  to  generate  synergies  for  more  effective 
implementation. 

The evaluation found that the Solidarity Fund is an adaptable and flexible instrument for EU interventions in 
disaster situations. At the EU level, the mechanism established for the availability of resources on an annual 
basis ensures  that  the  fund  can  provide  assistance  even  in  catastrophic  events,  as witnessed  by  the  record 
grant  of  more  than  EUR 1 billion  approved  in  response  to  the  series  of  earthquakes  which  hit  Italy  during 
2016 and 2017. At the operational level, this flexibility is ensured by the possibility for beneficiary countries 
to  use  the  grant  in  order  to  cover  expenditure  incurred  retrospectively,  i.e.  for  projects  started  and 
implemented already before the actual deployment of Solidarity Fund on the ground. 

(352)  Report on budgetary and financial management of the European Commission for the financial year 2018, Section III of the Budget 

Report pursuant to Art. 249 of the Financial Regulation, 29 March 2019. 

(353)  SWD (2019) 186 final of 15 May 2019  

142 

 
                                                        
2018 Annual Management and Performance Report 

On the other hand, one of the most criticised features of the Solidarity Fund is the time taken for deployment 
of the grant, which remains on average about 1 year. In the current regulatory framework, the Solidarity Fund 
is  not  an  instrument  for  rapid  interventions  in  disaster  situations  and  further  discussion  is  required  on 
solutions to help address the issue of timing for its mobilisation.  

The  solidarity  instrument  will  continue,  with  a  few  new  features  providing  more  flexibility  in  its 
implementation. 

European Globalisation Adjustment Fund 

Programme objectives  

The  European  Globalisation  Adjustment  Fund  provides  support  to  workers  made  redundant,  and  to  self-
employed persons whose activity has ceased as a result of major structural changes in world trade patterns 
due to globalisation or as a result of the continuation of the global financial and economic crisis. 

Implementation and latest achievements (354) 

In  2014-2018,  the  European  Globalisation  Adjustment  Fund  offered  support  to  49  062  targeted  workers 
and persons not in education, employment, or training (NEETs) in 27 different economic sectors. The 
reintegration  rate  of  redundant  workers  into  the  job  market  improved  compared  to  the  previous  funding 
period  2007-2013  (from  49%  to  56%) (355).  In  2018,  Member  States  received  EUR 27.7 million  to  support 
former workers that had been made redundant. Some examples of the support offered in 2018 (356): 

 

 

 

 

 

 

 

for 550 former workers in the publishing sector in Greece; 

for 730 former workers in the Portuguese clothing sector; 

for 1 858 former workers of Air France; 

for 2 285 former Caterpillar employees in Belgium; 

for 646 former Goodyear workers in Germany; 

for 303 former workers in the Spanish clothing sector in Galicia; 

for 900 former Ericson workers in Sweden. 

This financial support was used for helping these workers with looking for a new job, career advice, education 
and training, mentoring and coaching or encouraging entrepreneurship and business creation.  

Assessment and evaluation (357) 

The results of the 2018 midterm evaluation of the European Globalisation Adjustment Fund (358) show that it 
offers redundant  workers a  unique combination of tailored measures that lead to  more sustainable results, 
increase  the  self-esteem  of  beneficiaries  (who  finally  have  a  more  proactive  approach  to  job  seeking),  and 
improves their employability.  

However, the evaluation also indicated that the European Globalisation Adjustment Fund eligibility criteria of 
funding are limited to redundancies due to globalisation or the financial and economic crisis and do not cover 
other  major  economic  developments.  For  example,  when  workers  are  made  redundant  for  reasons  of 

(354)  Directorate-General Employment, Social Affairs and Inclusion, Annual activity report 2018 p. 10. For additional info, see COM(2018) 

297 final, pp. 2-4. 

In some cases the support was requested in 2017.   

(355)  The reintegration rates are very case specific, depending on, for example, the specific economic situation in the area concerned. 
(356) 
(357)  Directorate-General Employment, Social Affairs and Inclusion, Annual activity report 2018. 
(358)  Report from the Commission on the mid-term evaluation of the European Globalisation Adjustment Fund (EGF) (COM(2018)297 
final, 16.5.2018), and accompanying Commission staff working document on the mid-term evaluation of the European 
Globalisation Adjustment Fund (EGF) (SWD(2018)192 final, 16.5.2018. 

143 

                                                        
2018 Annual Management and Performance Report 

automation  or  digitisation,  they  cannot  benefit  from  the  European  Globalisation  Adjustment  Fund  support. 
Moreover, applying for support is unnecessarily burdensome (extensive justification required) and is subject to 
a long approval process. Finally, the evaluation showed that monitoring and reporting needs to be improved in 
order to better analyse the effectiveness of the fund.  

Based on these findings, on 30 May 2018, the Commission adopted a proposal for a strengthened and more 
effective  European  Globalisation  Adjustment  Fund (359)  as  from  2021,  with  a  wider  scope  of  application 
covering  also  any  large-scale  restructuring  events,  such  as  the  ones  caused  by  automation  and  digitisation 
and with a lower threshold for intervention, as well as a simplified and faster budgetary mechanism. 

(359)  Proposal for a Regulation of the European Parliament and of the Council on the European Globalisation Adjustment Fund (EGF) 

COM(2018) 380 final.  

144 

                                                        
2018 Annual Management and Performance Report 

Section 2  
Internal control and financial 
management 

1. The EU budget is well-managed  

The European Commission attaches great importance to the proper use of the EU budget. Its well-designed 
control systems reduce the risk to the legality and regularity of financial transactions. 

In this context, management action is taken to prevent, detect and remedy any errors, irregularities or fraud. 
In 2018, for the second year in a row, the overall level of error is estimated to be below 2% (360). For those 
segments which have a risk at payment above 2%, management actions are in place. 

Chart: Overall risk at payment and at closure, over time.  
Source: European Commission annual activity reports. 

In  2018,  all  authorising  officers  by  delegation (361)  provided  reasonable  assurance  on  their 
verififcation  (‘control’)  systems  and financial  management. Where  appropriate, this assurance  was  qualified 
with  reservations  —  a  keystone  in  the  accountability  chain.  Reservations  provide  transparency  on  the 
challenges  and  weaknesses  encountered  in  specific  areas,  as  well  as  on  the  measures  needed  to  address 
them. In the 2018 annual activity reports, the financial impact of the reservations remains limited. 

(360)  The ‘materiality threshold’ is set, in most cases, at 2% of the relevant expenditure, which is in line with the European Court of 

Auditors’ methodology. 

(361)  Articles 73-74 of Regulation 2018/1046 of 18 July 2018 on the financial rules applicable to the general budget of the Union (OJ-L 

193/30.07.2018); hereinafter 'the financial regulation'. 

145 

 
                                                        
2018 Annual Management and Performance Report 

The Commission’s governance, assurance and accountability model was further strengthened in 2018 (see 
the 'building blocks' in the chart overleaf). In addition: 

 

 

The  revised  financial  regulation  has  been  adopted,  reducing  red  tape  for  beneficiaries  of  EU  funds 
and  simplifying  each  important  phase  in  the  funding  process.  These  simplification  measures  are 
embedded in the new spending programmes proposed by the Commission. 

The Commission's revised internal control framework is now fully implemented. 

  Outside  the  Commission,  the  treatment  of  conflicts  of  interest  and  the  Framework  financial 
regulation  for  decentralised  agencies (362)  have  been  strengthened  and  the  Commission  has  made 
proposals to protect the EU budget against generalised deficiencies in the rule of law in the Member 
States. 

 

 

 

Financial management has further improved, resulting in lower error rates, timely payments, further 
efficiency gains and appropriate costs of control in view of the management environment. 

The identification of any weaknesses leads to a steady level of financial corrections and recoveries. 

The internal auditor in his overall opinion considered that, in 2018, the Commission had put in place 
governance, risk management and internal control procedures which, taken as a whole, are adequate 
to  give  reasonable  assurance  on  the  achievement  of  its  financial  objectives except  for  those  areas 
under reservation by the directors-general (see section 2 subsection 5). 

The  steady  improvement  in  financial  management  and  control  systems  has  also  been  confirmed  by  the 
European Court of Auditors. In 2018, for the second consecutive year, the European Court of Auditors gave 
a  qualified  (‘favourable,  but …’)  rather  than  an  adverse  (‘negative’)  opinion  on  the  legality  and 
regularity of the 2017 EU budget payments. In addition, for the 11th consecutive year, the European Court 
of Auditors also gave a positive (‘clean’) opinion on the EU annual accounts. 

On  the  basis  of  the  assurances  and  reservations  in  the  annual  activity  reports (363),  the  College 
adopts this 2018 Annual Management and Performance Report for the EU budget and takes overall political 
responsibility for the management of the EU budget. 

The Commission achieved these positive results thanks to its assurance model and a robust control 
environment. 

The Commission has strengthened its robust assurance and accountability model 

The Commission has strong arrangements in place to ensure sound financial management. The main building 
blocks  in  its  solid  chain  of  assurance  building  and  accountability,  underpinned  by  clear  roles  and 
responsibilities. These are presented in the chart overleaf.  

The  underlying  assurance  and accountability  model  was  reinforced  in 2018  by  strengthening  oversight  at 
corporate level while maintaining the decentralised accountability of authorising officers by delegation for the 
sound financial management of the funds allocated to their departments. (See also  section 2 subsection 9.1. 
on our ‘robust governance arrangements’) 

(362)  Framework financial regulation for the bodies set up under the TFEU and Euratom Treaty adopted on 18 December 2018.  
(363)  Article 74(9) of the Financial Regulation. 

146 

 
                                                        
2018 Annual Management and Performance Report 

Chart: Commission’s assurance building and accountability: clear roles and responsibilities.  
Source: European Commission. 

147 

 
2018 Annual Management and Performance Report 

The revised internal control framework has been implemented 

The Commission’s internal control framework is based on the 2013 framework proposed by the Committee of 
Sponsoring Organisations of the Treadway Commission (COSO). It meets the highest international standards. 

Within  this  corporate  framework  and  in  line  with  the  Commission’s  decentralised  governance  model,  each 
department puts in place the organisational structure and internal control systems best suited to ensuring the 
achievement of its policy and operational objectives, including sound financial management. 

2018 was the first year of full implementation of the revised internal control framework by all Commission 
departments. Thanks to intensive communication efforts, workshops and the exchange of good practice, the 
internal control culture has improved substantially. The internal control framework is increasingly perceived as 
a powerful management tool across the Commission. In line with this increased level of maturity, Commission 
departments increasingly monitor the effectiveness of their internal control systems beyond pure compliance 
considerations. Further efforts will be made to build on the progress achieved. 

Overall, Commission departments assessed their internal control systems as  effective (see chart below). The 
main  strengths  reported  concern  the  control  environment  and  risk  assessment.  This  reflects  the  recent 
revision of the Commission’s governance arrangements and the reinforcement of corporate oversight of risk 
management during 2018. 

Some Commission departments also identified areas for improvement in their control activities. These are in 
line  with  related  audit  findings  and/or  reservations.  Action  is  being  taken  to  address  the  weaknesses 
identified, including adjusting the control strategies concerned. 

Chart: 2018 assessment of the 17 principles of the Commission’s internal control framework. Graph shows the number of departments 
(X-axis) that consider the related principle to function well, or to need some improvements, or to need major improvements. 
Source: European Commission annual activity reports. 

148 

 
2018 Annual Management and Performance Report 

Validation of local systems  
As the accuracy of the local financial systems that feed the Commission’s corporate financial and accounting 
system  is  key  to  ensuring  the  overall  reliability  of  the  annual  accounts,  the  accounting  officer  performs  a 
separate  validation  of  those  local  financial  systems.  This  is  in  addition  to  Commission  departments’ 
management assessments of their own internal control system(s).  
From the work done during 2018, none of the weaknesses identified relate to the design or implementation of 
local systems not meeting the validation criteria. Furthermore, none of the weaknesses detected are likely to 
have a material impact on the annual accounts.  
The  analysis  has  nonetheless  resulted  in  a  number  of  recommendations  intended  to  improve  the  control 
environment and accounting quality in the authorising departments (364) — mitigating risks to the accuracy of 
the financial and regulatory management reporting (365). 

(364)  Mainly the executive agencies and the paymaster, human resources, enlargement and justice departments.  
(365)  Mainly various issues with the accounting control environment, the recovery of receivable amounts and the provision of 

information to support the calculation of the employee benefits liability.  

149 

 
                                                        
2018 Annual Management and Performance Report 

2. Control systems are cost-effective 

The Commission strives to ensure that its management and control systems are cost-effective. Cost-effective 
controls  are  those  which  strike  the  right  balance  between  being  effective  in  fulfilling  the  intended  control 
objectives, in an efficient manner and at an acceptable cost. We want controls solid enough to ensure that 
financial  management  systems  and  financial  transactions  comply  with  legal  and  contractual  rules  and 
support the fight against fraud. However, these controls must not be so burdensome as to prevent the swift 
processing of contract signatures and payments. The corresponding costs must also remain at an acceptable 
level. 

In 2018, following the combined assessment of their effectiveness, efficiency and economy, all 
Commission departments conclude that, overall, their controls are cost-effective. 

Effectiveness 

Efficiency    

       Economy 

This  means  that  they  have  struck  the  right 
balance between the three factors. 
Effectiveness  in  protecting  the  EU  budget:  the 
risk  at  closure  is  0.8%  (see  subsection 2.1). 
is 
Furthermore,  the  anti-fraud  strategy 
implemented (see subsection 4). 

Efficiency:  the  Commission’s  average  time  to 
pay  is  only  18 days  (well  below  the  legal 
ceiling  of  30 days)  and  efforts  to  achieve 
greater  synergies  and  efficiency  are  being 
maintained (see subsection 2.2). 

Economy:  overall,  the  Commission’s  estimated 
cost  of  controls 
(see 
subsection 2.3). 

is  acceptable 

Source: European Commission. 

Furthermore, whenever weaknesses are identified as a result of audit findings and/or lead to reservations, the 
control  strategies  are  enhanced  accordingly.  Improvements  can  also  be  triggered  by  changes  in  the 
control environment or by internal reorganisations. 

Cost-effectiveness of controls entails  risk-differentiated control strategies.  It involves a higher level of 
scrutiny and/or frequency of controls in riskier areas and less intensive, costly or burdensome controls in low-
risk areas. There are also other ways of ensuring the cost-effectiveness of controls, such as: (i) reducing risks 
through simplified programmes (366) and/or processes; (ii)  cross-relying on audits and  controls performed by 
other entities (367); and/or (iii)  achieving  economies of  scale  through  shared  control  functions.  These  aspects 
were also taken fully into consideration when the proposals for future spending programmes  were prepared 
(see also the point on preparation of post-2020 programmes at the end of subsection 5). 

(366)  For example, simplified cost options, which means making use of lump sums, flat rates and scales of unit costs to determine the 

amounts to reimburse or pay to beneficiaries. 

(367)  The Commission may rely (in full or in part) on assessments, controls or audits made by other entities insofar as those were made 

compliant with conditions equivalent to those of the Commission and they provide equivalent assurance (Articles 126-127 of the 
Financial Regulation). 

150 

 
                                                        
 
 
 
 
 
 
2018 Annual Management and Performance Report 

2.1. Control systems are effective: system weaknesses and financial 
errors are prevented, detected and corrected 

Effective controls ensure that the internal control objectives are achieved. This is measured in the light of the 
benefits of controls, some of which can be quantified, others not. The main benefit of well-designed control 
systems  is the  reduced  risk to  the  legality  and regularity  of  financial  transactions  —  as well  as preventing, 
detecting and pursuing fraud (see subsection 4).  

The risk to the legality and regularity of financial transactions remains below 2% 

The Commission’s multiannual control cycle: a management tool to prevent, detect and 
correct financial errors and their causes 

Although EU spending is subject to common control features, individual spending programmes may be very 
diverse. Therefore, control strategies need to be adapted to differing management modes,  policy areas 
and/or  specific  funding  procedures  (‘modalities’)  —  and  their  associated  risks.  Riskier  areas  will  trigger  a 
higher  level  of  scrutiny  and/or  frequency  of  controls,  whereas  low-risk  areas  should  lead  to  less  intensive, 
costly or burdensome controls. 

Each  year,  the  Commission  provides  assurance  for  its  relevant  expenditure,  which  was  EUR 150.3 billion 
in 2018 (see graph below; for definitions and details, see Annex 2). 

Chart: The European Commission’s 2018 relevant expenditure per policy area  
(‘relevant expenditure’ includes the payments made, subtracts new pre-financing paid out (still owned by the Commission) and adds 
previous pre-financing cleared (ownership transferred to the beneficiaries) during the financial year.) 
Source: European Commission annual activity reports. 

The Commission is responsible for ensuring that EU funds (including the European Development Fund and the 
EU  Trust  Funds)  are  properly  spent.  This  is  so  regardless  of  whether  the  funds  are  implemented  by 
Commission departments themselves (direct management; approximately 21% of 2018 expenses), entrusted 
to  external  entities  (indirect  management;  approximately  8%)  or  executed  by  Member  State  authorities 
(shared management; approximately 71%).  

151 

 
2018 Annual Management and Performance Report 

Accordingly, for 79% of the  budget the Commission is dependent on the reliability of the management and 
control  information  reported  by  Member  States  and  other  entrusted  bodies  based  on  their  own  control 
systems.  Therefore,  before  accepting  them  as  partners  for  co-managing  the  EU  budget,  the  Commission 
preventively  verifies  that  they  meet  all  financial  management  conditions  (cf.  the  ‘designation’  or 
‘accreditation’  procedure  for  Member  State  authorities,  the  ‘pillar  assessment’  for  entrusted  entities). 
Furthermore,  the  Commission  may  also  perform  risk-based  audits  to  verify  the  reliability  of  the  control 
systems, the control results and/or the management reports of those entities but does so avoiding duplication 
of control layers.  

Most departments use only one management mode. While direct management is used by all 50 departments, 
indirect management is used by 22 and shared management by seven. 

The  Commission  analyses  the  risks  to  the  legality  and  regularity  of  the  financial  transactions  not  only  for 
reporting  purposes,  but  also  because  it  is  an  important  management  tool.  This  entails  detecting  any 
weaknesses  at  programme  level  and  correcting  them,  identifying  the  root  causes  of  systemic  errors  and 
preventing  future  errors,  preparing  the  next  programmes  by  considering  the  lessons  learned.  This  approach 
ensures the continuous improvement of the Commission's financial management over the years.  

Ex ante 
controls 

Ex ante 
adjustments 

Payments 

Ex post 
controls 

Recoveries 
and 
corrections 

End of 
programmes’ 
lifecycle 

Risk at 
payment  

- 

Estimated 
future 
corrections 

= 

Risk at 
closure 

 1.7% 

 0.9% 

 0.8% 

Equivalent to 
 Court of Auditors’ 
Most Likely  
Error rate 

Chart: European Commission’s multiannual control cycle 
Source: European Commission. 

As EU spending programmes are multiannual by design, the related control systems and management cycles 
also cover multiple years. This implies that while errors may be detected in any given year, they are corrected 
in the current or in subsequent year(s) until the very end of a programme's lifecycle. Consequently, the risk 
(both  as  %  and  in  amount)  is estimated  at  two  key  stages in  the  cycle:  at  payment  and  at  closure  (see 
chart  above).  The  Commission  considers  that  the  budget  is  effectively  protected  when  the  risk  at 
closure is below the 2% materiality (368) threshold. 

(368)  Materiality is an expression of the magnitude of an error. Information is material if omitting, misstating or obscuring could 

reasonably be expected to influence the decisions that the users (for instance the discharge authority) make on the basis of this 
information. Determining specific materiality criteria involves making a judgment by the authorising officer by delegation. For most 
activities this benchmark for residual rate of error is set at 2%. 

152 

 
                                                        
2018 Annual Management and Performance Report 

 

 

The risk at payment quantifies those errors that might remain after preventive controls have been 
applied  and  payments  have  been  made (369).  These  errors  are  typically  detected  by  Commission 
departments  through  surveys  or  audits.  Measurement  at  this  stage  allows  authorising  officers  to 
correct the errors and to take additional preventive measures if necessary (e.g. additional guidance to 
beneficiaries), and to gauge the effectiveness of their (ex ante) controls and to adapt them if needed. 
Once  an  error  is  detected,  it  will  subsequently  be  corrected  either  via  recovery  or  by  being  offset 
against future payments. As both detection and remedy may not be immediate, corrections will often 
not  be  made  in  the  same  financial  year  as  the  related  payment.  However,  the  multiannual  control 
systems  ensure  that  necessary  corrections  are  made  within  the  relevant  programme's 
lifecycle. 

To determine the risk at closure, the estimated future corrections are deducted from the risk at 
payment. These are the corrections that each department estimates they will implement as a result 
of (ex post)  controls in subsequent years. These conservative and forward-looking estimates are to 
some extent based on the average financial corrections and recoveries made in past years adjusted 
as necessary, especially to neutralise elements no longer valid for the current programmes.  

Subsection  3  presents  the  complete  picture  of  all  measures  applied  in  2018  to  protect  the  EU 
budget.  Those  2018  actuals  must  not  be  confused  with  the  estimates  of  future  corrections 
described  here.  Firstly,  the  scope  of  the  actuals  is  broader  as  they  include  both  preventive  and 
corrective  measures  —  not  only  ex  post  corrections.  Secondly,  the  timing  is  different  as  the 
actuals relate to expenditure from previous years (during which errors may have been higher) — 
compared to the estimated future corrections calculated to relate only to 2018 expenditure.  

While  this  approach  is  applied  consistently  across  the  Commission,  individual  departments  also  provide 
additional information on the specificities of their area, if relevant. Further methodological explanations are 
provided in Annex 2. 

These  concepts  have  been  developed  to  fit  the  Commission’s  management  context,  but  they 
largely converge with those used by the European Court of Auditors in its audit approach (see also 
the comparison in the table on the following page).  

  Risk  at  payment  is  closest  to  the  European  Court  of  Auditors’  ‘most  likely  level  of  error’.  In  recent 
years, the Court has recognised that the Commission figures are, in most cases, broadly in line with 
the Court's own estimates and/or within its range (370). 

  As a basis for calculating the amount(s) at risk, ‘relevant expenditure’ includes the payments made, 
subtracts  new  pre-financing  paid  out  (still  owned  by  the  Commission)  and  adds  previous  pre-
financing cleared (ownership transferred to the beneficiaries) during the financial year. This is fully in 
line with the European Court of Auditors’ approach (371).  

 

The ‘materiality threshold’  set, in most cases (372), at 2% of  the relevant expenditure, is also in line 
with the Court’s methodology (373).  

In addition, in order to  be able to provide  bottom-up  management assurance, and to identify and address 
issues  in  specific  areas,  the  Commission  calculates  the  error  rates  per  programme  (or  other  relevant 
segment).  This  means  that  the  Commission’s information  on  error rates is  more  detailed  than  that  of  the 
Court. Moreover, the Commission’s methodology takes into account the  multiannual nature of the spending 
programmes, especially the fact that errors not identified at the point of payment can still be detected and 
corrected during the subsequent year(s). 

(369)  Or equivalent, such as after the expenditure is accepted (registered in the Commission’s accounting system) or after the pre-

financing is cleared. 

(370)  European Court of Auditors, 2017 Annual report, paragraphs 1.32, 1.34, 1.36. 
(371)  European Court of Auditors, 2017 Annual report, methodological Annex 1.1, paragraph 15. 
(372)  The only exceptions are: (a) 1% for revenue (by the budget department; stricter in view of the very large amounts); and (b) the 
range of 2-5% for the Horizon 2020 programme (by the research and family departments; see details in subsection 5). 

(373)  European Court of Auditors, 2017 Annual report, methodological Annex 1.1, paragraph 23. 

153 

 
                                                        
2018 Annual Management and Performance Report 

European Commission 
management perspective 

European Court of Auditors 
audit perspective 

Objective 

  provide annual management assurance 

  provide an audit opinion on 

 

identify weaknesses and take action  
on a multiannual basis 

legality and regularity of financial 
transactions of one specific year 

Level of 
granularity 

  EU budget as a whole and individual 
error rates for each department and 
policy area under all MFF headings 
(1 to 5), plus for revenue 

  error rates calculated per policy 
area, programme and/or relevant 
(sub)segments 

  EU budget as a whole and 
individual error rates for  
MFF headings 1a, 1b, 2 and 5,  
plus for revenue 

  expenditure and revenue of the year (or 

  expenditure and revenue of  

2 years for research) with a 
multiannual perspective 

the year 

Multiannuality 

  two error rates ('risk at payment' 

and 'risk at closure'); 
multiannuality prospectively taken 
into account for the risk at closure, 
through estimated future 
corrections for all programmes 

  one error rate ('most likely error'): 
multiannuality retroactively taken 
into account, only through 
financial corrections implemented 
for closed programmes 

Materiality 
threshold 

More 
information 

  2%  

  2% 

  except for revenue (1%) and for 

Horizon 2020 (between 2% and 5%) 

  Annex 2 of this report 

  ECA’s annual report; Annex 1.1 

Table: Methodology used by the Commission to estimate the risk at payment and closure in comparison with the Court of Auditors’ 
methodology 
Source: European Commission annual activity reports and annual report of the European Court of Auditors. 

154 

 
 
 
 
2018 Annual Management and Performance Report 

The 2018 control results show that, with an estimated risk at closure of 0.8% of EU 
spending, the EU budget is protected 

The graphs overleaf present the risks at payment and at closure for the period 2016 to 2018, for the entire 
Commission  and  per  main  policy  area  of  the  EU  budget  (in  %).  Annex  2  provides  further  details  and 
definitions. 

Chart: Risks at payment and at closure for the period 2016-2018, for the entire Commission in %. 
Source: European Commission annual activity reports 

155 

2016201720182.0%2.6%MaterialityRiskat paymentRiskat closure0.6%2.6%1.7%0.8%1.7% 
 
2018 Annual Management and Performance Report 

Charts: Risks at payment and at closure for the period 2016-2018, per policy area in %. 
Source: European Commission annual activity reports  

156 

2.2%Materiality2.2%Materiality2.2%Materiality4.4%4.0%Materiality H2020Materiality2.2%Materiality2.2%Materiality 
 
 
 
2018 Annual Management and Performance Report 

The estimated risk at payment (1.7%) remains stable below the 2% level. The future 
corrections (0.9%) are conservatively estimated. The estimated risk at closure (0.8%) 
remains very low. 

For agriculture, the risk at payment is continuing its downward trend (slight further decrease), both in absolute 
amount and as a percentage (2.1%). As in previous years, the risk remains higher (3.2%) in rural development 
(the common agricultural policy's pillar II) than in the Guarantee Fund's Market Interventions (2.5%) and direct 
payments (1.8%) (together the common agricultural policy's pillar I). Owing to the design of the programmes 
and control  systems,  nearly  all  errors  affecting  payments not  yet  detected  at  year-end,  are  expected  to  be 
covered by subsequent financial corrections. This explains the high level of estimated future corrections (1.9% 
for  2018,  2.1%  in  2017).  Thus  the  estimated  risk  at  closure  (here  termed  ‘final  amount  at  risk’  —  in  the 
absence of a formal closure of the Guarantee Fund programmes) remains low at 0.2%.  

In cohesion, migration and fisheries, implementation of the current programmes is now fully up to speed. The 
risk at payment has increased from 1.1% in 2017 to 1.7% in 2018, but the estimated future corrections have 
increased as well (to 0.4%). The risk at closure is estimated at 1.3%, broadly in line with 2017 (1.1%). 

In  cohesion,  a  number  of  operational  programmes  in  Member  States  proceeded  to  their  first  payments  in 
2018.  This  led  to  a  significant  increase  in  payments  between  2017  and  2018,  by  approximately 
EUR 20 billion. It was possible for auditors to examine the full process  for a  higher number of programmes 
and higher volume of expenditure. This resulted in an increased number of or operational programmes under 
reservation  compared  to  2017  as  well  as  a  higher  weighted  average  error  rate.  For  the  European  Regional 
Development Fund, in particular, which entails the largest share of expenditure under this policy area, the risk 
at payment has increased to 2.0%. 

In 2018, the Member States' audit authorities reported irregularities under a common  typology  agreed  with 
and  recommended  by  the  Commission.  Ineligible  expenditure  and  public-procurement  irregularities  are  the 
main  sources  of  irregularities  they  identified.  This  also  corresponds  to  the  most  common  types  of 
irregularities 
identified  by  the  Commission  departments  through  their  audits.  Moreover,  missing 
documentation or audit-trail issues constitute another important source of audit findings.  

In order to tackle the most frequent errors, besides financial corrections for past expenditure and corrective 
measures  on  the  system  for  the  future  in  all  cases,  audit  authorities  are  encouraged  by  the  Commission 
services to report back to managing and certifying authorities on the main sources of identified irregularities. 
This allows these programme authorities to adjust their internal controls, reinforce their checklists and further 
train their staff and beneficiaries. Capacity-building events and joint workshops are also organised with  the 
programme  authorities  in  particular  with  audit  authorities  (for  example  to  determine  which  minimum 
documentation should be available to ensure an adequate audit trail, a recommendation made by the Court in 
its 2017 annual report).  

Given  the  importance  of  public  procurement  for  cohesion  policy, the  Commission  public-procurement  action 
plan  has  been  updated  to  improve  compliance  of  public-procurement  procedures (374)  in  this  policy  area. 
Particular emphasis is given to actions helping Member States to further professionalise procurers, in line with 
the  public-procurement  package  adopted  by  the  Commission  in  October  2017.  Extensive  guidance,  good 
practices  and  explanations  are  made  available  online  by  the  Commisison  and  peer-to-peer  exchanges  are 
promoted  under  this  action  plan  to  support  contracting  authorities  and  programme  authorities  to  deal  with 
these issues and reduce errors. 

All  errors  detected  by  the  Member  States,  the  Commission  or  by  the  Court  of  Auditors  in  their  respective 
audits  are  systematically  subject  to  financial  corrections.  Under  shared  management,  programmes  are  not 
closed until all financial corrections are implemented and, for cohesion policy, the Commission applies further 
financial  corrections  when  the  level  of  error  (reported  or  recalculated)  remains  above  2%  in  annual 
programme accounts.  

(374)  Public-procurement procedural errors can be assigned up to 100% error rates by the European Court of Auditors — even if their 

actual financial impact is (much) less. However, even when a procurement selection/award decision may have been non-compliant 
and the contractor could have been different, this does not necessarily mean that all related payments for the full value of the 
contract would be 100% erronous. If the deliverable is well executed, then taxpayers' money is not lost. 

157 

                                                        
2018 Annual Management and Performance Report 

For  external  relations,  studies carried  out  annually  show  that  the  error  rates  have  further  decreased, which 
leads  to  a  lower  risk  at  payment  (0.9%  for  2018,  down  from  1.2%  in  2017)  (see  also  subsection 5).  The 
control strategies used lead to systematic ex post corrections but only those from the most recent years are 
used as the basis for the estimated future corrections.  

For  the  broad  research,  industry,  space,  energy  and  transport  policy  area,  the  weighted  average  risk  at 
payment is for the first time below 2% (1.9% for 2018, down from 2.4% in 2017). Within this policy area, the 
risk at payment for the research and competitiveness programmes remains above 2%. Higher risk is inherent 
to  grants based  on  the  reimbursement  of  actual  eligible costs claimed  which  are  used  in  the  Horizon  2020 
and the competiveness for small and medium-sized enterprises programmes. Complexities in determining the 
exact direct and indirect costs which can be charged to projects lead to errors in cost claims and the related 
payments.  Even  though  many  such  errors  are  later  detected  and  corrected  by  ex  post  controls  (see  below), 
they  still  affect  the  risk  at  payment  stage.  Nevertheless,  the  research  departments  continuously  strive  to 
reduce  of  the  level  of  error:  e.g.  through  further  simplification  of  the  model  grant  agreement,  clearer 
communication  of  eligibility  rules  (15  events  organised)  and  further  extending  lump-sum  financing.  The 
Commission’s proposal for the next generation research programme (Horizon Europe) also includes simplified 
cost options. Meanwhile, the ex post control strategy for the Horizon 2020 research programme common to 
all departments involved is well established and  has led to significant  ex post corrections over the years  — 
which are used as the basis for the estimated future corrections.  

However,  outside  the  Horizon  2020  grants,  the  risks  at  payment  and  closure  for  the  Connecting  Europe 
Facility  (transport,  energy  and  telecom)  —  implemented  by  the  Innovation  and  Networks  Executive 
Agency (INEA)  —  are  below  2%.  Furthermore,  the  type  of  funding  and  the  related  full  auditing  of  the 
entrusted  entities  active  for  the  space  and  the  global  navigation  satellite  system  (sub)programmes (375)  — 
such  as  the  European  Space  Agency  (ESA)  and  the  European  GNSS  Agency  (GSA)  —  entail  inherently  lower 
risks at payment and closure, conservatively set between 0.5 - 0.6% nevertheless.  

For other internal policies, the risk at payment, estimated future corrections and risk at closure remain stable 
and low, at  0.7%,  0.1% and  0.6% respectively. Some education and culture programmes have a higher-risk 
profile  (also  typically  complex  reimbursement  programmes;  see  above)  which  has  led  to  reservations  (see 
subsection 5).  

Finally,  the  other  services  and  administration  departments  manage  mostly  low-risk  types  of  expenditure. 
Nevertheless,  a  prudent  approach  is  taken  and  a  conservative  0.5%  error  rate  is  applied.  This  results  in  a 
weighted  average  risk  at  payment  of  0.2%.  As  most  of  these  departments  have  control  systems  with 
predominantly ex ante controls, a conservative 0.0% estimate is applied in terms of systemic future  ex post 
corrections. Thus, the risk at closure is almost equal to the risk at payment and remains very low at 0.2%.  

Given that the overall risk at closure is estimated to be less than 2% of the total relevant expenditure, the 
Commission  departments’  multiannual  control  systems  in  general  ensure  appropriate  management  of  the 
risks relating to the legality and regularity of the transactions and ensure that the financial corrections and 
recoveries made over the entire life of programmes protect the EU budget overall. 

(375)  Such as Galileo, EGNOS and Copernicus for satellite system navigation or earth observation. 

158 

                                                        
2018 Annual Management and Performance Report 

2.2.  Control systems are efficient: they lead to less burdensome 
procedures and enable timely payments 

During  2018,  the  Commission  continued  its  efforts  to  generate  synergies  and  efficiencies  in  financial 
management.  

The  2018  revision  of  the  financial  regulation  reduced  red  tape (376).  It  introduced  concrete 
simplifications  for  beneficiaries  of  EU  funds  in  terms  of  access  to  funds,  use  of  funds  and  controls.  For 
instance,  less  but  more-targeted  information  is required  from recipients;  information  will  only  be  requested 
once (e.g. proof of legal status in the context of e-grants/e-procurement); the Commission can rely on existing 
assessments  (national  authorities/trusted  international  organisations)  instead  of  checking  the  same  thing 
twice (e.g. technical/financial capacity); payments may be based on outputs or results achieved instead of on 
costs incurred — this used to require justifying every cost with supporting documents; plus the acceptance of 
beneficiaries’  usual  accounting  practices  will  be  checked  ex  ante  and  may  not  be  challenged  via  ex  post 
controls.  Concrete  simplification  measures  in  shared  management  include  simpler,  harmonised  and  more-
flexible  financial  rules  and  amendments  for  seven  funds  and  the  rollover  of  existing  designations  of 
implementing  authorities  in  Member  States.  In  terms  of  fraud,  the  simplification  possibilities  for  the  future 
programmes offer the chance to make those even more fraud-resilient. 

Further  progress  has  been  achieved 
tenderers/applicants, which went live in the second half of 2018. 

in  the  field  of  a  common  single-entry  point  for  all 

For  the  next  multiannual  financial  framework,  the  Commission  has  prioritised  further  simplification  and 
harmonisation  of  the  next  generation  of  spending  programmes.  It  has  proposed  a  more  consistent, 
focused  and  transparent  set-up  of  the  EU  budget  with  a  clear  structure  more  closely  aligned  with  political 
priorities.  For example, the  Commission  has  proposed  reducing  the  number of  programmes by  more  than  a 
third,  bringing  funding  sources  together.  The  Commission  also  proposes  more  consistent  and  interoperable 
spending programmes by harmonising rules across programmes in order to facilitate combining support under 
several  programmes  and  to  avoid  overlaps.  In  addition,  the  new  spending  programmes  proposed  by  the 
Commission allow for the use of the simplification steps envisaged by the new financial regulation. 

Commission  departments  reported  that  they  made  92%  of  their  payments  on  time.  In  2018,  the 
Commission’s  average  net  payment  time  was  18 days  (well  below  the  statutory  ceiling  of  30 days). 
Furthermore, the number of payments affected by delay further decreased, from 10.4%  in 2017 to 7.6% in 
2018 (see details in Annex 6). 

The  Commission’s  continuous  efforts  to  introduce  improvements  in  the  control  environment  and 
to  exploit  synergies  contribute  to  less  burdensome  procedures  and  increased  efficiency  of 
controls.  This,  amongst  other  things,  enables  timely  payments  to  beneficiaries  and  other 
recipients of EU funds. 

(376)  Furthermore, the new financial regulation also paved the way to update the financial framework regulation for EU bodies, to 

reinforce rules on treating conflicts of interest in Member States and entrusted entities, and to strengthen the fraud early detection 
and exclusion system (see details in subsection 4). 

159 

                                                        
2018 Annual Management and Performance Report 

2.3.  Control costs are economical  

The costs of controls vary substantially between departments. This can be explained by a number of factors: 
see examples in the box below.  

Examples of cost drivers: 

 

 

 

 

the different degrees of complexity of the programmes managed;  

the  volumes  and  amounts  to  be  processed  (i.e.  processing  a  high  number  of  low-value  transactions  is 
more labour intensive);  

the specific risk profiles of the programmes managed;  

possible diseconomies of scale for certain smaller programmes or funds managed by smaller entrusted 
entities  

Therefore,  a  simple  comparison  between  the  quantifiable  aspects  reported  by  departments  would  be  of 
limited value. For example, despite the fact that certain smaller programmes and/or departments (377) can 
benefit  less  from  economies  of  scale,  procurement  controls  may  be  irreducible  regardless  of  the  amount 
involved. 

In the annual activity reports for 2018, the majority of the departments reported that, overall, their estimated 
costs of control were stable over time (378). This was mainly due to the unchanged control environments and 
strategies in place for the current programmes. Most of them reported that costs were  suitable in view of 
their control environment. Those departments which reported an apparently high cost for (some parts of) their 
relevant control systems have explained this by referring to specific cost drivers in such cases. 

In addition, for the sake of transparency, those departments dealing with shared and/or indirect management 
reported on the cost of controls in Member States and entrusted entities separately from the Commission’s 
own cost of controls.  

(377)  The financial importance of the 50 Commission departments varies significantly. The management of funds is highly concentrated 
among a few big spending departments (e.g. 37% of the total amount of payments are made by the agriculture department on its 
own, 80% by six departments and 95% by 16 out of the 50 departments). 

(378)  The variations observed as compared to 2017 are mainly explained by the new guidance on the estimation, assessment and 

reporting on the cost-effectiveness of audits (‘controls’), which harmonises the estimation of the cost of controls. 

160 

                                                        
2018 Annual Management and Performance Report 

3. Financial corrections and recoveries show that the multiannual 
control cycle protects the EU budget 

The primary objective of financial corrections and recoveries is to ensure that only expenditure in 
accordance with the legal framework is financed by the EU budget. 

When  implementing  the  EU  budget  it  is especially  important  to  prevent,  or  detect  and  subsequently  correct 
system  weaknesses  leading  to  errors,  irregularities  or  fraud.  The  Commission  and,  for  programmes  under 
shared  management,  Member  State  authorities  take  preventive  and  corrective  measures  (i.e.  financial 
corrections and recoveries) as provided for in EU legislation to protect the EU budget from illegal or irregular 
expenditure — see also subsection 2 above and Annex 2. 

3.1. Overview of ex ante and ex post controls 

3.1.1. Ex ante controls 

Prevention  is  the  first  line  of  defence  against  errors.  The  Commission’s  key  preventive  mechanisms  include 
interrupting and suspending  payments (379), as well as carrying out  ex ante checks (‘controls’) leading to the 
rejection  of  ineligible  amounts  before  the  Commission  accepts  expenditure  and  makes  payments.  The 
Commission  focuses  more  and  more  on  such  preventive  measures  with  a  view  to  better  protecting  the  EU 
budget. These also serve as incentives for Member States to reduce irregular payments. In 2018, preventive 
measures  confirmed  amounted  to  EUR  449  million  and  preventive  measures  implemented 
amounted  to  EUR  551  million.  These 
include  ex  ante  controls  such  as  deductions  before 
payment/acceptance  by  the  Commission,  Member  State  deductions  from  new  expenditure  declared  to  the 
Commission (‘at source’ deductions) and other ex ante adjustments which, if not performed, would otherwise 
have led to expenditure being incurred that was not in line with the legal framework. 

Preventive measures 
confirmed 

Agricultural policy: 

European Agricultural 
Guarantee Fund 

Rural Development 

Cohesion policy: 

European Regional 
Development Fund 

Cohesion Fund 

European Social Fund 

Financial Instrument for 
Fisheries Guidance /EFF 
European Agricultural 
Guidance and Guarantee 
Fund 

Internal Policies 

External Policies 

Administration 

Total 

2018   

Preventive measures 
implemented 

87 

87 

  Agricultural policy: 

  European Agricultural 

Guarantee Fund 

- 

- 

- 

- 

- 

- 

- 

196 

162 

  Rural Development 

  Cohesion policy: 

  European Regional 
Development Fund 

  Cohesion Fund 

  European Social Fund 

  Financial Instrument for 
Fisheries Guidance /EFF 

  European Agricultural 

Guidance and Guarantee 
Fund 

  Internal Policies 

  External Policies 

3 

  Administration 

449 

  Total 

2018 

87 

87 

- 

105 

105 

– 

- 

- 

- 

195 

161 

3 

551 

Tables: Preventive measures overview for 2018 (EUR million) It should be noted that due to the rounding of figures into EUR millions, 
some financial data in the tables above may appear not to add up. 
Source: European Commission. 

(379)  These are not reported in the tables below but in a separate section in Annex 4. 

161 

                                                        
2018 Annual Management and Performance Report 

3.1.2. Ex post controls 

Where  preventive  mechanisms  are  not  effective,  the  Commission,  as  part  of  its  supervisory  role,  applies 
corrective  mechanisms. The  Commission’s main corrective mechanisms include  ex  post audits (‘controls’) on 
amounts it has accepted and paid out. In shared management, these lead to financial corrections and in direct 
and  indirect  management,  they  result  in  recoveries  from  final  recipients.  In  2018,  corrective  measures 
confirmed  amounted  to  EUR 1.2 billion  and  corrective  measures  implemented  amounted  to 
EUR 2.6 billion. These include recovery orders issued, implementation of the results of the ex post controls in 
cost claims and invoices, financial corrections applied and replacement of expenditure (‘withdrawals’). 

Corrective measures 
confirmed 
Agricultural policy: 

European Agricultural 
Guarantee Fund 

Rural Development 

Cohesion policy: 

European Regional 
Development Fund 

Cohesion Fund 

European Social Fund 

Financial Instrument for 
Fisheries Guidance / 
European Fisheries Fund 

European Agricultural 
Guidance and Guarantee 
Fund  

Internal Policies 

External Policies 

Administration 

Total 

2018   

 730 

 358 

 372 

 414 

 286 

 90 

 34 

 - 

Corrective measures 
implemented 

  Agricultural policy: 

  European Agricultural 

Guarantee Fund 

  Rural Development 

  Cohesion policy: 

  European Regional 
Development Fund 

  Cohesion Fund 

  European Social Fund 

  Financial Instrument for 
Fisheries Guidance / 
European Fisheries Fund 

 3 

  European Agricultural 

Guidance and Guarantee 
Fund  

 53 

 25 

 0 

  Internal Policies 

  External Policies 

  Administration 

2018 

1 579 

 876 

 702 

 965 

 902 

 48 

 12 

- 

 3 

 47 

 18 

 0 

1 222 

  Total 

2 609 

Tables: Corrective measures overview for 2018 (EUR million) 
It should be noted that due to the rounding of figures into EUR millions, some financial data in the tables above may appear not to add up. 
Source: European Commission. 

3.2. Preventive and corrective mechanisms - from confirmation to 

implementation 

The workflow of preventive and corrective mechanisms applied by the Commission entails two significant steps, 
the  confirmation  and  the  implementation  phases.  For  example,  a  deduction  before  the  acceptance  of 
expenditure is confirmed as soon as decided by the relevant Commission services, while a financial correction is 
confirmed once it is accepted by the Member State or decided by an official Commission decision.  

Some preventive and corrective mechanisms are implemented in the year in which they were confirmed but in 
most  cases  the  beneficiary  of  the  spending  programme  has,  based  on  EU  legislation,  time  to  comment  or 
provide additional material on proposed corrections/deductions/rejections. Once such an adversarial process is 
finalised the Commission needs to recover the amount corresponding to the correction proposed and thus the 
implementation takes place in one or often in several years after confirmation.  

A  financial  correction  is  considered  implemented  when  the  correction  has  been  applied  and  recorded  in  the 
Commission  accounts,  which  means  the  financial  transaction  was  validated  by  the  responsible  authorising 
officer in the following cases: deduction of the financial correction from the amounts declared by the Member 

162 

2018 Annual Management and Performance Report 

State  in  an  interim  or  final  payment  claim,  a  recovery  order  and/or  the  cancelling  (‘decommitment’)  of  the 
commitment appropriation(s) corresponding to the financial correction amount (380). 

Example: The workflow of corrective mechanisms. 

Audit / 
Control 

In progress  

Confirmed 

Implemented  

Reported 

3.3. Preventive and corrective measures applied in 2018 

The  table  below  provides  a  complete  picture  (including  one-off  measures)  of  all  preventive  and  corrective 
measures  applied  during  2018  to  protect  the  EU  budget  —  EUR 1.7 billion  confirmed  and  EUR 3.2 billion 
implemented. These amounts cover preventive actions and corrective actions made during 2018 irrespective 
of the year in which the initial expenditure was made. More details can be found in Annex 4. 

Total EU 
budget 
payments in 
2018 

Total 
amounts 
confirmed in 
2018 

% of 
payments of 
the EU 
budget 

Total 
amounts 
implemented 
in 2018 

% of 
payments of 
the EU 
budget 

56 777 

44 310 

12 467 

54 040 

30 070 

9 252 

13 932 

 786 

 817 

 445 

 372 

 414 

 286 

 90 

 34 

 0 

1.4 

1.0 

3.0 

0.8 

1.0 

1.0 

0.2 

0.0 

1 666 

 964 

 702 

1 070 

1 007 

 48 

 12 

 0 

2.9 

2.2 

5.6 

2.0 

3.3 

0.5 

0.1 

0.0 

 0 

 3 

n/a 

 3 

n/a 

 Fund 

Agricultural policy: 

European Agricultural 
Guarantee Fund 

Rural development 

Cohesion policy: 

European Regional 
Development Fund 

Cohesion Fund 

European Social Fund 

Financial Instrument for 
Fisheries Guidance / 
European Fisheries Fund 

European Agricultural 
Guidance and Guarantee 
Fund  

Internal policies 

External policies 

Administration 

26 213 

9 519 

9 944 

 249 

 188 

 3 

0.9 

2.0 

0.0 

1.1 

 243 

 179 

 3 

3 161 

0.9 

1.9 

0.0 

2.0 

Total 

156 493* 

1 671 

Table: Financial corrections and recoveries overview for 2018 (381) (EUR million).  
It should be noted that due to the rounding of figures into EUR million, some financial data in the table above may appear not to add up. 
* Excludes EUR 180 million paid out under the ‘Special instruments’ heading.  
Source: European Commission 

(380) 

(381) 

In cohesion this is not always a ‘net’ reimbursement to the EU budget, as Member States have the option to replace the ineligible 
expenditure with new eligible expenditure. 
Including financial corrections at source and corrections from financial clearance in agriculture. 

163 

 
                                                        
3.3.1. Types of ex ante and ex post mechanisms in 2018  

2018 Annual Management and Performance Report 

1 500

1 000

 500

 0

Cohesion policy

Agricultural policy

Internal policies

External policies

Net corrections and recoveries
EUR 1 678 million

Replacement of expenditure
EUR 932 million

At source/Ex ante corrections
EUR 551 million

Chart: Types of financial corrections and recoveries implemented in 2018 (EUR million) 
Source: European Commission 

Net corrections leading to a reimbursement  of the EU budget amounts previously paid are characteristic of 
agriculture  and  rural  development  and  for  direct  and  indirect  management.  For  agriculture,  in  2018  the 
Commission continued to apply the net financial corrections in the same way as in previous years.  

For cohesion policy, net corrections were,  prior to the 2007-2013 programming period, the exception. They 
were  only  applied  in  cases  where  Member  States  were  not  able  to  replace  irregular  expenditure  with  new 
expenditure or, after the corresponding contradictory procedure, they did not agree to implement the financial 
corrections  proposed  by  the  Commission.  Under  the  legal  framework  for  2014-2020,  the  Commission  is  to 
apply  net  financial  corrections  —  despite  the  Member  State  agreeing  to  the  proposed  corrections  —  where 
EU/ECA  audits  detect  a  serious  deficiency  leading  to  a  material  level  of  risk  in  reimbursed  expenditure 
remained  undetected,  uncorrected  and  unreported  by  the  Member  State.  In  all  other  circumstances,  the 
Commission  will  continue  to  apply  financial  corrections  as before,  meaning  that  the  Member  State  can  still 
reuse  the  funds  if  it  accepts  the  corrections  and  has  sufficient  additional  new  expenditure  to  replace  the 
amounts withdrawn as irregular. 

The  Commission  applies  a  number  of  available  preventive  instruments  such  as  the  interruption,  suspension 
and reduction of EU financing with a view to better protecting the EU budget and giving incentives to Member 
States to reduce irregular payments. 

164 

 
 
 
2018 Annual Management and Performance Report 

3.4. Multiannual character of EU spending programmes 

5 000

4 000

3 000

2 000

1 000

 0

2012

2013

2014

2015

2016

2017

2018

Agricultural policy

Cohesion policy

Internal policies

External policies

Administration

Chart: Financial corrections and recoveries confirmed 2012-2018 cumulative (EUR million) 
Source: European Commission 

Cumulative figures provide more useful information on the significance of corrective mechanisms used by the 
Commission  because  they  take  into  account  the  multiannual  character  of  most  EU  spending  and  neutralise 
the impact of one-off events — see Annex 4. 

For  the  European  Agricultural  Guarantee  Fund,  the  average  correction  rate  for  Commission  financial 
corrections under conformity clearance of accounts for the period 1999 to end 2018 was 1.7% of expenditure 
(all of which are net financial corrections) — see Annex 4, Section 2.4.  

For the 2007-2013 European Regional Development Fund, Cohesion Fund and European Social Fund, 
at the end of 2018 the combined rate of financial corrections, based on Commission supervision work only, 
was 2.0% of the allocations made — see Annex 4, Section 3.4.1. 

During  the  period  2012-2018  the  average  amount  of  confirmed  financial  corrections  and 
recoveries  was  EUR 3.2 billion  or  2.3%  of  the  average  amount  of  payments  made  from  the  EU 
budget, while the average amount implemented in this period was EUR 3.5 billion or 2.4% of the 
payments. 

165 

 
2018 Annual Management and Performance Report 

4. The Commission's anti-fraud strategy has been revised 

The Commission’s anti-fraud strategy and the departments’ anti-fraud strategies 

As part of the sound financial management of the EU budget, the Commission — under shared management 
together with the Member States in first instance — is responsible for the fight against fraud (382). Moreover 
the Commission has a specific objective to prevent, detect, correct and follow up fraud and irregularities (383). 

As  an  essential  tool  in  this  endeavour,  the  Commission  anti-fraud  strategy (384)  provides  a  policy 
framework for the prevention, detection, investigation and reparation of fraud at the level of the Commission 
and  for  the  good  functioning  of  the  Commission  departments  in  their  management  responsibilities  for  the 
protection  of  the  financial  interests  of  the  EU.  The  Commission  anti-fraud  strategy  was  first  adopted  in 
2011 (385) and recently revised (386) under the lead of the European Anti-Fraud Office. 

A  key  achievement  of  the  2011  strategy  was  for  every  Commission  department  to  develop,  implement 
and  regularly  update  its  own  anti-fraud  strategy  for  the  policy  area  that  they  are  responsible  for.  Until 
2018, they have fulfilled this task as presented in the table below. 

Year of update of 
department-level 
anti-fraud strategies 

2018 

2017 

2016 

2015 or 
before 

Total 

Number of 
Commission 
departments 

13 

18 

9 

10 

50 

Table: Anti-fraud strategies updated by Commission departments.  
Source: European Commission Annual activity reports. 

Moreover, an evaluation of the 2011 Commission  anti-fraud strategy identified an increase in the efficiency 
of  the  European  Anti-Fraud  Office's  selection  and  investigation  procedures,  as  well  as  a  more  effective 
exchange  of  fraud-related  information  between  the  Commission  departments  and  the  European  Anti-Fraud 
Office. Further improvement was nonetheless called for (387). 

The  revision  of  the  Commission's  anti-fraud  strategy  prepares  the  Commission’s  departments  for  the 
challenges  of  the  multiannual  financial  framework  2021-2027  and  takes  into  account:  (i)  important 
developments in EU fraud legislation (adoption of the ‘protection of the financial interests directive’ (388) and 
establishment of the European Public Prosecutor’s Office (389)); (ii) a special report by the European Court of 
Auditors  on  fraud  risk  management  in  EU  spending (390);  (iii)  an  audit  by  the  Commission’s  Internal  Audit 

(382)  Treaty on the Functioning of the European Union (TFEU), Article 325. 
(383)  Article 36(2)(d) of the Financial Regulation. 
(384)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, and 
the Committee of the Regions and the Court of Auditors on the Commission anti-fraud strategy, COM(2011) 376 final, 24.6.2011. 
(385)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, and 
the Committee of the Regions and the Court of Auditors of 24 September 2011 on the Commission Anti-Fraud Strategy, COM 
(2011) 376 final. 

(386)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the 
Committee of the Regions and the Court of Auditors of 29 April 2019 on the Commission anti-fraud strategy: enhanced action to 
protect the EU budget, COM(2019) 196. 

(387)  SWD (2019) 500, Section 5.2.3. 
(388)  Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s 

financial interests by means of criminal law (OJ L 198, 28.7.2017, pp. 29-41). 

(389)  Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European 

Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, pp. 1-71). 

(390)  European Court of Auditors, Fighting fraud in EU spending: action needed — Special report No 01/2019. 

166 

                                                        
2018 Annual Management and Performance Report 

Service  on  anti-fraud  activities  in  the  revenue  area (391);  and  (iv)  the  communication  on  governance  in  the 
European Commission adopted on 21 November 2018 (392). 

The  new  strategy  aims  for  more  consistency  and  coordination  in  the  fight  against  fraud  and  is  based  on 
knowledge-based,  data-driven  anti-fraud  measures.  All  Commission  departments  will  contribute  to  its 
implementation, coordinated by the European Anti-Fraud Office.  

In parallel, the European Anti-Fraud Office will further develop into a knowledge and advisory centre for 
the fight against fraud. It will intensify its work with Commission services and Member States to identify, 
collect, enhance and analyse relevant fraud-related data more comprehensively and accurately.  

The European Anti-Fraud Office will implement or coordinate most of these measures to broaden and improve 
the detection, understanding and assessment of fraud risks. A more comprehensive analysis of fraud risks will 
serve financial actors, auditors and investigators and contribute to a more cost-effective deployment of fraud 
controls.  

New financial regulation 

The  adoption  of  the  Commission  proposal  to  simplify  the  financial  regulation  and  15  sectoral  legal 
acts  provided  the  departments  with  a  simplified  basis  for  the  preparation  of  the  post-2020  generation  of 
funding programmes. The new financial regulation entered into force on 2 August 2018. Other secondary acts 
had to be aligned to the new financial regulation, such as the financial framework regulation for EU bodies.  

A  high priority was  given to  the implementation of the reinforced rules on  conflict of interest in the new 
financial  regulation  in  the  area  of  shared  management  in  close  coordination  with  shared  management 
departments. A survey of national legislation in this area was launched to help develop guidance to Member 
States’ authorities on how to apply the new rules. Negotiations started on the proposal for the protection of 
the EU's budget in the case of generalised deficiencies as regards the rule of law. 

The  Commission  also  focused  its  efforts  on  a  substantial  simplification  of  the  proposals for  the  post-2020 
funding  programmes  and  increased  flexibility  and  interoperability  of  those  programmes.  Well  implemented 
and  monitored,  such  simplification  offers  the  chance  to  make  spending  programmes  even  more  fraud-
resilient. Work in this context also included fraud proofing of future spending programmes.  

Early detection and exclusion system 

In  parallel,  fraud-prevention  action  also  continued  through  the  early  detection  and  exclusion  system  which 
allows for the early detection and exclusion of unreliable economic operators from EU funds.  

The  early  detection  and  exclusion  system  panel  for  the  assessment  of  cases  of  intended  sanctions  on 
unreliable  economic  operators  has  become  fully  operational.  Its  recommendations  have  led,  where 
appropriate,  to  decisions  by  the  authorising  officers  to  exclude  operators  from  EU  funding.  This  has 
represented an important step forward in the fight against fraud.  

An  internal  audit  has  assessed  positively  the  role  of  the  panel  since  its  creation  in  2016.  The  budget 
department  is  implementing  the  recommendation  to  increase  awareness  among  Commission  departments 
and other institutions to make sure that all possible cases are referred to the panel. 

The entry into force of the 2018 financial regulation has reinforced the early detection and exclusion system 
by integrating the financial irregularities panel, which allows for harmonised decision-making.  

(391)  Report from the Commission to the European Parliament and the Council — Annual report to the discharge authority on internal 

audits carried out in 2016 (Article 99(5) of the Financial Regulation), COM(2017) 497 final, 15.9.2017, p. 11. 

(392)  Communication to the Commission on Governance in the European Commission, COM(2018) 7703 final, 21.11.2018; Commission 

Decision on the Corporate Management Board, COM(2018) 7706 final, 21.11.2018. 

167 

                                                        
2018 Annual Management and Performance Report 

In terms of outputs, since 2016 the early detection and exclusion system panel: 

 

 

 

has  adopted  27  recommendations  (included  three  where  the  panel  recommended  not  to  exclude 
because the economic operator had taken remedial measures); 

has addressed a formal reply to the competent authorising officer in seven cases (e.g. inadmissible 
case due to the non-establishment of facts, case of dissolved company or case not falling within the 
scope of the panel’s competence); and 

has requested authorising officers to withdraw their request in four cases (e.g. absence of legal basis 
for the imposition of an administrative sanction). 

Given that the ultimate responsibility remains with the individual  authorising officers, it is important to note 
that all the panel's recommendations were followed in full by the competent requesting officers.  

The early detection and exclusion system aims at reinforcing the protection of the EU’s financial interests by 
ensuring (i) the early detection of economic operators representing risks to the EU’s financial interests; (ii) the 
exclusion  of  unreliable  economic  operators  from  obtaining  EU  funds  and/or  the  imposition  of  a  financial 
penalty; and (iii) in the most severe cases, the publication on the Commission’s website of information relating 
to the exclusion and/or the financial penalty, in order to reinforce the deterrent effect.  

This system,  which  was  set  up  in  2016, represents  a  significant  improvement  in  the application  of  rules on 
administrative sanctions with respect to fundamental rights, independence and transparency. In the absence 
of  a  final  national  judgment  or,  where  applicable,  a  final  administrative  decision,  EU  institutions,  agencies, 
offices  and  bodies  can  decide  to  impose  sanctions  on  unreliable  economic  operators  only  after  obtaining  a 
recommendation from the centralised interinstitutional panel.  

The panel has no investigative powers. In principle, it bases its assessment on facts and findings established 
in  the  context  of  audits  or investigations  carried  out  by  the  European  Court  of  Auditors, the  European  Anti-
Fraud  Office  or  the  Internal  Audit  Service,  or  any  other  check,  audit  or  control  performed  under  the 
responsibility of the competent authorising officer. It is composed of a standing high-level independent chair, 
two  permanent  members  representing  the  Commission  (as  owner  of  the  system)  and  one  ad  hoc  member 
representing  the  authorising  officer  of  the  service  requesting  the  recommendation.  It  respects  the  right  of 
defence  of  the  economic  operator concerned  and applies  the  principle  that  a  level  of  government  must  not 
take any action that exceeds that necessary to carry out its assigned task (‘proportionality’). 

In  2018,  various  authorising  services  submitted  23  cases,  including  16  on  early  detection,  of  which  seven 
have already been referred to the panel through its permanent secretariat. As far as exclusion is concerned, 
the  panel  issued  four  recommendations  including  the  publication  of  the  exclusion  for  all  of  them. 
Recommended  exclusions  were  based  on  grave  professional  misconduct,  significant  breaches  of  main 
obligations in the implementation of a contract, and fraud. Regarding the other three cases sent to the panel, 
in  one  case  the  panel  did  not  issue  a  recommendation  but  addressed  a  formal  reply  to  the  competent 
authorising officer (since the situation of exclusion had not been legally established) and the other two cases 
are currently ongoing. 

The  Commission  must  also  report  on  decisions  taken  by  authorising  officers  (i)  not  to  exclude  economic 
operators,  so  as  to  ensure  continuity  of  service  for  a  limited  period  pending  the  adoption  of  remedial 
measures by the operators concerned; and (ii) not to publish information on administrative sanctions on the 
Commission website, either to protect the confidentiality of investigations or to  comply with the principle of 
proportionality where a natural person is concerned. Authorising officers took no such decisions. 

168 

2018 Annual Management and Performance Report 

5. Management provides reasonable assurance and the financial 
impact of reservations is limited 

In  their  2018  declarations  of  assurance (393),  all  50  authorising  officers  by  delegation  declared  they 
had reasonable assurance that: (i) the information contained in their report presents a ‘true and fair view’ 
(i.e. reliable, complete and correct) on the state of affairs in their department; (ii) the resources assigned to 
their  activities  have  been  used  for  their  intended  purpose  and  in  accordance  with  the  principle  of  sound 
financial management; (iii) the control procedures put in place give the necessary guarantees concerning the 
legality and regularity of the underlying transactions. 

Within  the  context  of  their  overall  assurance-building  process  and  from  their  management  perspective, 
authorising officers by delegation also perform a more detailed analysis for each programme or segment of 
their portfolio. They use all available information, especially the results of the ex ante and ex post controls, to 
spot any potential significant weakness in quantitative or qualitative terms. At the end of each financial year, 
they determine whether the financial and/or reputational impact from such a weakness  is likely to be above 
the materialty threshold. If so, they qualify their declaration of assurance with a reservation for the 
specific area inside the programme affected (394). 

Reservations  are  keystones  in  the  accountability  construction.  They  are  an  indicator  of  the 
Commission’s transparency concerning challenges or weaknesses encountered and their  potential financial 
impact. That they may lead to the qualification of a declaration of assurance in an annual activity report is 
part of sound financial management. They are also a tool to address weaknesses that remain. Although most 
reservations are prompted by findings regarding management and control of past payments, they also have a 
positive  preventive  effect,  with  action  plans  being  developed  to  mitigate  future  risks  and  to  strengthen 
control systems.  

Furthermore,  the  number  of  reservations  is  not  an  indicator  of  the  quality  of  financial 
management.  This  is  partly  because  there  is  no  direct  link  between  the  number  of  reservations  and  their 
financial  impact,  and  also  because  some  weaknesses  trigger  multiple  reservations.  For  example,  multiple 
reservations  may arise from programme segments implemented by  more than one department; or because 
the  weakness  resulting  in  a  ‘new’  reservation  for  the  current  programming  period  is  a  continuation  of  one 
from  a  previous  programming  period  (e.g.  the  2018  reservation  for  the  competitiveness  of  small  and 
medium-sized  enterprises  programme,  which  is  the  successor  to  the  competitiveness  and  innovation 
programme). However, this reporting method provides more precision and transparency. 

For the 2018 reporting year, 30 authorising officers by delegation issued unqualified declarations of 
assurance, while 20 issued qualified declarations with a total of 40 reservations (see chart below). 
These reservations affect revenue as well as expenditure. In all cases, the authorising officers by delegation 
concerned  adopted  action  plans  to  address the  underlying  weaknesses and  mitigate  the  resulting  risks.  The 
complete list of reservations for 2018 is provided in Annex 3. 

(393)  https://ec.europa.eu/info/publications/annual-activity-reports_en  
(394)  See details in Annex 3. 

169 

 
 
                                                        
2018 Annual Management and Performance Report 

Of  the  40  reservations,  38  are  recurrent  and  two  are  new  (one  by  the  Executive  Agency  for  Small  and 
Medium-sized  Enterprises;  and  one  by  the  home  affairs  department).  Five  recurrent  reservations  have  been 
updated, from quantified to unquantified (or vice versa) or for a change of scope (see details in  box below). 
For all reservations, the impact on 2018 expenditure has been (re)calculated.  

EASME (NEW) 
[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

[CATEGORY NAME] 
[VALUE] 

HOME (NEW) 
[CATEGORY NAME] 
[VALUE] 

Chart: Reservations per policy area 
Source: European Commission annual activity reports. 

Ten reservations are entirely or partially non-quantified for 2018. It is not possible to quantify a reservation 
when the financial impact is zero, when it is not possible to assess the impact accurately, or when the effect 
will be only reputational. 

Half the reservations concern legacy programmes for the period 2007-2013. For these legacy programmes, 
there is only a very limited number of transactions remaining. These reservations are maintained, despite all 
having low financial impacts, as the related error levels remain above the 2% materiality threshold. (See also 
consideration  below  (page  173)  on  the  possible  introduction  of  a  de  minimis  rule  for  reservations,  which 
would be applicable to most of the legacy programmes.) 

170 

 
 
 
2018 Annual Management and Performance Report 

New and updated reservations in 2018 

Two reservations have been newly introduced. 

The Executive Agency for Small and Medium-sized Enterprises has issued an additional reservation for their 
competitiveness  of  small  and  medium-sized  enterprises  grants  because  of  a  residual  error  rate  above  2%. 
This  programme  is  the  successor  of  the  competitiveness  and  innovation  programme,  which  had  also  been 
under  reservation.  The  results  of  the  initial  audits  performed  suggest  that  the  programme’s  complexity 
(payment modalities based on reimbursement of eligible costs) may not yet have been sufficiently simplified 
to reduce the error level. This hypothesis will be re-examined in 2019, when results from a larger number of 
audits will have become available. 

The  home  affairs  department  has  issued  an  additional  (reputational)  reservation  related  to  the  European 
Border and  Coast  Guard  Agency.  The  European  Court  of  Auditors  found  an  irregular  procurement  procedure 
(ferry transport services in Greece) for which payments had been made in 2018, and the European Parliament 
has mentioned several control weaknesses in the agency’s most recent discharge report. 

Five recurrent reservations have been updated.  

The regional and employment departments have modified their 2017  quantified reservations for the 2007-
2013  programmes  to  non-quantified  ones  for  2018.  This  is  because  no  new  payments  were  made  to  the 
affected operational programmes in 2018, although related final payments are pending for the coming years. 

The Structural Reform Support Service has modified its 2017 non-quantified reservation into a quantified one 
as  the  restricted  scope  has  become  clear.  The  residual  error  rate  for  direct  management  grants  has  been 
evaluated  as  being  above  2%  on  the  basis  of  the  first  results  from  the  ex  post  controls,  now  in  operation. 
However, this reservation is limited to grants from technical-support programmes agreed with organisations 
not  subjected  to  a  pillar  assessment  beforehand.  They  represent  only  a  minority  of  all  organisations  with 
which such grants have been agreed. 

The budget department has modified its 2017 quantified reservation for traditional own resources into a non-
quantified one. This is explained by the absence of new material exposure from the United Kingdom for 2018 
and by the impossibility of quantifying, as yet, the extent of potential undervaluation fraud in other Member 
States.  Recovery  of  the  traditional  own  resources  lost  between  2011  and  2017  is  being  pursued  via 
infringement proceedings. 

The Education, Audiovisual and Culture Executive Agency has modified the scope of its 2017 (non-quantified) 
reservation  (related  to  internal  control  weaknesses identified  by  Internal  Audit  Service)  to  take  into  account 
progress  made  so  far  (none  of  the  pending  recommendations  are  now  rated  as  critical).  However,  the 
reservation was maintained for 2018 as full follow-up of the audit will take place in 2019. 

171 

 
 
2018 Annual Management and Performance Report 

In  cases  where  the  residual  error  rate  is  above  the  materiality  threshold,  the  financial  impact  resulting 
from  a  reservation  is  obtained  by  multiplying  the  relevant  programme  or  segment  expenditure  by  the 
residual error rate. The total amount for 2018 (EUR 1 078 million) and the evolution compared to the previous 
years is presented in the table and chart below: 

1800

1600

1400

1200

1000

800

600

400

200

0

1 621 

1 053 

1 078 

2016

2017

2018

Policy area 

Agriculture 

Cohesion, Migration & Fisheries 

External Relations 

Research, industry, space, energy & 
transport 

Other Internal Policies 

Other Services & Administration 

Total 

Total 2018 payments 

Financial impact from the 
reservations 

56 830 

56 802 

13 281 

16 242 

6 712 

6 881 

156 749 

of which 'current' programmes 

of which 'legacy' programmes 

 725 

 284 

 16 

 42 

 9 

 0 

1 078 

1 037 

 41 

Policy area 

Total 2018 own resources 

Financial impact from the 
reservations 

Own Resources 

142 355 

 0 

Chart and Table: Financial impact (‘exposure’) of the 2016, 2017 and 2018 quantified reservations (EUR million)  
Source: European Commission annual activity reports. 

172 

 
 
 
2018 Annual Management and Performance Report 

The steady results across 2017 and 2018 have been delivered by the following.  

  Stability  in  agriculture:  the  financial  impact  from  the  reservations  remains  fairly  stable  (slight 
decrease) compared to last year — for market measures, direct payments and rural development. 

  An  increase  in  cohesion,  migration  and  fisheries:  here  the  doubling  can  be  explained  by  the 
implementation  of  the  current  programmes  now  being  fully  up  to  speed  and  the  increase  in  the 
relevant expenditure by some EUR 20 billion compared to 2017. There are also more cases detected 
involving operational programmes in more Member States affected by high levels of error. 

  A  decrease  in  the  other  policy  areas:  there  the  financial  impact  has  more  or  less  halved.  This  is 
because  the  residual  error  rates  have  further  decreased,  fewer  segments  are  affected  by 
reservations than before and/or to smaller volumes of expenditure in the segments affected (e.g. the 
development department’s direct grants). 

As  for  reservations  on  legacy  programmes,  their  financial  impact  continues,  logically,  to  decrease:  down  to 
EUR 41 million in 2018 (EUR 129 million in 2017). As long as the related residual error rates surpass the 2% 
materiality threshold, the reservations cannot be lifted — even though their financial impact has fallen to very 
low levels. 

As  in  previous  years,  the  research  departments  and  executive  agencies  have  no  reservations  and  have  not 
qualified  their  declarations  of  assurance  in  relation  to  the  Horizon  2020  programme.  This  is  because  they 
apply a specific 2%-5% materiality threshold to the programme to take into account its inherent risks and the 
control limitations (395). Their current residual error level appears to be below 5% and close to 2% (see also 
subsection 1). 

Progress made in assurance building during 2018 

In  2018,  Commission  departments  continued  to  strengthen  their  assurance  building  through  their  annual 
activity reports. For example:  

The  cohesion  departments  have  significantly  revised,  simplified  and  harmonised  the  presentation  of  their 
error  rates,  as  recommended  by  and  discussed  with  the  European  Court  of  Auditors  and  agreed  with  the 
Commission’s Central Financial Service. Furthermore, a subtotal for economic, social and territorial cohesion 
as per budget heading 1B has been added to the  presentation of the overall risk at payment/closure tables 
(see subsection 1 and Annex 2). 

In  shared  management,  from  2018  Member  States'  audit  authorities  report  on  the  main  types  of 
weaknesses leading to irregularities under a common typology shared by the Commission and Member States 
(see  details  and  actions  under  subsection  2.1).  In  addition,  they  report  on  possible  conflicts  of  interest  in 
general and the action taken to mitigate such situations in order to protect the EU budget.  

The  external  relations  departments  for  development  and  neighbourhood  have  further  improved  the 
segmented  assurance  building  for  their  portfolios,  thereby  better  focusing  their  reservation  on  the  relevant 
higher-risk segment (direct grants). Both departments have also responded to observations by the European 
Court of Auditors and have provided further details to enhance the transparency of their residual error rate 
studies.  

The  research  departments  continue  to  act  to  obtain  a  further  reduction  of  the  level  of  error:  e.g.  further 
simplification of the model grant agreement, clearer communication on eligibility rules (15 events organised) 
and  further  extending  lump-sum  financing.  The  Commission’s  proposal  for  the  next  generation  research 
programme (Horizon Europe) also includes simplified cost options (see also in subsection 2.1). 

(395)  The legislative financial statement accompanying the Commission’s proposal for the Horizon 2020 regulation states: ‘The 

Commission considers therefore that, for research spending under Horizon 2020, a risk of error, on an annual basis, within a range 
between 2-5% is a realistic objective taking into account the costs of controls, the simplification measures proposed to reduce the 
complexity of rules and the related inherent risk associated to the reimbursement of costs of the research projects. The ultimate 
aim for the residual level of error at the closure of the programmes after the financial impact of all audits, corrections and 
recovery measures will have been taken into account is to achieve a level as close as possible to 2%.’ 

173 

                                                        
2018 Annual Management and Performance Report 

Since its creation in 2016, the structural reform support service has made significant progress in setting 
up  a  mature  system  for  internal  control  and  management  to  enable  appropriate  management  of  its 
expanding budget. The ex post control function became operational during 2018. This has enabled the service 
to quantify its risk exposure in grant management (see above). 

The Internal Audit Service’s overall opinion and emphasis of matter paragraph 

Accompanying its 2015, 2016 and 2017 overall opinions, the Internal Audit Service reiterated its emphasis of 
matter paragraph (396) that departments relying on entrusted entities to implement parts of their policy and/or 
budget  should  strengthen  their  monitoring  and  supervision  strategies  and  activities,  albeit  while  also  duly 
taking  into  account  the  specific  (i.e.  sometimes  limited)  mandates  and  roles  these  departments  have  been 
assigned  in  this  context.  This  has  been  repeated  for  2018  as  well.  See  more  details  in  subsection 6  and/or 
Annex 5. 

As four reservations concern issues in agencies and other entrusted entities (the Education, Audiovisual and 
Culture Executive Agency, the European Asylum Support Office, the European Border and Coast Guard Agency 
and the African Union Commission), this remains a point of particular attention for the Commission. In 2018, 
central  services  and  departments  set  up  joint  working  groups  to  clarify  and  delineate  the  role  of  the 
departments supervising such bodies.  

Actions  to  improve  the  situation  are  undertaken  by  the  agencies,  the  partner  departments  and  the  central 
services. This includes the enhancement of the governance arrangements (new framework financial regulation 
has been adopted) and the preparations of a strengthened risk management by the decentralised agencies). 

Possible developments for 2019  

The Commission will consider exploring with the European Court of Auditors the introduction of a  de minimis 
rule for reservations. If agreed, reservations would no longer be considered meaningful for segments below a 
certain proportion of a department’s portfolio (e.g. less than 5%) and with a financial impact below a certain 
threshold (e.g. less than EUR 5 million). This would apply to many of the legacy programmes. 

Looking forward beyond 2019 and/or 2020 

The  revised  financial  regulation  entered  into  force  in  2018.  It  provides  a  simplified  basis  for  post-2020 
funding programmes for which the interinstitutional negotiations are ongoing. Special attention is being given 
to  maximising  simplifications,  synergies and efficiencies,  as well  as to  risk-differentiated  and cost-effective 
control systems. The aim is to achieve both the policy/programme and the internal control objectives, i.e. fast 
payments, low errors and economical control costs. Examples which can contribute to  these three goals are 
the increased use of lump-sum grants (which furthermore reduces the need for detailed record-keeping) and 
the  possibility  of  funding  based  on  outputs  or  results  (which  eliminates  the  need  to  track  working  hours 
through time sheets). 

(396)  A paragraph included in the auditor's report that is required, or is included at the auditor's discretion, and that refers to a matter 

appropriately presented or disclosed in the financial statements that, in the auditor's professional judgment, is of such importance 
that it is fundamental to users' understanding of the financial statements. (definition of the AICPA) 

174 

                                                        
2018 Annual Management and Performance Report 

6. Assurance obtained through the work of the Internal Audit Service 

The  Commission  departments  also  based  their  assurance  on  the  work  done  by  the  Internal  Audit  Service. 
Annex  5  to  this  Annual  Management  and  Performance  Report  includes  more  information  on  the  assurance 
provided  by the Internal  Audit Service. A summary  report  of the internal auditor’s work is forwarded  by the 
Commission to the discharge authority in accordance with Article 118(8) of the Financial Regulation. 

The  Internal  Audit  Service  has  a  strict  follow-up  policy  in  place  to  assess  the  implementation  of  its 
recommendations. The Internal Audit Service’s work confirmed that 97% of its recommendations followed up 
during 2014-2018 were effectively and timely implemented by the auditees.  

With  a  view  to  contributing  to  the  Commission's  performance-based  culture  and  greater focus on  value  for 
money,  the  Internal  Audit  Service  carried  out  performance  audits  and  audits  which  include  important 
performance elements (comprehensive audits) in 2018 as part of its 2016-2018 strategic audit plan.  

(i) As regards horizontal processes, the Internal Audit Service made recommendations to help improve the 
overall  performance  of  several  key  processes  in  the  areas  of  governance,  information  technology  security, 
human resources, synergies and use of resources. 

 

In  particular,  the  Internal  Audit  Service  audited  the  state  of  play  of  the  ‘synergies and  efficiencies’ 
review launched in 2016 and recommended proportionate improvements aimed at helping to ensure 
that this initiative is ultimately successful in delivering against its objectives. Following the Internal 
Audit  Service  audit,  the  Commission  issued  a  new  communication  on  The  synergies  and 
efficiencies initiative: stock-taking and way forward in April 2019.  

  On  governance  processes,  the  Commission  issued  a  set  of  communications  and  decisions 
(‘Governance  package’)  in  November  2018  to  address  the  issues  identified  by  the  Internal  Audit 
Service  in  its  audit  report  issued  in  January  2018  and  update  the  corporate  governance 
arrangements of the Commission. In 2018, the Internal Audit Service made further recommendations 
in the governance areas of Connecting Europe Facility telecom programme and IT governance in the 
Directorate-General for International Cooperation and Development. 

  On human-resources management, several observations were made to the Joint Research Centre in 
Internal  Audit  Service  audits  and,  in  view  of  similar  issues  identified  in  recent  years  in  other 
Commission departments, the Internal Audit Service sent a management letter to Directorate-General 
for  Human  Resources  and  Security  raising  a  number  of  issues  for  consideration  to  help  the 
Commission  respond  effectively  to  the  human  resources  challenges  faced  by  the  Directorates-
General and services.  

  Appropriate  coordination  of  activities  and  cooperation  with  stakeholders  are  essential  in  order  to 
ensure  consistent  and  effective  action  between  different  policy  areas.  The  Internal  Audit  Service 
made  specific  recommendations  concerning  the  coordination  activities  between  the  Commission 
(Directorate-General  for  International  Cooperation  and  Development,  Directorate-General  for 
Neighbourhood  and  Enlargement  Negotiations  and  the  Service  for  Foreign  Policy  Instruments)  and 
the  European  External  Action  Service  and  the  cooperation  between  Eurostat  and  EU  bodies  and 
international organisations. 

  Various  audits  concluded  that  further  progress  can  also  be  made  in  improving  the  overall 

performance of other horizontal processes, as presented in Annex 5. 

  Several aspects of better regulation were audited (as presented in Annex 5), but no significant issues 

were identified in these areas. 

(ii) Performance in implementing budget operational and administrative appropriations. 

 

The  Internal  Audit  Service  performed  several  audits  assessing  programme  management  and 
payment  processes  in  shared  management,  but  did  not  identify  significant  performance 
weaknesses in these areas.  

175 

2018 Annual Management and Performance Report 

 

 

In  the  area  of  directly  managed  funds,  several  audits  assessed  the  management  of  grants  by 
executive agencies (Education, Audiovisual and Culture Executive Agency, Executive Agency for Small 
and  Medium-Sized  Enterprises,  European  Research  Council  Executive  Agency,  Innovation  and 
Networks Executive Agency, Research Executive Agency) and no significant performance weaknesses 
were  identified,  except  for  Education,  Audiovisual  and  Culture  Executive  Agency.  In  this  agency, 
serious shortcomings affecting the effectiveness of the  overall internal control system put in  place 
for  the  project  management  of  Erasmus+  and  Creative  Europe  grants  were  identified.  The  Internal 
Audit Service noted that the agency had already started to address these issues (see subsection 5), 
in line with the audit recommendations.  

In the area of indirectly managed funds, several audits focused on the supervision arrangements 
in  place  in  the  departments.  While  no  significant  performance  weaknesses  were  identified  in 
department Internal Market, Industry, Entrepreneurship and Small and Medium-Sized Enterprises, the 
Internal  Audit  Service  identified  weaknesses  with  regard  to  specific  issues  in  the  management  of 
financial instruments in department for Climate Action, department for Environment and department 
for  Neighbourhood  and  Enlargement  Negotiations.  The 
Internal  Audit  Service  also  made 
recommendations  to  department  for  International  Cooperation  and  Development  concerning  the 
assurance-building  process  in  headquarters,  in  particular  the  monitoring  process  of  the  annual 
management  declarations  to  be  provided  by  the  international  financial  institutions  and/or  national 
agencies implementing projects under indirect management.  

In  addition  to  its  audits,  the  Internal  Audit  Service  issued  in  February  2019  limited  conclusions  on  the 
state of internal control to every department. These conclusions  contributed to the 2018  annual activity 
reports  of  the  concerned  departments  and  cover  all  open  recommendations  issued  by  the  Internal  Audit 
Service related to the management and control systems in the audited processes in the departments in the 
past 3 years. Particular attention was drawn in the limited conclusion addressed to the Education, Audiovisual 
and Culture Executive Agency, with regard to one critical and two very important recommendations issued in 
the  context  of  the  audit  on  Erasmus+  and  Creative  Europe  —  grant  management  (phase  2  —  from  project 
monitoring  to  payment).  The  agency  issued  a  reservation  in  line  with  the  limited  conclusion  of  the  Internal 
Audit Service (see subsection 5). 

Finally, as required by its mission charter, the Internal Audit Service issued an annual overall opinion on the 
Commission's financial management. It is based on the audit work in the area of financial management in 
the  Commission  carried  out  by  the  Internal  Audit  Service  during  the  previous  3 years  (2016-2018).  It  also 
takes into account information from other sources, namely the reports from the European Court of Auditors.  

Based  on  this  audit  information,  the  internal  auditor  considered  that,  in  2018,  the  Commission  had  put  in 
place governance, risk management and internal control procedures which, taken as a whole, are adequate to 
give  reasonable  assurance  on  the  achievement  of  its  financial  objectives.  However,  the  overall  opinion  is 
qualified  with  regard  to  the  reservations  made  in  the  authorising  officer  by  delegation’s  declarations  of 
assurance issued in their respective annual activity reports. 

In  arriving  at  the  overall  opinion,  the  internal  auditor  also  considered  the  combined  impact  of  all  amounts 
estimated  to  be  at  risk  at  payment  as  these  go  beyond  the  amounts  put  under  reservation.  The  overall 
amounts  at  risk  are  the  authorising  officers  by  delegation's  best  estimation,  in  their  2018  annual  activity 
reports,  of  the  amount  of  the  expenditure  authorised  not  in  conformity  with  the  applicable  contractual  and 
regulatory  provisions  at  the  time  of  the  payment  in  2018.  Taken  together,  these  correspond  to  an  overall 
amount  below  the  materiality  of  2%  of  all  total  relevant  expenditure (397)  in  the  Commission  budget,  the 
European Development Fund and the EU Trust Funds in 2018. These amounts at risk at payment in 2018 do 
not yet include any financial corrections and recoveries related to deficiencies and errors the departments will 
detect and correct in the next years due to the multiannual corrective mechanisms built into the Commission’s 
internal  control  systems.  Given  these  elements,  the  Internal  Audit  Service  considers  that  the  EU  budget  is 
therefore adequately protected in total and over time. 

Without  further  qualifying  the  opinion,  the  internal  auditor  added  an  ‘emphasis  of  matter’,  relating  to  the 
supervision  strategies  regarding  third  parties  implementing  policies  and  programmes,  which  is  described  in 
Annex 5 to this report. 

(397) 

‘Relevant expenditure’ means the total amount of payments made in 2018 minus the total amount of new pre-financing paid in 
2018 plus the total amount of old pre-financing cleared in 2018 as reported by the Commission services in their 2018 AARs. 

176 

                                                        
2018 Annual Management and Performance Report 

7. Summary of conclusions on the work carried out by the Audit 
Progress Committee 

The Audit Progress Committee has focused its work on four key objectives set out in its 2018 and 2019 work 
programmes, namely: considering the audit planning of the internal auditor; analysing the results of internal 
and external audit work to identify potentially significant risks, including in a thematic manner; monitoring the 
follow-up  to  significant  residual  risks  identified  by  audit  work;  ensuring  the  independence  of  the  internal 
auditor and monitoring the quality of internal audit work. 

The Audit Progress Committee is satisfied as to the independence and quality of internal audit work and 
that the internal auditor's planning adequately covers the audit universe and continues to cover the key risk 
areas. Following the revision of its  charter in autumn 2018, the Audit Progress Committee was able for the 
first  time  to  compare  the  internal  auditor's  risk  assessment  with  the  critical  risks  identified  by  the 
management. 

The committee welcomed that the internal auditor's overall opinion for 2018 is positive and is qualified 
only  with  regard  to  the  management  reservations  as  expressed  in  the  annual  activity  reports  of  the 
authorising officers by delegation. But for the fourth year in a row the internal auditor includes an emphasis 
of  matter  relating  to  outsourcing  (‘externalisation’).  The  committee  has  highlighted  its  concerns  about  such 
risks  on  numerous  occasions,  and  again  reiterated  that  efforts  to  mitigate  them  through  adequate  control 
strategies and tools need to be continued as a matter of priority. 

The  committee  took  note  of  the  internal  auditor’s  overall  conclusions  on  performance  audits,  in 
particular  concerning  governance,  financial  instruments,  human  resources  and  risk  management  processes, 
and noted the parallelism with its own thematic priorities and that most of the highlighted key audit findings 
have been discussed by the committee.  

The  Audit  Progress  Committee  noted  that  all  of  the  audit  recommendations  issued  by  the  internal 
auditor  in  2018  were  accepted  by  the  management  and  satisfactory  action  plans  are  being 
implemented to address the risks identified. 

One critical recommendation was issued by the internal auditor during the reporting period, addressed to 
the  Education,  Audiovisual  and  Culture  Executive  Agency.  This  is  the  second  critical  recommendation 
concerning the grant management process in the agency and results from the second phase of a three-phase 
audit.  The  committee  engaged  with  the  agency  and  its  parent  directorates-general  to  ensure  intensive  and 
timely action to address the recommendations issued. All recommendations from the phase I audit have been 
assessed as fully implemented by the internal auditor and are now closed. Sufficient progress has been made 
to partially mitigate the risks underlying the critical recommendation issued in phase II for the internal auditor 
to downgrade its ranking to very important.  

The  Audit  Progress  Committee  took  note  of  the  internal  auditor’s  findings  on  the  progress  made  in 
implementing the synergies and efficiencies initiative and welcomed the renewed political commitment 
to the initiative as demonstrated in the recent Commission communication (398). The committee stressed the 
need for ongoing further efforts to ensure that this way  of working is fully embedded in the  culture of the 
institution at all levels.  

The  committee  continued  to  follow-up  on  the  issues  raised  in  its  previous  annual  reports  and  paid 
particular  attention 
information-technology  security, 
externalisation and performance. 

risk  management,  anti-fraud, 

to  governance, 

  Significant progress has been made in implementing the recommendations of the  internal auditor's 
report  on  the  Commission’s  governance/oversight  arrangements  concerning  risk  management, 
financial  reporting  and  the  ex  post  verification/audit  function,  in  particular  through  the  adoption  of 
the  governance  package  in  November  2018.  This  included  a  revised  Audit  Progress  Committee 
Charter,  in  line  with  which  the  committee  now  considers  consolidated  information  on  the  list  of 

(398)  The synergies and efficiencies initiative: stock-taking and way forward. C(2019)2329 final of 26 March 2019. 

177 

                                                        
2018 Annual Management and Performance Report 

critical risks identified by the management alongside the internal auditor's own risk assessment and 
scrutinises  the  follow-up  to  the  European  Court  of  Auditors'  audit  recommendations  relating  to  the 
reliability of the European Union consolidated accounts. Whilst the  committee had already fully met 
the requirements of the new financial regulation over many years, these further developments have 
enabled  it  to  bring  further  added  value,  consolidating  the  role  it  has  developed  over  the  past 
mandate as a mature and effective actor in the Commission's overall governance structure.  

In the  context of a thematic  discussion on internal and external audit findings in the area of  anti-
fraud  strategies,  the  committee  followed  up  on  audit  recommendations  to  combat  fraud  in  the 
own  resources  and  taxation  areas.  With  the  adoption  of  the  enhanced  Commission  anti-fraud 
strategy in April 2019 (399) all recommendations are considered by the management as implemented.  

In  the  area  of  externalisation,  and  in  addition  to  the  above-mentioned  developments  in  the 
Educational, Audiovisual and Culture Executive Agency, all recommendations from the internal audit 
on  the  transportation  department’s  monitoring  of  the  aviation  and  maritime  security  policies  have 
been closed.  

 

 

  As  concerns  information  security,  the  long-overdue  very  important  recommendation  on  the 
information  security  of  the  emission  trading  scheme  has  recently  been  assessed  by  the  internal 
auditor as appropriately implemented. 

 

In  the  area  of  performance,  the  three  very  important  internal    audit  recommendations  to  the 
statistics  department  as  concerns  the  production  process  and  the  quality  of  statistics  other  than 
those produced by that service are yet to be implemented, one of them is nearly 6 months overdue. 

  One  of  the  two  very  important  internal  audit  recommendations  addressed  to  the  paymaster 
department  concerning the  budget of the European  Anti-Fraud  Office’s Supervisory Committee was 
reopened  after  the  internal  auditor's  follow-up  work,  but  given  the  mitigating  measures  taken,  the 
risk  rating  was  downgraded  to  important.  The  Audit  Progress  Committee  strongly  encouraged  the 
paymaster  department  to  complete  the  necessary  steps  to  fully  implement  this  recommendation 
which is overdue by more than 12 months.  

implementation  rate  of  the 

The  effective 
(i.e.  97%  for 
recommendations  issued  over  the  period  2014-2018)  is  high.  The  number  of  very  important  audit 
recommendations which are overdue by more than 6 months has considerably fallen over recent years, from 
an average of 28 in the period from June 2015 to October 2016 to an average of 15 since January 2017. 

internal  auditor’s  recommendations 

32 

28 

27 

34 

25 

20 

40

35

30

25

20

15

10

5

0

19 

18 

14 

11 

12  12 

12 

18 

16 

14 

June 
2015 

October 
2015 

January 
2016 

April 
2016 

June 
2016 

October 
2016 

January 
2017 

April 
2017 

June 
2017 

October 
2017 

January 
2018 

April 
2018 

June 
2018 

October 
2018 

January 
2019 

April 
2019 

Chart: Number of critical and very important recommendations overdue for more than 6 months 
Source: European Commission. 

During  the  reporting  period  the  Audit  Progress  Committee  has  further  integrated  consideration  of  the 
European  Court  of  Auditors’  audit  reports  and  special  reports  into  its  thematic  discussions  and  has 

(399)  Commission Anti-Fraud Strategy: enhanced action to protect the EU budget. COM(2019)196 final of 29 April 2019. 

178 

 
                                                        
  
  
2018 Annual Management and Performance Report 

enhanced  its  scrutiny  of  the  follow-up  given  to  the  Court’s  recommendations.  After  the  committee’s 
intervention  many  overdue  recommendations  were  reported  as  having  been  addressed.  As  of  March  2019 
only  10  European  Court  of  Auditors’  recommendations  from  the  years  2001  to  2015  remain  overdue, 
including eight recommendations from the year 2015, which is the focus of the  European Court of Auditor’s 
latest follow-up review. The committee has helped ensure that the Commission was prepared for this review, 
including by discussing the recommendations which were long overdue with the respective auditees. Following 
the  revision  of  its  charter,  the  Audit  Progress  Committee  has  also  for  the  first  time  engaged  with  the 
accounting officer as concerns the follow-up to the Court’s audit findings on the reliability of the EU accounts. 

The  Audit  Progress  Committee  will  continue  to  pay  attention  to  these  and  other  emerging  issues  in  the 
remainder  of  its  mandate.  Over  the  past  5 years  the  committee's  responsibilities  and  workload  have 
increased, whilst through improved working methods and composition, and greater a focus on themes which 
are  of  crosscutting  relevance  for  the  institution  as  a  whole,  the  committee  has  increased  the  quality  and 
added  value  of  its  oversight  and  advice,  and  has  evolved  into  a  mature  and  effective  player  in  the 
Commission's governance structures. 

179 

2018 Annual Management and Performance Report 

8. External audit and discharge: learning from the past to improve the 
future 

The  Commission  is  responsible  for  implementing  the  EU  budget  in  cooperation  with  Member  States  in  line 
with  the  principles  of  sound  financial  management,  i.e.  funds  are  to  be  spent  in  an  effective,  efficient  and 
economic  manner.  An  accountability  framework  based  on  comprehensive  reporting,  external  audit  and 
political control exists to provide reasonable assurance that EU funds are spent well in a proper manner.  

The discharge procedure 

Every year the European Court of Auditors, which is the European Union's independent external auditor, 
examines the reliability of accounts, whether all revenue has been received and all expenditure incurred in a 
lawful  and regular  manner,  and whether the  financial  management  has  been  sound.  The  publication  of  the 
annual  report  of  the  European  Court  of  Auditors  is  the  starting  point  for  the  discharge  procedure.  The 
auditors  also  prepare  special  reports  on  specific  spending  or  policy  areas,  or  budgetary  or  management 
issues.  

The  decision  on  the  discharge  is  also  based  on  the  Commission’s  integrated  financial  and  accountability 
reporting,  on  hearings  of  Commissioners  and  on  the  replies  provided  to  written  questions  addressed  to  the 
Commission.  

The annual discharge procedure allows the European Parliament and the Council to hold the Commission 
politically accountable for the implementation of the EU budget. The European Parliament decides, after a 
recommendation by the Council, on whether or not to provide its final approval, known as ‘granting discharge’, 
to the way the Commission implemented the EU budget in a given year.  

Chart: Accountability cycle for the EU Budget 

180 

EuropeanCourtofAuditorspublishes:1Annual Report including a statement ofassurance covering the annual accountsand the legality and regularity ofrevenue and expenditure;2Special Reports.1EuropeanParliament,uponaCouncil recommendation,decideswhethertogrant, refuseor postpone the discharge.2Both Institutionsmakerequeststo theCommission.3Decisionondischargeisbasedonthe IFAR, the ECA annualandspecialreports,hearingsofrelevantCommissioners,writtenquestionsaddressedtotheCommission.EuropeanCommissionsubmitsthe Integrated Financial andAccountability Reporting (IFAR).EuropeanCommission,Member Statesand otherPartners(third countries andinternationalorganisations)implement the EUbudget.EuropeanParliamentandCouncilapprove the EU Budget.N-1yearNyearN+1yearN+1yearN+1yearN+2yearN-1yearNyearN+1CYCLEReportsLessonsLearnedImplementationTHEEUACCOUNTABILITYyearN+2 
2018 Annual Management and Performance Report 

2017 discharge 

The  European  Parliament  granted  discharge  to  the  Commission  for  the  financial  year  2017  by  a  clear 
majority  on  26 March 2019  after  having  examined  the  reports  of  the  European  Court  of  Auditors,  the 
Commission’s Integrated Financial Reporting Package, and the Council's discharge recommendation. The 
European  Parliament’s  Committee  on  Budgetary  Control  also  invited  selected  Commissioners  and  Directors-
General for exchanges of views during the discharge procedure.  

The  European  Parliament’s  discharge  resolution  for  2017  includes many  examples of  success  stories 
for  the  EU  budget,  and  highlights  great  improvements  in  financial  management  of  the  EU  budget  (a  better 
performance  framework,  lower  error  rates  and  improved  absorption  of  funds).  In  addition,  it  includes 
recommendations  for  the  improvement  of  budget  implementation,  as  well  as  recommendations  linked  to 
specific policy areas and situations (in particular in relation to specific reported conflicts of interest).  

The Commission reports every year on its follow-up of requests addressed by the European Parliament and 
the Council to the Commission. This  follow-up report is part of the Commission’s integrated financial and 
accountability reporting. The Commission’s follow-up report for 2016 fed into the 2017 discharge procedure, 
while the follow-up report for 2017 will be published in June 2019.  

Follow-up of audits of the European Court of Auditors 

The European Court of Auditors has also increased the number and scope of its  special reports during the 
past few years. In 2018, the Court published 32 special reports addressed to the Commission, compared to 23 
in  2017,  resulting  in  the  Commission  facing  an  increasing  number  of  recommendations  (the  Commission 
accepted 297 recommendations either fully or partially). The Commission will continue to ensure an adequate 
follow-up  of  these  recommendations,  and  report  in  its  IT  tool  ‘RAD’ (400)  and  annual  activity  reports  on  the 
measures  taken.  Moreover,  the  Commission  reports  on  a  regular  basis  on  the  implementation  of 
recommendations to the Audit Progress Committee, which performs certain monitoring activities under its 
mandate.  

The European Court of Auditors also monitors the Commission's implementation of its recommendations and 
provides feedback, helping the Commission to enhance its  follow-up activities. In its 2017 annual report, the 
European  Court  of  Auditors  assessed  the  quality  of  the  Commission's  follow-up  measures  based  on  a 
sample  of  100  audit  recommendations  from  17  special  reports  published  in  2014.  The  European  Court  of 
Auditors  noted  that  the  Commission  had  implemented  58%  of  the  recommendations  fully,  17%  were 
implemented in most respects and 19% in some respects, while 6% were not implemented (recommendations 
that were not implemented at all were not accepted by the Commission). The outcome for fully implemented 
recommendations is broadly in line with figures from previous years.  

(400)  RAD: recommendations, actions, discharge. 

181 

                                                        
2018 Annual Management and Performance Report 

9. Organisational management 

9.1. Robust governance arrangements 

The governance system used by the European Commission (401) is tailored to its unique structure and role. This 
system was set up as part of administrative reforms in 2000 (402). This reform significantly strengthened the 
Commission’s  system  of  governance  and  established  clear  lines  of  accountability  and  responsibility.  These 
governance arrangements help the College to deliver the Commission’s objectives, to use resources efficiently 
and  effectively,  and  to  manage  the  EU  budget  in  accordance  with  the  principles  of  sound  financial 
management. Under this system, the College delegates responsibility for the day-to-day operational 
management to the directors-general and heads of service, who lead the administrative structure 
of the Commission. They manage and shape their departments in accordance with the rules and standards 
laid  down  by  the  Commission  in  order  to  deliver  on  their  various  objectives,  taking  into  account  available 
resources. They are responsible for the operational implementation of the EU budget, under the supervision of 
the  relevant  Commissioner.  The  directors-general  and  heads  of  service  are  supported  in  this  role  by  the 
presidential  and  central  services  of  the  Commission  and  by  the  Corporate  Management  Board  and  other 
specialised corporate governance bodies. 

This  governance  system  has  continued  to  evolve  —  adapting  to  changing  circumstances  and  keeping  the 
Commission  at  the  forefront  of  good  administrative  practice.  This  was  demonstrated  in  2018  when  the 
Commission  adopted  a  ‘governance  package’ (403),  which  significantly  streamlined  and  strengthened  its 
corporate governance arrangements and leveraged recent audit work by the European Court of Auditors (404) 
and the Commission’s Internal Audit Service (405). 

Political level 
College of Commissioners 
On the basis of proposals from the 
responsible member(s) 

Audit Progress 
Committee 

Corporate oversight 
Corporate Management 
Board 

Operational level 
Directors-General and  
Heads of Service 

Presidential and 
Central Services 

External 
European Parliament, Council, 
European Court of Auditors 

Internal 
Internal Audit Service 

The  new  package  clarifies  the  corporate  level  role  —  by  providing  advice  to  the  College  as  well  as 
oversight and strategic direction to the services on all corporate management issues.  

In particular, the package: 

 

formalised  and  clarified  the  role  of  the  Corporate  Management  Board:  a  new  Commission 
decision (406)  formally  established  the  Corporate  Management  Board  as  the  main  corporate 
governance body. Acting under the President’s authority, the Corporate Management Board supports 
the services by providing oversight and strategic direction in all areas of corporate management. 

(401)  Communication to the Commission on the Governance in the European Commission, C(2018) 7703, 21.11.2018. 
(402)  European Parliament resolution on the Commission White Paper on reforming the Commission (aspects concerning the Committee 

on Budgets), COM(2000) 200, 5.4.2000. 

(403)  https://ec.europa.eu/info/publications/governance-in-the-commission_en 
(404)  European Court of Auditors, Governance at the European Commission — best practice? — Special report N°27/2016. 
(405)  See, inter alia, Section 4.1.1.1. Governance processes in the Report from the Commission to the European Parliament and the 
Council — Annual report to the Discharge Authority on internal audits carried out in 2017, COM(2018) 661), 21.9.2018. 

(406)  Commission Decision on the Corporate Management Board, C(2018) 7706, 21.11.2018. 

182 

 
                                                        
2018 Annual Management and Performance Report 

 

 

 

streamlined  the  subgroups  reporting  to  the  Corporate  Management  Board:  a  number  of 
specialised  subgroups  and  boards  were  formally  brought  under  the  authority  of  the  Corporate 
Management  Board.  For  example,  a  new  information  technology  and  cybersecurity  board,  replaced 
two previous boards to ensure that the Commission’s information technology is effective, secure and 
efficient. In this context, it will also oversee the implementation of the new European Commission 
digital strategy (407). 

strengthened  corporate  oversight  of  risk  management:  the  Secretariat-General  and  the  budget 
department  organised  a  peer  review  process  to  ensure  that  critical  risks  are  identified  and  assessed 
coherently and that the necessary steps are being taken to manage these risks. The Corporate Management 
Board now reviews the list of critical risks — both crosscutting and department specific — from all services. 
The results are communicated to the College and made available to the Internal Audit Service.  

clarified the role of the Audit Progress Committee in relation to risk management and the EU 
consolidated accounts (408). 

Corporate Management Board 

Information Technology  
and Cybersecurity Board 

Synergies and efficiencies 

Domain leaders 

Steering Committees 

Group of  
Resource Directors 

Information Management  
Steering Board 









Human resource management 
Internal and external communication 
Room management and conference 
organisation 
Informatics 
Logistics 
Financial management and internal 
control framework 







Human Resources Modernisation 
Steering Committee 
Corporate Communication Steering 
Committee 
Steering Board on Conferences and 
Meeting Rooms  

In  addition  to  the  revision  of  the  Commission’s  corporate  governance  arrangements,  the  Corporate 
Management Board and its subgroups continued to provide coordination, advice and strategic orientation on 
corporate  management  matters  in  2018.  This included  the  delivery  of  synergies and efficiencies across  the 
Commission  in  areas  such  as  IT,  translation  and  logistics;  the  creation  of  a  Commission  data  strategy;  the 
implementation  of  new  data  protection  rules;  the  security  of  staff,  information  and  assets;  the  further 
modernisation of the Commission’s IT solutions; the fight against fraud and risk management. 

9.2. Reinforced Code of Conduct for Commissioners 

All  Members  of  the  European  Commission  are  required  to  follow  the  rules  regarding  ethics  and  integrity 
contained in the treaties and in the Code of Conduct for Commissioners while carrying out their duties.  

A new Code of Conduct for the Members of the Commission entered into force on 1 February 2018. It puts the 
Commission at the forefront of ethics in public-sector organisations. The modernised rules set new standards in 
Europe.  The  new  Code  of  Conduct  continues  President  Juncker’s  push  for  greater  transparency  since  the 
beginning  of  his  mandate  and  extends  the  ‘cooling-off’  period  for  former  Commissioners  from  18 months  to 
2 years and to 3 years for the President of the Commission. The modernisation goes further by setting clearer 
rules and higher ethical standards as well as by introducing greater transparency in a number of areas. 

(407)  Communication to the Commission — European Commission digital strategy — A digitally transformed, user-focused and data-

driven Commission, C(2018) 7118 final, 21.11.2018. 

(408)  Communication to the Commission — Update of the charter of the Audit Progress Committee of the European Commission, 

C(2018) 7707 final, 21.11.2018. 

183 

 
 
 
                                                        
 
 
 
2018 Annual Management and Performance Report 

9.3. Data protection 

On  11 December 2018 (409)  the  new  data  protection  regulation  entered  into  force.  In  July  2018,  the 
Commission’s Data Protection Officer and the Secretary-General addressed an implementation roadmap to all 
Commission departments. On 7 November 2018, a communication to the Commission ‘The Commission’s data 
protection action plan’ for the implementation of the new internal regulation was adopted. This plan indicated 
key actors, precise tasks and a time period for the Commission departments to implement the new regime. 
Structured  collaboration  with  Commission  departments  was  carried  out  throughout  the  year  with  monthly 
meetings of the Network of Data Protection Coordinators, chaired by the Data Protection Officer. 

In their annual activity reports, almost all departments have given a clear account of their implementation of 
the new data protection framework.  

In July 2018, the Commission appointed a new Data Protection Officer.  

In  the  second  half  of  2018,  new  operational  procedures (410)  and  a  new  IT  system  (the  Data  Protection 
Management  System)  were  implemented.  These  measures  allowed  continued  compliance  with  the  new 
regulation in 2018 without any delay. Information about the entry into force of Regulation (EU) 2018/1725, 
together  with  new  guidance  material,  was  published  on  the  Commission  internal  web-portals  and  on  the 
website of the Commission’s Data Protection Officer.  

The  Data  Protection  Officer  continued  internal  awareness-raising  via  a  wide  range  of  activies,  such  as 
publications  on  the  Commission’s  intranet  and  their  own  dedicated  portal,  but  also  with  speeches  and 
meetings with  senior management,  through  collaborating  with  relevant  corporate  management  entities and 
by  reviewing  training  material  for  the  classroom  courses  about  the  new  regulation.  The  number  of  training 
courses was increased to respond to the high demand. 

(409)  Regulation (EU) 2018/1725 (repealing Regulation (EC) No°45/2001). 
(410)  Reviewed workflow for the drafting and validation of records (documentation of processing operations on personal data under 

Article 31 of Regulation (EU) 2018/1725). 

184 

                                                        
2018 Annual Management and Performance Report 

185