COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS CONSOLIDATED ANNUAL ACCOUNTS OF THE EUROPEAN UNION FOR THE FINANCIAL YEAR 2018
Date: 2019-06-26
Institutions: Directorate-General for Budget, European Commission
Subjects: European Union, balance sheet, closing of accounts, consolidated account, financial situation, general budget (EU), implementation of the budget

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.6.2019  COM(2019) 316 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS CONSOLIDATED ANNUAL ACCOUNTS OF THE EUROPEAN UNION FOR THE FINANCIAL YEAR 2018   
 
 
Consolidated annual 

accounts of the  

European Union  

Financial year 2018 

 
 
 
 
 
 
CONTENTS 

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

EUROPEAN UNION POLITICAL AND FINANCIAL FRAMEWORK, GOVERNANCE AND 
ACCOUNTABILITY ...................................................................................... 4 

NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS ............................... 12 

HIGHLIGHTS OF THE FINANCIAL YEAR 2018 ............................................... 13 

CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES ............ 15 

BALANCE SHEET ................................................................................... 17 

STATEMENT OF FINANCIAL PERFORMANCE .............................................. 18 

CASHFLOW STATEMENT ......................................................................... 19 

STATEMENT OF CHANGES IN NET ASSETS ............................................... 20 

NOTES TO THE FINANCIAL STATEMENTS ................................................. 21 

FINANCIAL STATEMENT DISCUSSION AND ANALYSIS ................................... 98 

BUDGETARY IMPLEMENTATION REPORTS AND EXPLANATORY NOTES ........... 113 

GLOSSARY ............................................................................................ 165 

LIST OF ABBREVIATIONS ........................................................................ 169 

 
 
 
 
Annual accounts of the European Union 2018 

FOREWORD 

It  is  my  pleasure  to  present  the  2018  annual  accounts  of  the  European 
Union.  They  provide  a  complete  overview  of  the  EU  finances  and  the 
implementation  of  the  EU  budget  for  the  last  year,  including  information 
on  contingent  liabilities,  financial  commitments  and  other  obligations  of 
the Union. Reflecting the multiannual nature of the Union’s activities, they 
offer  explanations  of  the  key  financial  figures  and  their  evolution.  The 
consolidated annual accounts of the European Union are part of the 
Commission’s  integrated  financial  and  accountability  reporting 
package  and  form  an  essential  part  of  our  highly  developed  system  of 
financial accountability. 

Despite its relatively modest size, the EU budget makes a big difference to 
millions  of  Europeans.  It  complements  national  budgets  and  supports 
political  priorities  where  it  has  real  added  value  and  where  it  can  deliver 
results in the most efficient way. 

2018 was the fifth year under the current multiannual financial framework; all the financial programmes 
are  fully  operational.  The  implementation  of  the  EU  budget  totalled  EUR  173.1  billion  in  commitment 
appropriations,  and  EUR  156.7  billion  in  payment  appropriations.  Throughout  the  year,  the  EU  budget 
continued  to  provide  our  response  to  the  challenges  deriving  from  a  complex  geopolitical  environment 
while simultaneously guaranteeing strategic investment and sustainable growth in Europe. 

Nearly  half  of  the  funds  were  aimed  at  stimulating  growth,  employment  and  competitiveness.  Funding 
was provided for reaserach and innovation under Horizon 2020, for small and medium sized enterprises 
under  the  COSME  programme  or  for  education  under  Erasmus+.  The  European  Fund  for  Strategic 
Investments, Connecting Europe Facility and the European Structural and Investment Funds all had also 
a major role to play. I invite you to discover the stories behind many EU investments on the ‘InvestEU’ 
portal (https://europa.eu/investeu). 

The  EU  budget  offered  also  strong  support  in  other  priority  areas  such  as  the  EU's  comprehensive 
approach  to  migration,  the  security  union  and  the  EU's  external  action.  It  allowed  the  Union  to  play  a 
strong role beyond our borders during a period of turbulence in Europe’s neighbourhood and contributed 
to  achieving  cross-cutting  policy  objectives  related  to  the  climate  change  and  the  biodiversity.  In  2018 
the amount allocated to climate mainstreaming amounted to more than EUR 32 billion, 20 % of the total 
budget.  

Finally,  the  continued  support  was  provided  to  promoting  sustainable  growth  and  the  preservation  of 
Europe's  natural  resources  though  the  Common  Agricultural  and  Fisheries  Policies  and  activities  in  the 
fields of climate and environment under the LIFE programme. 

The consolidated annual accounts of the European Union are produced in accordance with International 
Public  Sector  Accounting  Standards.  In  order  to  uphold  these  standards,  the  Commission  is 
consistently  improving  its  rules  and  procedures,  organisational  structure  and  agility.  Reporting 
consistently  and  effectively  increases  the  accountability  of  the  EU  spending,  not only  for  the  purpose  of 
legal  compliance.  It  helps  to  engage  with  citizens  and  with  other  stakeholders,  and  to  maintain  their 
confidence and trust in the European Union.  

Günther H. Oettinger 

Commissioner for Budget and Human Resources 

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Annual accounts of the European Union 2018 

EUROPEAN UNION POLITICAL AND 
FINANCIAL FRAMEWORK, GOVERNANCE 
AND ACCOUNTABILITY 

The  European  Union  (EU)  is  a  Union  within  which  the  Member  States  confer  competences  to  attain 
objectives  they  have  in  common.  The  Union  is  founded  on  the  values  of  respect  for  human  dignity, 
freedom,  democracy,  equality,  the  rule  of  law  and  respect  for  human  rights,  including  the  rights  of 
persons  belonging  to  minorities.  These  values  are  common  to  the  Member  States  in  a  society  in  which 
pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail. 

1. 

POLITICAL AND FINANCIAL FRAMEWORK 

EU Treaties 

The  overarching  objectives  and  principles  that  guide  the  Union  and  the 
European  Institutions  are  defined  in  the  Treaties.  The  Union  and  the  EU 
institutions  may  only  act  within  the  limits  of  the  competences  conferred  by 
the  Treaties  so  as  to  attain  the  objectives  set  out  therein  and  must  do  this    
in accordance with the principles1 of subsidiarity and proportionality. To attain  
its objectives and carry out its policies, the Union provides itself with the necessary financial means. The 
Commission is responsible for implementing the objectives in cooperation with the Member States and in 
accordance with the principle of sound financial management. 

The EU  pursues the  objectives established in  the  Treaty with a number of tools, one of which is the EU 
budget. Others are, for example, proposing legislation or pursuing policy strategies.  

Commission political 
priorities 

The political priorities of the Commission are defined in the political guidelines 
set by the President of the Commission. These guidelines provide a roadmap 
for  the  Commission's  action  that  is  fully  consistent  and  compatible  with 
Europe 2020 as the EU's long-term growth strategy.  

10 PRIORITIES 

A  new  boost  for  jobs,  growth  and 
investment. 

A  balanced  and  progressive  trade 
policy to harness globalisation. 

A connected digital single market. 

An area of Justice and Fundamental 
Rights based on mutual trust. 

A  resilient  Energy  Union  with  a 
change 
forward-looking 
policy. 

climate 

Towards a new policy on migration. 

A  deeper  and  fairer  internal  market 
with a strengthened industrial base. 

Europe as a stronger global actor. 

1 

  Under the principle of subsidiarity, the Union shall act only if and in so far as the objectives of the proposed action 
cannot be sufficiently achieved by the Member States but can rather, by reason of the scale or  effects, be better 
achieved  at  Union  level.  Under  the  principle  of  proportionality,  the  content  and  form  of  Union  action  shall  not 
exceed what is necessary to achieve the objectives of the Treaties. See Article 5 of the TFEU. 

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Annual accounts of the European Union 2018 

A  deeper  and  fairer  Economic  and 
Monetary Union (EMU). 

A Union of democratic change. 

Europe 2020  
strategy 

The  Europe  2020  strategy  agreed  in  2010  by  the  Heads  of  State  or 
Government of EU Member States defined a 10-year jobs and growth strategy 
for  the  EU2.  The  strategy  put  forward  three  mutually  reinforcing  priorities  of 
smart, sustainable and inclusive growth with five EU headline targets. 

The EU budget is one of the EU levers contributing to the delivery of the Europe 2020 objectives. A wide 
range of actions at national, EU and international levels are being mobilised to deliver concrete results in 
relation to the Europe 2020 strategy. 

2030 Agenda for 
Sustainable 
Development3 

Sustainable development has long been at the heart of the European project. 
The  EU  Treaties  give  recognition  to  its  economic,  social  and  environmental 
dimensions  which  should  be  addressed  together.  The  EU  is  committed  to 
development that meets the needs of the present without compromising the 
ability of future generations to meet their own needs. The EU budget plays an 
essential role in many sustainability challenges from youth unemployment to ageing populations, climate 
change,  pollution,  sustainable  energy  and  migration.  Under  the  current  Commission,  sustainable 
development is mainstreamed in key cross-cutting projects as well as in sectoral policies and initiatives. 

The  policies  supported  by  the  EU  budget  are  implemented  in  accordance  with  the  Multiannual  Financial 
Framework (MFF) and corresponding sectorial legislation defining spending programmes. 

Multiannual Financial 
Framework and  
spending programmes 

The  Multiannual  Financial  Framework  translates  the  EU’s  political  priorities 
into financial terms over a period long enough to be effective and to provide a 
coherent  long-term  vision  for  beneficiaries  of  EU  funds  and  co-financing 
national  authorities.  It  sets  maximum  annual  amounts  (ceilings)  for  EU 
expenditure  as  a  whole  and  for  the  main  categories  of  expenditure 
(headings). The sum of the ceilings of all headings gives the total ceiling of 

commitment appropriations. The Multiannual Financial Framework is adopted by unanimity indicating the 
agreement  of  all  Member States  to  the  objectives  and  the  level  of  spending  (maximum  level  of  budget 
commitments and payments), with the consent of the European Parliament.  

Interinstitutional 
agreement 

The  Multiannual 
the 
Framework 
interinstitutional  agreement4  which  is  a  political  agreement  between  the 
European  Parliament,  the  Council  and  the  Commission.  The  purpose  of  this 
agreement, adopted in 2013 in accordance with Article 295 of the TFEU, is to  
implement  budgetary  discipline,  improve  the  functioning  of  the  annual  budgetary  procedure  and 
cooperation  between  the  institutions  on  budgetary  matters  as  well  as  to  ensure  sound  financial 
management. 

complemented  by 

Financial 

is 

Annual budget 

The annual budget is prepared by the Commission and usually agreed by mid-
December  by  the  European  Parliament  and  the  Council,  based  on  the 
procedure of Art. 314 TFEU. According to the principle of budget equilibrium, 
total  revenue  must  equal  total  expenditure  (payment  appropriations)  for  a 
given financial year.  

The  main  sources  of  funding  of  the  EU  are  own  resources  revenues  which  are  complemented  by  other 
revenues. There are three types of own resources: traditional own resources (such as custom duties and 
sugar  levies),  the  own  resource  based  on  value  added  tax  (VAT)  and  the  own  resource  based  on  gross 
national  income  (GNI).  Other  revenues  arising  from  the  activities  of  the  EU  (e.g.  competition  fines) 
normally  represent  less  than  10 %  of  total  revenue.  The  overall  amount  of  own  resources  needed  to 
finance  the  budget  is  determined  by  total  expenditure  less  other  revenue.  In  the  current  MFF  the  total 
amount  of  own  resources  cannot  exceed  1.20 %  of  the  sum  of  gross  national  income  (GNI)  of  the 
Member States. 

2   See  Communication  from  the  Commission,  Europe  2020,  A  strategy  for  smart,  sustainable  and  inclusive  growth, 

COM(2010)2020, 3 March 2010. 

3   Commission communication "Next steps for a sustainable European future European action for sustainability", 

SWD(2016) 390 final, 22 November 2016. 

4   Interinstitutional  Agreement  of  2  December  2013  between  the  European  Parliament,  the  Council  and  the 
Commission  on  budgetary  discipline,  on  cooperation  in  budgetary  matters  and  on  sound  financial  management 
(2013/C 373/01). 

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Annual accounts of the European Union 2018 

The EU's operational expenditure covers the various headings of the Multiannual Financial Framework and 
takes  different  forms,  depending  on  how  the  money  is  paid  out  and  managed.  The  EU  budget  is 
implemented in three management modes: 

Shared  management:  under  this  method  of  budget  implementation,  tasks  are  delegated  to 
Member States. About 75 % of the expenditure falls under this management mode covering such 
areas as agricultural spending and structural actions. 

Direct  management:  this  is  where  the  budget  is  implemented  directly  by  the  Commission 
services. 

Indirect management: this refers to cases where the Commission confers tasks of implementation 
of the budget to third parties, such as the EU regulatory agencies or international organisations. 

Financial Regulation 

The  Financial  Regulation  (FR)5  applicable  to  the  general  budget  is  a  central 
act  in  the  regulatory  architecture  of  the  EU´s  finances  defining  EU  financial 
rules applicable to the EU budget. 

2.  GOVERNANCE AND ACCOUNTABILITY 

2.1.  INSTITUTIONAL STRUCTURE 

The organisational governance of the EU consists of institutions, agencies and other EU bodies, which are 
listed  in  note  9  of  the  notes  to  the  consolidated  financial  statements.  The  European  Investment  Bank 
(EIB), the European Investment Fund (EIF) and the European Central Bank (ECB) are not included in the 
scope  of  the  Financial  Regulation.  The  main  institutions,  in  the  sense  of  being  responsible  for  drafting 
policies  and  taking  decisions,  are  the  European  Parliament,  the  European  Council,  the  Council  and  the 
Commission. 

The European Commission is a unique organisation. Under the Treaty, the Commission is responsible for 
planning,  preparing  and  proposing  legislation;  for  managing  EU  policies,  including  the  monitoring  of 
implementation  of  EU  legislation  and  ensuring  its  enforcement  and  allocating  EU  funding;  and  for 
representing the EU internationally. 

As  foreseen  in  the  Treaty6,  the  Commission  implements  the  budget  in  cooperation  with  the  Member 
States. Together, they ensure that the appropriations are used in accordance with the principles of sound 
financial  management.  Regulations  lay  down  the  control  and  audit  obligations  of  the  Member  States  in 
the  implementation  of  the  budget  and  the  resulting  responsibilities.  They  also  lay  down  the 
responsibilities and detailed rules for each institution concerning its part in effecting its own expenditure. 

The Commission performs these roles under the leadership of the College of Commissioners, which sets 
priorities  and  takes  overall  political  responsibility  for  the  decisions  of  the  Commission.  The  President, 
whose role was strengthened by the Nice and Lisbon Treaties, decides on the internal organisation of the 
Commission, ensuring that it acts consistently, efficiently and as a collegiate body. 

The  Commission's  internal  functioning  is  based  on  a  number  of  key  principles  underpinning  good 
governance:  clear  roles  and  responsibilities,  a  strong  commitment  to  performance  management  and 
compliance  with  the  legal  framework,  clear  accountability  mechanisms,  a  high  quality  and  inclusive 
regulatory framework, openness and transparency, and high standards of ethical behaviour. 

5   Regulation(EU,  Euratom)  No  2018/1046  of  the  European  Parliament  and  of  the  Council  of  18 July 2018  on  the 
financial  rules  applicable  to  the  general  budget  of  the  Union  and  repealing  Council  Regulation  (EU,  Euratom)  No 
966/2012 – OJ L 193 of 30 July 2018, p. 1. 

6   Treaty on the Functioning of the European Union, art 317. 

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Annual accounts of the European Union 2018 

2.2.  THE COMMISSION'S GOVERNANCE STRUCTURE 

The European Commission has a unique governance system, with a clear distinction between political and 
administrative  oversight  structures  and  well-defined  lines  of  responsibility  and  financial  accountability7. 
The system is based on the Treaties and the structure has evolved to adapt to a changing environment 
and to remain in line with best practice as set out in relevant international standards8. 

In  2018,  the  Commission  adopted  a  ‘governance  package’9,  which  significantly  streamlined  and 
strengthened  its  corporate  governance  arrangements  and  leveraged  recent  audit  work  by  the  European 
Court of Auditors10 and the Internal Audit Service. 

 

 

The  College  of  Commissioners  assumes  collegial  political  responsibility  for  the  work  of  the 
Commission.  Operational  implementation  of  the  budget  is  delegated  to  Directors-General  and 
Heads of Service who lead the administrative structure of the Commission11.  

The  College  delegates  financial  management  tasks  to  the  Directors-General  or  Heads  of  Service 
who  thereby  become  Authorising  Officers  by  Delegation  (AOD).  These  tasks  can  further  be 
delegated  to  Directors,  Heads  of  Unit  and  others,  who  thereby  become  Authorising  Officers  by 
Sub-Delegation.  The  responsibility  of  the  Authorising  Officers  covers  the  entire  management 
process,  from  determining  what  needs  to  be  done  to  achieve  the  policy  objectives  set  by  the 
institution to managing the activities from both an operational and budgetary standpoint. 

 

The  Audit  Progress  Committee  follows-up  implementation  of  audits,  in  particular  of  the  Internal 
Audit Service but also on the basis of European Court of Auditors audits. 

  Under  the  authority  of  the  President,  the  Corporate  Management  Board,  chaired  by  the 
Secretary-General,  brings  together  on  a  regular  basis  the  Directors-General  responsible  for 
budget,  human  resources  and  security,  and  the  Director-General  of  the  Legal  Service.  The 
Member(s) responsible for budget and administration in the  Cabinet of the President, as well as 
the  Head(s)  of  Cabinet  of  the  Member(s)  of  the  Commission  in  charge  of  budget,  human 
resources  and  administration,  are  observers.  The  board  provides  coordination,  oversight,  advice 
and strategic orientations on corporate management issues, in areas including the management 
of  financial  and  human  resources,  risk  management,  performance  management,  IT  governance, 
cyber- and physical security, business continuity, and information management. In this way, the 
Corporate  Management  Board  contributes  to  ensuring  that  the  necessary  structures,  processes 
and administrative policies are in place in the Commission to deliver on the political priorities of 
the College and the tasks entrusted to it by the Treaties in an efficient and effective manner. 

2.3.  THE COMMISSION’S FINANCIAL MANAGEMENT 

In the Commission, the roles and responsibilities in financial management are clearly defined (e.g. in the 
Financial Regulation) and applied. This is a decentralised approach with clear responsibilities with the aim 
of  creating  an  administrative  culture  that  encourages  civil  servants  to  take  responsibility  for  activities 
over which they have control and to give them control over the activities for which they are responsible. 

The  Commission  may  also  delegate  the  implementation  of  specific  programmes  to  executive  agencies. 
Expenditure  decisions  can  also  be  managed  via,  or  together  with,  another  institution  or  body.  A  large 

7   For  more  details  see  Communication  to  the  Commission  from  President  Juncker  and  First  Vice-President 
Timmermans:  Governance  in  the  European  Commission,  C(2017)  6915  final  of  11 October 2017,  URL: 
https://ec.europa.eu/info/sites/info/files/c_2017_6915_final_en.pdf. 

8   E.g. internal control standards are based on the COSO 2013 Internal Control principles. 
9   https://ec.europa.eu/info/publications/governance-in-the-commission_en.  For  more  details  see  Communication  to 
the  Commission  C(2018)7704  “Streamlining  and  strengthening  corporate  governance  within  the  European 
Commission”,  https://ec.europa.eu/info/sites/info/files/file_import/streamlining-strengthening-corporate-governa-
nce-european-commission_en.pdf. 

10   Special Report N° 27/2016 on “Governance at the European Commission – best practice?” 
11  As a result, the term 'European Commission' is used to denote both the institution  – the College - formed by the 
Members  of  the  Commission,  and  its  administration  managed  by  the  Directors-General  of  its  departments  (and 
heads of other administrative structures such as services, offices and executive agencies). 

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Annual accounts of the European Union 2018 

proportion  of  the  budget  is  managed  under  a  system  of  shared  management  with  the  Member  States, 
notably in the areas of structural funds and agriculture. 

Budget implementation tasks are also entrusted to: 

 

 

 

 

 

national agencies; 

the European Investment Bank Group; 

third countries; 

international organisations (e.g. the World Bank or the United Nations); 

other entities. 

As  authorising  officers  by  delegation,  the  Directors-General  are  responsible  for  the  sound  financial 
management  of  resources.  In  implementing  the  EU  budget,  authorising  officers  by  delegation  must 
comply  with  the  provisions  of  the  Financial  Regulation  and  establish  an  appropriate  internal  control 
framework. Among other things, the internal control objectives focus on: 

 

 

 

 

 

 

 

effectiveness, efficiency and economy of operations; 

financial control and anti-fraud; 

integrity and ethics; 

the management of human resources; 

reliable reporting; 

communication; 

the safeguarding of assets and information. 

Each authorising officer by delegation may rely on one or two senior or middle managers in charge of risk 
management and internal control to oversee and monitor the implementation of internal control systems. 
The Commission’s central services provide guidance and advice and promote best practices. 

Within  the  context  of  the  Commission's  Strategic  Planning  and  Programming  cycle,  each  authorising 
officer is required to prepare an annual activity report (“AAR”) on the activities and policy achievements 
and  results  of  the  year.  In  the  AAR  he/she  declares  that  resources  have  been  used  based  on  the 
principles  of  sound  financial  management  and  that  he/she  has  set  in  place  control  procedures  which 
provide the necessary guarantee concerning the legality and regularity of the underlying transactions. At 
Commission  level  the  Annual  Management  and  Performance  Report  for  the  EU  budget  is  the  main 
instrument  through  which  the  College  of  Commissioners  takes  political  responsibility  for  the 
management of the budget. 

The Accounting Officer of the Commission is centrally responsible for the treasury management, recovery 
procedures, laying down accounting rules based on International Public Sector Accounting Standards and 
methods,  validating  accounting  systems  and  the  preparation  of  the  Commission's  and  consolidated 
annual  accounts  of  the  EU.  Furthermore,  the  Accounting  Officer  is  required  to  sign  the  annual  accounts 
declaring  that  they  present  fairly,  in  all  material  aspects,  the  financial  position,  the  results  of  the 
operations  and  the  cash  flows  of  the  Union.  The  annual  accounts  are  adopted  by  the  College  of 
Commissioners.  The  Accounting  Officer  is  an  independent  function  and  bears  a  major  responsibility  as 
regards  financial  reporting  in  the  Commission.  The  Internal  Auditor  of  the  Commission  is  likewise  a 
centralised  and  independent  function  and  provides  independent  advice,  opinions  and  recommendations 
on the quality and functioning of internal control systems inside the Commission, EU agencies and other 
autonomous bodies.  

2.4.  PERFORMANCE FRAMEWORK 

Implementing  robust  performance  frameworks  is  essential  for  ensuring  a  strong  focus  on  results,  EU 
added value and sound management of EU programmes. The performance framework of the EU budget is 
highly  specified,  scoring  higher  than  any  Organisation  for  Economic  Co-operation  and  Development 
(OECD) country in the standard index of performance budgeting frameworks. The EU budget performance 
framework  reports  on  several  types  and  levels  of  strategic  goals,  objectives  and  targets,  including  the 
Europe 2020 strategy and other political priorities. It must also take account of the complementarity and 
mainstreaming  of policies and  programmes  and the key  role of  the  Member  States in  implementing  the 
EU Budget.  

  Objectives, indicators and targets are strongly featured in the programmes' legal basis and every 
year the Commission reports on them through the Programme Statements that accompany the 

8 

 
Annual accounts of the European Union 2018 

draft  budget.  They  provide  all  of  the  key  information  that  is  necessary  for  careful  programme 
scrutiny and performance measurement: this includes 7-year financial commitments; programme 
performance baselines (starting points for policy action); end-goals (to be achieved at the end of 
the multi-annual programming period); and intermediate milestones. 

To ensure resources are allocated to priorities and that every action brings high performance and 
added  value,  the  Commission  promotes  a  performance  culture  across  the  Commission  services. 
Moreover,  over  the  past  years  it  has  developed  an  approach  that  promotes  a  better  balance 
between compliance and performance. 

The  Annual  Management  and  Performance  Report  for  the  EU  budget  provides  a 
comprehensive  overview  on  the  performance,  management  and  protection  of  the  EU  budget.  It 
explains  how  the  EU  budget  supports  the  European  Union’s  political  priorities,  the  results 
achieved with the EU budget, and the role the Commission plays in ensuring and promoting the 
highest standards of budgetary and financial management. 

The  European  Court  of  Auditors  takes  a  systematic  and  thorough  approach  to  assessing  the 
qualitative  aspects  of  budgeting,  including  the  performance  dimension,  as  a  normal  part  of  its 
annual reporting and through special reports.  

 

 

 

All of these elements place the budget authority in a strong position to take performance into account as 
a significant factor in deciding on the next annual budget. 

2.5.  FINANCIAL REPORTING 

The main element of EU financial reporting is the Integrated Financial and Accountability Reporting 
of  the  EU,  which  comprises  the  consolidated  annual  accounts  of  the  EU,  the  Annual  Management  and 
Performance Report for the budget, which includes the evaluation report according to art. 247(1) (e) FR, 
the annual internal audit report, a long-term forecast of future inflows and outflows covering the next five 
years  and  the  report  on  the  follow-up  to  the  discharge.  The  Integrated  Financial  and  Accountability 
Reporting provides the public with a comprehensive view of the financial and operational situation of the 
EU each year. 

The  consolidated  annual  accounts  of  the  EU  provide  financial  information  on  the  activities  of  the 
institutions,  agencies  and  other  bodies  of  the  EU  from  both  an  accrual  accounting  and  budgetary 
perspective. These accounts do not encompass the annual accounts of Member States. 

The consolidated annual accounts of the EU consist of two separate but linked parts: 

a) 

b) 

the consolidated financial statements; and 

the  reports  on  implementation  of  the  budget,  which  provide  an  aggregated  record  of 
budget implementation. 

In  addition,  the  consolidated  annual  accounts  of  the  EU  are  accompanied  by  a  Financial  Statement 
Discussion  and  Analysis  (FSDA),  which  summarises  significant  changes  and  trends  in  the  financial 
statements  and  explains  significant  risks  and  uncertainties  the  EU  has  faced  and  needs  to  address  in 
future.  

9 

 
 
 
Reporting and Accountability in the Commission: 

Annual accounts of the European Union 2018 

Integrated Financial & 
Accountability Reporting 
Art. 247 FR 

  Consolidated Annual Accounts of the EU 

  Annual Management and Performance Report for the EU budget 

(incl. reporting on the evaluation of the EU finances) 

  Annual internal audit report 

  A long-term forecast of future in- and outflows for 5 years 

  Report on the follow up to the discharge 

Other reports 

  Communication  package  at  the  occasion  of  the  State  of  the 

Union address 

  General Report on the activities of the EU 

  Annual Activity Reports of the Directorates-General 

  Report on Budgetary and Financial Management 

2.6.  EXTERNAL AUDIT AND DISCHARGE PROCEDURE 

External audit 

The  European  Court  of  Auditors  (ECA)  is  the  external  auditor  of  the  EU  institutions  (and  bodies).  The 
ECA's  mission  is  to  contribute  to  improving  EU  financial  management,  promote  accountability  and 
transparency, and act as the independent guardian of the financial interests of the citizens of the EU. Its 
role as the EU’s independent external auditor is to check that EU funds are correctly accounted for, are 
collected  and  spent  in  accordance  with  the  relevant  rules  and  regulations  and  have  achieved  value  for 
money. 

As part of its activities, the ECA draws up for the use of the European Parliament and the Council: 

(1) 

(2) 

(3) 

an annual report on the activities financed from the general budget, detailing its observations on 
the EU annual accounts and underlying transactions; 

an  opinion,  based  on  its  audits  and  included  in  the  annual  report  in  the  form  of  a  statement  of 
assurance,  on  (i)  the  reliability  of  the  accounts  and  (ii)  the  legality  and  regularity  of  the 
underlying transactions involving both revenue collected and payments to final beneficiaries; and 

special  reports  covering  specific  areas  as  well  as  specific  annual  reports  (on  e.g.  the  European 
Development Fund, on EU Agencies). 

Discharge 

The final step of the budget lifecycle is the discharge procedure for a given financial year. It represents 
the political dimension of the external control of budget implementation and is the decision by which the 
"Discharge Authority" (i.e. the European Parliament, acting on a Council recommendation) "releases" the 
Commission  (and  other  EU  bodies)  from  its  responsibility  for  the  management  of  a  given  budget.  This 
decision  is  based  on  an  examination  of  the  EU  consolidated  annual  accounts  and  a  set  of  Commission 
reports (the Annual Management and Performance Report for the EU budget, the report on the follow-up 
to  the  previous  year's  discharge  and  the  annual  report  to  the  discharge  authority  on  internal  audits 
carried out) as well as on the European Court of Auditors' Annual Report, audit opinion (the "Statement 
of Assurance") and Special Reports. It also takes account of the Commission written replies to questions 
and  other  information  requests  as  well  as  hearings  of  the  Budget  Commissioner,  Commissioners  and 
Directors  General  responsible  for  the  main  spending  areas  and  the  Secretary  General  before  the 
European Parliament's Budgetary Control Committee (CONT). 

10 

 
 
 
 
Annual accounts of the European Union 2018 

The  outcome  of  the  discharge  procedure  may  be  threefold:  granting,  postponement  or  refusal  of  the 
discharge. The final discharge reports also include specific requests addressed to the Commission by both 
the European Parliament and the Council. These requests are subject to a follow up report in which the 
Commission outlines the concrete actions it has already taken or intends to take.  

11 

 
 
Annual accounts of the European Union 2018 

NOTE ACCOMPANYING THE 
CONSOLIDATED ACCOUNTS 

The  consolidated  annual  accounts  of  the  European  Union  for  the  year  2018  have  been  prepared  on  the 
basis  of  the  information  presented  by  the  institutions  and  bodies  under  Article  246(2)  of  the  Financial 
Regulation  applicable  to  the  general  budget  of  the  European  Union.  I  hereby  declare  that  they  were 
prepared  in  accordance  with  Title  XIII  of  this  Financial  Regulation  and  with  the  accounting  principles, 
rules and methods set out in the notes to the financial statements. 

I have obtained from the accounting officers of these institutions and bodies, who certified its reliability, 
all  the  information  necessary  for  the  production  of  the  accounts  that  show  the  European  Union's  assets 
and liabilities and the budgetary implementation. 

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the 
accounts of the European Commission, I have a reasonable assurance that the accounts present fairly, in 
all  material  aspects,  the  financial  position,  the  results  of  the  operations  and  the  cashflows  of  the 
European Union. 

[signed] 

Rosa ALDEA BUSQUETS 

Accounting Officer of the Commission 

21 June 2019 

12 

 
 
 
 
 
Annual accounts of the European Union 2018 

HIGHLIGHTS OF THE FINANCIAL YEAR 
2018 

Implementation of the 2018 Union budget 

The 2018 adopted budget focused on two main policy priorities for Europe among the ten priorities set by 
President Juncker at the beginning of this Commission’s mandate. 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. In 
addition to these two clear priorities, in 2018, the EU budget and other instruments continued to support 
farmers  and  rural  development,  and  deepened  and  strengthened  the  strategic  interconnectors  and 
networks  between  EU  countries  with  the  implementation  of  the  digital  single  market  and  the  energy 
union.  The  Commission  continued  to  support  the  external  projection  of  the  EU  as  a  key  economic  and 
political partner as well as a leading international provider of investment and humanitarian assistance. 

The  implementation  of  the  EU  budget  in  2018  totalled  EUR  173.1  billion  in  commitment  appropriations, 
and EUR 156.7 billion in payment appropriations.  

Nearly half of the funds – EUR 87.4 billion in commitment appropriations were aimed at stimulating smart 
and  inclusive  growth,  jobs,  competitiveness  and  cohesion.  This  included  funding  for  research  and 
innovation  under  Horizon  2020,  education  under  Erasmus+,  small  and  medium  sized  enterprises  under 
the COSME programme, the Connecting Europe Facility (CEF), the guarantee fund for the European Fund 
for Strategic Investments (EFSI)  which is the tool behind the Investment Plan for Europe, and fostering 
convergence among Member States and among regions through the European Structural and Investment 
Funds  (ESIF).  Moreover,  the  EU  budget  support  to European  farmers  amounted  to  EUR 44.4 billion  in 
payments made. 

The  budget  was  also  used  to  reinforce  the  external  borders  of  the  Union  and  address  the  migration 
and  refugee  crisis  by  funding  actions  including  emergency  assistance,  relocation,  border  control, 
resettlement,  return  and  integration  of  refugees  and  asylum-seekers.  Finally,  the  budget  continued  to 
fund  programmes  to  support the  protection  of  justice  and  fundamental  rights as  well  as  social  cohesion 
so that our European societies remain inclusive, free and fair. 

The United Kingdom's withdrawal from the European Union 

Background 

On  23  June  2016  a  majority  of  the  citizens  of  the  United  Kingdom  who  voted  in  the  referendum  on 
membership  of  the  European  Union  voted  to  leave  the  EU.  On  29  March  2017,  the  United  Kingdom 
formally  notified  the  European  Council  of  its  intention  to  leave  the  EU  and  the  European  Atomic  Energy 
Community  (Euratom).  In  doing  so,  it  triggered  Article  50  of  the  Treaty  on  European  Union,  which  sets 
out the procedure for a Member State to withdraw from the Union.  

The negotiation process  

On  19  March  2018  the  Commission  published  a  draft  of  the  Withdrawal  Agreement  that  outlined  the 
progress  made  in  the  negotiations.  In  the  financial  settlement  part  of  the  draft  Withdrawal  Agreement, 
the EU and the UK translated the progress achieved in the first phase of negotiations into a legal text. 

A Joint Report was published on 14 November 2018 reporting agreement at negotiators’ level on the full 
text of the draft Withdrawal Agreement, and on an outline of the Political Declaration on the framework 
for the future relationship between the United Kingdom and the European Union. On the same day, this 
updated  and  agreed  draft  Withdrawal  Agreement  was  published,  in  which  the  UK  agreed  to  pay  all  its 
obligations under the current Multiannual Financial Framework (MFF) and previous financial perspectives 
as if it were still a Member State, including its share of the Union's liabilities and contingent liabilities. The 
UK government approved the draft Withdrawal Agreement on the 14 November and the European Council 
endorsed  it  on 25  November  2018.  On 11  January  2019, the  Council  (Article 50)  approved  the decision 
on the conclusion of the Withdrawal Agreement and sent it to the European Parliament for its consent. On 
the request of the United Kingdom, in accordance with the procedure set in the Article 50 of the TFEU, on 

13 

 
Annual accounts of the European Union 2018 

21 March 2019 the European Council agreed to extend the UK’s departure date to 22 May 2019, provided 
the Withdrawal Agreement was approved by the House of Commons by 29 March 2019 at the latest and 
to the 12 April 2019 if it was not the case (European Council Decision (EU) 2019/476 of 22 March 2019, 
OJ  L80  22.3.2019,  p.  1).  Subsequent  to  this,  the  House  of  Commons  did  not  approve  the  Withdrawal 
Agreement by 29 March 2019 and so, again on the request of the United Kingdom, on 10 April 2019 the 
European Council agreed to an extension to the UK’s departure until 31 October 2019 (European Council 
Decision (EU) 2019/584 of 11 April 2019, OJ L101 11.4.2019, p. 1). The withdrawal should take place on 
the first day of the month following the completion of the ratification procedures or on 1 November 2019, 
whichever is the earliest. The United Kingdom will remain a Member State until the new withdrawal date, 
with full rights and obligations in accordance with Article 50 TEU, and the United Kingdom has a right to 
revoke its notification at any time. 

Financial settlement and the 2018 EU annual accounts 

With regard to the financial settlement, it was stated in the draft Withdrawal Agreement published on 14 
November  2018,  that  the  UK  would  pay  all  its  obligations  under  the  current  MFF  and  previous  financial 
perspectives as if it were still a Member State. More specifically, the draft Withdrawal Agreement states 
that the United Kingdom shall in particular be liable to the Union for its share of: 

• 

• 

• 

• 

The budgetary commitments of the Union budget and of the budgets of the Union decentralised 
agencies outstanding on 31 December 2020 – see Article 140 of the draft Withdrawal Agreement; 

The financing of the Union's liabilities incurred until 31 December 2020, with certain exceptions – 
see Article 142; 

The contingent financial liabilities of the Union arising from financial operations decided/approved 
before the withdrawal date – see Articles 143 & 144; and 

The  payments  required  to  discharge  the  contingent  liabilities  of  the  Union  that  become  due 
related to legal cases concerning financial interests of the Union (provided that the facts forming 
the subject matter of those cases occurred no later than 31 December 2020) – see Article 147. 

At the time of the signature of these accounts, and in the absence of ratification by the United Kingdom, 
the actual departure date and manner of departure (with or without agreement) is not yet known. Based 
on this current situation, there is no financial impact to be reported in the 2018 consolidated EU annual 
accounts. 

14 

 
 
Annual accounts of the European Union 2018 

EUROPEAN UNION 
FINANCIAL YEAR 2018 

CONSOLIDATED FINANCIAL STATEMENTS 
AND EXPLANATORY NOTES 

It should be noted that due to the rounding of figures into millions of euros, some financial data in the 
tables below may appear not to add-up.

15 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

CONTENTS 

BALANCE SHEET .............................................................................................. 17 

STATEMENT OF FINANCIAL PERFORMANCE ......................................................... 18 

CASHFLOW STATEMENT ................................................................................... 19 

STATEMENT OF CHANGES IN NET ASSETS .......................................................... 20 

NOTES TO THE FINANCIAL STATEMENTS ............................................................ 21 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

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

NOTES TO THE BALANCE SHEET ............................................................. 36 

NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE ........................ 63 

CONTINGENT LIABILITIES AND ASSETS .................................................. 70 

BUDGETARY AND LEGAL COMMITMENTS ................................................. 74 

FINANCIAL RISK MANAGEMENT .............................................................. 79 

RELATED PARTY DISCLOSURES .............................................................. 93 

EVENTS AFTER THE BALANCE SHEET DATE .............................................. 95 

SCOPE OF CONSOLIDATION ................................................................... 96 

16 

 
 
 
Annual accounts of the European Union 2018 

BALANCE SHEET 

NON-CURRENT ASSETS 
Intangible assets 
Property, plant and equipment 
Investments accounted for using the equity method 
Financial assets 
Pre-financing 
Exchange receivables and non-exchange recoverables 

CURRENT ASSETS 
Financial assets 
Pre-financing 
Exchange receivables and non-exchange recoverables 
Inventories 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Pension and other employee benefits 
Provisions 
Financial liabilities 

CURRENT LIABILITIES 
Provisions 
Financial liabilities 
Payables 
Accrued charges and deferred income 

TOTAL LIABILITIES 

NET ASSETS 

Reserves 
Amounts to be called from Member States* 
NET ASSETS 

Note 

31.12.2018 

31.12.2017 

 EUR million 

2.1 
2.2 
2.3 
2.4 
2.5 
2.6 

2.4 
2.5 
2.6 
2.7 
2.8 

2.9 
2.10 
2.11 

2.10 
2.11 
2.12 
2.13 

2.14 
2.15 

 446 
11 185 
 591 
65 231 
26 006 
 416 

103 875 

4 168 
23 968 
24 248 
 73 
18 113 

70 570 
174 444 

(80 456) 
(3 281) 
(53 289) 

 405 
10 745 
 581 
59 980 
25 022 
 611 

97 344 

8 655 
24 005 
11 755 
 295 
24 111 

68 821 
166 165 

(73 122) 
(2 880) 
(50 063) 

(137 025) 

(126 065) 

 (852) 
(2 617) 
(32 227) 
(63 186) 

(98 882) 
(235 907) 

 (659) 
(6 850) 
(39 048) 
(63 902) 

(110 459) 
(236 524) 

(61 463) 

(70 359) 

4 961 
(66 424) 
(61 463) 

4 876 
(75 234) 
(70 359) 

*  The  European  Parliament  adopted  a  budget  on  12  December  2018  which  provides  for  the  payment  of  the  Union's  short -term 
liabilities from own resources to be collected by, or called up from, the Member States in 2019. Additionally, under Article 83 of the 
Staff  Regulations  (Council  Regulation  259/68  of  29 February  1968  as  amended),  the  Member  States  shall  jointly  guarantee  the 
liability for pensions. 

17 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

STATEMENT OF FINANCIAL PERFORMANCE 

Note 

2018 

2017      

EUR million 

REVENUE 
Revenue from non-exchange transactions 
GNI resources 
Traditional own resources 
VAT resources 
Fines 
Recovery of expenses 
Other 

Revenue from exchange transactions 
Financial revenue 
Other 

Total Revenue 

EXPENSES 
Implemented by Member States 

European Agricultural Guarantee Fund 
European Agricultural Fund for Rural Development 
and other rural development instruments 
European Regional Development Fund and            
Cohesion Fund 
European Social Fund 
Other 

Implemented by the Commission, executive agencies 
and trust funds 
Implemented by other EU agencies and bodies 
Implemented by third countries and international 
organisations 
Implemented by other entities 
Staff and pension costs 
Changes in employee benefits actuarial assumptions 
Finance costs 
Other expenses 

Total Expenses 
ECONOMIC RESULT OF THE YEAR 

3.1 
3.2 
3.3 
3.4 
3.5 
3.6 

3.7 
3.8 

3.9 

3.10 

3.11 
3.11 

3.11 
3.12 
3.13 
3.14 
3.15 

105 780 
22 767 
17 624 
6 740 
2 215 
3 312 

78 620 
20 520 
16 947 
4 664 
1 879 
10 376 

158 438 

133 006 

3 115 
1 379 

4 494 

1 845 
1 332 

3 177 

162 932 

136 183 

(43 527) 
(13 149) 

(44 289) 
(11 359) 

(30 230) 

(17 650) 

(11 935) 
(2 826) 
(17 551) 

(3 396) 
(4 016) 

(3 569) 
(10 929) 
– 
(1 677) 
(6 208) 

(7 353) 
(1 253) 
(15 738) 

(2 667) 
(4 115) 

(1 478) 
(10 002) 
(3 544) 
(1 896) 
(6 756) 

(149 014) 
13 918 

(128 101) 
8 082 

18 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
Amortisation 
Depreciation 
(Reversal of) impairment losses on investments 
(Increase)/decrease in loans 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-
exchange recoverables 
(Increase)/decrease in inventories 
Increase/(decrease) in pension and other employee 
benefits 
Increase/(decrease) in provisions 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred 
income 
Prior year budgetary surplus taken as non-cash revenue 
Remeasurement of employee benefits liability (non-cash 
movement not included in statement of financial 
performance) 
Other non-cash movements 
Investing activities 
(Increase)/decrease in intangible assets and property, 
plant and equipment  
(Increase)/decrease in investments accounted for using 
the equity method 
(Increase)/decrease in available for sale financial assets 
(Increase)/decrease in financial assets at fair value 
through surplus or deficit 
NET CASHFLOW 

Net increase/(decrease) in cash and cash equivalents 
Cash and cash equivalents at the beginning of the year 
Cash and cash equivalents at year-end 

2018 
13 918 

 104 
 998 
– 
1 041 
 (947) 
(12 299) 

 222 
7 334 

 594 
(1 007) 
(6 821) 
 (716) 

 (556) 
(4 396) 

EUR million 
2017 
8 082 

 99 
 888 
– 
 497 
(3 557) 
 (745) 

 (130) 
5 891 

 928 
 (438) 
 (957) 
(3 678) 

(6 405) 
– 

 (71) 

 3 

(1 583) 

(1 687) 

 (9) 

(1 811) 
 7 

 (53) 

(3 190) 
 (22) 

(5 998) 

(4 474) 

(5 998) 
24 111 
18 113 

(4 474) 
28 585 
24 111 

19 

 
  
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Union 2018 

BALANCE AS AT 31.12.2016 
Movement in Guarantee Fund reserve 
Fair value movements 
Other 
2016 budget result credited to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Movement in Guarantee Fund reserve 
Fair value movements 
Remeasurements in employee benefits liabilities 
Other 
2017 budget result credited to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2018 

Amounts to be called from Member States  
Accumulated Surplus/(Deficit) 

Other reserves 

Fair value 
reserve 

(76 881) 
 (20) 
– 
 (11) 
(6 405) 
8 082 
(75 234) 
 (186) 
– 
(4 396) 
 30 
 (556) 
13 918 
(66 424) 

4 516 
 20 
– 
 62 
– 
– 
4 598 
 186 
– 
– 
 (54) 
– 
– 
4 730 

 325 
– 
 (2) 
 (46) 
– 
– 
 278 
– 
 (47) 
– 
– 
– 
– 
 231 

EUR million 

Net Assets  

(72 040) 
– 
 (2) 
 5 
(6 405) 
8 082 
(70 359) 
– 
 (47) 
(4 396) 
 (24) 
 (556) 
13 918 
(61 463) 

20 

 
 
 
 
 
 
 
 
  
  
Annual accounts of the European Union 2018 

NOTES TO THE FINANCIAL STATEMENTS 

21 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

1. 

SIGNIFICANT ACCOUNTING POLICIES 

1.1.  LEGAL BASIS AND ACCOUNTING RULES 

The  accounts  of  the  EU  are  kept  in  accordance  with  Regulation  (EU,  Euratom)  No  1046/2018  of  the 
European  Parliament  and  of  the  Council  of  18  July  2018 on  the  financial  rules  applicable  to  the  general 
budget  of  the  Union,  amending  Regulations  (EU)  No  1296/2013,  (EU)  No  1301/2013,  (EU)  No 
1303/2013,  (EU)  No  1304/2013,  (EU)  No  1309/2013,  (EU)  No  1316/2013,  (EU)  No  223/2014,  (EU)  No 
283/2014,  and  Decision  No  541/2014/EU  and  repealing  Regulation  (EU,  Euratom)  No  966/2012  (OJ L 
193, 30 July 2018, p. 1) hereinafter referred to as the 'Financial Regulation' (FR). 

In accordance with article 80 of the Financial Regulation, the EU prepares its financial statements on the 
basis  of  accrual-based  accounting  rules  that  are  based  on  International  Public  Sector  Accounting 
Standards (IPSAS). These accounting rules, adopted by the Accounting Officer of the Commission, have 
to  be  applied  by  all  the  institutions  and  EU  bodies  falling  within  the  scope  of  consolidation  in  order  to 
establish a uniform set of rules for accounting, valuation and presentation of the accounts with a view to 
harmonising the process for drawing up the financial statements and consolidation. 

Application of new and amended European Union accounting rules (EAR) 

Revised EAR which is effective for annual periods beginning on or after 1 January 2018 

The  following  accounting  rules,  adopted  by  the  Accounting  Officer  of  the  Commission,  became 
mandatorily effective in the current year: 

  Revision  of  EAR  12  "Employee  Benefits":  The  revised  EAR  12  was  adopted  by  the  Accounting 
Officer in 2017 which is based on the new IPSAS 39 “Employee Benefits” published in July 2016. 
For  the  first  application  of  the  revised  EAR  12  there  were  no  significant  impacts  on  the  EU 
consolidated  financial  statements,  aside  from  the  recognition  of  any  gain  or  loss  resulting  from 
changes  in  the  actuarial  assumptions,  which  under  the  revised  EAR  is  recognised  directly  in  net 
assets, in contrast with the previous requirement to recognise in surplus or deficit. 

New EAR adopted but not yet effective at 31 December 2018 

The EU has not applied the following new EAR, which have been adopted by the Accounting Officer of the 
Commission, but which is not yet effective: 

  New  EAR  20  "Public  Sector  Combinations"  (effective  for  annual  periods  beginning  on  or  after  1 
January  2019):  The  EAR  20,  which  is  based  on  the  IPSAS  40  "Public  Sector  Combinations", 
establishes the classification of a public sector combination into two different types depending on 
whether the transaction takes place under common control or not: (i) amalgamation, in which the 
transaction  is  based  on  the  carrying  amounts  of  the  entity  combined  with  the  EU;  and  (ii) 
acquisition,  in  which  the  transaction  is  based  on  the  acquisition  date  fair  values  of  the  entity 
acquired by the EU. Both have distinct requirements and levels of disclosure, in order to provide a 
better understanding of its effects to users of the financial statements of the EU.  

The impact on the EU financial statements in the year of initial application will depend on whether in 
that period the EU would enter into a public sector combination transaction. 

1.2.  ACCOUNTING PRINCIPLES 

The objective of financial statements is to provide information about the financial position, performance 
and cashflows of an entity that is useful to a wide range of users. For the EU as a public sector entity, the 
objectives  are  more  specifically  to  provide  information  useful  for  decision-making,  and  to  demonstrate 
the  accountability  of  the  entity  for  the  resources  entrusted  to  it.  It  is  with  these  goals  in  mind  that  the 
present document has been drawn up.  

The  overall  considerations  (or  accounting  principles)  to  be  followed  when  preparing  the  financial 
statements  are  laid  down  in  EU  accounting  rule  1  "Financial  Statements"  and  are  the  same  as  those 

22 

 
 
Annual accounts of the European Union 2018 

described  in  IPSAS  1:  fair  presentation,  accrual  basis,  going  concern,  consistency  of  presentation, 
materiality,  aggregation,  offsetting  and  comparative  information.  The  qualitative  characteristics  of 
financial  reporting  are  relevance,  faithful  representation  (reliability),  understandability,  timeliness, 
comparability and verifiability. 

1.3.  CONSOLIDATION 

Scope of consolidation 

The  consolidated  financial  statements  of  the  EU  comprise  all  significant  controlled  entities  (i.e.  the  EU 
institutions  (including  the  Commission)  and  the  EU  agencies),  associates  and  joint  ventures.  The 
complete  list  of  consolidated  entities  can  be  found  in  note  9  of  the  EU  financial  statements.  It  now 
comprises  52  controlled  entities  and  1  associate.  Entities  that  fall  under  the  consolidation  scope,  but 
which are immaterial to the EU consolidated financial statements as a whole, need not be consolidated or 
accounted for using equity method where to do so would result in excessive time or cost to the EU. Those 
entities  are  referred  to  as  'Minor  entities'  and  are  separately  listed  in  note  9.  In  2018,  7  entities  have 
been classified as minor entities. 

Controlled entities 

The decision to include an entity in the scope of consolidation is based on the control concept. Controlled 
entities are all entities for which the EU is exposed, or has right, to variable benefits from its involvement 
and  has  the  ability  to  affect  the  nature  and  amount  of  those  benefits  through  its  power  over  the  other 
entity. This power must be presently exercisable and must relate to the relevant activities of the entity. 
Controlled  entities  are  fully  consolidated.  The  consolidation  begins  at  the  first  date  on  which  control 
exists, and ends when such control no longer exists. 

The most common indicators of control within the EU are: creation of the entity through founding treaties 
or secondary legislation, financing of the entity from the EU budget, the existence of voting rights in the 
governing bodies, audit by the European Court of Auditors and discharge by the European Parliament. An 
individual assessment for each entity is made in order to decide whether one or all of the criteria listed 
above are sufficient to result in control. 

Under  this  approach,  the  EU's  institutions  (except  the  European  Central  Bank)  and  agencies  (excluding 
the  agencies  of  the  former  2nd  pillar)  are  considered  as  under  the  exclusive  control  of  the  EU  and  are 
therefore  included  in  the  consolidation  scope.  Furthermore,  the  European  Coal  and  Steel  Community 
(ECSC) in Liquidation is also considered as a controlled entity.  

All material "inter-entity transactions and balances" between EU controlled entities are eliminated, while 
unrealised gains and losses on such transactions are not material and so have not been eliminated. 

Joint Arrangements 

A joint arrangement is an agreement over which the EU and one or more parties have joint control. Joint 
control is contractually agreed sharing of control over an arrangement, which exists only when decisions 
about the relevant activities require the unanimous consent of parties sharing control. Joint agreements 
can  be  either  joint  operations  or  joint  ventures.  In  case  a  joint  arrangement  is  structured  through  a 
separate vehicle and parties to the joint arrangement have rights to the net assets of the arrangement, 
this  joint  arrangement  classifies  as  a  joint  venture.  Participations  in  joint  ventures  are  accounted  for 
using the equity method (see note 1.5.4). In case the parties have rights to the assets, and obligations 
for the liabilities, related to the arrangement, this joint arrangement is classified as a joint operation. In 
relation  to  its  interest  in  joint  operations,  the  EU  recognises  in  its  financial  statements:  its  assets  and 
liabilities,  revenue  and  expense,  as  well  as  its  share  of  assets,  liabilities,  revenue  and  expense  held  or 
incurred jointly. 

Associates 

Associates are entities over which the EU has, directly or indirectly, significant influence but not control. 
It is presumed that significant influence exists if the EU holds directly or indirectly 20 % or more of the 
voting rights. Participations in associates are accounted for using the equity method (see note 1.5.4). 

23 

 
 
 
Non-consolidated entities the funds of which are managed by the Commission 

Annual accounts of the European Union 2018 

The  funds  of  the  Joint  Sickness  Insurance  Scheme  for  staff  of  the  EU,  the  European  Development  Fund 
and  the  Participants  Guarantee  Fund  are  managed  by  the  Commission  on  their  behalf.  However,  since 
these entities are not controlled by the EU, they are not consolidated in its financial statements. 

1.4.  BASIS OF PREPARATION 

Financial  statements  are  presented  annually.  The  accounting  year  begins  on  1  January  and  ends  on 
31 December. 

1.4.1.  Currency and basis for conversion 

Functional and reporting currency 

The financial statements are presented in millions of euros, unless stated otherwise, the euro being the 
EU's functional and reporting currency. 

Transactions and balances 

Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates 
of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency 
transactions  and  from  the  re-translation  at  year-end  exchange  rates  of  monetary  assets  and  liabilities 
denominated in foreign currencies are recognised in the statement of financial performance. Translation 
differences  on  non-monetary  financial  instruments  classified  as  available  for  sale  financial  assets  are 
included in the fair value reserve. 

Different conversion methods apply to property, plant and equipment and intangible assets, which retain 
their value in euros at the rate that applied at the date when they were purchased. 

Year-end balances of monetary assets and liabilities denominated in foreign currencies are converted into 
euros on the basis of the European Central Bank (ECB) exchange rates applying on 31 December: 

Euro exchange rates 

Currency 
BGN 
CZK 
DKK 
GBP 
HRK 
HUF 

31.12.2018 
1.9558 
25.7240 
7.4673 
0.8945 
7.4125 
320.9800 

31.12.2017 
1.9558 
25.5350 
7.4449 
0.8872 
7.4400 
310.3300 

Currency 
PLN 
RON 
SEK 
CHF 
JPY 
USD 

31.12.2018 
4.3014 
4.6635 
10.2548 
1.1269 
125.8500 
1.145 

31.12.2017 
4.177 
4.6585 
9.8438 
1.1702 
135.01 
1.1993 

1.4.2.  Use of estimates 

In  accordance  with  IPSAS  and  generally  accepted  accounting  principles,  the  financial  statements 
necessarily  include  amounts  based  on  estimates  and  assumptions  by  management  based  on  the  most 
reliable information available. Significant estimates include, but are not limited to: amounts for employee 
benefit  liabilities,  provisions,  financial  risk  on  inventories  and  accounts  receivable,  accrued  revenue  and 
charges,  contingent  assets  and  liabilities,  degree of  impairment  of  intangible assets  and  property,  plant 
and equipment and amounts disclosed in the notes concerning financial instruments. Actual results could 
differ  from  those  estimates.  Changes  in  estimates  are  reflected  in  the  period  in  which  they  become 
known. 

24 

 
  
 
 
 
Annual accounts of the European Union 2018 

1.5.  BALANCE SHEET 

1.5.1. 

Intangible assets 

Acquired  computer  software  licences  are  stated  at  historical  cost  less  accumulated  amortisation  and 
impairment  losses.  The  assets  are  amortised  on  a  straight-line  basis  over  their  estimated  useful  lives 
(3-11 years). The estimated useful lives of intangible assets depend on their specific economic lifetime or 
legal  lifetime  determined  by  an  agreement.  Internally  developed  intangible  assets  are  capitalised  when 
the  relevant  criteria  of  the  EU  accounting  rules  are  met  and  the  expenses  relate  solely  to  the 
development phase of the asset. The costs capitalisable include all directly attributable costs necessary to 
create,  produce,  and  prepare  the  asset  to  be  capable  of  operating  in  the  manner  intended  by 
management.  Costs  associated  with  research  activities,  non-capitalisable  development  costs  and 
maintenance costs are recognised as expenses as incurred.  

1.5.2. 

Property, plant and equipment 

All  property,  plant  and  equipment  are  stated  at  historical  cost  less  accumulated  depreciation  and 
impairment losses. Cost includes expenditure that is directly attributable to the acquisition, construction 
or transfer of the asset. 

Subsequent  costs  are  included  in  the  asset’s  carrying  amount  or  recognised  as  a  separate  asset,  as 
appropriate,  only  when  it  is  probable  that  future  economic  benefits  or  service  potential  associated  with 
the  item  will  flow  to  the  EU  and  its  cost  can  be  measured  reliably.  Repairs  and  maintenance  costs  are 
charged to the statement of financial performance during the financial period in which they are incurred. 

Land  and  works  of  art  are  not  depreciated  as  they  are  deemed  to  have  an  indefinite  useful  life.  Assets 
under  construction  are  not  depreciated,  as  these  assets  are  not  yet  available  for  use.  Depreciation  on 
other  assets  is  calculated  using  the  straight-line  method  to  allocate  their  cost  less  their  residual  values 
over their estimated useful lives, as follows: 

Type of asset 
Buildings 
Space assets 
Plant and equipment 
Furniture and vehicles 
Computer hardware 
Other 

Straight line depreciation rate 

4 % to 10 % 
8 % to 25 % 
10 % to 25 % 
0 % to 25 % 
25 % to 33 % 
10 % to 33 % 

Gains  or  losses  on  disposals  are  determined  by  comparing  proceeds  less  selling  expenses  with  the 
carrying amount of the disposed asset and are included in the statement of financial performance. 

Leases 

Leases  of  tangible  assets,  where  the  EU  has  substantially  all  the  risks  and  rewards  of  ownership,  are 
classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of 
the  fair  value  of  the  leased  asset  and  the  present  value  of  the  minimum  lease  payments.  The  interest 
element of the finance lease payment is charged to expenditure over the period of the lease at a constant 
periodic  rate  in  relation  to  the  balance  outstanding.  The  rental  obligations,  net  of  finance  charges,  are 
included  in  financial  liabilities  (non-current  and  current).  The  interest  element  of  the  finance  cost  is 
charged  to  the  statement  of  financial  performance  over  the  lease  period  so  as  to  produce  a  constant 
periodic  interest  rate  on  the  remaining  balance  of  the  liability  for  each  period.  The  assets  held  under 
finance leases are depreciated over the shorter of the asset's useful life and the lease term. 

Leases where the lessor retains a significant portion of the risks and rewards  inherent to ownership are 
classified as operating leases. Operating lease payments are recognised as an expense in the statement 
of financial performance on a straight-line basis over the lease term. 

25 

 
 
 
1.5.3. 

Impairment of non-financial assets 

Annual accounts of the European Union 2018 

Assets  that  have  an  indefinite  useful  life  are  not  subject  to  amortisation/depreciation  and  are  tested 
annually  for  impairment.  Assets  that  are  subject  to  amortisation/depreciation  are  reviewed  for 
impairment whenever events or changes in circumstances indicate that the carrying amount may not be 
recoverable.  An  impairment  loss  is  recognised  for  the  amount  by  which  the  asset’s  carrying  amount 
exceeds  its  recoverable  (service)  amount.  The  recoverable  (service)  amount  is  the  higher  of  an  asset’s 
fair value less costs to sell and its value in use. 

Intangible  assets  and  property,  plant  and  equipment  residual  values  and  useful  lives  are  reviewed,  and 
adjusted if appropriate, at least once per year. An asset’s carrying amount is written down immediately 
to  its  recoverable  (service)  amount  if  the  asset’s  carrying  amount  is  greater  than  its  estimated 
recoverable  (service)  amount.  If  the  reasons  for  impairments  recognised  in  previous  years  no  longer 
apply, the impairment losses are reversed accordingly. 

1.5.4. 

Investments accounted for using the equity method 

Participations in associates and joint ventures 

Investments  accounted  for  using  the  equity  method  are  initially  recognised  at  cost,  being  the  carrying 
amount subsequently increased or decreased to recognise the EU’s share of the surplus or deficit of the 
investee after the date of acquisition. The EU's share of the investee’s surplus or deficit is recognised in 
the statement of financial performance, and its share of investee’s movements in equity is recognised in 
the reserves within net assets. The initial cost together with all movements (further contributions, share 
of  economic  results  and  reserve  movements,  impairments  and  dividends)  give  the  book  value  of  the 
investment  in  the  financial  statements  at  the  balance  sheet  date.  Distributions  received  from  the 
investment reduce the carrying amount of the asset. 

If the EU's share of deficits of an investment accounted for using the equity method equals or exceeds its 
interest  in  the  investment,  the  EU  discontinues  recognising  its  share  of  further  losses  ("unrecognised 
losses").  After  the  EU's  interest  is  reduced  to  zero,  additional  losses  are  provided  for  and  a  liability  is 
recognised only to the extent that the EU has incurred legal or constructive obligation or made payments 
on behalf of the entity. 

If  there  are  indications of  impairment,  a  write-down  to the  lower  recoverable amount  is  necessary.  The 
recoverable amount is determined as described under note 1.5.3. If the reason for impairment ceases to 
apply  at  a  later  date,  the  impairment  loss  is  reversed  to  the  carrying  amount  that  would  have  been 
determined had no impairment loss been recognised. 

In  cases  where  the  EU  holds  20 %  or  more  of  an  investment  capital  fund,  it  does  not  seek  to  exert 
significant  influence.  Such  funds  are  therefore  treated  as  financial  instruments  and  categorised  as 
available for sale financial assets. 

Associates and joint ventures classified as minor entities are not accounted for under the equity method. 
EU contributions to those entities are accounted for as an expense of the period.  

1.5.5. 

Financial assets 

Classification 

The  EU  classifies  their  financial  assets  in  the  following  categories:  financial  assets  at  fair  value  through 
surplus  or  deficit;  loans  and  receivables;  held-to-maturity  investments;  and  available  for  sale  financial 
assets. The classification of financial instruments is determined at initial recognition and re-evaluated at 
each balance sheet date. 

(i)  Financial assets at fair value through surplus or deficit 

A financial asset is classified in this category if acquired principally for the purpose of selling in the short 
term  or  if  so  designated  by  the  entity.  Derivatives  are  also  categorised  in  this  category.  Assets  in  this 
category  are  classified  as  current  assets  if  they  are  expected  to  be  realised  within  12  months  of  the 
balance sheet date. 

26 

 
Annual accounts of the European Union 2018 

(ii)  Loans and receivables 

Loans  and  receivables  are  non-derivative  financial  assets  with  fixed  or  determinable  payments  that  are 
not quoted in an active market. They arise when the EU provides money, goods or services directly to a 
debtor  with  no  intention  of  trading  the  receivable,  or  in  case  the  EU  is  subrogated  to  the  rights  of  the 
original lender following a payment made by the EU under a guarantee contract. Payments due within 12 
months  of  the  balance  sheet  date  are  classified  as  current  assets.  Payments  due  after  12  months  from 
the balance sheet date are classified as non-current assets. Loans and receivables include term deposits 
with the original maturity above three months. 

(iii) Held-to-maturity investments 

Held-to-maturity  investments  are  non-derivative  financial  assets  with  fixed  or  determinable  payments 
and  fixed  maturities  that  the  EU  has  the  positive  intention  and  ability  to  hold  to  maturity.  During  this 
financial year, the EU did not hold any investments in this category.  

(iv) Available for sale financial assets 

Available  for  sale  financial  assets  are  non-derivatives  that  are  either  designated  in  this  category  or  not 
classified  in  any  of  the  other  categories.  They  are  classified  as  either  current  or  non-current  assets, 
depending  on  the  period  of  time  the  EU  expects  to  hold  them.  Investments  in  entities  that  are  neither 
consolidated  nor  accounted  for  using  the  equity  method  and  other  equity-type  investments  (e.g.  Risk 
Capital Operations) are also classified as available for sale financial assets. 

Initial recognition and measurement 

Purchases  and  sales  of  financial  assets  at  fair  value  through  surplus  or  deficit,  held-to-maturity  and 
available  for  sale  are  recognised on  trade-date  –  the  date on  which  the  EU  commits  to  purchase or  sell 
the asset. Cash equivalents and loans are recognised when cash is deposited in a financial institution or 
advanced to borrowers. Financial instruments are initially recognised at fair value. For all financial assets 
not carried at fair value through surplus or deficit transactions costs are added to the fair value at initial 
recognition. Financial assets carried at fair value through surplus or deficit are initially recognised at fair 
value and transaction costs are expensed in the statement of financial performance. 

The fair value of a financial asset on initial recognition is normally the transaction price (i.e. the fair value 
of the consideration received), unless the fair value  of that instrument is evidenced by comparison with 
other observable current market transactions in the same instrument or based on a valuation technique 
whose  variables  include  only  data  from  observable  markets  (e.g.  in  case  of  some  derivative  contracts). 
However,  when  a  long-term  loan  that  carries  no  interest  or  an  interest  below  market  conditions  is 
granted, its fair value can be estimated as the present value of all future cash receipts discounted using 
the prevailing market rate of interest for a similar instrument with a similar credit rating. 

Loans  granted  are  measured  at  their  nominal  amount,  which  is  considered  to  be  the  fair  value  of  the 
loan. The reasoning for this is as follows: 

 

 

 

The  “market  environment”  for  EU  lending  is  very  specific  and  different  from  the  capital  market 
used  to  issue  commercial  or  government  bonds.  As  lenders  in  these  markets  have  the 
opportunity to choose alternative investments, the opportunity possibility is factored into market 
prices. However, this opportunity for alternative investments does not exist for the EU, which is 
not  allowed  to  invest  money  on  the  capital  markets;  it  only  borrows  funds  for  the  purpose  of 
lending  at  the  same  rate.  This  means  that  there  is  no  alternative  lending  or  investment  option 
available  to  the  EU  for  the  sums  borrowed.  Thus,  there  is  no  opportunity  cost  and  therefore  no 
basis  of  comparison  with  market  rates.  In  fact,  the  EU  lending  operation  itself  represents  the 
market.  Essentially,  since  the  opportunity  cost  "option"  is  not  applicable,  the  market  price  does 
not fairly reflect the substance of the EU lending transactions. Therefore, it is not appropriate to 
determine the fair value of EU lending with reference to commercial or government bonds. 

Furthermore,  as  there  is  no  active  market  or  similar  transactions  to  compare  with,  the  interest 
rate to be used by the EU for fair valuing its lending operations under the EFSM, BOP and other 
such loans, should be the interest rate charged. 

In addition, for these loans, there are compensating effects between loans and borrowings due to 
their back-to-back character. Thus, the effective interest for the loan equals the effective interest 
rate for the related borrowings. The transaction costs incurred by the EU and then recharged to 
the beneficiary of the loan are directly recognised in the statement of financial performance. 

27 

 
Annual accounts of the European Union 2018 

Financial instruments are derecognised when the rights to receive cashflows from the investments have 
expired or the EU has transferred substantially all risks and rewards of ownership to another party. 

Subsequent measurement 

a)  Financial  assets  at  fair  value  through  surplus  or  deficit  are  subsequently  carried  at  fair  value. 
Gains and losses arising from changes in the fair value of the ‘financial instruments at fair value 
through surplus or deficit’ category are included in the statement of financial performance in the 
period in which they arise. 

b)  Loans  and  receivables  are  carried  at  amortised  cost  using  the  effective  interest  method.  In  the 
case of loans granted on borrowed funds, the same effective interest rate is applied to both the 
loans and borrowings since these loans have the characteristics of 'back-to-back operations' and 
the differences between the loan and the borrowing conditions and amounts are not material. The 
transaction costs incurred by the EU and then recharged to the beneficiary of the loan are directly 
recognised in the statement of financial performance. 

c)  Held to maturity assets are carried at amortised cost using the effective interest method. The EU 

currently holds no held to maturity investments. 

d)  Available for sale financial assets are subsequently carried at fair value. Gains and losses arising 
from changes in the fair value of available for sale financial assets are recognised in the fair value 
reserve,  except  for  translation  differences  on  monetary  assets,  which  are  recognised  in  the 
statement  of  financial  performance.  When  assets  classified  as  available  for  sale  financial  assets 
are derecognised or impaired, the cumulative fair value adjustments previously recognised in the 
fair value reserve are recognised in the statement of financial performance. Interest on available 
for  sale  financial  assets  calculated  using  the  effective  interest  method  is  recognised  in  the 
statement  of  financial  performance.  Dividends  on  available  for  sale  equity  instruments  are 
recognised when the EU's right to receive payment is established. 

The fair values of quoted investments in active markets are based on current bid prices. If the market for 
a  financial  asset  is  not  active  (and  for  unlisted  securities  and  over-the–counter  derivatives),  the  EU 
establishes  a  fair  value  by  using  valuation  techniques.  These  include  the  use  of  recent  arm’s  length 
transactions,  reference  to  other  instruments  that  are  substantially  the  same,  discounted  cashflow 
analysis, option pricing models and other valuation techniques commonly used by market participants.  

Investments in Venture Capital Funds, classified as available for sale financial assets, which do not have a 
quoted  market  price  in  an  active  market  are  valued  at  the  attributable  net  asset  value,  which  is 
considered as an equivalent of their fair value. 

In  cases  where  the  fair  value  of  investments  in  equity  instruments  that  do  not  have  a  quoted  market 
price  in  an  active  market  cannot  be  reliably  measured,  these  investments  are  valued  at  cost  less 
impairment losses. 

Impairment of financial assets 

A  financial  asset  is  impaired  and  a  loss  is  recognised  if,  and  only  if,  there  is  objective  evidence  of 
impairment as a result of one or more events that occurred after the initial recognition of the asset and 
that  loss  event  (or  events)  has  an  impact  on  the  estimated  future  cashflows  of  the  financial  asset  that 
can  be  reliably  estimated.  The  EU  assesses  at  each  reporting  date  whether  there  is  objective  evidence 
that a financial asset is impaired. 

(a)  Assets carried at amortised cost 

If  there  is  objective  evidence  that  an  impairment  loss  on  loans  and  receivables  or  held-to-maturity 
investments  carried  at  amortised  cost  has  been  incurred,  the  amount  of  the  loss  is  measured  as  the 
difference  between  the  asset’s  carrying  amount  and  the  present  value  of  estimated  future  cashflows 
(excluding  future  credit  losses  that  have  not  been  incurred)  discounted  at  the  financial  asset’s  original 
effective  interest  rate.  The  carrying  amount  of  the  asset  is  reduced  and  the  amount  of  the  loss  is 
recognised  in  the  statement  of  financial  performance.  If  a  loan  or  held-to-maturity  investment  has  a 
variable  interest  rate,  the  discount  rate  for  measuring  any  impairment  loss  is  the  current  effective 
interest rate determined under the contract. The calculation of the present value of the estimated future 
cashflows  of  a  collateralised  financial  asset  reflects  the  cashflows  that  may  result  from  foreclosure  less 
costs for obtaining and selling the collateral, whether or not foreclosure is probable. If, in a subsequent 
period,  the  amount  of  the  impairment  loss  decreases  and  the  decrease  can  be  related objectively  to  an 

28 

 
Annual accounts of the European Union 2018 

event  occurring  after  the  impairment  was  recognised,  the  previously  recognised  impairment  loss  is 
reversed through the statement of financial performance. 

(b)  Assets carried at fair value 

In  the  case  of  equity  investments  classified  as  available  for  sale  financial  assets,  a  significant  or 
permanent (prolonged) decline in the fair value of the security below its cost is considered in determining 
whether the securities are impaired. If any such evidence exists for available for sale financial assets, the 
cumulative loss – measured as the difference between the acquisition cost and the current fair value, less 
any  impairment  loss  on  that  financial  asset  previously  recognised  in  the  statement  of  financial 
performance  –  is  removed  from  reserves  and  recognised  in  the  statement  of  financial  performance. 
Impairment  losses  recognised  in  the  statement  of  financial  performance  on  equity  instruments  are  not 
reversed  through  the  statement  of  financial performance.  If,  in  a  subsequent  period, the  fair  value of a 
debt  instrument  classified  as  available  for  sale  financial  asset  increases  and  the  increase  can  be 
objectively related to an event occurring after the impairment loss was recognised, the impairment loss is 
reversed through the statement of financial performance. 

1.5.6. 

Inventories 

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, 
first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct 
labour,  other  directly  attributable  costs  and  related  production  overheads  (based  on  normal  operating 
capacity).  Net  realisable  value  is the estimated  selling  price  in  the  ordinary  course  of business,  less the 
costs of completion and selling expenses. When inventories are held for distribution at no charge or for a 
nominal  charge,  they  are  measured  at  the  lower  of  cost  and  current  replacement  cost.  Current 
replacement cost is the cost the EU would incur to acquire the asset on the reporting date. 

1.5.7. 

Pre-financing amounts 

Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be 
split into a number of payments over a period defined in the particular contract, decision, agreement or 
basic legal act. The float or advance is either used for the purpose for which it was provided during the 
period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditure, they 
have the obligation to return the pre-financing advance to the EU. The amount of the pre-financing may 
be reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses).  

Pre-financing is, on subsequent balance sheet dates, measured at the amount initially recognised on the 
balance sheet less eligible expenses (including estimated amounts where necessary) incurred during the 
period.  

Interest  on  pre-financing  is  recognised  as  it  is  earned  in  accordance  with  the  provisions  of  the  relevant 
agreement. An estimate of the accrued interest revenue, based on the most reliable information, is made 
at the year-end and included on the balance sheet. 

Other  advances  to  Member  States  which  originate  from  reimbursement  by  the  EU  of  amounts  paid  as 
advances  by  the  Member  States  to  their  beneficiaries  (including  "financial  instruments  under  shared 
management") are recognised as assets and presented under the pre-financing heading. Other advances 
to  Member  States  are  subsequently  measured  at  the  amount  initially  recognised  on  the  balance  sheet 
less  a  best  estimate  of  the  eligible  expenses  incurred  by  final  beneficiaries,  calculated  on  the  basis  of 
reasonable and supportable assumptions. 

The  EU  contributions  to  the  trust  funds  of  the  European  Development  Fund  or  other  unconsolidated 
entities are also classified as pre-financing since their purpose is to give a float to the trust fund to allow 
it to finance specific actions defined under the trust fund's objectives. The EU contributions to trust funds 
are  measured  at  the  initial  amount  of  the  EU  contribution  less  eligible  expenses,  including  estimated 
amounts where necessary, incurred by the trust fund during the reporting period and allocated to the EU 
contribution in accordance with the underlying agreement. 

29 

 
 
 
1.5.8.  Exchange receivables and non-exchange recoverables 

Annual accounts of the European Union 2018 

As the EU accounting rules require a separate presentation of exchange and non-exchange transactions, 
for  the  purpose  of  drawing  up  the  accounts,  receivables  are  defined  as  stemming  from  exchange 
transactions  and  recoverables  are  defined  as  stemming  from  non-exchange  transactions,  i.e.  when  the 
EU receives value from another entity without directly giving approximately equal value in exchange (for 
example recoverables from Member States related to own resources). 

Receivables  from  exchange  transactions  meet  the  definition  of  financial  instruments  and  are  thus 
classified as loans and receivables and measured accordingly (see note 1.5.5). The financial instruments 
notes  disclosures  concerning  receivables  from  exchange  transactions  include  accrued  revenue  and 
deferred  charges  from  exchange  transactions,  as  they  are  not  material.  A  general  write-down  based  on 
past experience is made for outstanding recovery orders not already subject to a specific write-down. 

Recoverables  from  non-exchange  transactions  are  carried  at  original  amount  (adjusted  for  interest  and 
penalties)  less  write-down  for  impairment.  A  write-down  for  impairment  of  recoverables  from  
non-exchange transactions is established when there is objective evidence that the EU will not be able to 
collect all amounts due according to the original terms of recoverables from non-exchange transactions. 
The amount of the write-down is the difference between the asset’s carrying amount and the recoverable 
amount. The amount of the write-down is recognised in the statement of financial performance. A general 
write-down, based on past experience, is also made for outstanding recovery orders not already subject 
to  a  specific  write-down.  See  note  1.5.14  concerning  the  treatment  of  accrued  revenue  at  year-end. 
Amounts  displayed  and  disclosed  as  recoverables  from  non-exchanges  transactions  are  not  financial 
instruments,  as  they  do  not  arise  from  a  contract  that  would  give  rise  to  a  financial  liability  or  equity 
instrument.  However,  in  the  notes  to  the  financial  statements  recoverables  from  non-exchange 
transactions are disclosed together with receivables from exchange transactions where appropriate. 

1.5.9.  Cash and cash equivalents 

Cash and cash equivalents are financial instruments and include cash at hand, deposits held at call or at 
short  notice  with  banks  and  other  short-term  highly  liquid  investments  with  original  maturities  of  three 
months or less. 

1.5.10.  Employee benefits 

The  accounting  policy  for  employee  benefits  has  been  updated  in  line  with  the  requirements  of  the 
revised accounting rule EAR 12 Employee Benefits, effective for periods beginning on or after 1 January 
2018, which is based on the new IPSAS 39 (Employee Benefits) published in July 2016. The main change, 
arising  from  the  revision  of  accounting  rule  12,  is  the  presentation  of  actuarial  gains  and  losses  as  a 
movement in net assets instead of in the statement of financial performance. 

Accounting  for  defined  benefit  plans  is  complex  because  actuarial  assumptions  and  judgement  are 
required  to  measure  the  obligation.  In  applying  the  revised  accounting  rule,  the  EU  has  reassessed  the 
judgements used, in particular, as regards to the estimate of the ultimate cost of the benefit attributed to 
the employees. As a result of this exercise, the appropriateness of the use of the estimated active service 
period  of  the  employee  as  the  basis  for  attributing  benefits  to  periods  of  service  was  confirmed.  The 
benefits  which  the  EU’s  employees  are  entitled  to  are  given  under  a  single  plan  –  although  split  in  two 
schemes – and they must be treated similarly so as to give a fair presentation of the situation and reflect 
the economic reality. 

The  EU  provides  a  set  of  benefits  (emoluments  and  social  security)  to  employees.  For  accounting 
purposes these have to be classified into short term and post-employment benefits. 

Short-term employee benefits 

Short-term employee benefits are those benefits due to be settled before twelve months after the end of 
the  reporting  period  in  which  employees  rendered  the  service,  such  as  salaries,  annual  and  paid  sick 
leaves,  and  other  short-term  allowances.  Short-term  employee  benefits  are  recognised  as  an  expense 
when the related service is provided. A liability is recognised for the amount expected to be paid if the EU 
has a present legal or constructive obligation to pay as a result of past service provided by the employee 
and the obligation can be estimated reliably. 

30 

 
Post-employment benefits 

Annual accounts of the European Union 2018 

The EU grants a set of post-employment benefits to employees, which include retirement, invalidity and 
survival pensions, as well as medical coverage (see note 2.9).  

The EU provides its staff with a post-employment benefit plan that includes:  

i. 

ii. 

Pension Scheme of European Officials (PSEO): The benefits granted under this notionally funded12 
scheme  relate  to  seniority,  invalidity  and  survival,  as  well  as,  family  allowances,  death  before 
retirement to those employees that work or worked in the EU Institutions, Agencies and other EU 
bodies  or  are  survivors  of  deceased  officials  or  pensioners.  Staff  contribute  one  third  of  the 
expected cost of these benefits from their salaries.  

Joint Sickness Insurance Scheme (JSIS): Under this scheme, the EU provides health coverage for 
staff  of  the  European  Commission,  Institutions,  Agencies  and  other  EU  bodies  through  the 
reimbursement of medical expenses. The benefits granted to the "inactives" of this scheme (i.e. 
pensioners, orphans, etc.) are classified as post-employment benefits. 

The  EU  also  provides  post-employment  benefits  to members of  the  EU  institutions  via  separate  pension 
schemes.  These  are  shown  under  the  heading  other  retirement  benefit  schemes.  Under  these  schemes 
the  EU  provides  pension  benefits  to  members  of  the  Commission,  Court  of  Justice  and  General  Court, 
Court  of  Auditors,  Council,  European  Parliament,  Ombudsman,  Data  Protection  Supervisor,  Civil  Service 
Tribunal. The EU provides health coverage to the members of the EU Institutions via the JSIS.  

The above post-employment benefits qualify as defined benefit obligations of the EU and are calculated at 
each  reporting  date  by  estimating  the  amount  of  future  benefit  that  employees  have  earned  in  the 
current and prior periods, discounting that amount and deducting the fair value of any plan assets. The 
calculation of defined benefit obligation is performed annually using the projected unit credit method. The 
present  value  of  the  defined  benefit  obligation  is  determined  by  discounting  the  estimated  future  cash 
outflows  using  interest  rates  of  government  bonds  that  are  denominated  in  the  currency  in  which  the 
benefits will be paid, and that have terms to maturity approximating to the terms of the related pension 
liability. 

The  post-employment  benefits  provided  to  EU  staff  are  incorporated  in  a  single  plan  comprising  both  a 
pension  scheme  (PSEO)  and  a  sickness  insurance  scheme  (JSIS),  with  the  right  to  coverage  under  the 
JSIS scheme being dependent on having acquired the right to coverage under the PSEO scheme. Under 
the terms of this single plan, as set out in the Staff Regulation, certain entitlements, such as the right to 
a  deferred  and  reduced  pension  under  the  PSEO  scheme,  are  acquired  after  10  years  of  service. 
However,  the  entitlements  acquired  under  the  single  plan  by  the  employee’s  subsequent  service  are 
materially  higher  than  those  initial  entitlements  as  reflected  by  subsequent  annually  accrued  pension 
rights.  

Therefore, in order to depict the economic substance of the underlying transaction required by the faithful 
representation  qualitative  characteristic  of  financial  reporting  as  outlined  in  both  EAR  1  and  the  IPSAS 
Conceptual Framework, the service cost incurred is accrued on a straight-line basis over staff’s estimated 
active service period, i.e. the period from the date when service by the employee first leads to benefits 
under the plan (whether or not the benefits are conditional on further service) until the date when further 
service  by  the  employee  will  lead  to  no  material  amount  of  further  benefits  under  the  plan,  other  than 
from further salary increases. This approach is applied consistently to the benefits provided for under the 
single plan. 

Remeasurements of the net defined benefit liability comprise actuarial gains and losses and the return on 
plan assets, and are recognised immediately in net assets.  

The  EU  recognises  the  net  interest  expense  (income)  and  other  expenses  related to the  defined benefit 
plans in the statement of financial performance within the caption ‘staff and pension costs’. 

12

 The PSEO is a notional (virtual) fund with defined benefits, in which staff’s contributions serve to finance their future 
pensions. Although there is no actual investment fund, the amount that would have been collected by such a fund is 
considered to have been invested in the Member States’ long-term bonds and is reflected in the pension liability that is 
registered in the annual accounts of the European Union. Member States jointly guarantee the payment of the benefits 
pursuant to Article 83 of the Staff Regulations and Article 4(3) of the Treaty on European Union (see COM(2018) 829 
for a detailed description of the scheme). 

31 

 
                                                 
 
Annual accounts of the European Union 2018 

When  benefits  provided  are  changed  or  curtailed,  the  resulting  change  in  benefits  that  relates  to  past 
service  or  the  gain  or  loss  on  curtailment  is  recognised  immediately  in  the  statement  of  financial 
performance.  Gains  and  losses  on  settlement  are  recognised  when  the  settlement  occurs.  Past  service 
cost  is  recognised  immediately  in  the  statement  of  financial  performance,  unless  the  changes  are 
conditional on the employees remaining in service for a specified period of time. 

1.5.11.  Provisions 

Provisions are recognised when the EU has a present legal or constructive obligation towards third parties 
as a result of past events, it is more likely than not that an outflow of resources will be required to settle 
the  obligation,  and  the  amount  can  be  reliably  estimated.  Provisions  are  not  recognised  for  future 
operating  losses.  The  amount  of  the  provision  is  the  best  estimate  of  the  expenses  expected  to  be 
required  to  settle  the  present  obligation  at  the  reporting  date.  Where  the  provision  involves  a  large 
number  of  items,  the  obligation  is  estimated  by  weighting  all  possible  outcomes  by  their  associated 
probabilities (“expected value” method). 

Provisions for onerous contracts are measured at the present value of the lower of the expected cost of 
terminating the contract and the expected net cost of continuing with the contract. 

1.5.12.  Financial liabilities 

Financial  liabilities  are  classified  as  financial  liabilities  at  fair  value  through  surplus  or  deficit,  financial 
liabilities carried at amortised cost or as financial guarantee liabilities. 

Borrowings are composed of borrowings from credit institutions and debts evidenced by certificates. They 
are recognised initially at fair value, being their issue proceeds (fair value of consideration received) net 
of  transaction  costs  incurred,  then  subsequently  carried  at  amortised  cost  using  the  effective  interest 
method;  any  difference  between  proceeds,  net  of  transaction  costs,  and  the  redemption  value  is 
recognised in the statement of financial performance over the period of the borrowings using the effective 
interest method. In the case of loans granted on borrowed funds, the effective interest method may not 
be  applied  to  loans  and  borrowings,  based  on  materiality  considerations.  The  transaction  costs  incurred 
by  the  EU  and  then  recharged to  the beneficiary of the  loan  are directly  recognised  in the  statement of 
financial performance. 

Financial liabilities categorised at fair value through surplus or deficit include derivatives where fair value 
is negative. They follow the same accounting treatment as financial assets at fair value through surplus 
or deficit, see note 1.5.5.  

Financial  guarantee  liabilities  are  initially  recognised  at  fair  value,  being  the  premium  received. 
Subsequently,  financial  guarantee  liabilities  are  measured  at  the  higher  of  the  best  estimate  of  the 
expenses  expected  to  be  required  to  settle  the  financial  guarantee  liability  and  the  amount  initially 
recognised  less,  when  appropriate,  cumulative  amortisation.  The  EU  recognises  a  financial  guarantee 
liability when it receives consideration for granting of the guarantee, that is at market terms, or when the 
fair value of the guarantee can be measured reliably.  In case no active market for a directly equivalent 
guarantee contract exists, the EU discloses the guarantee given as a contingent liability (see note 1.7.2) 
or - when it is more likely than not that an outflow of resources will be required to settle the obligation – 
the EU recognises a provision (see note 1.5.11). 

Financial liabilities are classified as non-current liabilities, except for maturities less than 12 months after 
the balance sheet date.  

EU trust funds that are considered as part of the Commission's operational activities are accounted for in 
the  Commission  accounts  and  further  consolidated  in  the  EU  annual  accounts.  Therefore,  contributions 
from  other  donors  to  the  EU  trust  funds  fulfil  the  criteria  of  revenues  from  non-exchange  transactions 
under  conditions  and  they  are  presented  as  financial  liabilities  until  the  conditions  attached  to  the 
contributions  transferred  are  met,  i.e.  eligible  costs  are  incurred  by  the  trust  fund.  The  trust  fund  is 
required to finance specific projects and return remaining funds at the time of winding-up. At the balance 
sheet  date  the  outstanding  contribution  liabilities  are  measured  at  contributions  received  less  the 
expenses  incurred  by  the  trust  fund,  including  estimated  amounts  when  necessary.  For  reporting 
purposes  the  net  expenses  are  allocated  to  the  contributions  of  other  donors  in  proportion  to  net 
contributions  paid  as  at 31  December.  This  allocation  of  contributions  is  only  indicative.  When  the  trust 
fund is wound up the actual split of remaining resources will be decided by the trust fund board. 

32 

 
1.5.13.  Payables 

Annual accounts of the European Union 2018 

A  significant  amount  of  the  payables  of  the  EU  are  unpaid  cost  claims  from  beneficiaries  of  grants  or 
other EU funding (non-exchange transactions). They are recorded as payables for the requested amount 
when the cost claim is received. Upon verification and acceptance of the eligible costs, the payables are 
valued at the accepted and eligible amount. 

Payables  arising  from  the  purchase  of  goods  and  services  are  recognised  at  invoice  reception  for  the 
original  amount  and  corresponding  expenses  are  entered  in  the  accounts  when  the  supplies  or  services 
are delivered and accepted by the EU. 

1.5.14.  Accrued and deferred revenue and charges 

Transactions and events are recognised in the financial statements in the period to which they relate. At 
year-end,  if  an  invoice  is  not  yet  issued  but  the  service  has  been  rendered,  the  supplies  have  been 
delivered by the EU or a contractual agreement exists (e.g. by reference to a treaty), an accrued revenue 
will  be  recognised  in  the  financial  statements.  In  addition,  at  year-end,  if  an  invoice  is  issued  but  the 
services have not yet been rendered or the goods supplied have not yet been delivered, the revenue will 
be deferred and recognised in the subsequent accounting period. 

Expenses are also accounted for in the period to which they relate. At the end of the accounting period, 
accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. 
The  calculation  of  accrued  expenses  is  done  in  accordance  with  detailed  operational  and  practical 
guidelines  issued  by  the  Commission  which  aim  at  ensuring  that  the  financial  statements  provide  a 
faithful  representation  of  the  economic  and  other  phenomena  they  purport  to  represent.  By  analogy,  if 
payment has been made in advance for services or goods that have not yet been received, the expense 
will be deferred and recognised in the subsequent accounting period. 

1.6.  STATEMENT OF FINANCIAL PERFORMANCE 

1.6.1.  Revenue 

REVENUE FROM NON-EXCHANGE TRANSACTIONS 

The vast majority of the EU's revenue relates to non-exchange transactions: 

GNI based resources and VAT resources 

Revenue is recognised for the period for which the Commission sends out a call for funds to the Member 
States claiming their contribution. They are measured at their “called amount”. As VAT and GNI resources 
are  based  on  estimates  of  the  data  for  the  budgetary  year  concerned,  they  may  be  revised  as  changes 
occur until the final data are issued by the Member States. The effect of a change in estimate is included 
when determining the net surplus or deficit for the period in which the change occurred. 

Traditional own resources 

Recoverables  from  non-exchange  transactions  and  related  revenues  are  recognised  when  the  relevant 
monthly  "A"  statements  (including  duties  collected  and  amounts  due  that  are  guaranteed  and  not 
contested) are received from the Member States. At the reporting date, revenue collected by the Member 
States for the period but not yet paid to the Commission is estimated and recognised as accrued revenue. 
The  quarterly  "B"  statements  (including  duties  neither  collected  nor  guaranteed,  as  well  as  guaranteed 
amounts  that  have  been  contested  by  the  debtor)  received  from  the  Member  States  are  recognised  as 
revenue less the collection costs to which they are  entitled. In addition, a value reduction is recognised 
for the amount of the estimated recovery gap. 

Fines 

Revenue  from  fines  is  recognised  when  the  EU's  decision  imposing  a  fine  has  been  taken  and  it  is 
officially  notified  to  the  addressee.  If  there  are  doubts  about  the  undertaking's  solvency,  a  value 

33 

 
Annual accounts of the European Union 2018 

reduction  on  the  entitlement  is  recognised.  After  the  decision  to  impose  a  fine,  the  debtors  have  two 
months from the date of notification: 

a)  either to accept the decision, in which case they must pay the fine within the time limit laid down 

and the amount is definitively collected by the EU; 

b)  or not to accept the decision, in which case they lodge an appeal under EU law.  

However, even if appealed, the fine must be paid within the time limit of three months laid down as the 
appeal  does  not  have  suspensory  effect  (Article  278  of  the  EU  Treaty)  or,  under  certain  circumstances 
and  subject  to  the  agreement  of  the  Commission's  Accounting  Officer,  the  debtor  may  present  a  bank 
guarantee for the amount instead. 

If the undertaking appeals against the decision, and has already provisionally paid the fine, the amount is 
disclosed  as  a  contingent  liability.  However,  since  an  appeal  against  an  EU  decision  by  the  addressee 
does  not  have  suspensory  effect,  the  cash  received  is  used  to  clear  the  recoverable.  If  a  guarantee  is 
received  instead  of  payment,  the  fine  remains  as  a recoverable.  If  it  appears probable that the  General 
Court  may  not  rule  in  favour  of  the  EU,  a  provision  is  recognised  to  cover  this  risk.  If  a  guarantee  had 
been  given  instead,  then  the  recoverable  outstanding  is  written-down  as  required.  The  accumulated 
interest  received  by  the  Commission  on  the  bank  accounts  where  received  payments  are  deposited  is 
recognised as revenue, and any contingent liability is increased accordingly. 

Since 2010, all provisionally cashed fines are managed by the Commission in a specifically created fund 
(BUFI) and invested in financial instruments. 

REVENUE FROM EXCHANGE TRANSACTIONS 

Revenue  from  the  sale  of  goods  and  services  is  recognised  when  the  significant  risk  and  rewards  of 
ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving 
the provision of services is recognised by reference to the stage of completion of the transaction at the 
reporting date. 

Interest revenue and expense 

Interest  revenue  and  expense  are  recognised  in  the  statement  of  financial  performance  using  the 
effective  interest  method.  This  is  a  method  of  calculating  the  amortised  cost  of  a  financial  asset  or  a 
financial liability and of allocating the interest revenue or interest expense over the relevant period. When 
calculating the effective interest rate, the EU estimates cashflows considering all contractual terms of the 
financial  instrument  (for  example  prepayment  options)  but  does  not  consider  future  credit  losses.  The 
calculation  includes  all  fees  and  points  paid  or  received  between  parties  to  the  contract  that  are  an 
integral part of the effective interest rate, transaction costs and all other premiums or discounts. 

Once  a  financial  asset  or  a  group  of  similar  financial  assets  has  been  written  down  as  a  result  of  an 
impairment loss, interest revenue is recognised using the rate of interest to discount the future cashflows 
for the purpose of measuring the impairment loss. 

Revenue from dividends 

Revenue  from  dividends  and  similar  distributions  is  recognised  when  the  right  to  receive  payment  is 
established. 

1.6.2.  Expenses 

Expenses from non-exchange transactions account for the majority of the EU's expenses. They relate to 
transfers  to  beneficiaries  and  can  be  of  three  types:  entitlements,  transfers  under  agreement  and 
discretionary grants, contributions and donations. 

Transfers  are  recognised  as  expenses  in  the  period  during  which  the  events  giving  rise  to  the  transfer 
occurred,  as  long  as  the  nature  of  the  transfer  is  allowed  by  regulation  (Financial  Regulation,  Staff 
Regulations, or other regulation) or an agreement has been signed authorising the transfer; any eligibility 
criteria have been met by the beneficiary; and a reasonable estimate of the amount can be made. 

34 

 
Annual accounts of the European Union 2018 

When a request for payment or cost claim is received and meets the recognition criteria, it is recognised 
as  an  expense  for  the  eligible  amount.  At  year-end,  incurred  eligible  expenses  due  to  the  beneficiaries 
but not yet reported are estimated and recorded as accrued expenses. 

Expenses  from  exchange  transactions  arising  from  the  purchase  of  goods  and  services  are  recognised 
when  the  supplies  are  delivered  and  accepted  by  the  EU.  They  are  valued  at  original  invoice  amount. 
Furthermore,  at  the  balance  sheet  date  expenses  related  to  the  service  delivered  during  the  period  for 
which an invoice has not yet been received or accepted are estimated and recognised in the statement of 
financial performance. 

1.7.  CONTINGENT ASSETS AND LIABILITIES 

1.7.1.  Contingent assets 

A  contingent  asset  is  a  possible  asset  that  arises  from  past  events  and  of  which  the  existence  will  be 
confirmed  only  by  the  occurrence  or  non-occurrence  of  one  or  more  uncertain  future  events  not  wholly 
within  the  control  of  the  EU.  A  contingent  asset  is  disclosed  when  an  inflow  of  economic  benefits  or 
service potential is probable. 

1.7.2.  Contingent liabilities 

A contingent liability is a possible obligation that arises from past events and of which the existence will 
be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly 
within  the  control  of  the  EU;  or  a  present  obligation  that  arises  from  past  events  but  is  not  recognised 
because: it is not probable that an outflow of resources embodying economic benefits or service potential 
will be required to settle the obligation or in the rare circumstances where the amount of the obligation 
cannot be measured with sufficient reliability. 

1.8.  CASHFLOW STATEMENT 

Cashflow information is used to provide a basis for assessing the ability of the EU to generate cash and 
cash equivalents, and its needs to utilise those cashflows. 

The  cashflow  statement is  prepared  using  the indirect  method.  This  means  that  the  economic  result  for 
the  financial  year  is  adjusted  for  the  effects  of  transactions  of  a  non-cash  nature,  any  deferrals  or 
accruals  of  past  or  future  operating  cash  receipts  or  payments,  and  items  of  revenue  or  expense 
associated with investing cashflows. 

Cashflows  arising  from  transactions  in  a  foreign  currency  are  recorded  in  the  EU’s  reporting  currency 
(Euro), by applying to the foreign currency amount the exchange rate between the euro and the foreign 
currency at the date of the cashflow. 

The  cashflow  statement  reports  cashflows  during  the  period  classified  by  operating  and  investing 
activities (the EU does not have financing activities). 

Operating activities are the activities of the EU that are not investing activities. These are the majority of 
the activities performed. Loans granted to beneficiaries (and the related borrowings, when applicable) are 
not  considered  as  investing  (or  financing)  activities  as  they  are  part  of  the  general  objectives  and  thus 
daily operations of the EU.  

Investing  activities  are  the  acquisition  and  disposal  of  intangible  assets  and  property,  plant  and 
equipment  and  of  other  investments  which  are  not  included  in  cash  equivalents.  Investing  activities  do 
not include loans granted to beneficiaries. The objective is to show the real investments made by the EU. 

35 

 
 
Annual accounts of the European Union 2018 

2.  NOTES TO THE BALANCE SHEET 

ASSETS 

2.1.  INTANGIBLE ASSETS 

Gross carrying amount at 31.12.2017 
Additions 
Disposals 
Transfer between asset categories 
Other changes 
Gross carrying amount at 31.12.2018 
Accumulated amortisation at 31.12.2017 
Amortisation charge for the year 
Amortisation written back 
Disposals 
Transfer between asset categories 
Other changes 
Accumulated amortisation at 31.12.2018 

Net carrying amount at 31.12.2018 
Net carrying amount at 31.12.2017 

EUR million 

 940 
 152 
 (16) 
0 
 (2) 
1 073 
 (535) 
 (105) 
 1 
 13 
- 
 (1) 
 (627) 

 446 
 405 

The above amounts relate primarily to computer software.  

2.2.  PROPERTY, PLANT AND EQUIPMENT 

The Space assets category covers operational fixed assets related to the two EU space programmes: the 
Global Navigation Satellite Systems (GNSS), i.e. Galileo and EGNOS, and the Copernicus European Earth 
observation  programme,  while  assets  of  the  space  systems  which  are  not  yet  operational  are  included 
under the Assets under construction heading. 

For Galileo, four new satellites have been added to the operational constellation in 2018 bringing it up to 
22  satellites.  The  Galileo  operational  fixed  assets,  covering  both  satellites  and  ground  installations,   
amounted to EUR 2 410 million at 31 December 2018, net of depreciation (2017: EUR 2 276 million). The 
remaining  assets  under  construction  totalling  EUR 1 324 million  (2017:  EUR  1  026  million)  include  the 
four  satellites  launched  in  July  2018  for  which  the  in-orbit  testing  had  not  yet  been  completed  at  the 
balance sheet date. The development of the Galileo system will continue until the system reaches its full 
operational capacity. When completed, the Galileo constellation will comprise 24 operational satellites and 
6 spares. 

Regarding Copernicus, two new satellites (Sentinel 5P & 3B) became operational in 2018, in addition to 
the five other Copernicus operational satellites, increasing the total value of Copernicus operational fixed 
assets  to  EUR 1 455 million  (2017:  EUR 1 140 million),  net  of  accumulated  depreciation.  Another 
EUR 1 207 million  related  to  Copernicus  satellites  is  recognised  as  assets  under  construction  (2017: 
EUR 1 443 million). 

Fixed  assets  related  to  the  European  Geostationary  Navigation  Overlay  System  (EGNOS)  ground 
infrastructure of EUR 52 million (2017: EUR 67 million) are also included under the Space assets heading. 
In addition, EGNOS assets under construction amount to EUR 130 million (2017: EUR 52 million). 

The  assets  related  to  the  EU  space  programmes  are  being  built  with  the  assistance  of  the  European 
Space Agency (ESA).  

36 

 
 
 
 
 
 
 
 
 
Property, plant and equipment 

Annual accounts of the European Union 2018 

Land and 
Buildings 

Space 
assets 

Plant and 
Equipment 

Furniture and 
Vehicles 

Computer 
Hardware 

Gross carrying amount at 31.12.2017 
Additions 
Disposals 
Transfer between asset categories 
Other changes 
Gross carrying amount at 31.12.2018 
Accumulated depreciation at 31.12.2017 
Depreciation charge for the year 
Depreciation written back 
Disposals 
Transfer between asset categories 
Other changes 
Accumulated depreciation at 31.12.2018 

 5 456 
  38 
  (39) 
  202 
  (31) 
 5 626 
 (3 035) 
  (180) 
– 
  10 
  (74) 
  0 
 (3 279) 

 4 264 
  14 
  (0) 
  982 
  0 
 5 259 
  (780) 
  (561) 
– 
  0 
– 
  (0) 
 (1 342) 

  597 
  48 
  (22) 
  0 
  17 
  641 
  (502) 
  (47) 
  0 
  14 
  (0) 
  (5) 
  (540) 

  266 
  13 
  (10) 
  0 
  0 
  270 
  (188) 
  (19) 
  0 
  9 
  (0) 
  (0) 
  (198) 

  675 
  55 
  (103) 
  5 
  2 
  634 
  (553) 
  (63) 
  5 
  96 
  (5) 
  (1) 
  (521) 

Other 

  309 
  20 
  (5) 
  3 
  0 
  327 
  (226) 
  (34) 
  0 
  5 
  (0) 
  (0) 
  (255) 

Finance 
leases 

 2 787 
  10 
  (9) 
  (170) 
  1 
 2 620 
 (1 244) 
  (98) 
– 
  7 
  79 
  (1) 
 (1 257) 

 Assets under 
construction 

EUR million 

Total 

 2 920 
 1 311 
  (8) 
 (1 023) 
  0 
 3 199 

 17 273 
 1 509 
  (196) 
  0 
  (11) 
 18 575 
 (6 528) 
 (1 003) 
  6 
  142 
– 
  (7) 
 (7 390) 

NET CARRYING AMOUNT AT 31.12.2018 
NET CARRYING AMOUNT AT 31.12.2017 

 2 347 
 2 422 

 3 917 
 3 484 

  101 
  95 

  72 
  78 

  113 
  122 

  72 
  83 

 1 363 
 1 543 

 3 199 
 2 920 

 11 185 
 10 745 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Annual accounts of the European Union 2018 

2.3.  INVESTMENTS ACCOUNTED FOR USING THE EQUITY 

METHOD 

The  participation  of  the  EU,  represented  by  the  Commission,  in  the  European  Investment  Fund  (EIF)  is 
treated  as  an  associate  using  the  equity  method  of  accounting.  The  EIF  is  the  EU's  financial  institution 
specialising in providing risk capital and guarantees to Small and Medium-sized Entities (SMEs). The EIF 
is located in Luxembourg and operates as a private-public partnership, whose members are the European 
Investment Bank (EIB), the EU and a group of financial institutions. At 31 December 2018, the EU held 
29.7 %  of  ownership  interests  in  the  EIF  (2017:  29.7 %)  and  29.7 %  of  the  voting  rights  (2017: 
29.7 %).  In  accordance  with  its  statutes,  the  EIF  is  required  to  allocate  to  a statutory  reserve  at  least 
20 %  of  its  annual  net  result  until  the  aggregate  reserve  amounts  to  10 %  of  subscribed  capital.  This 
reserve is not available for distribution. 

Participation at 31.12.2017 
Contributions 
Dividends received 
Share of net result 
Share in the net assets 
Participation at 31.12.2018 

EUR million 
European 
Investment Fund 
 581 
– 
 (3) 
 37 
 (24) 
 591 

The following carrying amounts are attributable to the EU based on its percentage of participation: 

Assets 
Liabilities 
Revenue 
Expenses 
Surplus/(deficit) 

31.12.2018 
Total EIF 
2 662 
 (674) 
291 
 (167) 
124 

EUR million 
31.12.2017 
Total EIF 
2 488 
 (532) 
263 
 (153) 
110 

Reconciliation of the above summarised financial information to the carrying amount of the interest held 
in the EIF is as follows: 

Net assets of the associate 
EC ownership interests in EIF 
Carrying amount 

31.12.2018 
1 988 
29.7% 
 591 

EUR million 
31.12.2017 
1 956 
29.7% 
 581 

The EU, represented by the Commission, has paid in 20 % of its subscribed shares in the EIF capital at 
31 December 2018, the amount uncalled being as follows: 

Total share capital 
Paid-in 
Uncalled 

Total EIF capital 
4 500 
 (900) 
3 600 

EUR million 
EU subscription 
1 337 
 (267) 
1 070 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

2.4.  FINANCIAL ASSETS 

Note 

31.12.2018 

31.12.2017 

EUR million 

Non-current financial assets 
Available for sale financial assets 
Financial assets at fair value through surplus or deficit 
Loans 

Current financial assets 
Available for sale financial assets 
Financial assets at fair value through surplus or deficit 
Loans 

2.4.1 
2.4.2 
2.4.3 

2.4.1 
2.4.2 
2.4.3 

Total 

2.4.1.  Available for sale financial assets 

BUFI investments 
ECSC in Liquidation 
European Bank for Reconstruction and Development 

Guarantee Funds for budgetary guarantees: 
EFSI Guarantee Fund 
Guarantee Fund for external actions 
EFSD Guarantee Fund 

Financial Instruments financed by the EU budget: 
Horizon 2020 
Risk Sharing Finance Facility 
Connecting Europe Facility 
EU SME Equity Facilities 
European Fund for South East Europe 
Risk Capital Operations 
Other 

Total 
Non-current 
Current 

13 657 
 14 
51 560 
65 231 

1 786 
 2 
2 380 
4 168 
69 398 

11 758 
 16 
48 205 
59 980 

1 873 
 6 
6 776 
8 655 
68 635 

31.12.2018 
1 888 
1 506 
 188 
3 582 

EUR million 
31.12.2017 
2 158 
1 658 
 188 
4 004 

5 000 
2 465 
 9 
7 474 

2 031 
 679 
 540 
 464 
 113 
 115 
 444 
4 386 
15 443 
13 657 
1 786 

3 414 
2 199 
– 
5 613 

1 730 
 665 
 482 
 508 
 119 
 113 
 397 
4 014 
13 632 
11 758 
1 873 

Out of the total of EUR 15 443 million, the EU holds available for sale financial assets in the form of debt 
securities  (e.g.  bonds)  of  EUR  13  993  million  (2017:  EUR  12  048  million),  equity  instruments  of 
EUR 1 365 million  (2017:  EUR  1  333  million)  and  investments  in  the  EIB  Unitary  Fund  (money  market 
fund)  of  EUR  85  million  (2017:  EUR  251  million).  The  debt  securities  and  units  in  the  EIB  Unitary  Fund 
are  mainly  used  to  temporarily  invest  the  amounts  allocated  to  the  EU  guarantee  and  risk-sharing 
instruments until they are used to satisfy the guarantee calls. 

BUFI investments 

Provisionally  cashed  fines  related  to  competition  cases  are  allocated  to  a  dedicated  fund  (BUFI  Fund  - 
'Budget  Fines'  Fund)  and  invested  by  the  Commission  in  debt  instruments  categorised  as  available  for 
sale financial assets. 

ECSC in Liquidation 

Regarding the  European  Coal  and  Steel  Community  (ECSC)  in  liquidation,  all available  for  sale  financial 
assets are debt securities denominated in EUR and quoted in an active market. 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
European Bank for Reconstruction and Development 

Annual accounts of the European Union 2018 

The  EU  holds  a  financial  investment  in  the  capital  of  the  European  Bank  for  Reconstruction  and 
Development  (EBRD),  in  which  at  31  December  2018  the  number  of  shares  held  were  90 044 
(2017: 90 044  shares),  representing 3 %  of  the  total  subscribed  share  capital.  The  EU  subscribed  for  a 
total  amount  of  EUR  900  million  of  share  capital,  out  of  which  EUR  713  million  is  currently  uncalled. 
According to the Agreement establishing EBRD, the shareholders have some contractual restrictions such 
as the fact that the  shares are  not transferable  and  their redemption  is capped at the maximum  of the 
original purchase cost. 

The EU measures the investment in EBRD at fair value. The original purchase cost is considered to be the 
best  estimate  of  the  fair  value,  in  particular  due  to  contractual  restrictions  referred  to  above.  Although 
EBRD's  shares  are  not  quoted  on  any  stock  exchange  market,  there  are  recent  transactions  in  the 
investee's equity (issuance of capital at par value), indicating that the cost is the best estimate of the fair 
value in this situation. 

GUARANTEE FUNDS FOR BUDGETARY GUARANTEES 

EFSI Guarantee Fund 

Pursuant  to  the  EFSI  Regulation  (Regulation  (EU)  2015/2017),  the  EFSI  Guarantee  Fund  has  been 
established  to  provide  a liquidity  cushion  against  potential  losses  incurred  by  the  EIB  in  relation  to  its 
financing and investment operations eligible for the EFSI EU guarantee under the EFSI Agreement - see 
note 4.1.1. The EFSI Guarantee Fund is financed by contributions from the EU budget. It is also endowed 
by  returns  on  guarantee  fund  resources  invested,  revenues  received by  the EU  as  remuneration  for the 
guarantee  under  the  EFSI  Agreement,  and  amounts  recovered  by  the  EIB  from  defaulting  debtors  in 
respect  of  previous  guarantee  calls.  The  fund  is  managed  by  the  Commission,  which  is  authorised  to 
invest the assets of the EFSI Guarantee Fund on the financial markets in accordance with the principle of 
sound financial management following appropriate prudential rules. The EFSI Guarantee Fund started its 
operations  in  April  2016.  In  accordance  with  the  EFSI  Regulation,  as  amended  in  2017  (Regulation 
(EU 2017/2396)), it will be progressively provisioned and shall gradually reach EUR 9.1 billion, i.e. 35 % 
of the total EU EFSI guarantee obligations. 

Guarantee Fund for external actions 

The  Guarantee  Fund  for  external  actions  covers  loans  guaranteed  by  the  EU  budget,  in  particular  EIB 
lending operations outside the EU financed from the EIB's own resources and loans under macro-financial 
assistance (MFA) and Euratom loans outside the EU – see note 4.1.1. It is a long-term instrument (non-
current  part:  EUR  2  275  million)  managed  by  the  EIB  and  intended  to  cover  any  defaulting  loans 
guaranteed by the EU. The Fund is endowed by payments from the EU budget, the proceeds from interest 
on investments made from the Fund's assets, and sums recovered from defaulting debtors for whom the 
Fund has had to activate its guarantee. The Fund should be maintained at a target amount corresponding 
to 9 % of the guaranteed loans outstanding at year-end. The difference between the target amount and 
the value of the Fund's assets at year-end shall be covered from the EU budget in year N+2, while any 
surplus is paid back to the EU budget. 

EFSD Guarantee Fund 

Pursuant  to  the  EFSD  Regulation  (Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the 
Council  of  26  September  2017),  the  EFSD  Guarantee  Fund  has  been  established  to  provide  a  liquidity 
cushion  to  be  used  in  the  event  of  a  call  on  the  Union  guarantee  given  pursuant  to  the  relevant  EFSD 
guarantee  agreements.  The  EFSD  Guarantee  Fund  is  financed  by  contributions  from  the  EU  budget  and 
from contributions from the 11th EDF to the EU budget and voluntary contributions from Member States 
and  other  contributors.  The  fund  is  also  endowed  by  returns  on  invested  resources,  amounts  recovered 
from  defaulting  debtors,  revenues  and  any  other  payments  received  by  the  EU  in  accordance  with  the 
EFSD  guarantee  agreements.  The  fund  is  managed  directly  by  the  Commission,  which  is  authorised  to 
invest  the  fund’s  assets  in  accordance  with  the  principle  of  sound  financial  management  following 
appropriate prudential rules. The first EU budget contributions to the EFSD Guarantee Fund were received 
in August 2018. Total payments received in 2018 amount to EUR 275.1 million, of which EUR 9 million is 
invested  in  available  for  sale  financial  assets  as  at  31  December  2018,  while  another  EUR 325  million 
(2017: EUR 275 million) have been committed but not yet paid and is included in the amount disclosed 
as RAL in note 5.1. The EFSD Guarantee Fund will be progressively provisioned and gradually reach EUR 
750 million, i.e. 50 % of total future EFSD guarantee obligations covered by the EU budget, and may be 
further increased by other contributions.  

40 

 
  
 
 
Annual accounts of the European Union 2018 

FINANCIAL INSTRUMENTS FINANCED BY THE EU BUDGET 

Horizon 2020 

Under  the  EU  Regulation  establishing  Horizon  2020  –  the  Framework  Programme  for  Research  and 
Innovation (2014-2020), new financial instruments have been established in order to enhance access to 
finance to entities engaged in research and innovation (R&I). These instruments are: the InnovFin Loan 
and Guarantee Service for R&I under which the Commission shares the financial risk related to a portfolio 
of  new  financing  operations  entered  into  by  the  EIB;  the  InnovFin  SME  Guarantee  including  the  SME 
Initiative  Uncapped  Guarantee  Instrument  (SIUGI)  –  guarantee  facilities  managed  by  the  EIF  providing 
guarantees and counter-guarantees to the financial intermediaries for the new portfolios of loans (under 
SIUGI the  Commission shares the financial risk related to the guarantee given with Member States, EIF 
and EIB); and the InnovFin Equity Facility for R&I providing for investments in venture capital funds and 
managed by the EIF.  

Risk-Sharing Finance Facility 

The  Risk-Sharing  Finance  Facility  (RSFF)  is  managed  by  the  EIB  and  the  Commission's  investment 
portfolio is used to provision financial risk for loans and guarantees given by the EIB to eligible research 
projects.  In  total,  an  EU  budget  of  up  to  EUR 1 billion  was  allocated  to  the  RSFF  under  the  2007-2013 
MFF.  Under  the  2014-2020  MFF,  there  are  no  new  budget  contributions  foreseen  for  the  RSFF.  The  EU 
overall risk is limited to the amount it contributes to the Facility. 

Connecting Europe Facility 

Pursuant  to  Regulation  (EU)  No  1316/2013,  the  Connecting  Europe  Facility  (CEF)  debt  instrument  has 
been established with the objective to facilitate infrastructure projects’ access to financing in the sectors 
of transport, telecommunications and energy. It is managed by the EIB under an agreement with the EU. 
The CEF debt financial instrument is the continuity of the Loan Guarantee Instrument for TEN-T projects 
(LGTT)  and  of  the  pilot  phase  of  the  Project  Bond  Initiative  (PBI).  The  LGTT  and  the  PBI  Portfolio  were 
merged into the CEF financial instrument with effect from 1 January 2016. It offers risk-sharing for debt 
financing in the form of senior and subordinated debt or guarantee as well as support for project bonds. 

EU SME Equity Facilities 

These are equity instruments financed by the COSME, the CIP and MAP programmes and the Technology 
Transfer Pilot Project, under the trusteeship of the EIF, supporting the creation and financing of EU SMEs 
in their early (start-up) and growth stages by investing in suitable specialised venture capital funds. 

2.4.2. 

Financial assets at fair value through surplus or deficit 

Type of derivative 

Foreign currency forward contract 
Guarantee on equity portfolio 
Total 
Non-current 
Current 

31.12.2018 

31.12.2017 

EUR million 

Notional 
amount  
476 
674 
1 150 
674 
476 

Fair value 

2 
14 
16 
14 
2 

Notional 
amount  
634 
258 
892 
258 
634 

Fair value 

6 
16 
23 
16 
6 

The EU enters into foreign currency forward contracts in order to hedge the foreign currency risk related 
to USD denominated debt securities held in the EFSI Guarantee Fund. Under the foreign currency forward 
contracts, the EU shall deliver the contractually agreed notional amount in foreign currency ('pay leg'), as 
presented in the table above, and will receive the notional amount in EUR ('receive leg') at the maturity 
date.  Such  derivative  contracts  are  measured  at  fair  value  at  the  balance  sheet  date  and  classified  as 
either financial assets or financial liabilities at fair value through surplus or deficit depending on whether 
their fair value is positive or negative.  

The EFSI guarantee given by the EU to the EIB Group in relation to the portfolios of equity investments is 
classified as a derivative financial instrument and accounted for as a financial asset or financial liability at 
fair value through surplus or deficit, see note 4.1.1. At 31 December 2018, the amount of the underlying 
equity investments disbursed by the EIB and EIF amounted to EUR 674 million and the fair value of the 
EU guarantee on the EFSI equity portfolios totalled EUR 14 million.  

41 

 
 
 
 
 
 
 
 
 
 
 
Fair value hierarchy of financial assets measured at fair value 

Annual accounts of the European Union 2018 

Level 1: Quoted prices in active markets 
Level 2: Observable inputs other than quoted prices 
Level 3: Valuation techniques with inputs not based on 
observable market data 
Total 

31.12.2018 
13 993 
 275 
1 191 

EUR million 
31.12.2017 
11 983 
 510 
1 161 

15 459 

13 654 

During the period there were no transfers between level 1 and level 2. 

Reconciliation of financial assets measured using valuation techniques with inputs not based on 
observable market data (level 3) 

Opening balance at 1.1.2018 
Purchases, sales, issues and settlements 
Gains or losses for the period in financial income or finance costs 
Gains or losses in net assets 
Transfers into level 3  
Transfers out of level 3  
Other 
Closing balance at 31.12.2018 

EUR million 

1 161 
 104 
 (36) 
 (37) 
– 
– 
– 
1 191 

2.4.3. 

Loans 

Loans for financial assistance 
Other loans 

Total 

Non-current 
Current 

Note 
2.4.3.1 
2.4.3.2 

31.12.2018 
53 873 
 67 

53 939 

51 560 
2 380 

EUR million 

31.12.2017 
54 844 
 137 

54 981 

48 205 
6 776 

2.4.3.1.  Loans for financial assistance 

EFSM 

BOP 

MFA 

Euratom 

ECSC in 

Total at 31.12.2017 
New loans 
Repayments 
Exchange differences 
Changes in carrying amount 
Impairment 
Total at 31.12.2018 
Non-current 
Current 

47 456 
4 500 
(4 500) 
– 
 (56) 
– 
47 400 
46 800 
 600 

3 114 
– 
(1 350) 
– 
 (30) 
– 
1 734 
 200 
1 534 

3 924 
 515 
 (56) 
– 
 5 
– 
4 388 
4 309 
 79 

Liqui-     
dation 
 100 
– 
– 
 (1) 
 (2) 
– 
 98 
– 
 98 

 250 
 50 
 (46) 
 (0) 
 0 
– 
 254 
 213 
 41 

EUR million 
Total 

54 844 
5 065 
(5 952) 
 (1) 
 (84) 
– 
53 873 
51 521 
2 351 

The  nominal  value  of  loans  for  financial  assistance  at  31  December 2018,  including  ECSC  in  Liquidation 
loans, total EUR 53 206 million (2017: EUR 54 093 million). The change in carrying amount corresponds 
to the change in accrued interests. 

EFSM enables the granting of financial assistance to a Member State in difficulties or seriously threatened 
by  severe  difficulties  caused  by  exceptional  circumstances  beyond  its  control.  The  assistance  may  take 
the  form  of  a  loan  or  credit  line.  The  ECOFIN  Council  conclusions  of  9 May 2010  restrict  the  facility  to 
EUR 60 billion  but  the  legal  limit  restricts  the  outstanding  amount  of  loans  or  credit  lines  to  the  margin 

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

available  under  the  own  resources  ceiling.  Borrowings  related  to  loans  disbursed  under  the  EFSM  are 
guaranteed by the EU budget. It is not foreseen that the EFSM will engage in new financing programmes 
or  enter  into  new  loan  facility  agreements.  During  the  year  ended  31  December  2018,  both  beneficiary 
countries  –  Ireland  and  Portugal  –  have  requested a  maturity  extension  in  respect  to  their  loans  falling 
due in 2018 for the amount of EUR 3.9 billion and EUR 0.6 billion, respectively. 

The  BOP  facility,  a  policy-based  financial  instrument,  provides  medium-term  financial  assistance  to 
Member  States  of  the  EU  that  have  not  adopted  the  Euro.  It  enables  the  granting  of  loans  to  Member 
States who are experiencing, or are seriously threatened by, difficulties in their balance of payments or 
capital movements. The maximum outstanding amount of loans granted under the instrument is limited 
to EUR 50 billion. Borrowings related to these BOP loans are guaranteed by the EU budget. 

MFA is a form of financial aid extended by the EU to partner countries experiencing a balance of payment 
crisis. It takes the form of medium/long term loans or grants or an appropriate combination of both and 
generally  complements  financing  provided  in  the  context  of  an  IMF-supported  adjustment  and  reform 
program. These loans are guaranteed by the Guarantee Fund for external actions. During the year ended 
31 December 2018, further disbursements of loans under MFA for a total amount of EUR 515 million were 
provided, being EUR 500 million to Ukraine and EUR 15 million to Georgia – see also note 4.1.2. 

The  European  Atomic  Energy  Community  (Euratom,  represented  by  the  Commission)  lends  money  to 
both  Member  States  and  non-Member  States,  and  to  entities  of  both,  to  finance  projects  relating  to 
energy installations. Guarantees from third-parties of EUR 254 million (2017: EUR 250 million) have been 
received to cover Euratom loans - see note 4.1.2. 

ECSC in Liquidation loans are not loans for financial assistance but promissory notes in order to keep the 
cash  flows  in  parallel  with  the  borrowings.  However,  similar  to  the  loans  for  financial  assistance,  they 
were  granted  on  borrowed  funds  in  accordance  with  articles  54  and  56  of  the  ECSC  Treaty  for  project 
financing. 

Loans effective interest rates (expressed as a range of interest rates) 

Macro Financial Assistance (MFA) 
Euratom 
Balance of Payment (BOP) 
European Financial Stability Mechanism (EFSM) 
ECSC in Liquidation 

2.4.3.2.  Other loans 

Loans with special conditions 
ECSC in liquidation housing loans 
Term deposits 
Total 
Non-current 
Current 

31.12.2018 
0 % - 3.82 % 
0.08 % - 5.76 % 
2.88 % - 3.38 % 
0.50 % - 3.75 % 
5.23 % - 5.81 % 

31.12.2017 
0 % - 4.54 % 
0.08 % - 5.76 % 
2.88 % - 3.38 % 
0.62 % - 3.75 % 
5.23 % - 5.81 % 

31.12.2018 
 64 
 2 
 0 
 67 
 38 
 28 

EUR million 
31.12.2017 
 78 
 4 
 55 
 137 
 61 
 76 

Nominal value of other loans at 31 December 2018 total EUR 617 million (2017: EUR 561 million). 

Loans with special conditions are granted at preferential rates as part of co-operation with non-Member 
States. 

Term  deposits  include  mainly  amounts  with  maturity  between  3  and  12  months  that  do  not  meet  the 
definition of cash equivalents. 

43 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Impairment on other loans 

31.12.2017 

Additions 

Reversals 

Write-off  

Other 

Loans with special 
conditions 
Subrogated loans 

Total 

 8 

 432 

 440 

 1 

 147 

148 

– 

– 

– 

 (0) 

– 

 (0) 

– 

– 

– 

EUR million 
31.12.2018 

 8 

 579 

 587 

Subrogated loans are defaulted loans which were granted by the EIB and guaranteed by the EU budget, 
for which all rights have been subrogated to the EU following the payment from the Guarantee Fund for 
external  actions  or  the  EFSI  Guarantee  Fund.  These  loans  are  fully  impaired  for  an  amount  of 
EUR 579 million (2017: EUR 432 million). Guarantee calls, which occurred in 2018, were partially covered 
by financial provisions made in previous years. Under the relevant agreements between the EU and the 
EIB,  recovery  proceedings  are  undertaken  by  the  EIB  on  behalf  of  the  EU  with  an  aim  to  recover  any 
sums due. 

2.5.  PRE-FINANCING 

Non-current pre-financing 
Pre-financing 
Other advances to Member States 
Contribution to Trust Funds 

Current pre-financing 
Pre-financing 
Other advances to Member States 

Total 

Note 

31.12.2018 

31.12.2017 

EUR million 

2.5.1 
2.5.2 

2.5.1 
2.5.2 

21 814 
4 122 
 71 
26 006 

21 572 
2 396 
23 968 
49 974 

21 939 
3 018 
 64 
25 022 

22 361 
1 645 
24 005 
49 027 

The level of pre-financing amounts in the various programmes must be sufficient to ensure the necessary 
funding  for  the  beneficiary  to  start  the  project,  while  also  safeguarding the  financial  interests of  the  EU 
and  taking  into  consideration  legal,  operational  and  cost-effectiveness  constraints.  The  increase  in  the 
total amount of pre-financing mainly relates to the increase in ’’other advances to member states’’ (see 
note 2.5.2). 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.5.1. 

Pre-financing 

Annual accounts of the European Union 2018 

Shared 
management 

EAFRD & other 
rural 
development 
instruments 
ERDF & CF 

ESF 

Other 

Direct 
Management 
Implemented by:  

Commission 

EU executive 
agencies 
Trust funds 

Indirect 
Management 
Implemented by: 

Other EU 
agencies & 
bodies 
Third countries 

International 
organisations 
Other entities 

Total 

Non-current 

Current 

Gross 
amount 

Cleared via 
accruals 

Net amount at 
31.12.2018 

Gross 
amount 

Cleared via 
accruals 

EUR million 
Net amount at 
31.12.2017 

3 743 

3 743 

3 735 

– 

3 735 

18 088 

6 548 

4 684 

(3 461) 

(1 147) 

(2 498) 

14 627 

5 401 

2 186 

20 561 

6 792 

5 037 

(5 678) 

(1 182) 

(2 267) 

33 063 

(7 105) 

25 958 

36 125 

(9 127) 

12 531 

15 012 

(8 262) 

(9 540) 

 585 

 (433) 

28 127 

(18 234) 

4 269 

5 472 

 152 

9 893 

12 165 

13 843 

(8 331) 

(8 749) 

 440 

 (212) 

26 447 

(17 292) 

14 883 

5 610 

2 770 

26 998 

3 834 

5 094 

 228 

9 155 

 762 

 (207) 

 555 

 723 

 (148) 

 575 

1 546 

7 684 

9 107 

19 099 

80 289 

21 814 

58 476 

 (879) 

(5 053) 

(5 426) 

(11 565) 

(36 904) 

– 

(36 904) 

 667 

2 631 

3 681 

7 534 

43 386 

21 814 

21 572 

1 586 

9 000 

7 753 

19 062 

81 635 

21 939 

59 696 

 (956) 

(5 879) 

(3 933) 

(10 916) 

(37 335) 

– 

(37 335) 

 630 

3 121 

3 820 

8 146 

44 300 

21 939 

22 361 

Pre-financing  represents  money  paid  out,  and  thus  implementation  of  payment  appropriations.  As 
explained in note 1.5.7, these are advances and so not yet expensed. Thus while pre-financing reduces 
outstanding RAL (see note 5.1) it represents expenses still to be recognised in the statement of financial 
performance. 

For  shared  management,  almost  all  pre-financing  amounts  relate  to  the  current  programming  period. 
There is an initial pre-financing which will not be cleared before the end of the period and is accounted for 
as  non-current.  There  is  also  an  annual  pre-financing  which  is  cleared  on  an  annual  basis  and  is 
accounted  for  as  current.  EUR  10  billion  of  new  pre-financing  has  been  paid  in  2018.  The  pre-financing 
amounts  related  to  shared  management  are  stable  compared  to  2017  except  for  a  decrease  in  the 
amounts  under  ‘’other’’  shared  management.  This  relates  to  the  European  Union  Solidarity  Fund 
(amounts  for  support  to  reconstruction  in  Italy  following  the  2016/2017  earthquakes  there).  These 
amounts were paid as pre-financing in 2017 and expensed in 2018.  

For  direct  management,  the  pre-financing  amounts  relate  mainly  to  Horizon  2020  and  the  Connecting 
Europe Facility. 

For  indirect  management,  the  pre-financing  covers  mainly  internal  policies  programmes  like  Erasmus, 
Galileo and EGNOS, but also instruments related to external relations like ENI (European Neighbourhood 
Instrument), DCI (Development Cooperation Instrument) and Humanitarian Aid.  

Guarantees received in respect of pre-financing 

These  are  guarantees  that  the  Commission  requests  from  beneficiaries  that  are  not  Member  States  in 
certain  cases  when  paying  out  advance  payments  (pre-financing).  There  are  two  values  to  disclose  for 
this  type  of  guarantee,  the  “nominal”  and  the  “on-going”  values.  For  the  nominal  value,  the  generating 
event  is  linked  to  the  existence  of  the  guarantee.  For  the  on-going  value,  the  guarantee’s  generating 

45 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

event is the pre-financing payment and/or subsequent clearings. At 31 December 2018 the nominal value 
of guarantees received in respect of pre-financing amounted to EUR 516 million while the on-going value 
of those guarantees was EUR 420 million (2017: EUR 620 million and EUR 462 million respectively). 

Certain pre-financing amounts paid out under the 7th Research Framework Programme for research and 
technological  development  (FP7)  and  under  Horizon  2020  are  effectively  covered  by  a  Participants 
Guarantee Fund (PGF). The PGF is a mutual benefit instrument set up to cover the risks relating to non-
payment  of  amounts  by  the  beneficiaries  during  the  implementation  of  the  indirect  actions  of  FP7  and 
Horizon 2020. All participants of indirect actions receiving a grant from the EU contribute 5 % of the total 
amount received to the PGF's capital. 

At  31 December 2018,  pre-financing  amounts  covered  by  the  PGF  totalled  EUR 2 billion  (2017: 
EUR 1.9 billion). The EU (represented by the Commission) acts as an executive agent of the participants 
of the PGF, but the fund is owned by the participants. 

At  year-end,  the  PGF  had  total  assets  of  EUR 2.1 billion  (2017:  EUR 2.0 billion).  The  assets  of  the  PGF 
also  include  financial  assets  that  are  managed  by  the  Directorate-General  for  Economic  and  Financial 
Affairs of the Commission. As the PGF is a separate entity the assets of the fund are not consolidated in 
these EU annual accounts. 

2.5.2.  Other advances to Member States 

Advances to Member States for financial instruments under 
shared management 
Aid Schemes 
Total 
Non-current 
Current 

31.12.2018 
3 675 

EUR million 
31.12.2017 
2 768 

2 843 
6 518 
4 122 
2 396 

1 895 
4 663 
3 018 
1 645 

Advances to Member States for financial instruments under shared management 

Under the framework of the European Structural and Investment Funds (ESIF) programmes, it is possible 
to make advance  payments from the  EU  budget to Member States so as to allow them to contribute to 
financial instruments (i.e. loans, equity  investments or  guarantees). These  financial  instruments are  set 
up  and  managed  under  the  responsibility  of  the  Member  States,  not  the  Commission.  Nevertheless, 
monies  that  are  unused  by  these  instruments  at  year-end  are  the  property  of  the  EU  (as  with  all  pre-
financing) and are thus treated as an asset on the EU’s balance sheet. 

2014-2020 Period: 

Under cohesion policy out of EUR 5 790 million paid, it is estimated that EUR 3 590 million was unused at 
31 December 2018.  This  includes  the  contribution  of  the  Member  States  to  the  SME  Initiative,  an 
instrument  aimed  at  stimulating  additional  lending  by  the  banking  sector  to  SMEs  (EUR 1 213 million 
paid, out of which EUR 391 million is estimated as unused). 

For rural development, EUR 83 million remained unused at year-end. 

2007-2013 Period:  

All  amounts  related  to  the  cohesion  policy  are  considered  to  have  been  either  implemented  or  re-
allocated to other measures, therefore no assets remain on the balance sheet at 31 December 2018. It 
should be noted that the actual implementation by the various instruments will be reviewed as part of the 
closure process of the programmes. 

Aid Schemes 

Similar  to  the  above,  advances  paid  by  the  Member  States  for  various  aid  schemes  (state  aid,  market 
measures  of  EAGF  or  investment  measures  of  EAFRD)  that  were  not  used  at  year-end  are  recorded  as 
assets (advances) on the EU's balance sheet. The Commission has estimated the value of these advances 
based on information provided by the Member States; the resulting amounts are included under the Aid 
Schemes sub-heading above. 

46 

 
 
 
 
 
2014-2020 Period: 

Annual accounts of the European Union 2018 

The  unused  amounts  at  year-end  were  estimated  at  EUR 1 477 million  for  cohesion  policy  and 
EUR 1 171 million for agriculture and rural development. 

2007-2013 Period: 

It is estimated that EUR 195 million paid in the context of rural development remains unused at the end 
of 2018. 

2.6.  EXCHANGE RECEIVABLES AND NON-EXCHANGE 

RECOVERABLES 

Note 

31.12.2018 

31.12.2017 

EUR million 

Non-current 
Recoverables from non-exchange transactions 
Receivables from exchange transactions 

Current 
Recoverables from non-exchange transactions 
Receivables from exchange transactions 

2.6.1 
2.6.2 

2.6.1 
2.6.2 

Total 

2.6.1.  Recoverables from non-exchange transactions 

 397 
 19 
 416 

22 212 
2 036 
24 248 
24 664 

 594 
 17 
 611 

11 065 
 689 
11 755 
12 366 

Non-current 
Member States 

Current 
Member States 
Competition fines 
Accrued income and deferred charges 
Other recoverables 

Total 

Note 

31.12.2018 

31.12.2017 

EUR million 

2.6.1.1 

2.6.1.1 
2.6.1.2 
2.6.1.3 

 397 

 397 

10 900 
9 727 
1 511 
 74 

22 212 

22 609 

 594 

 594 

6 190 
4 225 
 570 
 81 

11 065 

11 659 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.6.1.1.  Recoverables from Member States 

Annual accounts of the European Union 2018 

TOR A accounts 
TOR separate accounts 
Own resources to be received 
Impairment 
Other 
Own resources recoverables 
European Agricultural Guarantee Fund (EAGF) 
European Agricultural Fund for Rural Development (EAFRD) 
Temporary Rural Development Instrument (TRDI) 
Special Accession Programme for Agriculture and Rural 
Development (SAPARD) 
Impairment 
EAGF and rural development recoverables 
Pre-financing recovery expected 
VAT paid and recoverable 
Other recoverables from Member States 
Total 
Non-current 
Current 

31.12.2018 
5 609 
1 612 
2 758 
 (991) 
 86 
9 075 
1 708 
 859 
 13 
 82 

 (788) 
1 875 
 145 
 45 
 158 
11 297 
 397 
10 900 

EUR million 
31.12.2017 
3 113 
1 617 
 46 
 (997) 
 56 
3 836 
2 280 
 955 
 16 
 136 

 (804) 
2 583 
 182 
 64 
 120 
6 784 
 594 
6 190 

The  non-current  amounts  due  from  Member  States  relate  mainly  to  non-executed  conformity  clearance 
decisions for the  European  Agricultural Guarantee Fund (EAGF) as  well as for the European  Agricultural 
Fund  for  Rural  Development  (EAFRD).  The  amounts  related  to  these  decisions  are  being  recovered  in 
annual instalments.  

Own resources recoverables 

'A  accounts'  refers  to  the  monthly  statements  where  the  Member  States  communicate  the  established 
Traditional  Own  Resources  (TOR)  entitlements  to  the  Commission  but  not  yet  recovered.  TOR  are 
composed of customs duties and sugar levies, collected by Member States on behalf of the Commission. 

For  2018,  the  ‘A  accounts’  figure  contains  TOR  from  the  infringement  case  explained  below  as  well  as 
from  inspection  reports.  The  increase  in  the  heading  ‘A  accounts’  is  driven  by  these  cases.  As  late 
payment  interest  of  EUR  1.3  billion  is  applicable,  those  amounts  are  therefore  also  reported  in  these 
annual accounts (see notes 2.6.2 and 3.7). 

Concerning  the  infringement  case,  on  8  March  2018,  the  European  Commission  sent  a  letter  of  formal 
notice  (Infringement  No  2018/2008)  to  the  United  Kingdom  (UK)  because  it  refused  to  make  customs 
duties available to the EU budget, as required by EU law. In view of a lack of a satisfactory reply from the 
UK, the Commission sent a Reasoned Opinion on 24 September 2018 and decided on 19 December 2018 
to  refer  the  case  to  the  Court  of  Justice  of  the  EU.  The  UK  replied  to  the  Reasoned  Opinion  on 
11 February  2019.  This  reply  was  again  considered  unsatisfactory  and  the  Commission  confirmed  on 
6 March 2019 its decision to refer the infringement to the Court of Justice of the EU. The application was 
lodged on 7 March 2019. A 2017 OLAF report had found that importers in the UK evaded a large amount 
of  customs  duties  by  using  fictitious  and  false  invoices  and  incorrect  customs  value  declarations  at 
importation. Based on a methodology developed by OLAF and JRC and on the information available, the 
Commission  estimates  that  the  infringement  of  EU  legislation  by  the  UK  resulted,  during  the  period 
November 2011 to October 2017, in losses to the EU budget amounting to EUR 2.1 billion (net, i.e. after 
deducting the collection costs to be retained by the UK from the gross amount of EUR 2.7 billion). The UK 
does not agree on the methodology used by the Commission to estimate the above losses. 

In addition, the Commission included in the accounts a management estimate of EUR 0.7 billion (of which 
the largest part being applicable interest) for established customs duties. The UK does not agree with this 
amount. 

‘Separate  accounts’  refers  to  established  entitlements  that  have  not  been  included  in  the  'A  accounts', 
because  they  have  not  been  recovered  by  Member  States  and  no  security  has  been  provided  (or  if 
security  has  been  provided  but  the  amounts  are  contested).  These  entitlements  are  subject  to 
impairment based on information provided every year by the Member States.  

48 

 
 
 
 
Annual accounts of the European Union 2018 

‘Own  resources  to  be  received’  refers  to  recoverables  as  a  result  of  the  amending  budget  No  6/2018 
adopted on 12 December 2018. The amounts were to be entered by Member States on the first working 
day of January 2019. 

EAGF and Rural Development recoverables 

This item primarily covers the amounts owed by Member States at 31 December 2018, as declared and 
certified by the Member States as at 15 October 2018. An estimation is made for the recoverables arising 
after this declaration and up to 31 December 2018. The Commission also estimates a write-down for the 
amounts  owed  by  beneficiaries  that  are  unlikely  to  be  recovered.  The  fact  that  such  an  adjustment  is 
made  does  not  mean  that  the  Commission  is  waiving  future  recovery  of  these  amounts.  A  deduction  of 
20 % is also included in the adjustment and corresponds to what Member States are allowed to retain to 
cover administrative costs. 

2.6.1.2.  Recoverables from competition fines 

Recoverable from fines gross amount 
Provisional payments 
Impairment 
Total 
Non-current 
Current 

31.12.2018 
13 022 
(3 131) 
 (164) 
9 727 
– 
9 727 

EUR million 
31.12.2017 
7 679 
(3 282) 
 (172) 
4 225 
– 
4 225 

The provisional payments mainly relate to cash receipts from companies that have nevertheless initiated 
an appeal or still have the option to appeal against the fine decisions at EU courts. A contingent liability is 
disclosed for the possibility to pay back these amounts to the companies (see note 4.1.4).  

Fined companies who have launched or are planning to launch an appeal have an option to either make 
provisional  payments  or  to  provide  bank  guarantees  to  the  Commission.  For  EUR  9  354  million  (2017: 
EUR 4 004 million) of fines not paid at year-end, the Commission has accepted guarantees.  

The amounts written down due to impairment reflect the Commission's case-by-case assessment of fines 
amounts not cashed or not covered with a guarantee, which the Commission expects not to recover. 

The  increase  in  the  competition  fines  recoverables  is  mainly  due  to  two  significant  fines  (totalling 
EUR 5 339 million)  where  the  companies  concerned  covered  the  fine  with  Commission  accepted  bank 
guarantees.  

2.6.1.3.  Accrued income and deferred charges 

Other accrued income 
Deferred charges relating to non-exchange transactions 
Total 
Non-current 
Current 

31.12.2018 
1 240 
 272 
1 511 
– 
1 511 

EUR million 
31.12.2017 
 328 
 241 
 570 
– 
 570 

Other  accrued  income  includes  EUR  1  146  million  that  the  Commission  expects  to  recover  from  the 
Member  States  in  the  area  of  cohesion.  The  recovery  will  be  made  as  a  result  of  the  examination  and 
acceptance of the annual accounts submitted by the Member States on 15 February 2019. This procedure 
for  the  acceptance  of  Member  States'  annual  accounts  has  been  introduced  for  the  first  time  in  the 
cohesion area for the programming period 2014-2020. 

49 

 
 
 
 
 
 
 
 
 
2.6.2.  Receivables from exchange transactions 

Annual accounts of the European Union 2018 

Non-current 
Other receivables 

Current 
Customers 
Impairment on receivables from customers 
Deferred charges relating to exchange transactions 
Other 

Total 

31.12.2018 

EUR million 
31.12.2017 

 19 
 19 

 232 
 (143) 
 243 
1 704 
2 036 
2 055 

 17 
 17 

 241 
 (141) 
 259 
 331 
 689 
 707 

The receivables under the heading other contain EUR 1.4 billion of accrued late payment interest on own 
resources out of which EUR 1.3 billion relate to the cases already mentioned in note 2.6.1.1. 

2.7.  INVENTORIES  

Scientific materials 
Other 
Total 

31.12.2018 
 52 
 21 
 73 

EUR million 
31.12.2017 
 45 
 250 
 295 

2.8.  CASH AND CASH EQUIVALENTS 

Accounts with Treasuries and Central Banks 
Current accounts 
Imprest accounts 
Transfers (cash in transit) 

Bank accounts for budget implementation 

Cash belonging to financial instruments 

Cash relating to fines 

Cash relating to other institutions, agencies and 
bodies 
Cash relating to trust funds 
Total 

2.8.1.  Bank accounts for budget implementation 

Note 

2.8.1 

2.8.2 

2.8.3 

31.12.2018 
12 932 
 79 
 5 
 0 

13 017 

2 377 

1 438 

1 167 

 114 
18 113 

EUR million 

31.12.2017 
20 078 
 152 
 5 
 0 

20 236 

1 608 

1 234 

 999 

 34 
24 111 

This  heading  covers  the  funds  which  the  Commission  keeps  in  its  bank  accounts  in  each  Member  State 
and  EFTA  country  (treasury  or  central  bank),  as  well  as  in  commercial  bank  current  accounts,  imprest 
accounts and petty cash. The treasury balance at the end of 2018 is due to the following main elements: 

  As  regards  own  resources,  the  end  of  year  treasury  balance  includes  EUR 0.75 billion  paid  in 

advance by some of the Member States in relation to amending budget 6 adopted in 2018. 

  An amount of EUR 1.4 billion of fines imposed by the Commission for breach of competition rules, 
definitively cashed in 2018 and not yet included in any amending budget is also part of the year-
end treasury balance. 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

 

The  treasury  balance  also  includes  assigned  revenue  and  other  payment  appropriations  of 
EUR 7.4 billion. 

2.8.2.  Cash belonging to financial instruments 

Amounts shown under this heading primarily concern cash equivalents managed by fiduciaries on behalf 
of  the  Commission  for  the  purpose  of  implementing  particular  financial  instrument  programmes  funded 
by  the  EU  budget  and  cash  and  cash  equivalents  held  in  the  guarantee  funds  relating  to  budgetary 
guarantees (see note 2.4.1). The cash belonging to financial instruments and guarantee funds can only 
be used in the programmes concerned. 

2.8.3.  Cash relating to fines 

This is cash received in connection with fines issued by the Commission for which the case is still open. 
These amounts are kept in specific deposit accounts that are not used for any other activities. Where an 
appeal  has  been  lodged  or  when  it  is  unknown  if  an  appeal  will  be  made  by  the  other  party,  the 
underlying amount is shown as contingent liability in note 4.1.4. 

Since  2010,  all  new  provisionally  cashed  fines  are  managed  by  the  Commission  in  the  BUFI  fund  and 
invested in financial instruments categorised as available for sale (see note 2.4.1). 

51 

 
 
Annual accounts of the European Union 2018 

LIABILITIES 

2.9.  PENSION AND OTHER EMPLOYEE BENEFITS 

Net employee benefit scheme liability 

Pension 
Scheme 
of 
European 
Officials 
70 017 
N/A 
70 017 

Other 
retirement 
benefit 
schemes 

Joint 
Sickness 
Insurance 
Scheme 

31.12.2018  
Total 

EUR million 
31.12.2017  
Total 

1 865 
 (119) 
1 746 

8 990 
 (296) 
8 694 

80 871 
 (415) 
80 456 

73 560 
 (438) 
73 122 

Defined Benefit Obligation 
Plan assets 
Net liability 

The  increase  in  the total employee  benefits liability  is  primarily  due  to  an  increase  in  the  net  liability  of 
the  Pension  Scheme  of  European  Officials.  The  rights  accrued  during the  year  due to  service  are  higher 
than the benefits paid out during the year. In addition to this, there is an annual interest cost (unwinding 
of the liability discounting) as well as actuarial losses from experience where a significant amount relates 
to the improvement mentioned in note 2.9.1. 

2.9.1. 

Pension Scheme of European Officials 

This  defined  benefit  obligation  represents  the present  value of  expected  future  payments  that  the  EU is 
required  to  make  so  as  to  settle  the  pension  obligations  resulting  from  employee  service  in  the  current 
and  prior  periods.  The  scheme  is  ongoing,  and  as  such,  all  payments  required  to  be  made  from  the 
scheme on an annual basis are included in the EU budget each year. 

In  accordance  with  Article  83  of  the  Staff  Regulations,  the  payment  of  the  benefits  provided  for  in  the 
staff pension scheme constitutes a charge to the EU's budget. The scheme is notionally funded, and the 
Member States guarantee the payment of these benefits collectively. A compulsory pension contribution 
is deducted from the basic salaries of active members, currently 10.0 %. These contributions are treated 
as budget revenue of the year and contribute to the funding of EU expenditure in general, see also note 
3.6. 

The liabilities of the pension scheme were assessed on the basis of the number of staff and retired staff 
at 31 December 2018 and on the rules of the Staff Regulations applicable at this date. This valuation was 
carried out in accordance with the methodology of IPSAS 39 (and therefore also EU accounting rule 12). 
As was already noted in the 2017 annual accounts, the relevant Commission services have been working 
to  strengthen  data  collection  methods,  as  well  as  improving  assumptions  and  calculation  methods.  One 
result  of  this  work  has  been  a  more  precise  valuation  of  the  liability  in  relation  to  the  pensions  of 
surviving persons (i.e. where the member is deceased) using the most up to date actuarial practice. The 
impact of this improved method on the 2018 liability is a EUR 2.1 billion increase. Had this method been 
used  in  2017,  that  liability  would  have  been  EUR  2.3  billion  higher  compared  to  the  previous  method 
used. 

2.9.2.  Other retirement benefit schemes 

This refers to the liability relating to the pension obligations towards Members and former Members of the 
Commission,  the  Court  of  Justice  (and  General  Court)  and  the  Court  of  Auditors,  the  Council,  the 
Ombudsman,  the  European  Data  Protection  Supervisor,  and  the  European  Union  Civil  Service  Tribunal. 
Also  included  under  this  heading  is  a  liability  relating  to  the  pensions  of  Members  of  the  European 
Parliament. 

2.9.3. 

Joint Sickness Insurance Scheme 

In addition to the above retirement benefit schemes, a valuation is made for the estimated liability that 
the  EU  has  regarding  the  Joint  Sickness  Insurance  Scheme  (JSIS)  in  relation  to  healthcare  costs  which 

52 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

must  be  paid  during  post-activity  periods  (net  of  their  contributions).  As  stated  in  note  1.5.10,  the 
calculation of this liability takes account of the full active service period, ensuring that both the pension 
and the sickness insurance schemes of the staff’s post-employment plan are accounted for consistently. 
Taking into account the obligation to faithfully present the economic substance of the underlying situation 
as  required  by  both  EAR  and  IPSAS,  we  have  not  interpreted  IPSAS  39  in  a  stricter  sense  when 
attributing  the  benefits  to  the  periods  of  service.  If  one  were  to  accrue  the  service  cost  for  the  JSIS 
scheme fully over 10 years for all officials, as opposed to the period of active service of the employee, the 
impact  of  such  an  approach  on  the  defined  benefit  obligation  at  year-end  would  be  an  increase  of 
EUR 3 billion.  However,  as  already  indicated,  this  stricter  approach  would  not  be  compatible  with  the 
qualitative  characteristic  of  faithful  representation,  and  thus  would  not  be  deemed  to  provide  reliable 
information  in  accordance  with  EAR  1  and  the  IPSAS  Conceptual  Framework.  This  estimate  is  highly 
sensitive  to  the  evolution  of  current  staff  administrative  status  (in  particular  the  number  of  fixed-term 
contract members assumed to become officials in the future). 

Movement in present value of employee benefits defined benefit obligation 

The present value of the defined benefit obligation is the discounted expected future payments required 
to settle the obligation resulting from employee service in the current and prior periods.   

An analysis of the current year movement in the defined benefit obligation is presented below: 

Present value as at 31.12.2017 
Recognised in statement of 
financial performance 
Current Service Cost 
Interest cost 
Recognised in net assets 
Remeasurements in employee benefits 
liabilities 

Actuarial (gains)/losses from 
experience 
Actuarial (gains)/losses from 
demographic assumptions 
Actuarial (gains)/losses from 
financial assumptions 

Other 
Benefits paid 
Present value as at 31.12.2018 

Pension 
Scheme of 
European 
Officials  
63 951 

Other 
retirement 
benefit 
schemes 

1 854 

Joint 
Sickness 
Insurance 
Scheme 

7 756 

EUR million 
Total 

73 560 

2 716 
1 215 

 87 
 32 

 270 
 155 

3 074 
1 402 

3 380 

 (15) 

 1 

 4 

– 

3 369 

 1 

 (36) 

 901 

1 115 

– 

 251 

(1 496) 
70 017 

 (58) 
1 865 

 (96) 
8 990 

(1 650) 
80 872 

Current  service  cost  is  the  increase  in  the  present  value  of  the  defined  benefit  obligation  arising  from 
current members' service in the current period.  

Interest  cost  refers  to  the  interest  cost  i.e.  the  increase  during  the  period  in  the  present  value  of  the 
defined benefit obligation because the benefits are one period closer to settlement.  

Actuarial  gains  and  losses  from  experience  refer  to  the  effects  of  differences  between  the  previous 
actuarial  assumptions  for  2018  and  what  has  actually  occurred  in  2018.  This  amount  includes  the 
improvement mentioned in note 2.9.1.  

Actuarial gains and losses from actuarial assumptions (demographic and financial like discount rates and 
expected salary increases) arise where these assumptions are updated in order to reflect changes in the 
underlying conditions.  

Benefits  (for  example,  pensions  or  medical  cost  reimbursements)  are  paid  during  the  year  according  to 
the rules of the scheme. These benefits paid lead to a decrease in the defined benefit obligation. 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Plan assets 

Present value as at 
31.12.2017 
Net movement in plan assets 
Present value as at 
31.12.2018 

Other retirement 
benefit schemes 

Joint Sickness 
Insurance Scheme 

137 

 (18) 
 119 

301 

 (5) 
 296 

EUR million 

Total 

 438 

 (23) 
 415 

Actuarial assumptions - employee benefits 

The  principle  actuarial  assumptions  used  in  the  valuation  of  the two  main  employee benefit  schemes of 
the EU are shown below: 

2018 
Nominal discount rate  
Expected inflation rate  
Real discount rate 
Expected rate of salary increases 
Medical cost trend rates 
Retirement age 
2017 
Nominal discount rate  
Expected inflation rate  
Real discount rate 
Expected rate of salary increases 
Medical cost trend rates 
Retirement age 

Pension Scheme 
of European 
Officials 

Joint Sickness 
Insurance 
Scheme 

1.9 % 
1.4 % 
0.5 % 
1.9 % 
N/A 
63/64/66 

1.9 % 
1.5 % 
0.4 % 
1.8 % 
N/A 
63/64/66 

2.0 % 
1.5 % 
0.5 % 
1.8 % 
3.0 % 
63/64/66 

2.0 % 
1.6 % 
0.4 % 
1.7 % 
3.0 % 
63/64/66 

Mortality rates for 2017 and 2018 are based on the EU Civil Servants Life Table - EULT 2018. 

The nominal discount rate is determined as the value of the Euro zero-coupon yield (with a maturity of 20 
years  as  of  December 2018  for  the  Pension  Scheme  of  European  Officials  (PSEO),  and  25  years  for  the 
Joint  Sickness  Insurance  Scheme).  The  inflation  rate  used  is  the  expected  inflation  rate  over  the 
equivalent period. It must be determined empirically, based on prospective values as expressed by index-
linked  bonds  on  the  European  financial  markets.  The  real  discount  rate  is  calculated  from  the  nominal 
discount rate and the expected long-term inflation rate. 

Sensitivity analyses  

The sensitivity analysis is based on simulations which change, ceteris paribus, the value of the concerned 
assumptions and observing how the model reacts. 

Joint Sickness Insurance Scheme sensitivity 

A ten basis point change in assumed medical cost trend rates would have the following effects: 

The aggregate of the current 
service cost and interest cost 
components of net periodic post-
employment medical costs 
Defined benefit obligation 

2018 
Increase 0.1%  Decrease 0.1% 

2017 
Increase 0.1%  Decrease 0.1% 

 12 

 (12) 

 11 

 (11) 

EUR million 

 253 

 (246) 

 220 

 (213) 

A ten basis point (0.1%) change in the assumed discount rate would have the following effects: 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Defined benefit obligation 

 (219) 

 226 

 (188) 

 194 

2018 
Increase 0.1%  Decrease 0.1% 

2017 
Increase 0.1%  Decrease 0.1% 

EUR million 

A ten basis point (0.1%) change in expected salary increases would have the following effects: 

Defined benefit obligation 

 (26) 

 25 

 (25) 

 24 

2018 
Increase 0.1%  Decrease 0.1% 

2017 
Increase 0.1%  Decrease 0.1% 

EUR million 

A one-year change in assumed retirement age would have the following effects: 

Defined benefit obligation 

2018 

One year 
increase 
 (91) 

EUR million 

2017 

One year 
decrease 

 54 

One year 
increase 
 (82) 

One year 
decrease 

 44 

Pension Scheme of European Officials sensitivity 

A ten basis point (0.1%) change in the assumed discount rate would have the following effects: 

Defined benefit obligation 

(1 434) 

1 478 

(1 281) 

1 319 

2018 
Increase 0.1%  Decrease 0.1% 

2017 
Increase 0.1%  Decrease 0.1% 

EUR million 

A ten basis point (0.1%) change in expected salary increases would have the following effects: 

Defined benefit obligation 

1 427 

(1 388) 

1 313 

(1 192) 

2018 
Increase 0.1%  Decrease 0.1% 

2017 
Increase 0.1%  Decrease 0.1% 

EUR million 

A one-year change in assumed retirement age would have the following effects: 

Defined benefit obligation 

2018 

One year 
increase 
 (573) 

EUR million 

2017 

One year 
decrease 
 645 

One year 
increase 
 (496) 

One year 
decrease 
 639 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

2.10.  PROVISIONS 

Amount at 
31.12.2017 

Additional 
provisions 

Unused 
amounts 
reversed 

Amounts 
used 

Transfer 
between 
categories 

Change in 
estimation 

 49 
 20 
 120 
1 934 

1 115 
 27 
 272 
3 538 
2 880 

 270 
– 
 3 
– 

 590 
– 
 38 
 901 
 704 

 (2) 
 (20) 
 (19) 
– 

 (7) 
 (27) 
 (38) 
 (115) 
 (38) 

 (47) 
– 
 (2) 
 (34) 

 (149) 
– 
 (18) 
 (249) 
 (52) 

– 
– 
– 
– 

– 
– 
– 
– 
 (272) 

– 
– 
 (1) 
 32 

 2 
– 
 24 
 57 
 59 

Legal cases: 
  Agriculture 
  Cohesion 
  Other 
Nuclear site 
dismantlement 
Financial 
Fines 
Other 
Total 
Non-current 

Current 

 659 

 197 

 (77) 

 (197) 

 272 

 (2) 

EUR million 
Amount at 
31.12.2018 

 270 
 (0) 
 100 
1 933 

1 551 
– 
 278 
4 132 
3 281 

 852 

Provisions are reliably estimated amounts, arising from past events, that will probably have to be paid by 
the EU budget in the future. 

Legal cases 

This is the estimate of amounts that will probably have to be paid out after the year-end in relation to a 
number of on-going legal cases. 

Nuclear site dismantlement 

As  of  2017  the  basis  for  the  provision  was  updated  as  per  the  "JRC  Decommissioning  &  Waste 
Management Programme Strategy (D&WMP) – Updated in 2017". The review of the strategy, along with 
budget  and  staff  needs,  was  conducted  together  with  the  independent  D&WMP  Expert  Group.  It 
represents the best available estimate of the budget and staff needed to complete the decommissioning 
of the JRC sites of Ispra, Geel, Karlsruhe and Petten.  

In accordance with the EU accounting rules, this provision is indexed for inflation and then discounted to 
its net present value (using the Euro swap curve). At 31 December 2018, this resulted in a provision of 
EUR 1 933 million,  split between  amounts  expected to  be  used in  2018  (EUR 31 million)  and  afterwards 
(EUR 1 902 million). 

It  must  be  noted  that  major  uncertainties,  inherent  to  the  long  term  planning  of  nuclear 
decommissioning,  could  affect  this  estimate,  which  could  significantly  increase  in  the  future.  The  main 
sources of uncertainty are related to the end state of the decommissioned site, nuclear materials, waste 
management  and  disposal  aspects,  incomplete  or  lacking  definition  of  national  regulatory  frames, 
complicated  and  time-consuming  licensing  process  and  future  developments  of  the  decommissioning 
industrial market. 

Financial provisions 

These concern mainly provisions, which represent the estimated losses that will be incurred in relation to 
the  guarantees  given  under  different  financial  instruments,  where  entrusted  entities  are  empowered  to 
issue guarantees in their own name but on behalf of and at the risk of the EU. The financial risk of the EU 
linked to the guarantees is capped and financial assets are gradually provisioned to cover for the future 
guarantee  calls.  This  heading  also  includes  provisions  for  outstanding  loans  to  Syria  issued  by  the  EIB 
under its external lending mandate and thus guaranteed by the EU via the Guarantee Fund for external 
actions. Non-current financial provisions are discounted to their net present value. 

The  increase  of  the  financial  provision  relates  to  the  increase  of  the  volume  of  guaranteed  operations 
under H2020 and COSME financial instruments. 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

2.11.  FINANCIAL LIABILITIES 

Non-current financial liabilities 
Financial liabilities at amortised cost 
Financial liabilities at fair value through surplus or 
deficit 

Note 

31.12.2018 

31.12.2017 

EUR million 

2.11.1 
2.11.2 

53 281 
 7 

50 061 
 2 

Current financial liabilities 
Financial liabilities at amortised cost 
Financial liabilities at fair value through surplus or 
deficit 

2.11.1 
2.11.2 

Total 

2.11.1.  Financial liabilities at amortised cost  

53 289 

50 063 

2 602 
 15 

2 617 
55 906 

6 850 
– 

6 850 
56 913 

Borrowings for financial assistance 
Other financial liabilities 

Total 

Non-Current 
Current 

2.11.1.1.  Borrowings for financial assistance 

Note 
2.11.1.1 
2.11.1.2 

31.12.2018 
53 872 
2 012 

55 884 

53 281 
2 602 

EUR million 

31.12.2017 
54 841 
2 070 

56 911 

50 061 
6 850 

EFSM 

BOP 

MFA 

Euratom 

ECSC in 

Total at 31.12.2017 
New borrowings 
Repayments 
Exchange differences 
Changes in carrying 
amounts 
Total at 31.12.2018 
Non-current 
Current 

47 456 
4 500 
(4 500) 
– 
 (56) 

47 400 
46 800 
 600 

3 114 
– 
(1 350) 
– 
 (30) 

1 734 
 200 
1 534 

3 924 
 515 
 (56) 
– 
 5 

4 388 
4 309 
 79 

Liquid-     
dation 
 97 
– 
– 
 (1) 
 0 

 97 
– 
 97 

 250 
 50 
 (46) 
 (0) 
 0 

 254 
 213 
 41 

EUR million 
Total 

54 841 
5 065 
(5 952) 
 (1) 
 (82) 

53 872 
51 521 
2 350 

Borrowings  mainly  include  debts  evidenced  by  certificates  amounting  to  EUR  53  725  million  (2017: 
EUR 54 674 million). The changes in carrying amount correspond to the change in accrued interests. 

Aside from ECSC in liquidation, the repayment of the above borrowings are ultimately guaranteed by the 
EU budget – see note 4.1.2, and by extension by each Member State. 

57 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings effective interest rates (expressed as a range of interest rates) 

Annual accounts of the European Union 2018 

Macro Financial Assistance (MFA) 
Euratom 
Balance of Payment (BOP) 
European Financial Stability Mechanism (EFSM) 
ECSC in Liquidation 

2.11.1.2.  Other financial liabilities 

31.12.2018 
0 % - 3.82 % 
0 % - 5.68 % 
2.88 % - 3.38 % 
0.50 % - 3.75 % 
6.91 % - 8.97 % 

31.12.2017 
0 % - 4.54 % 
0 % - 5.68 % 
2.88 % - 3.38 % 
0.62 % - 3.75 % 
6.91 % - 8.97 % 

31.12.2018 

EUR million 
31.12.2017 

Non-current 
Finance lease liabilities 
Buildings paid for in instalments 
Other 

Current 
Finance lease liabilities 
Buildings paid for in instalments 
Fines to be reimbursed 
Other 

Total 

Finance lease liabilities 

1 331 
 314 
 115 
1 760 

 93 
 29 
 125 
 5 
 252 
2 012 

Description 

< 1 year 

Future amounts to be paid 
> 5 years 

1-5 years 

Land and buildings 
Other fixed assets 
Total at 31.12.2018 
Interest element 
Total future minimum lease 
payments at 31.12.2018 
Total future minimum lease payments at 
31.12.2017 

 86 
 7 
 93 
 60 
 153 

 158 

 428 
 10 
 438 
 216 
 654 

 682 

 893 
– 
 893 
 196 
1 089 

1 271 

2 111 

The lease and building related amounts above will have to be funded by future budgets.  

2.11.2.  Financial liabilities at fair value through surplus or deficit  

Type of derivative 

Guarantee on equity portfolio 
FX option (put spread) 
Total 
Non-current 
Current 

Guarantee on equity portfolio 

31.12.2018 

31.12.2017 

EUR million 

Notional 
amount  
 536 
 11 
 546 
 82 
 464 

Fair value 

 20 
 2 
 22 
 7 
 15 

Notional 
amount  
– 
 9 
 9 
 9 
– 

Fair value 

– 
 2 
 2 
 2 
– 

Guarantees  given  on  equity  portfolio  are  classified  as  financial  liabilities  at  fair  value  through  surplus  or 
deficit  since  they  do  not  meet  the  definition  of  a  financial  guarantee  liability  –  see  note  1.5.12. 
As at 31 December  2018  this  heading  relates  to  a  guarantee  provided  by  the  EU  under  the  H2020 
financial  instruments  (see  note  2.4.1)  to  the  EIB  Group  for  portfolios  of  equity  operations.  The  EU 
financial liability is measured based on the value of the underlying investments.  

58 

1 456 
 305 
 159 
1 920 

 89 
 24 
 13 
 24 
 150 
2 070 

EUR million 

Total 
Liability 
1 407 
 17 
1 424 
 472 
1 896 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange option 

Annual accounts of the European Union 2018 

As  at  31  December  2018 the  EU  holds  a  derivative financial  instrument  (Foreign  exchange  option  –  put 
spread type of option) in which it covers the devaluation of the foreign exchange currency (UHA) related 
to  loans  given  by  financial  institutions  to  SMEs  in  Ukraine  so  as  to  enhance  the  access  to  financing,  as 
well  as  the  attractiveness  of  the  loan  conditions  in  Ukraine.  Under  the  terms  of  the  contract,  the  EU 
provides its partners with an option to call, for each eligible loan, up to a maximum of 30 %, for an EU 
contribution in the case of devaluation of the ratio UHA/EUR. 

Fair value hierarchy of financial liabilities measured at fair value 

Level 1: Quoted prices in active markets 
Level 2: Observable inputs other than quoted prices 
Level 3: Valuation techniques with inputs not based on 
observable market data 
Total 

2.11.3.  Financial guarantee liabilities 

31.12.2018 
– 
 2 
 20 

EUR million 
31.12.2017 
– 
 2 
– 

 22 

 2 

The  EFSI  guarantee  on  the  debt  portfolio  disbursed  by  the  EIB  under  the  EFSI  Innovation  and 
Infrastructure window (IIW) is classified as a financial guarantee liability. At 31 December 2018 the EFSI 
financial guarantee liability totals EUR zero, as the revenues to be received under the guarantee exceed 
expected losses (see note 4.1.1). 

2.12.  PAYABLES 

Gross 
Amount 

Adjust- 
ments 

Net Amount at 
31.12.2018 

Gross 
Amount 

Adjust- 
ments 

EUR million 
Net Amount at 
31.12.2017 

Cost claims and 
invoices received 
from: 
Member States: 

EAFRD & other 
rural development 
instruments 
ERDF & CF 

ESF 

Other 

Private and public 
entities 
Total cost claims 
and invoices 
received 
EAGF 

Own resources 
payables 
Sundry payables 

Other 

Total 

 247 

– 

 247 

 481 

– 

 481 

10 761 

(1 724) 

5 195 

 632 

1 461 

 (496) 

 (75) 

 (179) 

9 037 

4 699 

 557 

1 282 

12 602 

4 183 

 746 

1 563 

 (883) 

 (264) 

 (280) 

 (144) 

11 719 

3 919 

 466 

1 419 

18 296 

(2 475) 

15 821 

19 574 

(1 571) 

18 004 

14 772 

 769 

 570 

 294 

N/A 

N/A 

N/A 

N/A 

14 772 

 769 

11 534 

8 836 

 570 

 294 

 341 

 333 

N/A 

N/A 

N/A 

N/A 

11 534 

8 836 

 341 

 333 

34 701 

(2 475) 

32 227 

40 618 

(1 571) 

39 048 

Payables  include  invoices  and  cost  claims  received  but  not  yet  paid  at  year-end.  They  are  initially 
recognised  at  the  time  of  the  reception  of  the  invoices  /  cost  claims  for  the  requested  amounts.  The 
payables  are  subsequently  adjusted  to  reflect only  the  amounts  accepted  following  review  of  costs,  and 
the  amounts  estimated  to  be  eligible.  The  amounts  estimated  to  be  non-eligible  are  included  in  the 
column "Adjustments"; the largest amounts concern the structural actions.  

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

In  the  2014-2020  programming  period,  the  Common  Provisions  Regulation  (CPR)  applicable  to  the 
Structural  Funds  (ERDF  and  ESF),  Cohesion  Fund  and  to  the  European  Maritime  and  Fisheries  Fund 
(EMFF)  foresees  that  the  EU  budget  is  protected  by  means  of  a  systematic  retention  of  10 %  of  the 
interim payments made. By February following the end of the CPR accounting year (1 July - 30 June), the 
control cycle is complete both through management verifications by the managing authorities and audits 
by the audit authorities. The Commission examines the assurance documents and the accounts provided 
by  the  relevant  authorities  in  the  Member  States.  The  payment  /  recovery  of  the  final  balance  is  made 
only after this assessment is finalised and the accounts are accepted. The amount retained according to 
this provision at end 2018 totalled EUR 5.7 billion. A part of this amount (EUR 0.9 billion) is estimated as 
being non-eligible on the basis of the information provided by the Member States in their accounts and is 
also  included  in  the  column  "Adjustments".  The  final  component  of  the  adjustments  to  the  payables  is 
represented by the amounts corresponding to other advances to Member States (see note 2.5.2) still to 
pay at year-end (EUR 0.8 billion). 

Payables  concerning  cohesion  policy  (ERDF,  CF,  ESF)  have  decreased  which  mainly  relates  to  the  fact 
that  claims  related  to  the  period  2007-2013  have  significantly  decreased  to  EUR 3.5 billion  (2017: 
EUR 10 billion), as the Commission is checking the final cost claims submitted by the Member States. At 
the  same  time,  claims  related  to  period  2014-2020  increased  to  EUR 10 billion  (2017:  EUR 5 billion) 
following further progress in the implementation of the programmes. 

The increase in EAGF payables relates to the repartition of the total EAGF liabilities between payables and 
accrued  charges.  The  total  EAGF  liabilities  remain  relatively  stable  at  EUR 44 159 million  against 
EUR 44 837 million  last  year.  However,  in  2018  the  claimed  amounts  already  covered  by  a  conformity 
decision (accounted for as payable) are higher than in 2017. 

Requests for pre-financing 

In addition to the above amounts, at the end of 2018, EUR 0.5 billion of requests for pre-financing have 
been received and were not yet paid at year-end. According to the EU accounting rules, these amounts 
are not booked as payables.  

Own Resources Payables 

Own  resources  payables  refer  to  Member  States  EU  budget  contributions  to  be  reimbursed  at  year-end 
following  the  amending  budget  no  6/2018  adopted  on  12  December  2018.  Amending  budgets  are 
implemented according to Article 10(3) of Regulation no 609/2014. According to this legal provision, the 
resulting  amounts  were  returned  to  the  Member  States  on  the  first  working  day  of  January  2019.  The 
significant  amount  on  31  December  2017  was  due  to  the  adoption  of  amending  budget  no  6/2017  on 
30 November 2017.  This  year  the  amending  budget  mainly  gave  rise  to  additional  Member  States 
contributions (see note 2.6.1.1). 

2.13.  ACCRUED CHARGES AND DEFERRED INCOME 

Accrued charges 
Deferred income 
Other 
Total 

31.12.2018 
62 877 
 96 
 213 
63 186 

EUR million 
31.12.2017 
63 588 
 111 
 203 
63 902 

60 

 
 
 
 
 
 
 
 
 
 
The split of accrued charges is as follows: 

Annual accounts of the European Union 2018 

EAGF 
EAFRD and other rural development instruments 
ERDF and CF 
ESF 
Other 
Total 

31.12.2018 
29 387 
18 687 
5 863 
2 321 
6 619 
62 877 

EUR million 
31.12.2017 
33 303 
17 464 
4 249 
2 870 
5 702 
63 588 

The  biggest  movement  concerns  agriculture  (EAGF),  for  the  explanation  see  note  2.12.  For  cohesion 
policy, the increase for ERDF & CF is due to the increasing accruals for the current programming period 
2014-2020 as the programmes further develop. 

61 

 
 
 
 
 
Annual accounts of the European Union 2018 

Note 
2.14.1 
2.14.2 
2.14.3 

31.12.2018 
 231 
2 849 
1 881 
4 961 

EUR million 

31.12.2017 
 278 
2 663 
1 935 
4 876 

NET ASSETS 

2.14.  RESERVES 

Fair value reserve 
Guarantee Fund reserve 
Other reserves 
Total 

2.14.1.  Fair value reserve 

In  accordance  with  the  EU  accounting  rules,  the  adjustment  to  fair  value  of  available  for  sale  financial 
assets is accounted for through the fair value reserve. 

Movements of the fair value reserve during the period 

Included in fair value reserve 
Included in the statement of financial performance 
Total 

2018 
 (70) 
 23 
 (47) 

EUR million 
2017 
 (8) 
 6 
 (2) 

2.14.2.  Guarantee Fund reserve 

This  reserve  reflects  the  9 %  target  amount  of  the  outstanding  amounts  guaranteed  by  the  EU  budget 
under the EIB external lending mandate, that is required to be kept as assets in the Guarantee Fund for 
external actions (see note 2.4.1). 

2.14.3.  Other reserves 

The amount relates primarily to the reserves of the ECSC in liquidation (EUR 1 514 million) for the assets 
of  the  Research  Fund  for  Coal  and  Steel,  which  were  created  in  the  context  of  the  winding-up  of  the 
ECSC. 

62 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

2.15.  AMOUNTS TO BE CALLED FROM MEMBER STATES 

Amounts to be called from Member States at 31.12.2017 
Return of 2017 budget surplus to Member States 
Movement in Guarantee Fund reserve 
Remeasurements in employee benefits liabilities 
Other reserve movements 
Economic result of the year 
Total amounts to be called from Member States at 31.12.2018 

EUR million 

75 234 
 556 
 186 
4 396 
 (30) 
(13 918) 
66 424 

This  amount  represents  that  part  of  the  expenses  incurred  by  the  EU  up  to  31 December  that  must  be 
funded  by  future  budgets.  Many  expenses  are  recognised  under  accrual  accounting  rules  in  the  year  N 
although they may be actually paid in year N+1 (or later) and therefore funded using the budget of year 
N+1  (or  later).  The  inclusion  in  the  accounts  of  these  liabilities  coupled  with  the  fact  that  the 
corresponding amounts are financed from future budgets, results in liabilities greatly exceeding assets at 
the year-end. The most significant amounts to be highlighted concern the EAGF activities and employee 
benefit liabilities. 

It should also be noted that the above has no effect on the budget result – budget revenue should always 
equal or exceed budget expenditure and any excess of revenue is returned to Member States. 

The remeasurements in employee benefits liabilities relate to actuarial gains and losses arising from the 
actuarial valuation of these liabilities. As from 1 January 2018 the amended EU accounting rule 12 (based 
on  IPSAS  39)  for  employee  benefits  is  applicable.  According  to  this  rule  actuarial  gains  and  losses  are 
presented as a movement in net assets rather than in the statement of financial performance. 

63 

 
 
 
 
 
Annual accounts of the European Union 2018 

3.  NOTES  TO  THE  STATEMENT  OF  FINANCIAL 

PERFORMANCE 

REVENUE 

REVENUE FROM NON-EXCHANGE TRANSACTIONS: OWN 
RESOURCES 

3.1.  GNI RESOURCES 

Own  resources  revenue  is  the  primary  element  of  the  EU's  operating  revenue.  GNI  (gross  national 
income) revenue amounts to EUR 105 780 million for 2018 (2017: EUR 78 620 million) and is the most 
significant  of  the  three  categories  of  own  resources.  A  uniform  percentage  is  levied  on  the  GNI  of  each 
Member State. The GNI revenue balances revenue and expenditure i.e. funds the part of the budget that 
is not covered by other sources of income. The increase of GNI revenue is explained mainly by the rise of 
payment appropriations in 2018 together with the limited budget surplus from the previous financial year 
(EUR 556 million;  excluding  EFTA  result).  Both  elements  impacted  the  requested  Member  States'  GNI 
contributions in 2018, as this contribution is a balancing figure. 

3.2.  TRADITIONAL OWN RESOURCES 

Customs duties 
Sugar levies 
Total 

2018 
22 763 
 4 
22 767 

EUR million 
2017 
20 475 
 45 
20 520 

Traditional  own  resources  comprise  custom  duties  and  sugar  levies.  Member  States  retain,  by  way  of 
collection  costs,  20 %  of  traditional  own  resources,  and  the  above  amounts  are  shown  net  of  this 
deduction.  The  increase  in  customs  duties  largely  refers  to  the  infringement  case  accrued  revenue  (see 
note 2.6.1.1). 

3.3.  VAT RESOURCES 

The  VAT  is  defined  as  the  Union’s  second  kind  of  own  resources  since  this  tax  type  was  the  first  to  be 
largely harmonised at the EU level. The VAT contribution is calculated by applying a uniform call rate of 
0.3 %  to  the  national  VAT  base  which  cannot  exceed  50  %  of  the  gross  national  income  (GNI)  of  each 
Member  State.  For  the  period  2014-2020,  the  Council  Decision  2014/335/EU,  Euratom,  foresees  a 
reduced rate of call of 0.15 % for Germany, the Netherlands and Sweden. 

64 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

REVENUE FROM NON-EXCHANGE TRANSACTIONS: 
TRANSFERS 

3.4.  FINES 

These  revenues  of  EUR  6  740  million  (2017:  EUR  4  664  million)  relate  to  fines  the  Commission  has 
imposed on companies for breaches of EU competition rules and to fines the Commission has imposed on 
Member  States  for  infringements  of  EU  law.  The  Commission  recognises  revenues  from  fines  when  it 
adopts  the  decision  to  impose  a  fine  and  it  officially  notifies  the  addressee.  The  amounts  are  mainly 
competition fines (EUR 6 534 million). The biggest cases concern breaches of EU antitrust rules i.e. a fine 
imposed on Google for imposing illegal restrictions on Android device manufacturers and mobile network 
operators  (EUR  4  343  million)  and  a  fine  imposed  on  Qualcomm  for  abusing  its  market  dominance  in 
chipsets (EUR 997 million). 

3.5.  RECOVERY OF EXPENSES 

Shared management 
Direct management 
Indirect management 
Total 

2018 
2 116 
 65 
 34 
2 215 

EUR million 

2017 
1 775 
 81 
 23 
1 879 

This heading mainly represents the recovery orders issued by the Commission that are cashed or offset 
against  (i.e.  deducted  from)  subsequent  payments  recorded  in  the  Commission's  accounting  system, 
made  so  as  to  recover  expenditure  previously  paid  out  from  the  EU  budget.  Recoveries  are  based  on 
controls,  audits  or  eligibility  analysis  and  therefore,  these  actions  are  an  important  consideration  in 
implementing  the  EU  budget.  These  operations  protect  the  EU  budget  from  expenditure  incurred  in 
breach of law.  

Recovery orders issued by Member States to beneficiaries of EAGF expenditure, as well as the variation of 
accrued income estimations from the previous year-end to the current, are also included.  

The  amounts  included  in  the  above  table  represent  revenue  earned  through  the  issuance  of  recovery 
orders.  For  this  reason,  these  figures  cannot  and  do  not  show  the  full  extent  of  the  measures  taken  to 
protect the EU budget, particularly for cohesion policy where specific mechanisms are in place to ensure 
the  correction  of  ineligible  expenditure,  most  of  which  do  not  involve  the  issuance  of  a  recovery  order. 
Not  included  are  amounts  recovered  through  offsetting  with  expenses,  amounts  recovered  by  way  of 
withdrawals and recoveries of pre-financing amounts. 

Shared management recoveries make up the bulk of the total: 

Agriculture: EAGF and rural development 

In the framework of the EAGF and the EAFRD, amounts accounted for as revenue of the year under this 
heading  are  financial  corrections  of  the  year  and  reimbursements  declared  by  Member  States  and 
recovered  during  the  year,  as  well  as  the  net increase  in  the  outstanding  amounts  declared  by  Member 
States to be recovered at year-end concerning fraud and irregularities. 

Cohesion policy 

The  main  amounts  related  to  cohesion  policy  relate  to  accrued  income  of  EUR  1  146  million  that  the 
Commission  expects  to  recover  from  the  Member  States.  The  recovery  will  be  made  as  a  result  of  the 
examination  and  acceptance  of  the  annual  accounts  submitted  by  the  Member  States  on 
15 February 2019.  This  procedure  for  the  acceptance  of  Member  States'  annual  accounts  has  been 
introduced for the first time in the cohesion area for the programming period 2014-2020. 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

3.6.  OTHER REVENUE FROM NON-EXCHANGE 

TRANSACTIONS 

Staff taxes and contributions 
Contributions from third countries 
Contributions from Member States for external aid 
Transfer of assets 
Adjustment of provisions 
Agricultural levies 
Budgetary adjustments 
Other 
Total 

2018 
1 268 
1 376 
 594 
 85 
 100 
 4 
 (726) 
 612 
3 312 

EUR million 

2017 
1 218 
1 269 
 988 
 208 
 29 
 4 
5 806 
 854 
10 376 

Staff taxes and contributions revenue relates primarily to the deductions from staff salaries. Retirement 
contributions and income tax represent the substantial amounts within the category. 

Contributions from third countries are contributions from EFTA countries and accession countries. 

Contributions from Member States for external aid are mainly the amounts received to set up the Facility 
for Refugees in Turkey. 

Transfer  of  assets  revenue  relates  mainly  to  the  transfer  of  satellites  under  the  Copernicus  programme 
from  the  European  Space  Agency  (ESA)  to  the  Commission  (see  note  2.2).  This  transfer  is  a  non-
exchange  transaction  according  to  the  EU  accounting  rules  and  will  occur  in  future  periods  for  the 
remaining Copernicus satellites currently under construction. 

The  budgetary  adjustments  resulted  in  a  negative  amount  as  they  include  a  considerably  lower  budget 
surplus  from  previous  year  (EUR  555  million  compared  to  EUR  6.4  billion  in  2017)  and  high  GNI/VAT 
adjustments of EUR 1 292 million. 

The  2018  amount  of  other  revenue  from  non-exchange  transactions  includes  an  amount  of 
EUR 100 million  called  from  the  EDF,  representing  its  contribution  to  the  EU budget  for the  purposes of 
the  EFSD  Guarantee  Fund  established  under  the  Regulation  (EU)  2017/1601  in  2018.  Other  significant 
amounts relate to ECSC Funding for the Coal and Steel Research (EUR 64 million) and contributions from 
other entities (EUR 176 million). 

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

REVENUE FROM EXCHANGE TRANSACTIONS 

3.7.  FINANCIAL REVENUE 

Interest on: 
  Late payments 
  Loans 
  Other  
Premium on financial guarantee liability (EFSI) 
Dividends 
Financial revenue from financial assets or liabilities at fair 
value through surplus or deficit 
Realised gains on available for sale financial assets 
Other 
Total 

2018 

1 458 
1 265 
 68 
 121 
 103 
 29 

 23 
 48 
3 115 

EUR million 
2017 

 217 
1 379 
 41 
 61 
 23 
 57 

 38 
 28 
1 845 

Interest revenue on late payments stems mainly from fines and own resources contributions due and not 
paid  on  time.  An  amount  of  EUR  1.3  billion  relates  to  the  own  resources  cases  referred  to  in  note 
2.6.1.1. 

Interest revenue on loans relate mainly to loans granted for financial assistance (see note 2.4.3). 

3.8.  OTHER REVENUE FROM EXCHANGE TRANSACTIONS 

Fee revenue for rendering of services (agencies) 
Foreign exchange gains 
Fee and premium revenue related to financial instruments 
Share of net result of EIF 
Sales of goods 
Fixed assets related revenue 
Other 
Total 

2018 
 602 
 329 
 54 
 37 
 33 
 27 
 297 
1 379 

EUR million 
2017 
 557 
 281 
 51 
 21 
 42 
 43 
 338 
1 332 

Fee  revenue  for  rendering  of  services  mainly  include  marketing  authorisation  fees  charged  by  the 
European  Medicines  Agency  and  trademark  fees  collected  by  the  European  Union  Intellectual  Property 
Office. 

67 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Annual accounts of the European Union 2018 

EXPENSES 

3.9.  SHARED MANAGEMENT 

Implemented by Member States 
European Agricultural Guarantee Fund 
European Agricultural Fund for Rural Development and 
other rural development instruments 
European Regional Development Fund and Cohesion Fund 
European Social Fund 
Other 
Total 

2018 
43 527 
13 149 

30 230 
11 935 
2 826 
101 666 

EUR million 
2017 
44 289 
11 359 

17 650 
7 353 
1 253 
81 905 

The  biggest  increase  concerns  cohesion  policy  (ERDF,  CF  and  ESF)  and  mainly  relates  to  expenses 
declared during the year, which were paid or used to clear pre-financing. While there was a reduction of 
expenses  for  the  period  2007-2013  (closure  phase),  the  implementation  for  the  current  programming 
period  2014-2020  has  significantly  increased  in  2018.  The  same  applies  for  the  EAFRD  and  other  rural 
development instruments.  

Other  expenses  mainly  include:  Asylum  and  Migration  (EUR 0.6 billion),  Fund  for  European  Aid  to  the 
Most Deprived (EUR 0.4 billion), European Union Solidarity Fund (EUR 0.9 billion) and European Maritime 
and Fisheries Fund (EUR 0.6 billion). The increase compared to last year mainly relates to the European 
Union Solidarity Fund and the European Maritime and Fisheries Fund. 

3.10.  DIRECT MANAGEMENT 

Implemented by the Commission 
Implemented by EU Executive Agencies 
Implemented by Trust funds 
Total 

2018 
8 120 
8 964 
 468 
17 551 

EUR million 
2017 
8 831 
6 699 
 208 
15 738 

These  amounts  mainly  concern  the  implementation  of  Research  Policy  (EUR 7.3 billion),  Networks 
Programmes  (EUR 2.7 billion),  Development  Co-operation  Instruments  (EUR 1.4 billion),  European 
Neighbourhood Policy (EUR 1.1 billion). 

The  increase  in  direct  management  expenses  implemented  by  EU  Executive  agencies  mainly 
(EUR 1.7 billion)  refers  to  the  Innovation  and  Networks  Executive  Agency  (INEA)  in  particular  the 
transport part of the Connecting Europe Facility (CEF). The CEF for transport is the funding instrument to 
implement European transport infrastructure policy and aims in building new or upgrading/rehabilitating 
transport infrastructure in Europe. 

68 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

3.11.  INDIRECT MANAGEMENT 

Implemented by other EU agencies & bodies 
Implemented by third countries 
Implemented by international organisations 
Implemented by other entities 
Total 

2018 
3 396 
 679 
3 337 
3 569 
10 981 

EUR million 

2017 
2 667 
1 101 
3 014 
1 478 
8 260 

Of  the  indirect  management  expenses,  EUR 4.2 billion  relates  to  external  actions  (mainly  the  areas  of 
pre-accession, humanitarian aid, international co-operation and neighbourhood). A further EUR 6 billion is 
related  to  increasing  Europe's  competitiveness  (in  areas  such  as  research,  satellite  navigation  systems 
and education). 

3.12.  STAFF AND PENSION COSTS 

Staff costs 
Pension costs 
Total 

2018 
6 454 
4 476 
10 929 

EUR million 
2017 
6 193 
3 808 
10 002 

Pension costs represent elements of the movements that have arisen following the actuarial valuation of 
the employee benefits liabilities other than actuarial assumptions. They do not therefore represent actual 
pension payments of the year, which are significantly lower. 

3.13.  CHANGES IN EMPLOYEE BENEFITS ACTUARIAL 

ASSUMPTIONS 

As from 1 January 2018 the amended EU accounting rule 12 (based on IPSAS 39) for employee benefits 
is  applicable.  According  to  this  rule  actuarial  gains  and  losses  (‘’remeasurements  in  employee  benefits 
liabilities’’)  are  presented  as  a  movement  in  net  assets  rather  than  in  the  statement  of  financial 
performance. The new accounting rule does not impact the estimation of these amounts. 

3.14.  FINANCE COSTS 

Interest expenses: 
  Borrowings 
  Other 
Impairment losses on loans and receivables 
Loss on financial assets or liabilities at fair value through 
surplus or deficit 
Finance leases 
Impairment losses on available for sale financial assets 
Realised loss on available for sale financial assets 
Other  
Total 

69 

2018 

1 260 
 26 
 126 
 95 

 73 
 25 
 21 
 50 
1 677 

EUR million 
2017 

1 373 
 22 
 324 
 12 

 81 
 39 
 2 
 42 
1 896 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

The  amount  of  interest  expense  on  borrowings  corresponds  mainly  to  interest  income  on  loans  for 
financial assistance (back-to-back transactions). 

3.15.  OTHER EXPENSES 

Administrative and IT expenses 
Fixed assets related expenses 
Adjustment of provisions 
Foreign exchange losses 
Operating lease expenses 
Reduction of fines by the Court of Justice 
Other 
Total 

2018 
2 313 
1 608 
 923 
 341 
 424 
 1 
 598 
6 208 

EUR million 
2017 
2 521 
1 423 
1 377 
 446 
 414 
 67 
 509 
6 756 

Expenses  relating  to  research  and  development  are  included  in  administrative  and  IT  expenses  and  are 
as follows: 

Research costs 
Non-capitalised development costs 
Total 

2018 
 385 
 106 
 491 

EUR million 
2017 
 376 
 81 
 456 

70 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

3.16.  SEGMENT REPORTING BY MULTIANNUAL FINANCIAL FRAMEWORK HEADING (MFF) 

Smart and 
inclusive 
growth 

Sustainable 
growth 

Security 
and 
citizenship 

Global 
Europe 

Administration 

GNI resources 
Traditional own resources 
VAT 
Fines 
Recovery of expenses 
Other 
Revenue from non-exchange transactions 
Financial revenue 
Other 
Revenue from exchange transactions 

Total revenue 

Expenses implemented by Member States: 
  EAGF 
  EAFRD & other rural development instruments 
  ERDF & CF 
  ESF 
  Other 
Implemented by the EC, executive agencies 
and trust funds 
Implemented by other EU agencies and bodies 
Implemented by third countries and int. org. 
Implemented by other entities 
Staff and Pension costs 
Changes in employee benefits actuarial 
assumptions 
Finance costs 
Other expenses 

Total expenses 
Economic result of the year 

– 
– 
– 
– 
1 395 
1 223 
2 619 
 282 
 170 
 453 

3 072 

– 
– 
(30 230) 
(11 935) 
 (437) 
(11 565) 

(2 767) 
 (505) 
(2 696) 
(1 675) 
– 

 (149) 
(1 945) 

(63 903) 
(60 831) 

– 
– 
– 
– 
 777 
 48 
 825 
 0 
 (14) 
 (13) 

 812 

(43 527) 
(13 149) 
– 
– 
 (596) 
 (571) 

 2 
 (74) 
 (0) 
 (369) 
– 

 (22) 
 (313) 

– 
– 
– 
– 
 6 
 109 
 115 
 0 
 (8) 
 (8) 

 107 

– 
– 
– 
– 
(1 762) 
 (930) 

 (810) 
 (202) 
 2 
 (447) 
– 

 (0) 
 (137) 

(58 620) 
(57 808) 

(4 287) 
(4 180) 

– 
– 
– 
– 
 35 
 228 
 262 
 16 
 6 
 23 

 285 

– 
– 
– 
– 
 (31) 
(4 496) 

 (48) 
(3 236) 
 (875) 
 (699) 
– 

 (16) 
 (109) 

(9 510) 
(9 225) 

– 
– 
– 
– 
 0 
5 077 
5 077 
 0 
 337 
 337 

5 414 

– 
– 
– 
– 
– 
 (13) 

– 
 (0) 
 (0) 
(6 697) 
– 

 (93) 
(3 231) 

(10 034) 
(4 620) 

Not 
assigned 
to MFF 
heading* 
105 780 
22 767 
17 624 
6 740 
 2 
(3 374) 
149 540 
2 816 
 887 
3 703 

153 243 

– 
– 
– 
– 
– 
 24 

 226 
– 
– 
(1 043) 
– 

(1 397) 
 (472) 

(2 661) 
150 581 

EUR million 

Total 

105 780 
22 767 
17 624 
6 740 
2 215 
3 312 
158 438 
3 115 
1 379 
4 494 

162 932 

(43 527) 
(13 149) 
(30 230) 
(11 935) 
(2 826) 
(17 551) 

(3 396) 
(4 016) 
(3 569) 
(10 929) 
– 

(1 677) 
(6 208) 

(149 014) 
13 918 

* 

"Not-assigned to MFF heading" includes consolidated entities' budget execution and consolidation eliminations, off-budget operations and unallocated programmes with individually immaterial amounts. 

The display of revenue and expenses by MFF heading is based on estimation as not all commitments are linked to an MFF heading.  

71 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

4. 

CONTINGENT 

LIABILITIES 

AND 

ASSETS 

4.1. 

 CONTINGENT LIABILITIES 

Contingent liabilities are possible future payment obligations for the EU that may arise due to past events 
or  legally  binding  commitments  taken  but  which  will  depend  on  future  events  not  wholly  under  the 
control  of  the  EU.  They  relate  mainly  to  financial  guarantees  given  (on  loans  and  financial  assistance 
programmes)  and  to  legal  risks.  All  contingent  liabilities,  except  those  relating  to  fines  and  guarantees 
covered by funds (see note 2.4.1), would be financed, should they fall due, by the EU budget (and thus 
the EU Member States) in the years to come. 

4.1.1.  Budgetary guarantees 

Ceiling 

40 417 

31.12.2018 

Signed 

30 889 

Disbursed 

20 510 

Ceiling 

37 479 

31.12.2017 

Signed 

28 950 

EUR million 

Disbursed 

19 972 

25 898 

66 315 

19 842 

50 731 

15 764 

36 273 

16 000 

53 479 

13 473 

42 423 

10 128 

30 100 

EIB external 
lending mandate 
guarantees 
EFSI guarantee 

Total 

The above table shows the extent of the exposure of the EU budget to possible future payments linked to 
guarantees  given  to  the  EIB  group.  Disbursed  amounts  represent  the  amounts  already  given  to  final 
beneficiaries, while signed amounts include these disbursed monies plus agreements already signed with 
beneficiaries or financial intermediaries but not yet disbursed. The ceiling represents the total guarantee 
that the EU budget, and thus its Member States, have committed to cover. 

EIB external lending mandate guarantees 

The  EU  budget  guarantees  loans  signed  and  granted  by  the  EIB  from  the  EIB's  own  resources  to  third 
countries.  At  31 December 2018  the  amount  of  loans  outstanding  and  covered  by  the  EU  guarantee 
totalled EUR 20 510 million (2017: 19 972 million). The EU budget guarantees: 

 

 

EUR 19 360 million (2017: EUR 18 583 million) via the Guarantee Fund for external actions (see 
note 2.4.1), and 

EUR 1  150 million  (2017: EUR 1 389 million)  directly  for  loans  granted  to  Member  States before 
accession. 

In  addition  to  the  EUR 20  510  million  disclosed  above  as  disbursed,  the  EU  guarantees  a  further 
EUR 210 million of outstanding loans to Syria for which provisions have been made. 

The EU external lending mandate guarantee relating to loans granted by the EIB is limited to 65 % of the 
outstanding  balances  for  agreements  signed  after  2007  (mandates  2007-2013  and  2014-2020).  For 
agreements  before  2007  the  EU  guarantee  is  limited  to  a  percentage  of  the  ceiling  of  the  credit  lines 
authorised, in most cases 65 % but also 70 %, 75 % or 100 %. Where the ceiling is not reached, the EU 
guarantee covers the full amount. 

To  disclose  the  maximum  exposure  faced  by  the  EU  at  31 December 2018,  however,  one  must  also 
include  loans  authorised  to  be  signed  but  not  yet  signed  (EUR 9  528 million)  and  loans  signed  but  not 
disbursed (EUR 10 379 million). 

In March 2018 Decision (EU) 2018/412 was adopted by the European Parliament and the Council allowing 
for  an  increase  of  the  ceiling  of  the  EIB  financing  operations  under  the  EU  guarantee.  The  guarantee 
agreement  with  the  EIB  has  been  amended  accordingly,  which  led  to  an  increase  of  the  EU  maximum 
exposure by EUR 3.4 billion in 2018. 

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
European Fund for Strategic Investments (EFSI) guarantee 

Annual accounts of the European Union 2018 

EFSI is an initiative that aims to increase the risk bearing capacity of the EIB Group by enabling the EIB 
to extend its investments in the EU. The objective of EFSI is to support additional investments in the EU 
and  access  to  finance  for small  companies.  EFSI  is  not  a  separate legal  entity  or  an  investment  fund  in 
the strict sense. The EFSI risk reserve offers protection to the EIB against potential losses for underlying 
operations. It is composed of a gradual allocation of at least EUR 7.5 billion of EIB's own capital and an 
EU budget guarantee of up to EUR 26 billion ('EFSI EU guarantee'). The EFSI EU guarantee is provided to 
the EIB under an agreement between the EU and the EIB, hereafter referred to as 'EFSI Agreement'. The 
EFSI  Agreement  was  amended  in  2018,  reflecting  the  increased  EFSI  EU  guarantee  ceiling  of 
EUR 26 billion in line with the amended EFSI Regulation (Regulation EU 2017/2396). 

The EFSI operations are conducted within two windows: the Infrastructure and Innovation Window (IIW) 
implemented  by  the  EIB  (EFSI  EU  guarantee  of  EUR 19.5 billion)  and  the  SME  Window  (SMEW) 
implemented by the EIF (EFSI EU guarantee of EUR 6.5 billion), both of which have a debt portfolio and 
an equity portfolio. The EIF acts under an agreement with the EIB on the basis of an EIB guarantee which 
itself is counter-guaranteed by the EFSI EU Guarantee under the EFSI Agreement. 

The EU and the EIB  have  distinct roles within EFSI.  EFSI is established within the EIB who  finances the 
operations  (debt  and  equity  investments)  and,  to  do  this,  borrows  the  necessary  funds  on  the  capital 
markets.  Regarding  the  IIW,  the  EIB  takes  the  investment  decisions  independently  and  manages  the 
operations  in  accordance  with  its  rules  and  procedures.  The  same  applies  to  the  SMEW  operations 
managed by the EIF. 

In  order  to  ensure  that  investments  made  under  EFSI  remain  focused  on  the  specific  objective  of 
addressing  the  market  failures  which  hinder  investment  in  the  EU  and  that  they  are  eligible  for  the 
protection of the EU guarantee, a dedicated governance structure has been put in place. The Investment 
Committee of independent experts examines each project proposed by the EIB under the IIW regarding 
its  eligibility  for  the  EU  guarantee  coverage.  Once  an  operation  is  confirmed  to  be  eligible  as  EFSI 
guaranteed  operation,  the  decision  to  continue  with  the  project  and  its  management  is  then  subject  to 
the  normal  EIB  project  cycle  and  governance  process.  Regarding  SMEW,  the  role  of  the  Investment 
Committee  is  limited  to  the  consultation  on  the  description  of  the  SMEW  Products,  which  are  being 
approved by the EFSI Steering Board and EFSI Managing Director. EFSI is also supervised by a steering 
board composed of five members, of which three are appointed by the Commission, one by the EIB and 
one non-voting member by the European Parliament. The decisions shall be taken by consensus, and - if 
the consensus cannot be achieved - by the unanimous vote among its voting members. The EFSI steering 
board does not take investment decisions. 

The role of the EU relates to the provision of the EU budget guarantee for part of the potential losses that 
the EIB may suffer from its investments in debt and equity instruments. Consequently, the EU does not 
intervene  in  the  selection  and  management  of  EFSI  operations,  does  not  invest  money  in  the  EFSI 
operations and is not a direct contractual party to the underlying instruments. As the control criteria and 
accounting  requirements  for  consolidation  under  the  EU  accounting  rules  (and  IPSAS)  are  not  met,  the 
related guaranteed assets are not accounted for in the consolidated annual accounts of the EU. 

The  EU  guarantee  granted  to  the  EIB  Group  under EFSI  is,  in  accordance  with  the  EU  accounting  rules, 
accounted for as a financial guarantee liability in respect of the IIW debt portfolio, as a financial provision 
for the SMEW debt portfolio and as a derivative (financial asset or liability at fair value through surplus or 
deficit) for both equity portfolios. In addition, a contingent liability related to the EFSI guarantee given is 
disclosed in this note. 

Under the EFSI IIW debt portfolio, the EU guarantee covers the first loss piece of a portfolio of financing 
operations entered into by the EIB, which are mainly standard loans and guarantees. The EU guarantee is 
called when the debtor fails to make a payment when due or in the case of a debt restructuring. The EU 
guarantee  is  remunerated  in  proportion  to  the  risk  taken  by  the  EU  and  this  happens  in  the  form  of  a 
distribution,  between  the  EIB  and  the  EU,  of  the  risk-related  revenues  received  by  EIB  from  the 
guaranteed  operations.  The  EU  revenues  should  first  cover  the  losses  incurred  on  the  guaranteed 
operations. The EU guarantee is therefore accounted for as financial guarantee liability and measured, at 
initial  recognition,  at  fair  value,  being  the  net  present  value  of  the  premiums  receivable  (the  EU 
revenues). At subsequent balance sheet dates, the financial guarantee liability is measured at the higher 
of  the  expected  losses  and  the  amount  initially  recognised  less,  when  appropriate,  the  accumulated 
amortisation of the revenue. The financial guarantee liability is presented net of the EU revenues still to 
be received – zero at 31 December 2018 (2017: nil) – see note 2.11.3. 

73 

 
Annual accounts of the European Union 2018 

Under  the  EFSI  IIW  equity  portfolio,  which  consists  of  direct  equity  or  quasi  equity  participations  or 
subordinated  loans,  the  EIB  invests  pari-passu  at  its  own  risk  and  also  at  the  risk  of  the  EU. 
Consequently, the EU guarantee covers - for the part of the equity investments guaranteed by the EU - 
the negative value adjustments (unrealised losses) at each balance sheet date, the realised losses at dis-
investment and the EIB funding costs. In cases where the value of an investment, which was previously 
subject  to  a  negative  value  adjustment, increases  at  subsequent  reporting  dates,  the  amount  up  to  the 
original cost of the investment is reimbursed by the EIB to the EU. At the time of the dis-investment, the 
EU  is  also  entitled  to  gains  on  the  investment  exceeding  the  original  cost.  The  EU  guarantee  is 
remunerated  by  revenues  received  by  the  EIB  from  the  guaranteed  operations,  including  interests, 
dividends and realised gains. The settlement between the EU and the EIB happens annually net of losses 
and revenues. 

Under EFSI SMEW equity  portfolio, the EU guarantees equity investments in venture capital and private 
equity funds, funded by the EIB and originated and managed by the EIF. The EU guarantee is provided 
on a portfolio basis for two portfolios: sub-window 1 and sub-window 2. The EFSI guarantee is called to 
cover  impairment  and  realised  losses  from  the  guaranteed  investments  and  the  EIB  funding  costs.  The 
EU  is  entitled  to  the  remuneration  for  the  risk  taken  in  form  of  dividends  and  realised  gains  from  the 
guaranteed  equity  operations.  Under  the  sub-window  2,  the  EU  Horizon  2020  programme  also  partially 
invests  in  the  same  equity  portfolio  (the  H2020  investment  funded  by  the  EU  is  accounted  for  as  an 
available  for  sale  financial  asset  in  the  EU  accounts)  and  bears  first  losses  from  the  investments,  while 
further losses are covered by the EU Guarantee and the EIF. 

The  EFSI  guarantee  on  the  EFSI  equity  portfolio  is  classified  as  a  derivative  financial  instrument  and 
accounted  for  as  a  financial  asset  or  financial  liability  at  fair  value  through  surplus  or  deficit.  At 
31 December  2018  the  fair  value  of  the  EFSI  EU  guarantee  on  the  EFSI  equity  portfolio  amounted  to 
EUR 14 million (2017: EUR 16 million) – see note 2.4.2. 

The contingent liability above includes operations of the COSME,  H2020, CCS  and EaSI programmes for 
the part covered by the EFSI EU guarantee under SMEW debt portfolio. 

EU  guarantee  payments  would  be  made  by  the  EFSI  Guarantee  Fund  –  see  note  2.4.1.  At  the  end  of 
2018  the  assets  of  the  guarantee  fund  totalled  EUR  5 452  million  (2017:  EUR 3 504  million),  while 
another  EUR 2  688  million  (2017:  EUR  2  633  million)  have  been  committed  but  not  yet  paid  and  is 
included in the amount disclosed as RAL in note 5.1. During 2018 EUR 61 million of guarantee calls have 
been paid out from the EFSI Guarantee Fund. 

4.1.2.  Guarantees relating to financial assistance (borrowing and lending activities) 

31.12.2018 

31.12.2017 

  Drawn 

  Undrawn 

Total 

  Drawn 

  Undrawn 

Total 

47 400 

1 734 

4 388 

 254 

53 775 

– 

– 

 980 

 200 

1 180 

47 400 

47 456 

1 734 

5 368 

 454 

3 114 

3 924 

 250 

54 955 

54 744 

– 

– 

 460 

 250 

 710 

47 456 

3 114 

4 384 

 500 

55 454 

EUR million 

EFSM 

BOP 

MFA 

Euratom 

Total 

The  EU  budget  guarantees  the  borrowings  of  the  Commission  taken  to  finance  lending  to  Member  and 
non-Member  States  in  the  back-to-back  transactions.  These  borrowings  are  already  recognised  as 
liabilities on the EU balance sheet - see note 2.11.1. However, should there be a default on the back-to-
back-loans  given  out  with  these  borrowings,  the  EU  budget,  based  on  Article  14  of  Council  Regulation 
609/2014, would have to bear the full cost of the amount defaulted:  

  Borrowings related to loans disbursed under the EFSM are guaranteed solely by the EU budget; 

  Borrowings related to BOP loans are guaranteed solely by the EU budget; 

  MFA loans are firstly guaranteed by the Guarantee Fund for external actions (see note 2.4.1) and 

then by the EU budget; and  

  Guarantees  from  third  parties  are  the  first  cover  for  the  entire  amounts  of  the  outstanding 
Euratom  loans.  The  Guarantee  Fund  would  cover  the  external  lending  amounts  should  the  third 
party guarantees not provide for them. 

74 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

ECSC  in  Liquidation  loans  granted  on  borrowed  funds  are  not  covered  by  an  EU  budgetary  guarantee. 
Instead, they are covered by financial assets of the ECSC in Liquidation – see note 2.4.1.  

4.1.3.  Guarantees given for EU financial instruments 

Horizon 2020 
Risk Sharing Finance Facility 
Connecting Europe Facility 
Other 
Total 

31.12.2018 
1 467 
 642 
 579 
 29 
2 717 

EUR million 
31.12.2017 
1 297 
 654 
 490 
 32 
2 473 

As  mentioned  in  Article  210(1)  FR,  the  budgetary  expenditure  linked  to  a  financial  instrument  and  the 
financial  liability  of  the  EU  shall  in  no  case  exceed  the  amount  of  the  relevant  budgetary  commitment 
made for it, thus excluding contingent liabilities for the budget. In practise, it means that these liabilities 
have a counter-part on the asset side of the balance sheet or are covered by the outstanding budgetary 
commitments  not  yet  expensed.  The  contingent  liabilities  above  are  shown  net  of  financial  provisions 
made for these instruments – see note 2.10. 

4.1.4. 

Legal cases 

Fines 
Agriculture 
Cohesion 
Other 
Total 

Fines 

31.12.2018 
3 187 
 653 
 26 
1 867 
5 732 

EUR million 
31.12.2017 
3 242 
1 737 
 3 
 481 
5 463 

These  amounts  mainly  concern  fines  imposed  by  the  Commission  for  infringement  of  competition  rules 
that  have  been  provisionally  paid  by  fined  companies  and  where  either  an  appeal  has  been  lodged  or 
where it is unknown if an appeal will be made. The contingent liability will be maintained until a decision 
by the Court of Justice on the case is final or until the expiry of the period for appeal. Interest earned on 
provisional  payments  is  included  in  the  economic  result  of  the  year  and  also  as  a  contingent  liability  to 
reflect the uncertainty of the Commission’s title to these amounts. 

Should  the  EU  lose  any  of  these  cases  relating  to  fines  imposed,  the  amounts  that  have  been 
provisionally  received  will  be  returned  to  the  companies.  The  amount  of  fines  is  only  recognised  as 
budgetary revenue when the fines are definitive (Article 107 FR). 

Agriculture 

These  are  contingent  liabilities  towards  the  Member  States  connected  with  EAGF  conformity  decisions, 
rural  development  and  pre  –accession  financial  corrections  pending  judgement  of  the  Court  of  Justice. 
The  determination  of  the  final  amount  of  the  liability  and  the  year  in  which  the  effect  of  successful 
appeals will be charged to the budget will depend on the length of the procedure before the Court. 

Cohesion 

These  are  contingent  liabilities  towards  the  Member  States  in  connection  with  actions  under  cohesion 
policy awaiting the oral hearing date or pending judgement of the Court of Justice. 

Other legal cases 

This heading relates to actions for damages currently being brought against the EU, other legal disputes 
and the estimated legal costs. It should be noted that in an action for damages under Article 340 TFEU 
the applicant must demonstrate a sufficiently serious breach by the institution of a rule of law intended to 
confer  rights  on  individuals,  real  harm  suffered  by  the  applicant,  and  a  direct  causal  link  between  the 
unlawful act and the harm. The amount for 2018 mainly concerns a damages claim against the European 

75 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commission  for  a  merger  prohibition  decision.  The  legal  case  is  fairly  new  and  at  an  early  stage.  As  a 
result, in the absence of a reliable estimate, the amount disclosed relates to the claimed amount. 

4.2.  CONTINGENT ASSETS 

Guarantees received: 
   Performance guarantees 
   Other guarantees 
Other contingent assets 
Total 

31.12.2018 

EUR million 
31.12.2017 

 321 
 19 
 25 
 366 

 352 
 22 
 34 
 409 

Performance guarantees are requested to ensure that beneficiaries of EU funding meet the obligations of 
their contracts with the EU. 

76 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

5.  BUDGETARY AND LEGAL COMMITMENTS 

This  note provides information on  the  budgetary  process  and  future  funding needs  and  not  on liabilities 
existing as at 31 December 2018. 

The  multiannual  financial  framework  (MFF)  agreed  by  the  Member  States  defines  the  programmes  and 
sets  out  the  heading  ceilings  for  commitment  appropriations  and  the  total  for  payment  appropriations 
within which the EU may enter into budgetary and legal commitments, and ultimately make payments for 
a period of 7 years – see table 1.1 in the notes to the budgetary implementation reports. 

The  MFF  ceilings  were  adopted  by  the  Council  (Member  States),  with  the  consent  of  the  European 
Parliament,  and  Article  16  of  Regulation  1306/2013  on  the  financing  of  the  CAP  makes  a  direct  link 
between  the  annual  ceiling  of  EAGF  expenditure  and  the  MFF  Regulation.  The  European  Parliament  and 
the Council also adopted the respective basic acts for the EAGF expenditure that set out the expenditure 
per Member State for the entire period 2014-2020. 

Legal  commitments  correspond  to  programmes,  projects,  agreements  or  contracts  signed,  thus  legally 
binding  the  EU.  A  legal  commitment  is  the  act  whereby  the  authorising  officer  enters  or  establishes  an 
obligation (for the EU) which results in a charge (Article 2(37) FR).  

A  budgetary  commitment  is  in  principle  made  before  the  legal  commitment,  but  for  some  multiannual 
programmes/projects  it  is  the  reverse,  the  relevant  budgetary  commitments  being  made  in  annual 
instalments, over several years, when the basic act so provides for. For example, for cohesion, Article 76 
of  the  Common  Provisions  Regulation  (CPR)  (Regulation  (EU)  No  1303/2013) provides  that  the decision 
of the Commission adopting a programme shall constitute a legal commitment within the meaning of the 
Financial Regulation but that the budget commitments of the Union in respect of each programme shall 
be  made  in  annual  instalments  for  each  Fund  during  the  period  between  1  January  2014  and 
31 December  2020.  Other  legal  bases  may  contain  similar  provisions.  For  this  reason,  there  may  be 
amounts  that  the  EU  has  legally  committed  to  pay,  but  where  the  budgetary  commitment  has  not  yet 
been made – see notes 5.2 and 5.3 below. 

If  the  budgetary  commitment  has  been  made  but  the  subsequent  payments  are  not  yet  made,  the 
amount of outstanding commitments is called "Reste à Liquider" (RAL). This  can represent programmes 
or  projects,  often  multiannual,  signed  and  for  which  payments  will  only  be  made  in  later  years.  They 
represent  payment  obligations  for  future  years.  As  the  financial  statements  are  prepared  on  an  accrual 
basis,  whereas  the  budgetary  implementation  reports  are  prepared  on  a  cash  basis,  part  of  the  overall 
amounts  unpaid  (RAL)  has  already  been  expensed  and  is  recognised  as  a  liability  on  the  balance  sheet 
(see  notes  2.12  and  2.13).  The  calculation  of  these  expenses  is  made  based  either  on  cost 
claims/invoices received or on the estimated implementation of a programme or project where no claims 
have been notified yet to the EU – see note 5.1 below. Once the payments relating to the RAL are made 
after  31 December 2018,  the  liability  on  the  balance  sheet  is  derecognised.  The  part  of  the  RAL  not 
expensed yet is not included under liabilities but is instead disclosed below. 

The  disclosures  below  thus  represent  amounts  at  31 December 2018 that  the  EU  has  committed to  pay 
based on the fulfilment of the contractual agreements and which are therefore intended to be funded by 
future EU budgets. 

Outstanding budgetary commitments not yet 
expensed 
Shared management legal commitments under the 
current MFF pending implementation 
Significant legal commitments in other areas 
Total 

Note 
5.1 

5.2 

5.3 

31.12.2018 
235 836 

EUR million 

31.12.2017 
221 391 

143 883 

211 688 

18 126 
397 845 

20 030 
453 109 

77 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

5.1.  OUTSTANDING BUDGETARY COMMITMENTS NOT YET 

EXPENSED 

Outstanding budgetary commitments not yet expensed 

31.12.2018 
235 836 

EUR million 
31.12.2017 
221 391 

The  amount  disclosed  above  is  the  budgetary  RAL  ("Reste  à  Liquider")  of  EUR 281 175 million  (see 
table 4.4  in  the  notes  to  the  budgetary  implementation  reports),  less  related  amounts  that  have  been 
included  as  liabilities  on  the  balance  sheet  and  as  expenses  in  the  statement  of  financial  performance. 
The  budgetary  RAL  is  an  amount  representing  the  open  commitments  for  which  payments  and/or  de-
commitments  have  not  yet  been  made.  As  explained  above,  this  is  the  normal  consequence  of  the 
existence of multiannual programmes.  

It should be noted that outstanding pre-financing advances at 31 December 2018 totalled EUR 50 billion 
(see  note  2.5).  This  represents  budgetary  commitments  that  have  been  paid,  decreasing  the  RAL,  but 
where  the  amounts  paid  are  still  considered  as  belonging  to  the  EU  and  not to  the  beneficiary  until  the 
contractual commitments are fulfilled. They are thus like the RAL disclosed above, not yet expensed.   

5.2.  SHARED MANAGEMENT LEGAL COMMITMENTS UNDER 
THE CURRENT MFF PENDING IMPLEMENTATION  

Funds 

European Regional Development 
Fund and Cohesion Fund 
European Social Fund 
European Neighbourhood Policy 
Instrument 
Fund for European Aid to the 
most Deprived 
HEADING 1B: COHESION 
POLICY FUNDS 
European Agricultural Fund for 
Rural Development  
European Maritime and Fisheries 
Fund 
HEADING 2: NATURAL 
RESOURCES 
Asylum and Migration Fund 
Internal Security Fund 
HEADING 3: SECURITY & 
CITIZENSHIP 

Financial 
framework 
2014-2020 (A) 

Legal 
commitments 
concluded (B) 

Budget 

commitments    

(C ) 

262 408 

262 408 

179 831 

92 935 

92 819 

65 230 

EUR million 

Legal 
commitments 
less budget 
commitments 
(B-C) 

82 578 

27 588 
– 

3 814 

3 814 

2 670 

1 144 

359 157 

359 041 

247 731 

111 310 

100 079 

100 079 

70 748 

29 331 

5 749 

5 749 

4 048 

1 702 

105 828 

105 828 

74 795 

31 033 

5 028 
3 016 
8 044 

4 393 
2 883 
7 276 

3 577 
2 159 
5 736 

 816 
 724 
1 540 

Total 

473 030 

472 145 

328 262 

143 883 

These  are  legal  obligations  that  the  EU  has  committed  to  paying  when  adopting  the  operational 
programmes  related  to  shared  management.  The  decision  of  the  Commission  adopting  an  operational 
programme shall constitute a financing decision within the meaning of Article 110 FR and once notified to 
the Member State concerned, a legal commitment within the meaning of that Regulation. 

Article 76 of the CPR for European Structural and Investment Funds (ESIF) states:  

"The  budget  commitments  of  the  Union  in  respect  of  each  programme  shall  be  made  in  annual 
instalments for each Fund during the period between 1 January 2014 and 31 December 2020. The budget 
commitments relating to the performance reserve in each programme shall be made separately from the 
remaining allocation to the programme." 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

The table above starts with the total MFF (column A) and shows the legal commitments for which budget 
commitments  have  not  yet  been  made  for  the  MFF  2014-2020,  headings  1B,  2  and  3.  These  legal 
commitments thus represent the outstanding amounts that the EU will commit budgetarily and then pay 
after 31 December 2018. Column B shows the legal commitments concluded by the Commission at year-
end  and  column  C  shows  the  budget  commitments  made  relating  to  these  legal  commitments  at  year-
end. 

5.3.  SIGNIFICANT LEGAL COMMITMENTS IN OTHER AREAS 

Connecting Europe Facility 
ITER 
Copernicus 
Galileo  
Fisheries agreements 
Operating lease commitments 
Other contractual commitments 
Total 

31.12.2018 
11 554 
1 489 
1 267 
 493 
 46 
2 352 
 924 
18 126 

EUR million 
31.12.2017 
12 676 
1 496 
1 841 
 253 
 133 
2 577 
1 054 
20 030 

These  amounts  reflect  the  long-term  legal  commitments  that  were  not  yet  covered  by  commitment 
appropriations  in  the  budget  at  year-end.  These  binding  obligations  will  be  budgeted  in  annual 
instalments in future years and paid.  

Certain  important  programmes  (see  below)  may  be  implemented  by  annual  instalments  according  to 
Article  112(2)  FR.  This  allows  the  EU  to  make  legal  commitments  (sign  grant  agreements,  delegation 
agreements and procurement contracts) in excess of the available commitment appropriations of a given 
year.  Therefore  a  substantial  amount  of  the  overall  allocation  for  the  current  MFF  may  be  already 
committed. This applies in particular for the programmes described below: 

Connecting Europe Facility (CEF) 

The CEF provides financial assistance to trans-European networks in order to support projects of common 
interest  in  the  sectors  of  transport,  telecommunications  and  energy  infrastructures.  The  legal 
commitments for the CEF programme cover an implementation period running from 2014 until 2023 for 
the  CEF  Transport  and  up  to  31.12.2024  for  CEF  Energy.  The  legal  basis  of  these  commitments  is 
Regulation  (EU)  No 1316/2013  of  the  EP  and  of  the  Council  of  11 December  2013  establishing  the 
Connecting  Europe  Facility,  amending  Regulation  (EU)  No 913/2010  and  repealing  Regulations  (EC) 
No 680/2007  and  (EC)  No 67/2010  Text  with  EEA  relevance  (OJ  L  348,  20 December 2013)  which 
foresees the use of the annual instalment in its article 19. 

Copernicus 

Copernicus  is the  European  Earth  observation  programme  –  see  also  note  2.2.  These  commitments  are 
made for the period until 2020. Based on Regulation (EU) 377/2014 of the EP and Council of 3 April 2014 
(OJ L 122/44  of  24  April 2014)  the  Commission  signed  delegation  agreements  with  the  European  Space 
Agency  (ESA),  EUMETSAT,  Mercator  and  the  European  Centre  for  Medium  Range  weather  forecasts. 
Article 8 of Regulation 377/2014 authorises the use of annual instalments. 

ITER – International Thermonuclear Experimental Reactor 

These commitments are intended to cover future funding needs of the ITER facilities up to 2021. The EU 
(Euratom)  contribution  to  ITER  International  is  given  through  the  Fusion  for  Energy  Agency,  including 
also the contributions from Member States and from Switzerland. These commitments are made on the 
basis  of  Council  decision  (Euratom)  791/2013  of  13 December 2013  amending  decision  (Euratom) 
198/2007  establishing  the  European  Joint  Undertaking  for  ITER  and  the  Development  of  Fusion  Energy 
which  authorises  the  use  of  annual  instalments.  ITER  was  created  to  manage  and  to  encourage  the 
exploitation of the ITER facilities, to promote public understanding and acceptance of fusion energy, and 
to undertake any other activities that are necessary to achieve its purpose. ITER involves the EU, China, 
India, Russia, South Korea, Japan and the USA.  

79 

 
 
 
 
 
 
Galileo 

Annual accounts of the European Union 2018 

These  are  amounts  committed  to  the  Galileo  programme  developing  a  European  Global  Navigation 
Satellite System – see also note 2.2. These commitments are made for the period until 2020. Based on 
Regulation  (EU)  1285/2013  of  the  EP  and  Council  of  11 December 2013  (OJ  L  347/1  of 
20 December 2013)  the  Commission  signed  a  delegation  agreement  with  ESA.  Article  9  of  Regulation 
(EU) 1285/2013 authorises the use of annual instalments. 

Fisheries agreements 

These  represent  commitments  entered  into  with  third  countries  for  operations  under  international 
fisheries agreements up to 2023. The commitments made are based on Council decisions for each third 
country  (e.g.  Council  Decision  (EU)  2019/385  of  4 March  2019 on  the  conclusion of the Protocol on the 
implementation of the Fisheries Partnership Agreement between the European Union and the Republic of 
Côte  d'Ivoire  (2018-2024);  OJ  L  70,  12  March  2019)  and  are  considered  specific  international  treaties 
with multiannual rights and obligations. 

Operating lease commitments 

Minimum amounts committed to be paid according to the underlying contracts during the remaining term 
of these lease contracts are as follows: 

Minimum lease payments 

EUR million 

Buildings 
IT materials and other equipment 
Total 

< 1 year 
 439 
 9 
 448 

1- 5 years 
 943 
 21 
 964 

> 5 years 
 940 
 0 
 940 

Total 
2 321 
 31 
2 352 

In the context of the United Kingdom’s notification of its intention to withdraw from the European Union, 
and  as  a  result  of  Regulation  (EU)  2018/1718  of  the  European  Parliament  and  of  the  Council  of 
14 November 2018 amending Regulation (EC) No 726/2004, the seat of the European Medicines Agency 
(‘EMA’) was relocated from London to Amsterdam. The current lease contract for the premises in London 
has a term expiring in 2039 and will thus need to be terminated early or subject to a reassignment or a 
subletting agreement with a third party.  

The  amounts  disclosed  in  the  table  above  include  EUR  468  million  still  due  under  this  lease  contract, 
however  the  future  net  financial  impact  in  the  consolidated  financial  statements,  if  any,  depends  on 
termination  negotiations  with  the  landlord  or  on  the  contractual  terms  of  subletting  agreement  entered 
into with a third party. 

Other contractual commitments 

The amounts included under this disclosure correspond to amounts committed to be paid during the term 
of the contracts. The most significant amount included here relates to building contracts of the European 
Parliament (EUR 87 million). 

80 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

6. 

FINANCIAL RISK MANAGEMENT 

The following disclosures with regard to the financial risk management of the EU relate to: 

  Borrowing and lending activities for financial assistance carried out by the Commission through: 
EFSM,  BOP,  MFA,  and  Euratom  actions  and  for  loans  from  borrowed  funds  of  the  ECSC  in 
Liquidation;  

 

The  treasury  operations  carried  out  by  the  Commission  in  order  to  implement  the  EU  budget, 
including the receipt of fines;  

  Assets held in funds for budgetary guarantees: the Guarantee Fund for external actions, the EFSI 

Guarantee Fund and the EFSD Guarantee Fund; and 

 

Financial instruments financed by the EU budget. 

6.1.  TYPES OF RISK 

Market  risk  is  the  risk  that  the  fair  value  or  future  cash  flows  of  a  financial  instrument  will  fluctuate, 
because of variations in market prices. Market risk embodies not only the potential for loss, but also the 
potential  for  gain.  It  comprises  currency  risk,  interest  rate  risk  and  other  price  risk  (the  EU  has  no 
significant other price risk). 

  Currency  risk  is  the  risk  that  the  EU's  operations  or  its  investments'  value  will  be  affected  by 
changes  in  exchange  rates.  This  risk  arises  from  the  change  in  price  of  one  currency  against 
another.  

 

Interest  rate  risk  is  the  possibility  of  a  reduction  in  the  value  of  a  security,  especially  a  bond, 
resulting  from  an  increase  in  interest  rates.  In  general,  higher  interest  rates  will  lead  to  lower 
prices of fixed rate bonds, and vice versa. 

Credit risk is the risk of loss due to a debtor's / borrower's non-payment of a loan or other line of credit 
(either  the  principal  or  interest  or  both)  or  other  failure  to  meet  a  contractual  obligation.  The  default 
events include a delay in repayments, restructuring of borrower repayments and bankruptcy. 

Liquidity risk  is  the  risk  that  arises  from  the  difficulty  in  selling  an  asset;  for  example,  the  risk  that a 
given  security  or  asset  cannot  be  traded  quickly  enough  in  the  market  to  prevent  a  loss  or  meet  an 
obligation. 

6.2.  RISK MANAGEMENT POLICIES  

The  implementation  of  the  EU  budget  relies  increasingly  on  the  use  of  operational  programme  financial 
instruments. For more information on the amounts concerned, see note 2.4.1. 

Common to most financial instruments is the fact that the implementation is delegated to either the EIB 
group  (including  EIF)  or  to  other  financial  institutions  based  on  an  agreement  between  the  Commission 
and  the  financial  institution.  Agreements  signed  with  these  financial  institutions  include  strict  conditions 
and obligations on the intermediaries so as to ensure that EU monies are properly managed and reported 
on. Once a financial contribution to one of the instruments has been committed, the funds are transferred 
to  a  specifically  created  bank  account  of  the  financial  institution  (i.e.  a  fiduciary  account).  The  financial 
institution  may,  depending  on  the  instrument  in  question,  use  the  funds  on  this  fiduciary  account  to 
provide loans, issue debt instruments, invest in equity instruments or cover the guarantee calls. Proceeds 
from financial instruments have, as a general rule, to be reimbursed to the EU budget. 

The  risk  as  regards  these  financial  instruments  is  limited  to  a  ceiling  as  indicated  in  the  underlying 
agreements, which is the budgeted amount foreseen for the instrument. As the Commission often bears 
the  "first  loss  piece"  and  since  instruments  are  intended  to  finance  riskier  beneficiaries  (who  have 
difficulties in obtaining funding from commercial lenders), it is therefore likely that some losses to the EU 
budget will occur. 

81 

 
Measurement of financial instruments 

Annual accounts of the European Union 2018 

The  following  classes  of  financial  assets  and  liabilities  are  not  measured  at  fair  value:  cash  and  cash 
equivalents, loans, exchange receivables and non-exchange recoverables, borrowings and other financial 
liabilities  measured  at  amortised  cost.  The  carrying  amount  of  those  financial  assets  and  liabilities  is 
considered as a reasonable approximation of their fair value. 

Borrowing and lending activities for financial assistance 

The borrowing and lending transactions, as well as related treasury management, are carried out by the 
EU  according  to  the  respective  Council  and  EP  Regulation,  Council  Decisions,  and,  if  applicable,  internal 
guidelines.  Written  procedure  manuals  covering  specific  areas  such  as  borrowings,  loans  and  treasury 
management  have  been  developed  and  are  used  by  the  relevant  operational  units.  Lending  operations 
are  financed  by  "back-to-back"  borrowings,  which  thus  do  not  generate  open  interest  rate  or  currency 
positions. 

Treasury 

The  rules  and  principles  for  the  management  of  the  Commission's  treasury  operations  are  laid  down  in 
the  Council  Regulation  609/2014  (as  amended  by  Council  Regulation  804/2016)  and  in  the  Financial 
Regulation. 

As a result of the above regulations, the following main principles apply: 

  Own resources are paid by the Member States into accounts opened for this purpose in the name 
of the Commission with the Treasury or national central bank. The Commission may draw on the 
above accounts solely to cover its cash requirements. 

  Own  resources  are  paid  by  Member  States  in  their  own  national  currencies,  while  the 

Commission's payments are mostly denominated in EUR. 

  Bank  accounts  opened  in  the  name  of  the  Commission  may  not  be  overdrawn.  This  restriction 
does  not  apply  to  the  Commission's  own  resource  accounts  in  case  of  a  default  on  loans 
contracted  or  guaranteed  pursuant  to  EU  Council  regulations  and  decisions  and  under  certain 
conditions in case the cash resource requirements are in excess of the assets of the accounts. 

 

Funds  held  in  bank  accounts  denominated  in  currencies  other  than  EUR  are  either  used  for 
payments in the same currencies or periodically converted in EUR. 

In  addition  to  the  own  resources  accounts,  other  bank  accounts  are  opened  by  the  Commission,  with 
central banks and commercial banks, for the purpose of executing payments and receiving receipts other 
than the Member State contributions to the budget.  

Treasury  and  payment  operations  are  highly  automated  and  rely  on  modern  information  systems. 
Specific procedures are applied to guarantee system security and to ensure segregation of duties in line 
with the Financial Regulation, the Commission’s internal control standards, and audit principles. 

A written set of guidelines and procedures regulates the management of the Commission's treasury and 
payment operations with the objective of limiting operational and financial risk and ensuring an adequate 
level  of  control.  They  cover  different  areas  of  operation  (for  example:  payment  execution  and  cash 
management,  cashflow  forecasting,  business  continuity,  etc.),  and  compliance  with  the  guidelines  and 
procedures is checked regularly. Additionally, information is exchanged between the Directorate General 
for  the  Budget  and  the  Directorate-General  for  Economic  and  Financial  Affairs  on  risk  management  and 
best practices.  

82 

 
 
 
Annual accounts of the European Union 2018 

Fines 

Provisionally cashed fines: deposits 

Amounts received before 2010 remain in bank accounts with banks specifically selected for the deposit of 
provisionally  cashed  fines.  The  selection  of  banks  is  conducted  in  compliance  with  tender  procedures 
defined by the Financial Regulation. Placement of funds with specific banks is determined by the internal 
risk management policy defining the credit rating requirements and the amount of funds which could be 
placed  in  proportion  to  the  counterparty  equity.  Financial  and  operational  risks  are  identified  and 
evaluated and compliance with internal policies and procedures is checked regularly. 

Provisionally cashed fines: BUFI portfolio 

Fines  imposed  and  provisionally  cashed  from  2010  onwards  are  invested  in  a  specifically  created 
portfolio,  BUFI.  The  main  objectives  of  the  portfolio  are  the  reduction  of  risks  associated  with  financial 
markets  and  the  equal  treatment  of  all  fined  entities  by  offering  a  guaranteed  return  calculated  on  the 
same  basis.  The  asset  management  for  provisionally  cashed  fines  is  carried  out  by  the  Commission  in 
accordance with internal asset management guidelines. Procedural manuals covering specific areas such 
as treasury management have been developed and are used by the relevant operational units. Financial 
and operational risks are identified and evaluated and compliance with internal guidelines and procedures 
is checked regularly. 

The  objectives  of  the  asset  management  activities  are  to  invest  the  fines  provisionally  paid  to  the 
Commission in such a way as to: 

 

 

ensure that the funds are easily available when needed, while 

aiming  at  delivering,  under  normal  circumstances,  a  return  which  on  average  is  in  line  with  the 
return of the BUFI Benchmark minus costs incurred, while preserving the nominal amount for the 
fines which were paid into the portfolio before the entry into force of the new Financial Regulation 
in August 2018. 

Investments  are  restricted  essentially  to  the  following  categories:  term  deposits  with  Member  States' 
Central  Banks,  sovereign  debt  agencies,  fully  state-owned  or  state-guaranteed  banks  or  supranational 
institutions,  and  bonds,  bills  and  Certificates  of  Deposit  issued  by  either  sovereign  or  supranational 
institutions. 

Bank guarantees 

Significant amounts of guarantees issued by financial institutions are held by the Commission in relation 
to  the  fines  it  imposes  on  companies  breaching  EU  competition  rules  (see  note  2.6.1.2).  These 
guarantees  are  provided  by  fined  companies  as  an  alternative  to  making  provisional  payments.  The 
guarantees  are  managed  in  compliance  with  the  internal  risk  management  policy.  Financial  and 
operational  risks  are  identified  and  evaluated  and  compliance  with  internal  policies  and  procedures  is 
checked regularly. 

Guarantee Fund for external actions 

The rules and principles for the asset management of the Guarantee Fund are laid out in the Convention 
between the Commission and the EIB dated 25 November 1994 and the subsequent amendments dated 
17/23 September 1996,  8 May 2002,  25 February 2008,  9 November 2010  and  28  October  2018.  This 
Guarantee  Fund  operates  only  in  euros.  It  exclusively  invests  in  this  currency  in  order  to  avoid  any 
foreign currency risk. Management of the assets is based upon the traditional rules of prudence adhered 
to  for  financial  activities.  It  is  required  to  pay  particular  attention  to  reducing  the  risks  and  to  ensuring 
that  the  managed  assets  can  be  sold  or  transferred  without  significant  delay,  taking  into  account  the 
commitments covered. 

EFSI Guarantee Fund 

The EFSI Guarantee Fund was established by EFSI Regulation – see note 2.4.1. The rules and principles 
for  the  asset  management  of  the  Fund  are  laid  out  in  the  Commission  Decision  C(2016)165  of 
21 January 2016.  The  managed  assets  shall  provide  sufficient  liquidity  in  relation  to  the  potential 
guarantee  calls,  while  still  aiming  at  optimising  the  return  and  risk  level  that  is  compatible  with 
maintaining a high degree of security and stability. 

83 

 
EFSD Guarantee Fund 

Annual accounts of the European Union 2018 

EFSD  Guarantee  Fund  has  been  established  pursuant  to  the  EFSD  Regulation  –  see  note  2.4.1.  The 
management  of  the  EFSD  Guarantee  Fund  assets  is  carried  out  by  the  Commission  in  accordance  with 
internal  guidelines  and  asset  management  guidelines  which  are  included  as  Annex  1  to  Commission 
Decision  C(2017)7693  of  22  November  2017.  The  assets  are  managed  in  such  a  way  so  as  to  provide 
sufficient  liquidity  in  relation  to  the  potential  guarantee  calls,  while  still  aiming  at  optimising  the  return 
and risk level that is compatible with maintaining a high degree of security and stability. 

6.3.  CURRENCY RISK 

Financial instruments exposure of the EU to currency risk at year-end – net position 

Financial assets 
Available for sale financial assets 
Financial assets at fair value 
through surplus or deficit 
Loans* 
Receivables and recoverables 
Cash and cash equivalents 

Financial liabilities 
Financial liabilities at fair value 
through surplus or deficit 
Payables 

Total 

Financial assets 
Available for sale financial assets 
Financial assets at fair value 
through surplus or deficit 
Loans* 
Receivables and recoverables 
Cash and cash equivalents 

Financial liabilities 
Financial liabilities at fair value 
through surplus or deficit 
Payables 

Total 

USD 

GBP 

DKK 

31.12.2018 
SEK 

EUR 

Other 

Total 

EUR million 

 619 
 (475) 

 6 
 19 
 49 
 218 

 57 
– 

 0 
4 109 
1 524 
5 690 

 18 
– 

– 
 99 
 290 
 407 

 7 
– 

– 
 109 
 406 
 523 

14 725 
 491 

 56 
20 026 
14 338 
49 635 

 17 
– 

 5 
 303 
1 505 
1 830 

15 443 
 16 

 67 
24 664 
18 113 
58 303 

– 

– 

– 

– 

 (20) 

 (2) 

 (22) 

 (2) 
 (2) 
 216 

 (1) 
 (1) 
5 689 

 (0) 
 (0) 
 407 

 (0) 
 (0) 
 523 

(32 218) 
(32 238) 
17 397 

 (5) 
 (7) 
1 824 

(32 227) 
(32 249) 
26 055 

USD 

GBP 

DKK 

31.12.2017 
SEK 

EUR 

Other 

Total 

EUR million 

 680 
 (632) 

 6 
 15 
 49 
 118 

 57 
– 

 0 
 549 
3 180 
3 787 

 17 
– 

– 
 63 
 27 
 107 

 56 
– 

– 
 86 
 693 
 835 

12 806 
 655 

 123 
11 591 
18 468 
43 642 

 16 
– 

 7 
 62 
1 694 
1 779 

13 632 
 23 

 137 
12 366 
24 111 
50 268 

– 

– 

– 

– 

– 

 (2) 

 (2) 

 (4) 
 (4) 
 114 

 (2) 
 (2) 
3 785 

 (0) 
 (0) 
 107 

 (1) 
 (1) 
 834 

(39 029) 
(39 029) 
4 613 

 (12) 
 (14) 
1 765 

(39 048) 
(39 050) 
11 218 

* Excluding back-to-back loans for financial assistance. 

If  the  EUR  had  strengthened  against  other  currencies  by  10 %,  then  it  would  have  had  the  following 
impact: 

2018 
2017 

31.12.2018 
31.12.2017 

Economic result 

USD 
 (7) 
 (5) 

GBP 
 (512) 
 (339) 

Net assets 

GBP 
 (5) 
 (5) 

USD 
 (13) 
 (5) 

84 

EUR million 

SEK 
 (47) 
 (71) 

EUR million 

SEK 
 (1) 
 (5) 

DKK 
 (35) 
 (8) 

DKK 
 (2) 
 (2) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If the EUR had weakened against these currencies by 10 %, then it would have had the following impact: 

Annual accounts of the European Union 2018 

2018 
2017 

31.12.2018 
31.12.2017 

Economic result 

USD 
 9 
 6 

USD 
 16 
 7 

GBP 
 625 
 414 

Net assets 

GBP 
 6 
 6 

EUR million 

SEK 
 57 
 87 

EUR million 

SEK 
 1 
 6 

DKK 
 43 
 10 

DKK 
 2 
 2 

Borrowing and lending activities for financial assistance 

Financial assets and liabilities are mostly in EUR, so the EU has no foreign currency risk.  

Treasury 

Own  resources  paid  by  Member  States  in  currencies  other  than  EUR  are  kept  on  the  own  resources 
accounts, in accordance with Council Regulation 609/2014 (as amended by Council regulation 804/2016). 
They  are  converted  into  EUR  when  they  are  needed  to  cover  for  the  execution  of  payments.  The 
procedures applied for the management of these funds are laid down by the above referred regulation. In 
a  limited  number  of  cases,  these  funds  are  directly  used  for  payments  to  be  executed  in  the  same 
currencies. 

A number of accounts in EU currencies other than EUR, and in USD and CHF, are held by the Commission 
with  commercial  banks,  for  the  purpose  of  executing  payments  denominated in  these  same  currencies. 
These accounts are replenished depending on the amount of payments to be executed, as a consequence 
their balances do not represent exposure to currency risk. 

When  miscellaneous  receipts  (receipts  other  than  own  resources)  are  received  in  currencies  other  than 
EUR,  they  are  either  transferred  to  Commission's  accounts  held  in  the  same  currencies,  if  they  are 
needed  to  cover  the  execution  of  payments,  or  converted  into  EUR  and  transferred  to  accounts  held  in 
EUR.  Imprest  accounts  held  in  currencies  other  than  EUR  are  replenished  depending  on  the  estimated 
short-term  local  payments  needs  in  the  same  currencies.  Balances  on  these  accounts  are  kept  within 
their respective ceilings. 

Fines 

Provisionally cashed fines (deposits and BUFI portfolio) and bank guarantees 

Since all fines are imposed and paid in EUR, there is no foreign currency risk. 

Guarantee Fund for external actions 

The financial assets of this fund are in EUR so there is no currency risk. The loans subrogated to the EU 
as  result  of  calls  on  the  Fund  following  payment  defaults  by  a  loan  beneficiary  are  carried  out  in  their 
original  currency  and  therefore  expose  the  EU  to  currency  risk.  There  are  no  activities  to  compensate 
foreign  currency  variations  ("hedging"  activities)  due  to  uncertainty  relating  to  the  loans  repayment 
timing. 

EFSI Guarantee Fund 

The  EFSI  Guarantee  Fund  currently  operates  in  both  EUR  and  USD.  Currency  risk  is  managed  through 
entering into derivative contracts (foreign exchange forward contracts) hedging the market value of the 
USD investments portfolio. The limit for maximum unhedged foreign exchange exposure is set  at 1 % of 
the  total  portfolio  value  within  the  benchmark  and  annual  strategy  allocations.  Thus,  upward  or 
downward movements in the USD investments' market value above or below the 1 % limit would trigger 
a rebalancing trade (a new forward contract with the same or opposite direction), adjusting or reversing 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

the hedged position accordingly. Readjustment of the hedge may also be prompted by movements of the 
EUR/USD exchange rate. 

The  loans  subrogated  to  the  EU  as  result  of  calls  on  the  Fund  following  payment  defaults  by  a  loan 
beneficiary are carried out in their original currency and therefore expose the EU to currency risk. For the 
subrogated loans, there are no activities to compensate foreign currency variations ("hedging" activities) 
due to uncertainty relating to the loans repayment timing. 

EFSD Guarantee Fund 

The EFSD Guarantee Fund currently operates in EUR only, but the asset management guidelines for the 
EFSD Guarantee Fund provide for the possibility to invest in certain non-EUR denominated assets. 

6.4.  INTEREST RATE RISK 

The following table illustrates the interest rate sensitivity of available for sale financial assets assuming a 
possible change in interest rates of +/- 100 basis points (1 %). 

2018: Available for sale financial assets 

2017: Available for sale financial assets 

Borrowing and lending activities for financial assistance 

Increase (+) / 
decrease (-) in 
basis points 
+100 
-100 
+100 
-100 

EUR million 

Effect on net 
assets 

 (348) 
 374 
 (359) 
 382 

Due  to  the  nature  of  its  borrowing  and  lending  activities,  the  EU  has  significant  interest-bearing  assets 
and liabilities. However, there is no interest rate risk since the borrowings are offset by equivalent loans 
at the same terms and conditions (back-to-back).  

Treasury 

The  Commission's  treasury  does  not  borrow  money;  so  as  a  consequence,  it  is  not  exposed  to  interest 
rate  risk.  Interest  is  however  calculated  on  balances  held  on  the  different  bank  accounts.  The 
Commission  has  therefore  put  in  place  measures  to  ensure  that  interest  earned  on  its  bank  accounts 
regularly reflects market interest rates, as well as their possible fluctuation.  

Accounts opened with Member States Treasuries for own resources receipts are non-interest bearing and 
free  of  charges.  Accounts  held  with  national  central  banks  may  be  remunerated  at  the  official  rates 
applied  by  each  institution.  As  some  of  the  remunerations  applied  to  these  accounts  may  currently  be 
negative, cash management procedures are in place to minimise balances kept on these accounts. 

In  addition,  own  resources  accounts  are  protected  from  any  impact  of  negative  interest  in  accordance 
with Council Regulation 609/2014 and as amended by Council Regulation 804/2016. 

Overnight  balances  held  on  commercial  bank  accounts  earn  interest  on  a  daily  basis.  This  is  based  on 
variable market rates to which a contractual margin (positive or negative) is applied. The rates applied by 
commercial  banks  are  in  general  contractually  floored  at  zero.  As  a  result  no  risk  exists  that  the 
Commission earns interest at rates lower than market rates. 

Fines 

Provisionally cashed fines (deposits, BUFI portfolio) and bank guarantees 

The  provisionally  cashed  fines  are  invested  in  a  portfolio  of  money  market  instruments  and  long-term 
bonds with an average duration of 2.58 years. 

86 

 
 
 
 
 
 
 
 
Guarantee Fund for external actions 

Annual accounts of the European Union 2018 

The budget provisioned in the Guarantee Fund is invested in a portfolio of money market instruments and 
long-term bonds with a total average portfolio duration of 2.58 years.  

EFSI Guarantee Fund 

The  budget  provisioned  in  the  EFSI  Guarantee  Fund  is  invested  in  a  portfolio  of  money  market 
instruments and long-term bonds with a total average portfolio duration of 2.4 years. 

EFSD Guarantee Fund 

As the first budget provisioning just started at the end of 2018, the EFSD Guarantee Fund mainly consists 
of cash held in central banks. The average portfolio duration amounts to 0.03 years. 

6.5.  CREDIT RISK 

The  amounts  that  represent  the  EU's  exposure  to  credit  risk  at  the  end  of  the  reporting  period  are  the 
carrying amounts of the financial instruments as disclosed in note 2. 

Analysis of the age of financial assets that are not impaired 

Total 

53 939 
24 664 
 16 

78 620 
54 981 
12 366 
 23 

Neither 
past due 
nor 
impaired 

53 939 
14 737 
 16 

68 692 
54 980 
8 905 
 23 

EUR million 

Past due but not impaired 

< 1 year 
 0 
6 585 
– 

1-5 years 
– 
3 209 
– 

> 5 years 
– 
 134 
– 

6 585 
 0 
2 894 
– 

3 209 
– 
 359 
– 

 134 
– 
 208 
– 

67 369 

63 908 

2 894 

 359 

 208 

Loans 
Receivables and recoverables 
Financial assets at fair value 
through surplus or deficit 
Total at 31.12.2018 
Loans 
Receivables and recoverables 
Financial assets at fair value 
through surplus or deficit 
Total at 31.12.2017 

Receivables  and  recoverables  less  than  1  year  include  recoverables  related  to  competition  fines 
amounting  to  EUR 6 366 million,  while  receivables  and  recoverables  between  1  and  5  years  contain 
recoverables  concerning  competition  fines  of  EUR 3 136 million.  The  previously  mentioned  amounts  are 
largely covered by bank guarantees, thus making the Commission’s exposure to the credit risk low. Fined 
companies provide these guarantees as an alternative to making provisional payments. 

87 

 
 
 
 
 
 
 
 
 
 
 
 
Counterparties 
with external 
credit rating 
Prime and high grade 

Upper medium grade 

Lower medium grade 

Non-investment 
grade 

Counterparties 
without external 
credit rating 
Group 1 

Group 2 

Counterparties 
with external 
credit rating 
Prime and high grade 

Upper medium grade 

Lower medium grade 

Non-investment 
grade 

Counterparties 
without external 
credit rating 
Group 1 

Group 2 

Credit quality of financial assets that are neither past due nor impaired 

Annual accounts of the European Union 2018 

AFS* 

Financial 
assets at 
FVSD** 

Loans 

Receivables 
and 
recoverables 

31.12.2018 

EUR million 

Cash 

Total 

9 019 

3 209 

1 765 

– 

 16 

– 

– 

– 

 98 

23 513 

25 775 

4 488 

9 064 

 755 

1 456 

 200 

14 950 

2 740 

 181 

 221 

33 146 

30 217 

29 177 

4 909 

13 993 

 16 

53 874 

11 475 

18 092 

97 449 

Total 

13 993 

 16 

53 939 

– 

– 

– 

– 

– 

– 

 64 

 2 

 66 

3 262 

 0 

3 262 

14 737 

 21 

– 

 21 

3 347 

 2 

3 349 

18 113 

100 797 

AFS* 

Financial 
assets at 
FVSD** 

Loans 

Receivables 
and 
recoverables 

31.12.2017 

EUR million 

Cash 

Total 

8 068 

1 794 

2 186 

– 

 16 

– 

– 

– 

 143 

23 585 

27 195 

3 977 

2 989 

 293 

 846 

 110 

19 261 

3 977 

 463 

 389 

30 477 

29 650 

30 691 

4 476 

12 048 

 16 

54 901 

4 239 

24 090 

95 293 

– 

– 

– 

 6 

– 

 6 

 80 

– 

 80 

4 665 

 1 

4 666 

8 904 

 21 

– 

 21 

4 772 

 1 

4 773 

24 111 

100 067 

Total 

12 048 

 23 

54 980 

*   Available for sale financial assets (excluding equity instruments and Unitary Fund). 
**  Financial assets at fair value through surplus or deficit. 

Not  included  in  the  above  table  are  available  for  sale  financial  assets  in  the  form  of  equity  instruments 
without  external  credit  rating.  The  four  risk  categories  mentioned  above  are  in  principle  based  on  the 
rating categories of external rating agencies and correspond to: 

 

Prime and high grade: Moody P-1, Aaa – Aa3; S&P A-1+, A-1, AAA – AA -; Fitch F1+, F1, AAA – 
AA- and equivalent 

  Upper medium grade: Moody P-2, A1 – A3; S&P A-2, A+ - A-; Fitch F2, A+ - A- and equivalent 

 

Lower medium grade: Moody P-3, Baa1 – Baa3, S&P A-3, BBB+ - BBB-; Fitch F-3, BBBB+ - BBB- 
and equivalent 

  Non-investment grade: Moody not prime, Ba1 – C; S&P B, C, BB+ - D; Fitch B, C, BB+ - D and 

equivalent 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

The  EU  uses  these  external  agencies  rating  categories  as  a  reference  point  notably  for  financial 
instruments  and  commercial  banks,  but  may,  after  making  its  own  analysis  of  individual  cases,  keep 
amounts  in  one  of  the  above  risk  categories  even  though  one  or  more  of  the  above  mentioned  rating 
agencies  may  have  downgraded  the  corresponding  counterparty.  As  regards  non-rated  counterparties, 
group 1 relates to debtors without defaults in the past and group 2 relates to debtors with defaults in the 
past. 

The  amounts  displayed  above  under  loans  and  receivables  categorised  in  non-investment  grade  relate 
primarily to financial support loans disbursed by the Commission to Member States in financial difficulties 
and  recoverables  against  certain  Members  States  based  on  own  resources  regulations  or  other  legal 
basis. The amount under cash relates to own resources bank accounts opened in the Treasury or in the 
central banks of Member States to hold the own resources contributions as foreseen in the above referred 
regulation. The Commission may draw on these accounts solely to cover cash requirements arising from 
execution of the budget. 

Borrowing and lending activities for financial assistance 

Exposure  to  credit  risk  is  managed  firstly  by  obtaining  State  guarantees  in  the  case  of  Euratom,  then 
through the Guarantee Fund for external actions (MFA & Euratom), then by the possibility of drawing the 
necessary funds from the  Commission's own resources accounts with the Member States and ultimately 
through the Budget of the EU. 

The Own Resources legislation fixes the ceiling for own resources payments at 1.20 % of Member States' 
GNI  and  during  2018  0.90 %  was  actually  used  to  cover  payment  appropriations.  This  means  that  at 
31 December 2018 there existed an available margin of 0.30 % to cover these guarantees. To this end, 
the EU is entitled to call upon all the Member States to ensure compliance with the EU's legal obligation 
towards its lenders. 

Treasury 

Most  of  the  Commission's  treasury  resources  are  kept,  in  accordance  with  Council  Regulation  609/2014 
(as  amended  by  Council  Regulation  804/2016)  on  own  resources,  in  the  accounts  opened  by  Member 
States  for  the  payment  of  their  contributions  (own  resources).  All  such  accounts  are  held  with  Member 
States'  treasuries  or  national  central  banks.  These  institutions  carry  the  lowest  credit  (or  counterparty) 
risk  for  the  Commission  as  the  exposure  is  with  its  Member  States.  For  the  part  of  the  Commission's 
treasury  resources  kept  with  commercial  banks,  in  order  to  cover  the  execution  of  payments, 
replenishment  of  these  accounts  is  made  on  a  just-in-time  basis  and  is  automatically  managed  by  the 
treasury cash management system. Minimum cash levels, which take into account the average amount of 
daily  payments  executed  from  it,  are  kept  on  each  account.  As  a  consequence  the  total  amount  kept 
overnight  on  these  accounts  remains  constantly  at  low  levels  (overall  less  than  EUR 80 million  on 
average,  spread  over  around  20  accounts)  and  so  it  is  ensured  that  the  Commission's  risk  exposure  is 
limited.  These  amounts  should  be  viewed  with  regard  to  the  daily  overall  treasury  balances  which 
fluctuated  in  2018  between  EUR 6 billion  and  EUR 37 billion,  and  with  an  overall  amount  of  payments 
made from Commission accounts in 2018 that exceeded EUR 155 billion. 

In  addition,  specific  guidelines  are  applied  for  the  selection  of  commercial  banks  in  order  to  further 
minimise counterparty risk to which the Commission is exposed: 

  All  commercial  banks  are  selected  by  call  for  tenders.  The  minimum  short-term  credit  rating 
required  for  admission  to  the  tendering  procedures  is  Moody's  P-1  or  equivalent.  A  lower  level 
may be accepted in specific and duly justified circumstances. 

 

 

The credit ratings of the commercial banks where the Commission has accounts are monitored on 
a daily basis.  

In delegations outside the EU, imprest accounts are held with local banks selected by a simplified 
tendering  procedure.  Rating  requirements  depend  on  the  local  situation  and  may  significantly 
differ  from  one  country  to  another.  In  order  to  limit  risk  exposure,  balances  on  these  accounts 
are kept at the lowest possible levels (taking into account operational needs), they are regularly 
replenished, and the applied ceilings are reviewed on a yearly basis. 

89 

 
 
 
Annual accounts of the European Union 2018 

Fines 

Provisionally cashed fines: deposits 

Banks holding deposits for the fines provisionally cashed before 2010 are selected by tender procedure in 
compliance with the risk management policy which defines the credit rating requirements and the amount 
of funds which could be placed in proportion to the counterparty equity. 

For commercial banks that have been specifically selected for the deposit of provisionally cashed fines, a 
minimum long-term rating A- (S&P or equivalent) with two rating agencies is required as a general rule. 
Specific  measures  are  applied  in  case  banks  in  this  group  are  subject  to  downgrade.  In  addition,  the 
amount  deposited  with  each  bank  is  limited  to  a  certain  percentage  of  its  own  funds,  which  varies 
depending on the rating level of each institution. The calculation of such limits also takes into account the 
amount of outstanding guarantees issued to the Commission by the same institution. The compliance of 
outstanding deposits with the applicable policy requirements is reviewed regularly. 

Provisionally cashed fines: BUFI portfolio 

For  sovereign  debt  investments  from  provisionally  cashed  fines  imposed  as  from  2010,  the  Commission 
takes  on  the  exposure  to  credit  risk.  The  highest  concentration  of  exposure  is  towards  Spain,  which 
represents  16  %  of  the  portfolio.  The  five  countries  with  the  highest  exposure  (Spain,  France, 
Luxembourg,  Germany  and  Italy)  represent  altogether  67  %  of  the  investment  portfolio.  The  weighted 
average credit rating of the portfolio is A- (S&P or equivalent). 

Bank guarantees 

The risk management policy applied for the acceptance of such guarantees ensures a high credit quality 
for  the  Commission.  The  compliance  of  the  outstanding  guarantees  with  the  applicable  policy 
requirements is reviewed regularly. 

Guarantee Fund for external actions 

The  treasury  portfolio’s  agreed  asset  management  guidelines  and/or  investment  strategy  define  certain 
limits  and  restrictions  in  order  to  limit  the  exposure  to  credit  risk  of  the  portfolio.  Such  limits  and 
restrictions  include  eligibility  criteria,  absolute  credit  limits  in  nominal  terms  depending  on  issuer 
category,  relative  concentration  limits  depending  on  issuer  category  and  concentration  limits  per  issue. 
All investments are rated at least as investment grade. 

EFSI Guarantee Fund 

The asset management guidelines, risk and investment strategies define certain limits and restrictions in 
order to limit the exposure to credit risk of the portfolio which is generally limited to investment grade. 
The weighted average credit rating of the portfolio is A- (S&P or equivalent). 

As the sole counterparty for all outstanding currency forwards as of 31 December 2018 is the Banque de 
France,  no  credit  enhancements,  such  as  collateral,  netting  agreements,  or  guarantees  are  put  in  place 
as of this date. The maximum exposure to credit risk for foreign exchange derivatives having a positive 
fair value at the end of the reporting period is equal to the carrying amount on the balance sheet. 

EFSD Guarantee Fund 

The asset management guidelines, risk and investment strategies define certain limits and restrictions in 
order to limit the exposure to credit risk of the portfolio, which is generally limited to investment grade. 
The  weighted  average  credit  rating  of  the  portfolio  is  AAA  (S&P  or  equivalent)  by  application  of  the 
sovereign rating for the cash held at central bank. 

90 

 
 
 
 
Annual accounts of the European Union 2018 

6.6.  LIQUIDITY RISK 

Maturity analysis of financial liabilities by remaining contractual maturity 

Borrowings 
Payables 
Other 
Total at 31.12.2018 
Borrowings 
Payables 
Other 
Total at 31.12.2017 

< 1 year 

(2 350) 
(32 227) 
 (252) 
(34 829) 
(6 700) 
(39 048) 
 (150) 
(45 898) 

1-5 years 
(17 363) 
– 
 (648) 
(18 011) 
(14 862) 
– 
 (665) 
(15 527) 

> 5 years 
(34 158) 
– 
(1 112) 
(35 270) 
(33 279) 
– 
(1 255) 
(34 534) 

Financial instruments at fair value through surplus or deficit  

Derivative pay leg 
Derivative receive leg 
Net cash flows at 31.12.2018 
Derivative pay leg 
Derivative receive leg 
Net cash flows at 31.12.2017 

< 1 year 

 (490) 
 477 
 (14) 
 (634) 
 638 
 5 

1-5 years 
 (2) 
– 
 (2) 
 (2) 
– 
 (2) 

> 5 years 
 (6) 
– 
 (6) 
– 
– 
– 

Borrowing and lending activities for financial assistance 

EUR million 
Total 
(53 872) 
(32 227) 
(2 012) 
(88 110) 
(54 841) 
(39 048) 
(2 070) 
(95 959) 

EUR million 
Total 

 (498) 
 477 
 (21) 
 (635) 
 638 
 3 

The  liquidity  risk  that  arises  from  borrowings  is  generally  offset  by  equivalent  loans  in  terms  and 
conditions  (back-to-back  operations).  For  MFA  and  Euratom,  the  Guarantee  Fund  for  external  actions 
serves as a liquidity reserve (or safety net) in case of payment default and payment delays of borrowers. 
For  BOP,  the  Council  Regulation  431/2009  provides  for  a  procedure  allowing  sufficient  time  to  mobilise 
funds through the Commission's own resources accounts with the Member States. For EFSM, the Council 
Regulation 407/2010 provides for a similar procedure. 

Treasury 

EU  budget  principles  ensure  that  overall  cash  resources  for  a  given  year  are  always  sufficient  for  the 
execution of all payments. In fact, the total Member States contributions together with the miscellaneous 
receipts  equal  the  amount  of  payment  appropriations  for  the  budgetary  year.  Member  States’ 
contributions, however, are received in twelve monthly instalments throughout the year, while payments 
are subject to certain seasonality. Moreover, in accordance with the Council Regulation 609/2014 (on the 
methods and procedure for making available own resources, amended by Council Regulation 804/2016), 
Member States contributions relating to amending budgets approved in a given month (N) only become 
available  either  on  the  first  working  day  of  the  month  N+1  (if  approved  before  the  16th  of  the  given 
month) or on the first working day of month N+2 (if approved on the 16th or later of that given month), 
while the related payment appropriations are immediately available. 

In  order  to  ensure  that  available  treasury  resources  are  always  sufficient  to  cover  the  payments  to  be 
executed  in  any  given  month,  procedures  regarding  regular  cash  forecasting  are  in  place,  and  own 
resources or additional funding can be called up in advance from Member States if needed, up to certain 
limits  and  under  certain  conditions.  Seasonality  of  expenditure  and  overall  budgetary  restrictions  in 
recent years have resulted in the need for increased monitoring of the rhythm of payments over the year. 
In  addition  to  the  above,  in  the  context  of  the  Commission's  daily  treasury  operations,  automated  cash 
management tools ensure that sufficient liquidity is available on each of the Commission's bank accounts, 
on a daily basis. 

Fines 

Provisionally cashed fines: BUFI portfolio 

The fund is managed according to the principle that the assets shall have a sufficient degree of liquidity 
and  mobilisation  in  relation  to  the  relevant  commitments.  The  portfolio  is  composed  of  mostly  highly 
liquid securities that can be sold to meet unexpected cash outflows. In addition, the share of cash, cash 
equivalents and securities maturing within 1 year is 23 %. 

91 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantee Fund for external actions 

Annual accounts of the European Union 2018 

The Fund is managed according to the principle that the assets shall have a sufficient degree of liquidity 
and  mobilisation  in  relation  to  the  relevant  commitments.  The  fund  therefore  maintains  a  sufficient 
amount  of  monetary  assets  to  cover  short-term  outflows.  The  share  of  cash,  cash  equivalents  and 
securities maturing within 1 year is 9.2 %. 

EFSI Guarantee Fund 

The  EFSI  Guarantee  Fund  is  managed  according  to  the  principle  that  the  assets  shall  have  a  sufficient 
degree of liquidity and mobilisation in relation to the relevant commitments. The portfolio is composed of 
liquid  assets  that  can  be  sold  to  meet  unexpected  cash  outflows.  In  addition  the  share  of  cash,  cash 
equivalents and securities maturing within 1 year is 22 %. 

The settlement of derivative contracts is gross and is based on their contractual maturity. Obligations are 
honoured  via  sales  of  USD-denominated  assets  and/or  a  swap  transaction,  whereby  it  is  possible  that 
a cash outflow arises due to foreign exchange differences. 

No  liquidity  management  is  necessary  with  regard  to  collateral  /  margin  requirements  as  the  current 
hedging  counterparty  accepts  to  operate  with  the  Commission  without  any  requirements  for  collateral  / 
margin calls. 

EFSD Guarantee Fund 

The  EFSD  Guarantee  Fund  is  managed  according  to  the  principle  that  the  assets  shall  have  a  sufficient 
degree of liquidity and mobilisation in relation to the relevant commitments. 

The portfolio is composed of 97 % cash held in current accounts. 

Other financial instruments – derivative financial liabilities 

In 2017 the EU entered into a derivative contract (foreign exchange option) covering the devaluation of 
foreign  exchange  currency  related  to  loans  given  by  financial  institutions  (see  note  2.11.2).  Moreover, 
the  EU  guarantee  on  equity  portfolios  held  by  the  EIB  Group  lead  to  a  financial  obligation  to  cover 
changes  in  the  value  or  impairments  of  underlying  investments.  As  for  the  other  financial  instruments 
financed by the EU Budget, the amount for which the EU is liable under these instruments cannot exceed 
the amount committed, being the liquidity risk mitigated by that fact. 

92 

 
 
Annual accounts of the European Union 2018 

7.  RELATED PARTY DISCLOSURES 

7.1.  RELATED PARTIES 

The  related  parties  of  the  EU  are  the  EU  consolidated  entities,  associates  and  the  key  management 
personnel  of  these  entities.  Transactions  between  these  entities  take  place  as  part  of  the  normal 
operations of the EU and as this is the case, no specific disclosure requirements are necessary for these 
transactions in accordance with the EU accounting rules. 

7.2.  KEY MANAGEMENT ENTITLEMENTS 

For the purposes of presenting information on related party transactions concerning the key management 
of the EU, such persons are shown here under five categories: 

Category  1:  the  Presidents  of  the  European  Council,  the  Commission  and  the  Court  of  Justice  of  the 
European Union 

Category 2: the Vice-president of the Commission and High Representative of the EU for Foreign Affairs 
and Security Policy and the other Vice-presidents of the Commission 

Category  3:  the  Secretary-General  of  the  Council,  the  Members  of  the  Commission,  the  Judges  and 
Advocates  General  of  the  Court  of  Justice  of  the  European  Union,  the  President  and  Members  of  the 
General  Court,  the  President  and  Members  of  the  European  Civil  Service  Tribunal,  the  Ombudsman  and 
the European Data Protection Supervisor 

Category 4: the President and Members of the European Court of Auditors 

Category 5: the highest-ranking civil servants of the Institutions and Agencies 

A  summary  of  their  entitlements  is  given  below  –  further  information  can  be  found  in  the  Staff 
Regulations  published  on  the  Europa  website  which  is  the  official  document  describing  the  rights  and 
obligations of all officials of the EU. Key management personnel have not received any preferential loans 
from the EU. 

93 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2% + 
187.69 
410.11 
100.18 
278.25 
556.5 
N/A 

N/A 

N/A 

2% + 
187.69 
410.11 
100.18 
278.25 
556.5 
N/A 

N/A 

N/A 

Annual accounts of the European Union 2018 

KEY MANAGEMENT FINANCIAL ENTITLEMENTS  

Entitlement (per employee) 
Basic salary (per month) 

Category 1 
27 903.32 

Category 2 

Category 3 

Category 4 

Category 5 

25 274.75 - 
26 285.75 

20 219.80 - 
22 747.28 

21 837.39 - 
23 252.78 

12 856.84 - 
20 219.80 

EUR 

15% 

15% 

15% 

15% 

0-4%-16% 

Residential/Expatriation 
allowance  

Family allowances: 
Household (% salary) 

Dependent child 
Pre-school 
Education, or 
Education outside place of work 
Presiding judges allowance 

2% + 
187.69 
410.11 
100.18 
278.25 
556.5 
N/A 

2% + 
187.69 
410.11 
100.18 
278.25 
556.5 
N/A 

2% + 
187.69 
410.11 
100.18 
278.25 
556.5 
638.43 

Representation allowance 

1 512.12 

971.82 

638.43 

Annual travel costs 

N/A 

N/A 

N/A 

Transfers to Member State: 
Education allowance* 
% of salary* 
% of salary with no cc 
Representation expenses 

Taking up duty: 
Installation expenses 

Family travel expenses 
Moving expenses 
Leaving office: 
Resettlement expenses 

Family travel expenses 
Moving expenses 
Transition (% salary)** 
Sickness insurance 
Pension (% salary, before 
tax) 

Deductions: 
Tax on salary 
Sickness insurance (% 
salary) 
Special levy on salary 
Pension deduction 
Number of persons at year-
end 

Yes 
5% 
max 25% 
Reimbursed 

Yes 
5% 
max 25% 
Reimbursed 

Yes 
5% 
max 25% 
Reimbursed 

Yes 
5% 
max 25% 
N/A 

Yes 
5% 
max 25% 
N/A 

55 806.65 

Reimbursed 
Reimbursed 

27 903.32 

Reimbursed 
Reimbursed 
40% - 65% 
Covered 
Max 70% 

50 549.49 
- 52 571.49 
Reimbursed 
Reimbursed 

25 274.75 - 
26 285.75 
Reimbursed 
Reimbursed 
40% - 65% 
Covered 
Max 70% 

40 439.60 
- 45 494.55 
Reimbursed 
Reimbursed 

20 219.80 - 
22 747.28 
Reimbursed 
Reimbursed 
40% - 65% 
Covered 
Max 70% 

43 674.78 
- 46 505.55 
Reimbursed 
Reimbursed 

21 837.39 - 
23 252.78 
Reimbursed 
Reimbursed 
40% - 65% 
Covered 
Max 70% 

Reimbursed 

Reimbursed 
Reimbursed 

Reimbursed 

Reimbursed 
Reimbursed 
N/A 
Covered 
Max 70% 

8% - 45% 
1.7% 

8% - 45% 
1.7% 

8% - 45% 
1.7% 

8% - 45% 
1.7% 

8% - 45% 
1.7% 

7% 
N/A 
3 

7% 
N/A 
6 

7% 
N/A 
93 

7% 
N/A 
28 

6-7% 
10.0% 
112 

* With correction coefficient ("CC") applied. 

** Paid for the first 3 years following departure. 

94 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

8. 

EVENTS AFTER THE BALANCE SHEET DATE 

At  the  date  of  signature  of  these  accounts  no  material  issues  had  come  to  the  attention  of,  or  were 
reported to, the Accounting Officer of the Commission that would require separate disclosure under this 
section. The accounts and related notes were prepared using the most recently available information and 
this is reflected in the information presented. 

95 

 
 
Annual accounts of the European Union 2018 

9. 

SCOPE OF CONSOLIDATION 

A. CONTROLLED ENTITIES (52) 
1. Institutions and consultative bodies (11) 
European Parliament 
European Council 
European Commission 
European Court of Auditors 
Court of Justice of the European Union 
European External Action Service 

European Data Protection Supervisor 
European Economic and Social Committee 
European Ombudsman 
Committee of the Regions 
Council of the European Union 

2. EU Agencies (39) 
2.1. Executive Agencies (6) 
Education, Audiovisual & Culture Executive Agency  Executive Agency for Small and Medium-sized 

Consumers, Health, Agriculture and Food 
Executive Agency 
Research Executive Agency 

2.2. Decentralised Agencies (33) 
European Maritime Safety Agency 
European Medicines Agency 
European GNSS Supervisory Authority 
European Chemicals Agency 
Fusion for Energy (European Joint Undertaking for 
ITER and the Development of Fusion Energy) 
Eurojust 
European Institute for Gender Equality 
European Agency for Safety and Health at Work 
European Centre for Disease Prevention and 
Control 
European Environment Agency 
European Centre for the Development of 
Vocational training 
European Agency for Cooperation of Energy 
Regulators 
European Banking Authority 
European Asylum Support Office 
Office for the Body of European Regulators for 
Electronic Communication 
European Agency Border and Coast Guard Agency 
(Frontex) 
EU-LISA (European Agency for the operational 
management of large-scale IT systems in the area 
of freedom, security and justice) 

3. Other controlled entities (2) 
European Coal and Steel Community (in 
liquidation) 

B. ASSOCIATES (1) 
European Investment Fund  

Enterprises 
Innovation & Networks Executive Agency 

European Research Council Executive Agency 

European Food Safety Authority 
European Railway Agency 
Community Plant Variety Office 
European Fisheries Control Agency 
European Monitoring Centre for Drugs and Drug 
Addiction 
European Union Intellectual Property Office 
European Police Office (EUROPOL) 
European Aviation Safety Agency 
European Network and Information Security 
Agency 
European Union Agency for Fundamental Rights 
European Insurance and Occupational Pensions 
Authority 
Translation Centre for the Bodies of the European 
Union 
European Securities and Markets Authority 
European Training Foundation 
European Foundation for the Improvement of 
Living and Working Conditions 
European Union Agency for Law Enforcement 
Training (CEPOL) 

European Institute of Innovation and Technology 

96 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MINOR ENTITIES 

Annual accounts of the European Union 2018 

The  entities  listed  below  have  not  been  consolidated  using  the  equity  method  into  the  2018  EU 
consolidated financial statements on the basis of immateriality: 

Bio Based Industries Joint Undertaking  

Bio  Based  Industries  is  a  Public-Private  Partnership  (PPP)  between  the  EU  and  the  Bio-based  Industries 
Consortium (BIC). The BBI is dedicated to realising the European bioeconomy potential, turning biological 
residues  and  wastes  into  greener  everyday  products  through  innovative  technologies  and  biorefineries, 
which are at the heart of the bioeconomy. 

Clean Sky Joint Undertaking 

Clean  Sky  is  the  largest  European  research  programme  developing  innovative,  cutting-edge  technology 
aimed at reducing CO2, gas emissions and noise levels produced by aircraft. Funded by the EU’s Horizon 
2020  programme,  Clean  Sky  contributes  to  strengthening  European  aero-industry  collaboration, global 
leadership and competitiveness. 

Innovative Medicines Initiative Joint Undertaking (IMI) 

IMI  is  Europe's  largest  public-private  initiative  aiming  to  speed  up  the  development  of  better  and  safer 
medicines  for  patients.  IMI  is  a  joint  undertaking  between  the  European  Union  and  a  pharmaceutical 
industry association. 

Electronic Components and Systems for European Leadership (ECSEL) Joint Undertaking (amalgamation 
of the former ARTEMIS & ENIAC JUs)  

ECSEL  is  a  PPP  in  electronic  components  and  systems,  bridging  the  gap  between  research  and 
exploitation, aligning strategies to increase European and national investments, and building an advanced 
ecosystem. 

Fuel Cells Hydrogen Joint Undertaking (FCH) 

FCH  is  a  PPP  supporting  research,  technological  development  and  demonstration  (RTD)  activities  in  fuel 
cell and hydrogen energy technologies in Europe. Its aim is to accelerate the market introduction of these 
technologies, realising their potential as an instrument in achieving a carbon-lean energy system. 

Single European Sky ATM Research Joint Undertaking (SESAR) 

SESAR is a PPP responsible for the modernisation of the European air traffic management (ATM) system 
by coordinating and concentrating all ATM relevant research and innovation efforts in the EU. 

Shift2Rail Joint Undertaking 

Shift2Rail  is  the  first  European  rail  joint  technology  initiative  to  seek  focused  research  and  innovation 
(R&I) and market-driven solutions by accelerating the integration of new and advanced technologies into 
innovative rail product solutions.  

The annual accounts of the above entities are publicly available on their respective websites. 

97 

 
 
Annual accounts of the European Union 2018 

FINANCIAL STATEMENT DISCUSSION AND 
ANALYSIS 

FINANCIAL YEAR 2018 

It should be noted that due to the rounding of figures into millions of euros, some financial data in the 
tables below may appear not to add up. 

98 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

CONTENTS 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EU: FINANCIAL SITUATION 

1. 
2018   ........................................................................................................... 100 

1.1. 

1.2. 

1.3. 

1.4. 

REVENUE ........................................................................................ 100 

EXPENSES ....................................................................................... 101 

ASSETS .......................................................................................... 102 

LIABILITIES .................................................................................... 108 

MANAGEMENT OF RISKS AND UNCERTAINTIES OF EU BUDGET 

2. 
IMPLEMENTATION .......................................................................................... 109 

2.1.  MACRO-ECONOMIC ENVIRONMENT .................................................... 109 

2.2. 

2.3. 

2.4. 

BUDGETARY CONTINGENT LIABILITIES FOR FINANCIAL ASSISTANCE .... 110 

BUDGETARY GUARANTEES ................................................................ 111 

NEW ENTRANTS' RESERVE (NER) 300................................................. 111 

99 

 
 
 
 
 
 
Annual accounts of the European Union 2018 

The  objective  of  this  Financial  Statement  Discussion  and  Analysis  (FSDA)  is  to  assist  readers  to 
understand  the  financial  position,  financial  performance  and  cash  flows  presented  in  the  consolidated 
financial statements of the EU. The information presented in this FSDA has not been audited. 

1. CONSOLIDATED FINANCIAL STATEMENTS OF THE 

EU: FINANCIAL SITUATION 2018 

1.1.  REVENUE 

The  consolidated  revenue  of  the  EU  incorporates  amounts  related  to  exchange  transactions  and  non-
exchange transactions, the latter being the most significant. 

The table below provides an overview of the main categories of non-exchange transactions. 

Five-year trend of revenue from main non-exchange transactions (in EUR million) 

As  budget  revenue  should  equal  (or  exceed)  budget  expenditure,  the  main  driver  in  the  revenue  trend 
shown  above  is  the  payments  made  each  year.  In  2018  the  consolidated  revenue  increase  of  20 %,  to 
EUR 163 billion, when compared to the previous year, was mainly due to the following: 

 

 

an increase of EUR 27 billion in the GNI resources, or 35 % compared to the previous year. This 
effect primarily reflects the impact of the growth of payment appropriations in the 2018 budget. 
The  sharp  increase  primarily  relates  to  the  low  GNI  resources  of  2017  and  the  effect  of  the 
budget  surplus  from  2016,  EUR 6.4 billion,  recognised  in  'other  revenue  from  non-exchange 
transactions’.  In  2018,  the  budget  surplus  from  2017,  recognised  in  the  statement  of  financial 
performance at 31 December 2018, was much lower, EUR 0.6 billion, which explains, on the one 
hand  the  increase  need  for  GNI  resources  since  GNI  resource  is  used  to  finance  the  part  of  the 
budget not covered by any other source of revenue and, on the other hand the decrease in ‘other 
revenue’; 

an increase in the Traditional Own Resources of EUR 2.2 billion related to an infringement of EU 
legislation  by  the  United  Kingdom  during  the  period  November  2011  to  October  2017.  As  a 
consequence  of  this  infringement,  late  payment  interest  of  EUR  1.3  billion  was  also  charged, 
explaining the increase of the financial revenue; and 

 

an increase compared to 2017 of EUR 2 billion in competition fines issued by the EU, as a result 
of law infringements by private entities. 

100 

 
 
 
Annual accounts of the European Union 2018 

1.2.  EXPENSES 

The  main  component  of  expenses  recognised  in  the  consolidated  financial  statements  is  transfer 
payments  under  the  shared  management  mode,  which  includes  the  following  funds:  (i)  European 
Agricultural Guarantee Fund (EAGF); (ii) European Agricultural Fund for Rural Development (EAFRD) and 
other rural development instruments; (iii) European Regional Development Fund (ERDF) & Cohesion Fund 
(CF); and (iv) European Social Fund (ESF). These funds made up almost 66 % of total expenses in 2018 
- the split can be found in the chart below. 

Relative weight of the main expenses implemented by the Member States (shared management) for the 
financial year of 2018 

Expenses  incurred  under  direct  management  represent  the  budget  implementation  by  the  Commission, 
executive  agencies  and  by  trust  funds.  Under  indirect  management  the  budget  is  implemented  by  EU 
agencies, EU bodies, third countries, international organisations and other entities.  

Expenses  incurred  under  direct  and  indirect  management  made  up  approx.  19 %  of  total  expenses 
(EUR 28.5 billion) and remained stable compared to the previous financial year. 

The EU recognises certain future payment obligations as expenses even if they are not yet shown in the 
cash-based  budgetary  accounts.  Significant  amounts  are  shown  under  payables  and  accrued  charges 
concerning  agriculture  and  rural  development  and  also  under  pension  and  employee  benefits  liabilities 
relating to pension and other post-employment rights acquired by Commissioners, MEPs and staff. 

Overall,  expenses  increased  by  16 %,  to  EUR 149 billion,  when  compared  with  2017,  mainly  resulting 
from  expenses  from  programmes  implemented  by  Member  States  which  rose  by  approx.  24 %,  or 
EUR 19.8 billion,  due  to  a  higher  level  of  expenses  incurred  in  relation  to  the  current  phase  of  the 
programmes  where  the  implementation  has  increased.  The  main  programmes  contributing  to  this 
increase were the ERDF & CF and ESF, which together represent an increase of EUR 17.2 billion. 

101 

 
  
 
 
 
Annual accounts of the European Union 2018 

1.3.  ASSETS 

The most significant items on the asset side of the balance sheet relate to financial assets (loans given, 
available for sale financial assets, cash) and pre-financing amounts, which make up approx. 79 % of the 
assets of the EU. 

Composition of the consolidated assets of the EU 

6% 

1% 

14% 

4% 

Loans

31% 

Available for sale financial assets

Cash and cash equivalents

Pre-financing

Other advances to Member States

Receivables and recoverables

Property, Plant & Equipment

25% 

10% 

9% 

Other

As at 31 December 2018 the total assets were EUR 174.4 billion, reflecting an increase of approximately 
5%. The key changes were: 

 

 

 

 

an  increase  of  EUR  12.5  billion  in  the  short-term  receivables  and  recoverable  amounts,  directly 
related to the increase in 2018 revenue not cashed at the reporting date;  

the  above  effect  was  partially  compensated  by  a  decrease  in  the  cash  and  cash  equivalents  of 
EUR 6 billion (see below); 

an increase of EUR 1 billion in financial assets mainly related to the provisioning of the Guarantee 
Fund for EFSI operations; and 

an  increase  of  EUR 0.4 billion  in  property,  plant  and  equipment  (PPE)  arising  from  further 
developments in the space assets (Galileo and Copernicus). 

In general, the EU institutions and bodies strive to keep the amounts held as cash and cash equivalents 
at a low level. The cash balance of EUR 18.1 billion at year-end is lower than in 2017 and is made up of 
the following main elements: 

  As  regards  own  resources,  the  end  of  year  treasury  balance  includes  EUR 0.75 billion  paid  in 

advance by some of the Member States in relation to amending budget 6 adopted in 2018. 

  An amount of EUR 1.4 billion of fines imposed by the Commission for breach of competition rules, 
definitively cashed in 2018 and not yet included in any amending budget is also part of the year-
end treasury balance. 

 

The  treasury  balance  also  includes  assigned  revenue  and  other  payment  appropriations  of 
EUR 7.4 billion. 

102 

 
 
 
 
 
Pre-financing 

Annual accounts of the European Union 2018 

It  should  be  noted  that  the  level  of  pre-financing  is  significantly  influenced  by  the  MFF  cycle  –  for 
example at the beginning of an MFF period one can expect large advances to be paid to Member States 
under cohesion policy. The Commission makes every effort to ensure that the levels of pre-financing are 
maintained at an appropriate level. A balance has to be struck between ensuring sufficient funding for the 
projects and the timely recognition of expenditure. 

The total pre-financing (excluding other advances to Member States and contributions to the trust funds 
Bêkou and Africa) on the EU balance sheet amounts to EUR 43.4 billion (2017: EUR 44.3 billion), almost 
all  of  which  relates  to  Commission  activities.  Some  60 %  of  the  Commission's  pre-financing  concerns 
shared management, which means that the implementation of the budget is delegated to Member States 
(the Commission retains a supervisory role). 

Commission pre-financing by management mode 

The most significant pre-financing amount under shared management mode relates to ERDF & Cohesion 
Fund (EUR 14.6 billion), which is at a similar level to 2017. 

FINANCIAL INSTRUMENTS 

The following items are shown in accounting terms as financial instruments in the consolidated financial 
statements of the EU: 

 

 

Financial Instruments financed by the EU budget: under this type of budget implementation funds 
are either already disbursed to the fiduciary accounts managed by the entrusted entities and stay 
available  (as  cash  and  cash  equivalents  and  debt  securities)  to  cover  future  guarantee  calls  or 
have been invested in equity; 

Financial  assets  held  in  guarantee  funds  for  budgetary  guarantees:  under  this  type  of  budget 
implementation the EU provides guarantees to counterparts for which the funding is only partially 
provisioned via guarantee funds set-up by the Commission and thus creating contingent liabilities 
for the EU budget – see note 4.1; and 

 

Loans and related borrowings for financial assistance programmes. 

Financial instruments financed by the EU budget 

The significance and volume of financial instruments financed by the EU budget under direct and indirect 
management  increases  from  year  to  year.  The  basic  concept  behind  this  approach,  in  contrast  to  the 
traditional method of budget implementation by giving grants and subsidies, is that for each euro spent 
from  the  budget  via  financial  instruments,  the  final  beneficiary  receives  more  than  EUR  1  as  financial 
support due to the leverage effect. This use of the EU budget aims at maximising the impact of the funds 
available.  Financial  instruments  financed  by  the  EU  budget  exist  in  the  form  of  guarantee  instruments, 

103 

 
 
Annual accounts of the European Union 2018 

equity  instruments  and  loan  instruments  -  see  the  overview  by  MFF  in  the  below  table.  Assets  held  in 
these instruments are either kept in cash and cash equivalents or invested in equity instruments and debt 
securities categorised as available for sale financial assets in the consolidated financial statements of the 
EU. 

Available  for  sale  financial  assets  relating  to  financial  instruments  financed  by  the  EU  budget  (year-end 
value): 

The following tables provide an overview of financial instruments financed by the EU budget per MFF and 
their values at 31 December 2018: 

Related to more than one MFF 

Assets* 

Liabilities**  Guarantees*** 

EUR million 

Guarantee and risk-sharing instruments: 

Guarantee Facility under the Western Balkan (EDIF) 

Equity instruments: 

European Fund for Southeast Europe (EFSE)  

Green for Growth Fund to the Eastern Neighbourhood Region 

MENA Fund for Micro-, Small and Medium Enterprises (SANAD) 

Enterprise Innovation Fund (ENIF) 

Enterprise Expansion Fund (ENEF) 

Microfinance Initiative for Asia Debt Fund (MIFA) 

Total  

 MFF 2014-2020 

Guarantee and risk-sharing instruments: 

Horizon 2020 – InnovFin Loan & Guarantee Service for R&I 

Horizon 2020 – InnovFin SME Guarantee 

Connecting Europe Facility Debt Instrument (CEF DI) 

COSME Loan Guarantee Facility 

Private Finance for Energy Efficiency Instrument (PF4EE) 

Cultural and Creative Sector Guarantee Facility 

SEMED MSME Financial Inclusion Programme 

Student Loan Guarantee Facility 

Eastern Partnership SME Finance Facility 

Natural Capital Financing Facility 

104 

37 

37 

165 

63 

25 

18 

10 

9 

290 

327 

(34) 

(34) 

- 

(0) 

- 

- 

- 

- 

(0) 

(34) 

- 

-  

- 

- 

- 

- 

- 

- 

-  

- 

Assets 

Liabilities 

Guarantees 

1 107 

902 

598 

310 

34 

30 

25 

14 

13 

12 

(43) 

(381) 

(2) 

(613) 

(0) 

(12) 

- 

(1) 

(4) 

(0) 

(934) 

(533) 

(579) 

(2) 

(5) 

- 

(11) 

- 

(1) 

(6) 

 
 
 
 
 
 
 
  
  
 
 
  
  
 
 
 
 
 
 
  
 
 
 
 
 
Annual accounts of the European Union 2018 

 MFF 2014-2020 

(continuing from previous page) 

Women in Business Programme in Eastern Partnership 

Support for Mongolian Economic Diversification 

Transferability & Convertibility (T&C) Facility 

Equity instruments: 

Horizon 2020 InnovFin Equity Facility for R&I 

COSME – Equity Facility for Growth 

Risk Capital Facility for the Southern Neighbourhood countries 

Climate Investor One 

Latin American Investment Facility 

Africa Agriculture Trade and Investment Fund 

Mixed instruments: 
Employment and Social Innovation (EaSI) Guarantee Facility and 
Capacity Building 

EU Deep and Comprehensive Free Trade Area Facility 

ElectriFI 

Agriculture Financing Initiative 

Total  

MFF Prior to 2014 

Guarantee and risk-sharing instruments: 

Risk Sharing Finance Facility (RSFF) 

SME Guarantee Facility under CIP 

Multi Annual Program (MAP) for Enterprises 

SME Guarantee Facility 

European Progress Microfinance Guarantee Facility 

Equity instruments:  

High Growth and Innovative SME Facility under CIP 

Multi Annual Framework Programme Equity Facility 

European Energy Efficiency Fund  

Global Energy Efficiency and Renewable Energy Fund 

European Progress Microfinance Fund 

Marguerite Fund 

European Technology Start up Facility 1998 (ETF) 

Technology Transfer Pilot projects 

Mixed instruments: 

Instrument of economic and financial cooperation MEDA 

European Neighbourhood and Partnership Instrument (ENPI) 

Assets 

Liabilities 

Guarantees 

4 

2 

1 

- 

- 

(1) 

(4) 

- 

- 

3 052 

(1 057) 

(2 075) 

368 

67 

24 

22 

12 

11 

(10) 

(2) 

- 

- 

- 

- 

504 

(12) 

73 

68 

31 

10 

(39) 

(6) 

- 

- 

182 

3 738 

(44) 

(1 113) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

(2 075) 

Assets 

Liabilities 

Guarantees 

731 

83 

32 

7 

4 

(65) 

(151) 

(31) 

- 

(4) 

(642) 

- 

- 

- 

- 

857 

(251) 

(642) 

410 

208 

104 

90 

68 

43 

9 

0 

(6) 

- 

- 

(20) 

- 

- 

(0) 

- 

932 

(26) 

140 

120 

260 

(2) 

(2) 

(4) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total  

Overall Total 

2 049 

(281) 

(642) 

6 115 

(1 428) 

(2 717) 

*    The assets presented in this table include several items of the financial statements (Available-for-sale of EUR 4 387 million (of which 
EUR 1 294 million are equity instruments); Cash and cash equivalents of EUR 1 615 million; Loans of EUR 64 million and other items in the 
amount of EUR 49 million). 
**   The liabilities presented in this table include several items of the financial statements (Provisions of EUR 1 337 million; Payables of 
EUR 69 million and other items in the amount of EUR 22 million). 
*** For certain guarantees the risk taken by the EU is fully covered by the provisions made.  

105 

 
 
 
 
 
 
 
 
  
 
 
  
  
 
 
  
  
 
 
 
 
 
 
  
  
 
 
  
  
 
 
  
  
 
 
 
 
Annual accounts of the European Union 2018 

Financial assets held in guarantee funds for budgetary guarantees 

The  Commission  has  set-up  guarantee  funds  to  cover  budgetary  guarantees  (see  note  4.1.1  of  the 
consolidated  financial  statements)  given  to  the  EIB  group.  These  guarantee  funds  are  provisioned  by 
payments  from  the  EU  budget  so  as  to  provide  a  liquidity  cushion  against  potential  losses  from 
guaranteed  operations.  Payments  to  the guarantee  funds  are  invested  in  financial instruments  including 
debt securities, cash and term deposits. At 31 December 2018, the Commission holds financial assets in 
the: 

  Guarantee Fund for external actions of EUR 2.5 billion;  

 

 

EFSI Guarantee Fund of EUR 5.5 billion; and 

EFSD Guarantee Fund of EUR 0.3 billion. 

Loans and related borrowings for financial assistance programmes 

Financial support for Member States and third countries in the form of bilateral loans financed from the 
capital  markets  with  the  guarantee  of  the  EU  budget  is  provided  by  the  Commission  under  decisions  of 
the European Parliament and of the Council. 

The Commission, acting on behalf of the EU, currently operates three main programmes:  

  European Financial Stabilisation Mechanism (EFSM);  
  Balance of Payments (BOP) assistance; and  
  Macro-financial assistance (MFA), under which it may grant loans.  

The capital required to fund the EU lending is raised on the capital markets or with financial institutions.  

At 31 December 2018, the nominal amount of the loans granted for financial assistance under the EFSM 
and BOP were: 

BOP 

Romania 
5.0** 

5.0 

(4) 

1 

Latvia 

3.1 

2.9 

(2.2) 

0.7 

EFSM* 

EUR billion 

TOTAL 

Total 

Ireland 

Portugal 

Total 

8.1 

7.9 

(6.2) 

22.5 

22.5 

- 

26.0 

24.3 

- 

48.5 

46.8 

- 

56.6 

54.7 

(6.2) 

1.7 

22.5 

24.3 

46.8 

48.5 

Total granted 

Total disbursed at 31.12.2018 

Total repaid at 31.12.2018 
Outstanding amount at 
31.12.2018 

*   Without re-financing transactions.  
**   Excluding precautionary assistance. 

EFSM 

EFSM  was  created  to  provide  financial  assistance  to  all  Member  States  experiencing  or  seriously 
threatened  by  a  severe  economic  financial  disturbance  caused  by  exceptional  occurrences  beyond  their 
control. The EFSM was used to provide financial assistance, conditional on the implementation of reforms, 
to Ireland and Portugal between 2011 and 2014. 

This  programme  expired  and  no  additional  loans  can  be  drawn,  though  it  remains  in  place  for  specific 
tasks such as the lengthening of maturities for loans to Ireland and Portugal and providing bridging loans. 

106 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
The main points of the EFSM programme are as follows: 

Annual accounts of the European Union 2018 

Ireland 

 

 

Ireland requested the full total of EUR 22.5 billion granted by the EFSM in December 2010. This 
amount was disbursed in eight instalments between January 2011 and March 2014; 

Ireland has the option to lengthen the maturity of the EFSM loans based on the extension of the 
maximum weighted average maturity to 19.5 years granted by the Council in 2013; 

  Repayments  of  EUR  3.4  billion  and  EUR  0.5  billion  were  scheduled  for  April  and  October  2018, 
respectively.  Ireland  requested  a  maturity  extension  and  the  amounts  were  approved  and 
successfully borrowed in the markets in 2018. They have been rescheduled for repayment in two 
instalments of EUR 2.4 billion and EUR 1.5 billion in 2025 and 2033 respectively. 

Portugal 

 

Portugal has requested EUR 24.3 billion from a total of EUR 26 billion granted by the EFSM in May 
2011. This amount was disbursed in seven instalments between May 2011 and November 2014. 
A  repayment  of  EUR  0.6  billion  was  scheduled  for  October  2018  but,  as  in  the  case  of  Ireland, 
Portugal requested the extension of the maturity and the loan was refinanced in the markets with 
a new maturity date in 2033. 

BOP 

The BOP is an assistance programme designed for countries outside the euro area that are experiencing 
or  are  threatened  by  difficulties  regarding  their  balance  of  payments.  BOP  assistance  takes  the  form  of 
medium-term loans that are conditional on the implementation of policies designed to address underlying 
economic problems. Typically, balance of payments assistance from the EU is offered in cooperation with 
the International Monetary Fund (IMF) and other international institutions or countries. 

The EU medium-term financial assistance under the BOP facility was activated in November 2008 to help 
Hungary and subsequently Latvia and Romania, in January and May 2009 respectively, to restore market 
confidence  for  a  total  commitment  of  EUR  14.6  billion.  The  BOP  assistance  programme  for  Hungary 
expired in 2010 and has been fully repaid in 2016. Both assistance programmes for Latvia and Romania 
expired in 2012, hence no additional instalments can be disbursed.  

Additionally,  the  two  precautionary  assistance  programmes  for  Romania  expired  in  2013  and  2015 
without being drawn down. 

The main points are as follows: 

  During  2018,  the  beneficiary  Member  States  of  BOP  have  reimbursed  on  time  and  fully  a  total 
amount of EUR 1.45 billion out of which EUR 1.35 billion related to a capital reimbursement from 
Romania, the remaining being related to interest; and 

 

The  outstanding  amount  at  end  2018  is  EUR  1.7  billion  in  total,  EUR  0.7  billion  for  Latvia  and 
EUR 1 billion for Romania. 

MFA 

The MFA is a form of financial aid extended by the EU to partner countries outside the EU experiencing a 
balance of payments crisis. It takes the form of medium/long-term loans or grants, or a combination of 
these, and is only available to countries benefiting from a disbursing IMF programme. 

The outstanding loans at 31 December 2018 under the MFA programme were EUR 4.4 billion at nominal 
amounts.  

107 

 
 
 
Annual accounts of the European Union 2018 

1.4.  LIABILITIES 

The  most  significant  items  on  the  liability  side  of  the  balance  sheet  consist  primarily  of  four  items:  (i) 
pension  obligation  and  other  employee  benefits  liabilities;  (ii)  borrowings;  (iii)  payables  to  third  parties 
and (iv) accrued charges. 

Composition of the liabilities on the consolidated balance sheet of the EU 

2% 

34% 

27% 

14% 

23% 

Pension & other employee benefits

Borrowings

Payables

Accrued charges & deferred income

Other liabilities

As  at  31  December  2018 the  total  liabilities  were  EUR 235.9 billion,  remaining  at  the  same  level  as  the 
previous year.  

The key changes were related to the following effects: 

 

Payables  fell  by  EUR 6.8 billion  due  to  a  decrease  in  amounts  due  to  Member  States  related  to 
own  resources  (i.e.,  EU  budget  contributions  to  be  reimbursed  at  year-end  following  amending 
budget). This year there were additional contributions due from Member States;  

  A slight decrease in the financial liabilities of EUR 1 billion resulting primarily from the repayment 
of  borrowings  (EUR 1.35 billion),  related  to  the  loan  provided  to  Romania,  under  the  BOP 
programme; and  

 

The above effects were offset by an increase of EUR 7.3 billion of the employee benefits liability. 

Overall,  all  other  items  of  the  liability  remained  stable.  It  should  be  noted  that  long-term  financial 
liabilities  (borrowings) increased,  offset  by  a  similar decrease  in  the  short-term  element.  This  relates to 
an EFSM debt rescheduling for Ireland (EUR 3.9 billion) and Portugal (EUR 0.6 billion). 

108 

 
 
 
 
 
Total cost claims and invoices received and recognised under the payables heading of the balance sheet 

Annual accounts of the European Union 2018 

Net assets 

The  excess  of  liabilities  over  assets  does  not  mean  that  the  EU  institutions  and  bodies  are  in  financial 
difficulties, rather it means that certain liabilities will be funded by future annual budgets. Many expenses 
are recognised under accrual accounting rules in the current year although they may be actually paid in 
the following or later years and funded using future budgets; the related revenues will only be accounted 
for in future periods. The most significant amounts to be highlighted are the EAGF activities (the bulk of 
which is usually paid in the first quarter of the following year) and the employee benefits liability (to be 
paid over the next 30 plus years). 

2. MANAGEMENT OF RISKS AND UNCERTAINTIES OF 

EU BUDGET IMPLEMENTATION 

2.1.  MACRO-ECONOMIC ENVIRONMENT 

The macro-economic environment of the EU13 has an impact on the ability of EU Member states to meet 
their  funding  obligations  towards  the  EU  institutions  and  bodies  and  thus  on  the  ability  of  the  EU  to 
continue implementing EU policies. 

The  European  economy  grew  for  the  sixth  year  in  a  row  in  2018,  but  the  growth  rate  was  lower  than 
anticipated,  especially  in  the  second  half  of  the  year,  due  to  a  combination  of  internal  and  external 
factors.  Domestic  factors  include  the  disruption  of  European  manufacturing  sector  (in  particular  car 
production) in the third quarter and social tensions and fiscal policy uncertainty in some Member States. 
Some  of  the  most  important  external  factors  include  the  increased  uncertainty  regarding  trade  policies, 
notably between US and China and a declining trend in global manufacturing output which resulted into 
weaker global trade growth, which impacted the Euro area in particular.  

Despite  these  developments,  the  fundamentals  of  the  European  economy  remain  strong  and  over  the 
next two years the economy is expected to continue growing but at a more moderate pace. 

Euro area and EU GDP is estimated to have grown by 1.9 % in 2018. Euro area GDP is forecasted to grow 
by 1.3 % in 2019 and 1.6 % in 2020, while EU GDP growth forecast is 1.5 % in 2019 and 1.7 % in 2020. 

13  See 

for  more 

information:  European  Commission  "European  Economic  Forecast  Winter  2019",  URL: 

https://ec.europa.eu/info/publications/european-economic-forecast-winter-2019_en. 

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Annual accounts of the European Union 2018 

Overall inflation averaged 1.7% in 2018, up from 1.5% in 2017. With oil price assumptions for 2019 and 
2020 now lower than in autumn 2018, euro area inflation is forecast to moderate to 1.4% in 2019 before 
picking up mildly to 1.5% in 2020. For the EU as a whole, inflation is forecast to average 1.6% this year 
and then pick up to 1.8% in 2020. 

The  euro  area  labour  market  improved  further  in  the  first  three  quarters  of  2018.  The  number  of 
employed  persons  has  reached  in  the  third  quarter  of  2018  the  highest  level  ever  recorded  in  the  euro 
area and in December 2018 the unemployment rate in the euro area stood at 7.9%, its lowest level since 
October 2008. 

Risks to the economic outlook remain substantial, as trade tensions and their uncertain evolution remain 
a  concern.  The  US  may  be  impacted  by  abrupt  fiscal  policy  changes.  The  Chinese  economy  may  be 
slowing  down  more  sharply  than  anticipated.  Global  financial  markets  and  many  emerging  markets  are 
vulnerable to sudden changes in risk appetite and growth expectation. For the EU, the domestic factors 
could be more long lasting than anticipated and “Brexit” remains a source of uncertainty. 

On the positive side, still favourable labour market conditions could result in stronger domestic demand 
while  a  more  extensive  use  of  EU  funds  in  recipient  countries  could  trigger  additional  investments.  The 
outlook for global GDP remains stable, with it being expected to expand at 3.8% for the next two years. 

2.2.  BUDGETARY CONTINGENT LIABILITIES FOR 

FINANCIAL ASSISTANCE 

The EU borrowing and lending activities for financial assistance programmes are non-budget operations. 
In general, funds raised are on-lent back-to-back to the beneficiary country, i.e. with the same coupon, 
maturity  and  amount.  Notwithstanding  the  back-to-back  methodology,  the  debt  service  of  the  funding 
instruments  is  a  legal  obligation  of  the  EU,  which  will  ensure  that  all  payments  are  made  fully  and  in  a 
timely manner. The Commission has put procedures in place to ensure the repayment of borrowings even 
in case of a loan default. 

Borrowings of the EU constitute direct and unconditional obligations of the EU and are guaranteed by the 
EU  Member  States  (budgetary  contingent  liabilities).  Borrowings  undertaken  to  fund  loans  to  countries 
outside  the  EU  are  covered  by  the  Guarantee  Fund  for  external  actions.  Should  a  beneficiary  Member 
State  default,  the  debt  service  will  be  drawn  from  the  available  treasury  balance  of  the  Commission,  if 
possible.  If  that  would  not  be  possible,  the  Commission  would  draw  the  necessary  funds  from  the 
Member  States.  EU  Member  States  are  legally  obliged,  according  to  the  EU  own  resources  legislation 
(Article  14  of  Council  Regulation  609/2014),  to  make  available  sufficient  funds  to  meet  the  EU’s 
obligations. Thus investors are only exposed to the credit risk of the EU, not to that of the beneficiary of 
loans  funded.  “Back-to-back”  lending  ensures  that  the  EU  budget  does  not  assume  any  interest  rate  or 
foreign exchange risk. 

For  each  country  programme,  the  EP,  the  Council  and  the  Commission  decisions  determine  the  overall 
granted amount, the number of instalments to be disbursed, and the maximum (average) maturity of the 
loan  package.  Subsequently,  the  Commission  and  the  beneficiary  country  agree  the  loan/funding 
parameters, in particular the maturity of instalments. In addition, except for the first one, all instalments 
of  the  loan  depend  on  compliance  with  policy  conditions,  in  the  context  of  a  joint  EU/IMF  financial 
assistance,  which  is  another  factor  influencing  the  timing  of  funding  operations.  This  implies  that  the 
timing  and  maturities  of  issuances  are  dependent  on  the  related  EU  lending  activity.  Funding  is 
exclusively denominated in euro and the maturity spectrum is from 3 to 30 years. 

110 

 
 
 
Annual accounts of the European Union 2018 

The  following  table  provides  an  overview  of  the  planned  reimbursement  schedule  in  nominal  value  for 
outstanding EFSM and BOP loan amounts at 31 December 2018: 

BOP 

EFSM 

Latvia 

Romania 

Total 

Ireland 

Portugal 

Total 

EUR billion 

TOTAL 

2019 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2031 

2032 

2033 

2035 

2036 

2038 

2042 

0.5 

1.0 

1.5 

- 

- 

- 

- 

0.2 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

0.2 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

0.7 

1.0 

1.7 

- 

3.0 

- 

2.0 

0.8 

2.4 

2.0 

1.0 

2.3 

1.0 

- 

3.0 

1.5 

2.0 

- 

1.5 

22.5 

- 

6.8 

2.7 

1.5 

1.8 

- 

2.0 

2.0 

- 

0.4 

2.2 

- 

0.6 

- 

1.0 

1.8 

1.5 

- 

9.8 

2.7 

3.5 

2.6 

2.4 

4.0 

3.0 

2.3 

1.4 

2.2 

3.0 

2.1 

2.0 

1.0 

1.8 

3.0 

1.5 

9.8 

2.7 

3.5 

2.6 

2.6 

4.0 

3.0 

2.3 

1.4 

2.2 

3.0 

2.1 

2.0 

1.0 

1.8 

3.0 

24.3 

46.8 

48.5 

The  Inter-governmental  financial  stability  mechanisms  European  Financial  Stability  Facility  (EFSF)  and 
European  Stability  Mechanism  (ESM)  are  outside the  EU  Treaty  framework  and  thus  not  included  in the 
consolidated annual accounts of the EU. 

2.3.  BUDGETARY GUARANTEES 

The EU has given the EIB Group guarantees on loans granted outside of the EU and on debt and equity 
operations  covered  by  the  EFSI  guarantee.  At  31  December  2018,  the  EU  discloses  in  the  notes  to  its 
consolidated  financial  statements  (see  note  4.1.1)  contingent  liabilities  for  both  guarantees,  while  the 
amounts  constituting  present  obligations  are  recognised  as  provisions  in  the  financial  statements  (see 
note 2.10 of the consolidated financial statements). In order to mitigate the risk that guarantee calls by 
the  EIB  Group  could  have  on  the  EU  budget,  the  EU  has  created  dedicated  guarantee  funds,  i.e.  the 
Guarantee Fund for external actions and the EFSI Guarantee Fund. 

The  Guarantee  Fund  for  external  actions  is  provisioned  by  the  EU  budget  so  as  to  cover  9 %  of  the 
guaranteed loans outstanding at year-end for EIB external lending mandate activities to third countries. 
At 31 December 2018, the total asset value of EUR 2.5 billion covers an exposure of amounts disbursed 
of EUR 20.7 billion.  

The  EFSI  Guarantee  Fund  started  its  activity  in  2016.  Pursuant  to  the  amended  EFSI  Regulation 
(Regulation EU 2017/2396) the EFSI EU guarantee ceiling was increased to EUR 26 billion (from the initial 
EUR 16 billion) and the boundary for the guarantee fund decreased to 35 % (from the initial 50 %) of the 
total  EU  guarantee  obligation.  Therefore,  the  EFSI  Guarantee  Fund  is  now  expected  to  reach  a  total 
amount  of  EUR 9.1 billion.  The  EFSI  Agreement  was  amended  in  2018,  in  line  with  the  amended  EFSI 
Regulation.  The  total  assets  that  make  up  the  EFSI  Guarantee  Fund  at  31  December  2018  is 
EUR 5.5 billion and that covers an exposure of disbursed amounts of EUR 15.8 billion. 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Pursuant  to  EFSD  Regulation  (Regulation  EU  2017/1601),  a  new  guarantee  fund  has  been  established: 
the EFSD Guarantee Fund. The first EU budget contributions into the fund were received in 2018 but no 
guarantee agreements were effective as at 31 December 2018. 

2.4.  NEW ENTRANTS' RESERVE (NER) 300 

The  NER  300  fund  originates  from  the  sale  of  the  Emission  Trading  Scheme  allowances  and  belongs  to 
the Member States who use the money to finance innovative low-carbon energy demonstration projects. 
The Commission manages the programme on behalf of the Member States, while the EIB is responsible 
for the asset management of the NER 300 Fund and acts as a technical advisor, under the  Cooperation 
Agreement  with  the  Commission.  Since  neither  the  revenues  from  the  allowances  nor  the  expenses  for 
the projects financed are part of the EU budget, these amounts are not accounted for in the EU accounts. 

112 

 
 
Annual accounts of the European Union 2018 

EUROPEAN UNION 
FINANCIAL YEAR 2018 

BUDGETARY IMPLEMENTATION REPORTS 
AND EXPLANATORY NOTES 

It should be noted that due to the rounding of figures into millions of euros, some financial data in the 
tables below may appear not to add-up.

113 

 
 
 
 
 
 
 
 
 
 
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CONTENTS 

EU BUDGET RESULT ....................................................................................... 115 

STATEMENTS OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS .................... 116 

NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS ................................... 118 

1.

THE EU BUDGET FRAMEWORK ................................................................. 118 

1.1.  MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020 ............................. 118 

1.2.  MFF DETAILED HEADINGS (PROGRAMMES) ......................................... 119 

1.3. 

1.4. 

1.5. 

1.6. 

ANNUAL BUDGET ............................................................................. 119 

REVENUE ........................................................................................ 121 

CALCULATION OF THE BUDGET RESULT .............................................. 122 

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT .......... 124 

2.

IMPLEMENTATION OF THE 2018 EU BUDGET – COMMENTARY ..................... 126 

2.1. 

2.2. 

REVENUE ........................................................................................ 126 

EXPENDITURE ................................................................................. 126 

3.

IMPLEMENTATION OF EU BUDGET REVENUE ............................................. 128 

3.1. 

SUMMARY OF THE IMPLEMENTATION OF EU BUDGET REVENUE ............. 128 

4.

IMPLEMENTATION OF EU BUDGET EXPENDITURE ...................................... 129 

4.1.  MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 
APPROPRIATIONS ....................................................................................... 129 

4.2.  MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS ................. 130 

4.3.  MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS ....................... 131 

4.4.  MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL) .................. 132 

4.5.  MFF: COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN ..................... 133 

4.6. 
APPROPRIATIONS ....................................................................................... 134 

DETAILED MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 

4.7. 

4.8. 

4.9. 

DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS .. 139 

DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS ........ 144 

DETAILED MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL) ... 150 

4.10.  DETAILED MFF: COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN ...... 155 

5.

IMPLEMENTATION OF THE BUDGET BY INSTITUTION ................................. 158 

5.1. 

5.2. 

5.3. 

IMPLEMENTATION OF BUDGET REVENUE ............................................ 158 

IMPLEMENTATION OF COMMITMENT APPROPRIATIONS......................... 159 

IMPLEMENTATION OF PAYMENT APPROPRIATIONS ............................... 160 

6.

IMPLEMENTATION OF THE AGENCIES' BUDGET ......................................... 161 

6.1. 

6.2. 

BUDGET REVENUE ........................................................................... 161 

COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY ................. 163 

114 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

EU BUDGET RESULT 

Revenue for the financial year 

Payments against current year appropriations 

Payment appropriations carried over to  year N+1 

Cancellation of unused appropriations carried over from year N-1 

Evolution of assigned revenue 

Exchange rate differences for the year 

Budget result 

Note 

2018 

2017 

EUR million 

1.1 

1.2 

1.3 

1.4 

1.5 

1.6 

159 318 

139 691 

(154 833) 

(135 764) 

(1 675) 

(1 796) 

 106 

 40 

(1 114) 

(1 450) 

 (1) 

1 802 

 (166) 

 555 

The budget result of the EU is returned to the Member States in 2019 through deduction of their amounts 
due.  It  is  calculated  in  accordance  with  Article 1(1)  of  Council  Regulation  No 608/2014  laying  down 
implementing  measures  for  the  system  of  own  resources.  More  information  can  be  found  under 
Calculation of the budget result. 

1.1 Revenue for the financial year: refers to table 3.1 “Summary of the implementation of EU Budget 

Revenue”, column 8 “Total Revenue”. 

1.2 Payments  against  current  year  appropriations:  refer  to  table  4.3  “MFF  –  Implementation  of 
Payment  appropriations”,  column  2  “Payments  made  from  adopted  budget  and  column  4 
“Payments made from assigned revenue”. 

1.3 Payment  appropriations  carried  over  to  year  N+1:  refer  to  table  4.3  “MFF  –  Implementation  of 
Payment appropriations”, column 7 automatic carry-overs plus column 8 carry-over by decision. 

1.4 Cancellation  of  unused  payment  appropriations  carried  over  from  year  N-1:  takes  into  account 
the  amount  of  payment  appropriations  (automatic  and  on  decision)  at  the  end  of  previous  year 
and  current  year’s  “Payments  made  from  carryovers”  as  in  column  3  of  table  4.3  “MFF  – 
Implementation of Payment appropriations”. 

1.5 Evolution  of  the  total  assigned  revenue  appropriations  at  year-end:  calculates  the  difference  of 
the  amount  of  assigned  revenue  appropriations  at  the  end  of  previous  year  (plus)  and  the 
amount  of  assigned  revenue  appropriations  at  the  end  of  the  current  year  (as  in  column  9  of 
table 4.3 “MFF – Implementation of Payment appropriations” - minus) to obtain the net variation 
of assigned revenue in the current year. 

1.6 Exchange rate differences include realised and non-realised exchange rate differences. 

115 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

STATEMENTS OF COMPARISON OF BUDGET AND ACTUAL 
AMOUNTS 

Budget revenue 

1  Own resources 

  11 - Sugar levies 

  12 - Customs duties 

  13 - VAT 

  14 - GNI 

  15 - Correction of budgetary imbalances 

16 - Reduction of GNI based contribution of the 
Netherlands and Sweden 

3  Surpluses, balances and adjustments 

4 

5 

6 

Revenue accruing from persons working with the 
institutions and other union bodies 

Revenue accruing from the administrative operation  of 
the institutions 

Contributions and refunds in connection with Union 
agreements and programmes 

7  Interests on late payments and fines 

8  Borrowing and lending operations 

9  Miscellaneous revenue 

  Total 

EUR million 

Initial 
budget 
adopted 

Final 
adopted 
budget 

Entitlements 
established 

Revenue 

142 832 

142 364 

142 373 

142 330 

– 

22 844 

17 250 

 (93) 

20 165 

17 149 

 (85) 

20 360 

17 133 

 (85) 

20 317 

17 133 

102 739 

105 143 

104 979 

104 979 

– 

– 

– 

– 

– 

 556 

 (19) 

 6 

 581 

 (19) 

 6 

 581 

1 547 

1 547 

1 552 

1 542 

 45 

 45 

 583 

 563 

 110 

 115 

 6 

 25 

 110 

 115 

 6 

 25 

13 346 

12 777 

14 592 

1 473 

 39 

 24 

 39 

 13 

144 681 

144 768 

173 090 

159 318 

Budget expenditure: commitments by multiannual financial 
framework (MFF) heading 

MFF Heading 

1  Smart and inclusive growth 

  1a: Competitiveness for growth and jobs 

  1b: Economic, social and territorial cohesion 

2  Sustainable growth: natural resources 

of which: Market related expenditure and direct 
payments 

3  Security and citizenship 

4  Global Europe 

5  Administration 

  of which: Administrative expenditure of the institutions 

6  Compensations 

8 

Negative reserve and deficit carried over from the 
previous financial year  

Initial 
adopted 
budget 

Final 
adopted 
budget 

Total 
appropriations 
available 

EUR million 

Commitments 
made 

77 534 

77 532 

22 001 

22 000 

55 532 

55 532 

59 285 

59 239 

43 235 

43 233 

3 493 

9 569 

9 666 

4 015 

– 

– 

3 492 

10 379 

9 666 

4 015 

– 

– 

89 649 

25 864 

63 785 

62 419 

45 284 

4 015 

11 448 

10 508 

4 465 

– 

– 

87 357 

23 773 

63 585 

60 560 

44 364 

3 855 

11 062 

10 124 

4 280 

– 

– 

9  Special Instruments 

  Total 

 567 

 388 

 429 

 180 

160 114 

160 696 

178 468 

173 139 

116 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Budget expenditure: payments by multiannual financial 
framework (MFF) heading 

MFF Heading 

1  Smart and inclusive growth 

  1a: Competitiveness for growth and jobs 

  1b: Economic, social and territorial cohesion 

2  Sustainable growth: natural resources 

of which: Market related expenditure and direct 
payments 

3  Security and citizenship 

4  Global Europe 

5  Administration 

of which: Administrative expenditure of the 
institutions 
6  Compensations 

8 

Negative reserve and deficit carried over from the 
previous financial year  

9  Special Instruments 

  Total 

Initial 
adopted 
budget 

Final 
adopted 
budget 

Total 
appropriations 
available 

66 624 

20 097 

46 527 

56 084 

66 733 

20 155 

46 578 

56 241 

80 917 

25 073 

55 844 

59 648 

EUR million 

Payments 
made 

75 876 

21 408 

54 468 

58 046 

43 189 

43 180 

45 436 

44 310 

2 981 

8 906 

9 666 

4 015 

– 

– 

3 013 

8 813 

9 667 

4 015 

– 

– 

3 305 

10 788 

11 355 

4 963 

– 

– 

3 108 

9 519 

9 944 

4 140 

– 

– 

 420 

 302 

 340 

 180 

144 681 

144 768 

166 353 

156 673 

117 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS  

1.

  THE EU BUDGET FRAMEWORK 

The  budgetary  accounts  are  kept  in  accordance  with  the  Financial  Regulation  (FR)  and  its  rules  of 
application. The general budget is the instrument which provides for and authorises the Union's revenue 
and  expenditure  every  year,  within  the  ceilings  and  other  provisions  laid  down  in  the  Multiannual 
Financial Framework in line with the legislative acts concerning multiannual programmes adopted under 
that framework. 

1.1.  MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020 

1. Smart and inclusive 
growth 

1.a Competitiveness 
for growth and jobs 
1.b Economic, social 
and territorial 
cohesion 

2. Sustainable growth: 
natural resources 

of which: market 
related expenditure 
and direct payments 

3. Security and 
citizenship 

4. Global Europe 

5. Administration 

of which: 
Administrative 
expenditure of the 
institutions 
6. Compensations 

8. Negative reserve 

9. Special Instruments 
Commitment 
appropriations 

Total payment 
appropriations 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

Total 

  52 756 

  77 986 

  69 304 

  73 512 

  76 420 

  79 924 

  83 661 

  513 563 

EUR million 

  16 560 

  17 666 

  18 467 

  19 925 

  21 239 

  23 082 

  25 191 

  142 130 

  36 196 

  60 320 

  50 837 

  53 587 

  55 181 

  56 842 

  58 470 

  371 433 

  49 857 

  64 692 

  64 262 

  60 191 

  60 267 

  60 344 

  60 421 

  420 034 

  43 779 

  44 190 

  43 951 

  44 146 

  44 163 

  44 241 

  44 264 

  308 734 

  1 737 

  2 456 

  2 546 

  2 578 

  2 656 

  2 801 

  2 951 

  17 725 

  8 335 

  8 721 

  8 749 

  9 076 

  9 143 

  9 483 

  9 432 

  9 825 

  10 268 

  10 510 

  9 918 

  10 346 

  10 786 

  11 254 

  66 262 

  69 584 

  7 056 

  7 351 

  7 679 

  8 007 

  8 360 

  8 700 

  9 071 

  56 224 

   29 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

   29 

– 

– 

  121 435 

  162 959 

  154 738 

  155 631 

  159 514 

  164 123 

  168 797 

 1 087 197 

  135 762 

  140 719 

  130 694 

  142 906 

  154 565 

  159 235 

  162 406 

 1 026 287 

The  above  table  shows  the  Multiannual  Financial  Framework  (MFF)  ceilings  at  current  prices.  2018  was 
the fifth financial year covered by the MFF 2014-2020. The overall ceiling for commitment appropriations 
for 2018 was EUR 159 514 million, equivalent to 1.02 % of the EU GNI, whilst the corresponding ceiling 
for  payment  appropriations  was  EUR 154  565 million,  or  0.98 %  of  the  EU  GNI  valid  throughout  the 
budgetary year 2018. 

New  flexibility  provisions  have  been  agreed  for  the  2014-2020  MFF.  One  of  the  new  provisions  is  a 
possibility to transfer unspent margins under the payment ceilings to the following years – via the Global 
Margin  for  Payments  in  the  framework  of  the  technical  adjustment  of  the  MFF  for  the  following  year. 
Therefore,  the  unspent  amount  from  2016  (EUR 13  991 million  in  current  prices)  and  2017  (EUR 16 
414 million in current prices) was transferred to the years 2018-2020 and the ceilings of 2016-2020 were 
adjusted  accordingly  –  see  the  above  mentioned  technical  adjustment  of  the  MFF  for  2018  and  the 
technical adjustment for 2019 (COM(2018) 282 of 23 May 2018). 

On  23  May  2018  the  Commission  adopted  a  Communication  on  technical  adjustment  of  the  financial 
framework for 2019 in line with movements in GNI (ESA 2010) (COM(2018) 282 of 23 May 2018).  

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

An explanation of the various headings of the MFF is given below: 

Heading 1 – Smart and inclusive growth 

This heading is divided into two separate, but interlinked components: 

Competitiveness  for  growth  and  jobs,  encompassing  expenditure  on  research  and  innovation, 
1a 
education  and  training,  Connecting  Europe  Facility,  social  policy,  the  internal market  and  accompanying 
policies. 

Economic,  social  and  territorial  cohesion,  designed  to  enhance  convergence  of  the  least 
1b 
developed  Member  States  and  regions,  to  complement  the  EU  strategy  for  sustainable  development 
outside the less prosperous regions and to support inter regional cooperation. 

Heading 2 – Sustainable growth: natural resources 

Heading  2  includes  the  common  agricultural  and  fisheries  policies,  and  the  environmental  measures,  in 
particular the Life + program. 

Heading 3 – Security and citizenship 

Heading 3 (Security and citizenship) reflects the growing importance attached to certain fields where the 
EU  has  been  assigned  particular  tasks  –  justice  and  home  affairs,  border  protection,  immigration  and 
asylum  policy,  public  health  and  consumer  protection,  culture,  youth,  information  and  dialogue  with 
citizens. 

Heading 4 – Global Europe 

Heading 4 covers all external action, including development cooperation, humanitarian aid, pre-accession 
and neighbourhood instruments. The EDF remains outside of the EU budget and is not part of the MFF. 

Heading 5 - Administration 

This  heading  covers  administrative  expenditure  for  all  institutions,  pensions  and  the  European  Schools. 
Administrative costs make up the total of the expenditure of institutions other than the Commission. 

Heading 6 - Compensations 

In accordance with the political agreement that new Member States should not become net-contributors 
to the budget at the very beginning of their membership, compensation was foreseen under this heading. 
This amount was available as transfers to them to balance their budgetary receipts and contributions. 

Heading 9 – Special instruments 

Flexibility mechanisms enable the EU to mobilise the necessary funds to react to unforeseen events such 
as crisis and emergency situations. Their scope, financial allocation and operating modalities are provided 
for  in  the  MFF  regulation  and  the  Interinstitutional  Agreement.  In  the  current  context  of  reduced 
expenditure, they also ensure that budgetary resources can respond to evolving priorities, so that every 
euro  is  used  where  it  is  most  needed.  Most of  the  flexibility  mechanisms  are  therefore  kept  outside  the 
MFF and the funding can be mobilised above the expenditure ceilings. 

1.2.  MFF DETAILED HEADINGS (PROGRAMMES) 

The  headings  of  the  MFF  are  further  broken  down  into  detailed  headings,  corresponding  to  the  main 
spending  programmes  (e.g.  Horizon  2020,  Erasmus+  etc.).  Underlying  legal  bases  for  budget 
implementation are adopted at this programme level. Programmes are the commonly used structure for 
reporting  on  implementation  and  results.  Tables  by  programme  are  available  in  the  budgetary 
implementation reports (see tables 4.6 - 4.10 below). 

119 

 
 
 
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1.3.  ANNUAL BUDGET 

Every  year,  the  Commission  estimates  all  the  Institutions'  revenue  and  expenditure  for  the  year  and 
draws up a draft budget which it sends to the budgetary authority. On the basis of this draft budget, the 
Council  sets  out  its  position,  which  is  then  the  subject  of  negotiations  between  the  two  arms  of  the 
budgetary authority. The President of the EP declares that the joint draft has been finally adopted, thus 
making the budget enforceable. During the year in question, amending budgets are adopted. The task of 
executing the budget is mainly the responsibility of the Commission. 

The  budget  structure  for  the  Commission  consists  of  administrative  and  operational  appropriations.  The 
other  Institutions  have  only  administrative  appropriations.  Furthermore,  the  budget  distinguishes 
between  two  types  of  appropriations:  non-differentiated  and  differentiated.  Non-differentiated 
appropriations  are  used  to  finance  operations  of  an  annual  nature  (which  comply  with  the  principle  of 
annuality). Differentiated appropriations are used in order to reconcile the principle of annuality with the 
need  to  manage  multiannual  operations.  Differentiated  appropriations  are  split  into  commitment  and 
payment appropriations: 

- 

commitment appropriations: cover the total cost of the legal obligations entered into for the current 
financial year for operations extending over a number of years. However, budgetary commitments for 
actions extending over more than one financial year may be broken down over several years into 
annual instalments where the basic act so provides. 

- 

payment appropriations: cover expenditure arising from commitments entered into in the current 
financial year and/or earlier financial years. 

In the accounts, the types of funding are grouped into two main items: 

 

 

Final adopted budget appropriations; and 

Additional appropriations containing: 

–  Carryovers from previous year (the financial regulation allows for a limited number of cases 

to carry unspent amounts from the previous year into the current year); and 

–  Assigned revenue arising from reimbursements, contributions from third parties/countries to 
EU programs and work performed for third parties are assigned directly to the corresponding 
expenditure budget lines and constitute the third pillar of funding. 

All funding types together form the available appropriations. 

120 

 
 
 
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1.4.  REVENUE 

1.4.1.  Own resources revenue 

The vast majority of revenue comes from own resources, which consist of the following categories:  

(1) 

(2) 

(3) 

Traditional own resources (TOR): usually account for +/- 14 % of own resource revenue. 

Value  added  tax  (VAT)  based  resource:  usually  accounts  for  around  12 %  of  own  resource 
revenue. 

Gross  national  income  (GNI)  based  resource:  usually  accounts  for  +/-  74 %  of  own  resource 
revenue. 

The  allocation  of  own  resources  is  made  in  accordance  with  the  rules  laid  down  in  the  Council  Decision 
No. 2014/335/EU, Euratom of 26 May 2014 on the system of the EU's own resources (ORD 2014). This 
decision has entered into force on 1 October 2016 and applied retroactively from 1 January 2014.  

The  total  amount  of  own  resources  allocated  to  the  Union  to  cover  annual  appropriations  for  payments 
shall not exceed 1.20 % of the sum of all the Member States' GNIs. 

1.4.2. 

Traditional own resources (TOR) 

Traditional  own  resources  (TOR)  consist  of  customs  duties  (levied  on  imports  from  third  countries)  and 
sugar  levies  (paid  by  sugar  producers  to  finance  expenditure  on  the  sugar  common  organisation  of  the 
market)  levied  on  economic  operators  and  collected  by  Member  States  on  behalf  of  the  EU.  However, 
Member  States  keep  20 %  as  a  compensation  for  their  collection  costs.  All  established  traditional  own 
resource amounts must be entered in one or other of the accounts kept by the competent authorities: 

- 

- 

In  the  ordinary  accounts  provided  for  in  Article  6(3)  of  Regulation  No  609/2014:  all  amounts 
recovered or guaranteed. 
In the separate accounts provided for also in the above Article: all amounts not yet recovered and/or 
not guaranteed; amounts guaranteed but challenged may also be entered in this account. 

Traditional  own  resources  must  be  entered  in  the  Commission's  account  with  the  treasury  or  national 
central  bank  by  the  Member  State  at  the  latest  on  the  first  working  day  following  the  19th  day  of  the 
second  month  following  the  month  during  which  the  entitlement  was  established  (or  recovered  in  the 
case of the separate account). 

1.4.3. 

Value added tax (VAT) 

Value added tax (VAT) is levied on Member States' VAT bases, which are harmonised for this purpose in 
accordance  with  EU  rules.  However,  the  VAT  base  is  capped  at  50 %  of  each  Member  State’s  GNI.  The 
uniform VAT rate applied is fixed at 0.30 % except for the period 2014-2020 in which the rate of call for 
Germany, the Netherlands and Sweden was fixed at 0.15 %. 

1.4.4.  Gross national income (GNI) 

The resource based on gross national income (GNI) is used to finance the part of the budget not covered 
by any other sources of revenue. The same percentage rate is levied on each Member States' GNI, which 
is established in accordance with EU rules. 

VAT and GNI-based resources are determined on the basis of forecasts of relevant bases made when the 
draft budget is being prepared. These forecasts are subsequently revised and updated during the budget 
year in question by means of an amending budget. Differences between the amounts due by the Member 
States by reference to the actual bases and the sums actually paid on the basis of the (revised) forecasts, 
either  positive  or  negative,  are  called  by  the  Commission  from  the  Member  States  for  the  first  working 
day of June of the second year following the budget year in question. Corrections may still be made to the 
actual  VAT  and  GNI  bases  during  the  subsequent  four  years,  unless  a  reservation  is  issued.  These 

121 

 
Annual accounts of the European Union 2018 

reservations  have  to  be  seen  as  potential  claims  on  the  Member  States  for  uncertain  amounts  as  their 
financial  impact  cannot  be  estimated  with  accuracy.  When  the  exact  amount  can  be  determined,  the 
corresponding  VAT  and  GNI-based  resources  are  called  either  in  connection  with  the  VAT  and  GNI 
balances exercise or by individual calls for funds. 

1.4.5.  UK correction 

A  budgetary  imbalance  correction  mechanism  in  favour  of  the  United  Kingdom  (reducing  their  own 
resource  payments  while  increasing  the  payments  of  other  Member  States)  was  instituted  by  the 
European Council in Fontainebleau (June 1984). Germany, Austria, Sweden and Netherlands benefit from 
a reduced financing of the UK correction (restricted to one fourth of their normal share). 

1.4.6.  Gross reduction 

The  European  Council  of  7-8  February  2013  concluded  that  Denmark,  the  Netherlands  and  Sweden 
should benefit from gross reductions in their annual contributions based on GNI for the period 2014-2020 
while Austria only benefited from gross reductions for the period 2014-2016. The annual reductions are 
as follows: Denmark EUR 130 million, the Netherlands EUR 695 million and Sweden EUR 185 million. 

1.5.  CALCULATION OF THE BUDGET RESULT 

The budget result of the EU is returned to the Member States during the following year through deduction 
of their amounts due for that year. 

The amounts of own resources entered in the accounts are those credited during the course of the year 
to the accounts opened in the Commission's name by the governments of the Member States. Revenue 
comprises  also,  in  the  case  of  a  surplus,  the  budget  result  for  the  previous  financial  year.  The  other 
revenue entered in the accounts is the amount actually received during the course of the year. 

For  the  purposes  of  calculating  the  budget  result  for  the  year,  expenditure  comprises  payments  made 
against the year's appropriations plus any of the appropriations for that year that are carried over to the 
following year. Payments made against the year's appropriations means payments that are made by the 
Accounting Officer by 31 December of the financial year. For the EAGF, payments are those effected by 
the Member States between 16 October N-1 and 15 October N, provided that the Accounting Officer was 
notified of the commitment and authorisation by 31 January N+1. EAGF expenditure may be subject to a 
conformity decision following controls in the Member States. 

The budget result comprises two elements: the result of the EU and the result of the participation of the 
EFTA  countries  belonging  to  the  European  Economic  Area  (EEA).  In  accordance  with  Article  1(1)  of 
Regulation No 608/2014 laying down implementing measures for the system of own resources, this result 
represents the difference between: 

- 

- 

total revenue received for the financial year; and 

total  payments  made  against  current  year's  appropriations  plus  the  total  amount  of  that  year's 
appropriations carried over to the following year. 

The following are added to or deducted from the resulting figure: 

- 

- 

- 

the net balance of cancellations of payment appropriations carried over from previous years and any 
payments  which,  because  of  fluctuations  in  the  euro  rate,  exceed  non-differentiated  appropriations 
carried over from the previous year;  

the evolution of assigned revenue; and 

the net exchange-rate gains or losses recorded during the year. 

Appropriations  carried  over  from  the  previous  financial  year  in  respect  of  contributions  by  and  work  for 
third  parties,  which  by  definition  never  lapse,  are  included  as  additional  appropriations  for  the  financial 
year.  This  explains  the  difference  between  carryovers  from  the  previous  year  in  the  year  N  budget 
implementation  reports  and  those  carried  over  to  the  following  year  in  the  year  N-1  budget 

122 

 
 
 
 
Annual accounts of the European Union 2018 

implementation  reports.  Appropriations  made  available  again  following  the  repayment  of  payments  on 
account are disregarded when calculating the budget result. 

Payment  appropriations  carried  over  include:  automatic  carryovers  and  carryovers  by  decision.  The 
cancellation  of  unused  payment  appropriations  carried  over  from  the  previous  year  shows  the 
cancellations of appropriations carried over automatically and by decision. 

1.6.  RECONCILIATION OF ECONOMIC RESULT WITH BUDGET 

RESULT  

ECONOMIC RESULT OF THE YEAR 

Revenue 
Entitlements established in current year but not yet 
collected 
Entitlements established in previous years and collected in 
current year 
Accrued revenue (net) 
Expenses 
Accrued expenses (net) 
Expenses prior year paid in current year 
Net-effect pre-financing 
Payment appropriations carried over to next year 
Payments made from carry-overs & cancellation of unused 
payment appropriations 
Movement in provisions 
Other 

Economic result Agencies and ECSC 

BUDGET RESULT OF THE YEAR 

2018 
13 918 

(6 220) 

9 331 

(4 015) 

4 511 
(6 086) 
(8 634) 
(2 941) 
2 098 

3 567 
(4 175) 

 448 

1 802 

EUR million 
2017 
8 082 

(4 408) 

10 739 

 (257) 

3 725 
(3 574) 
(12 059) 
(3 373) 
1 784 

6 752 
(6 676) 

 (179) 

 555 

In accordance with the Financial Regulation, the economic result of the year is calculated on the basis of 
accrual accounting principles, while the budget result is based on modified cash accounting rules. As the 
economic result and the budget result both cover the same underlying transactions, it is a useful control 
to ensure that they are reconcilable.  

Reconciling items - Revenue 

The actual budgetary revenue for a financial year corresponds to the revenue collected from entitlements 
established  in  the  course  of  the  year  and  amounts  collected  from  entitlements  established  in  previous 
years. Therefore the entitlements established in the current year but not yet collected are to be deducted 
from the economic result for reconciliation purposes as they do not form part of budgetary revenue. On 
the contrary the entitlements established in previous years and collected in current year must be added 
to the economic result for reconciliation purposes.  

The  accrued  revenue  mainly  consists  of  accrued  revenue  for  agriculture,  own  resources,  interests  and 
dividends. Only the net-effect, i.e. accrued revenue for current year minus reversal accrued revenue from 
previous year, is taken into consideration.  

Reconciling items - Expenditure  

The  accrued  expenses  mainly  consists  of  accruals  made  for  year-end  cut-off  purposes,  i.e.  eligible 
expenses  incurred  by  beneficiaries  of  EU  funds  but  not  yet  reported  to  the  Commission.  Only  the  net-
effect,  i.e.  accrued  expenses  for  current  year  minus  reversal  accrued  expenses  from  previous  year,  is 
taken into consideration. Payments made in the current year relating to invoices registered in prior years 
are part of current year's budgetary expenditure and therefore must be added to the economic result for 
reconciliation purposes. 

The  net  effect  of  pre-financing  is  the  combination  of  (1)  the  new  pre-financing  amounts  paid  in  the 
current  year  and  recognised  as  budgetary  expenditure  of  the  year  and  (2)  the  clearing  of  the  pre-

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

financing  through  eligible  costs  accepted  during  the  current  year.  The  latter  represent  an  expense  in 
accrual  terms  but  not  in  the  budgetary  accounts  since  the  payment  of  the  initial  pre-financing  had 
already been considered as a budgetary expenditure at the time of its payment.  

As well as the payments made against the year's appropriations, the appropriations for that year that are 
carried  forward  to  the  next  year  also  need  to  be  taken  into  account  in  calculating  the  budget  result  for 
the year (in accordance with Article 1(1) of Regulation No 608/2014). The same applies for the budgetary 
payments made in the current year from carry-overs from previous years, and the cancellation of unused 
payment appropriations. 

The  movement  in  provisions  relates  to  year-end  estimates  made  in  the  financial  statements  (employee 
benefits mainly) that do not impact the budgetary accounts. Other reconciling amounts comprise different 
elements such as asset amortisation/depreciation, asset acquisitions, capital lease payments and financial 
participations for which the budgetary and accrual accounting treatments differ. 

2.

 IMPLEMENTATION  OF  THE  2018  EU  BUDGET  – 
COMMENTARY 

2.1.  REVENUE 

In  the  initial  adopted  EU  budget,  signed  by  the  President  of  the  European  Parliament  on  30  November 
2017, the amount of payment appropriations was EUR 144 681 million and the amount to be financed by 
own resources totalled EUR 142 832 million. The revenue and expenditure estimates in the initial budget 
are  typically  adjusted  during  the  budgetary  year,  such  modifications  being  presented  in  amending 
budgets.  Adjustments  in  the  GNI-based  own  resources  ensure  that  budgeted  revenue  matches  exactly 
budgeted  expenditure.  In  accordance  with  the  principle  of  equilibrium,  budget  revenue  and  expenditure 
(payment appropriations) must be in balance. 

During 2018, six amending budgets were adopted. Taking them into account, the final adopted revenue 
for  2018  amounted  to  EUR  144  767.9  million  and  the  total  financed  by  own  resources  was 
(EUR 142 363.7 million). The main factor for the reduction of Member States' contributions in 2018 was 
the  surplus  from  the  previous  financial  year  (EUR  555.5  million)  slightly  counterbalanced  by  a  net 
increase of payment appropriations (EUR 86.9 million).   

As far as the own resources result is concerned, the collection of traditional own resources was very close 
to the forecasted amounts. This is primarily because the budget estimates were modified at the time the 
amending budget 6/2018 was established (based mainly on the forecasts of spring 2018). 

The final Member States' VAT and GNI payments also correspond closely to the final budgetary estimate. 
The differences between the forecasted amounts and the amounts actually paid are due to the differences 
between the euro rates used for budgetary purposes and the rates in force at the time when the Member 
States outside the EMU actually made their payments. 

As  far  as  the  VAT  and  GNI  balances  are  concerned  the  rules  are  set  out  in  Article  10  b  of  the  Making 
Available Regulation (Regulation 609/2014). The procedure does not entail a budgetary amendment and 
therefore  the  Commission  directly  requests  the  Member  States  to  pay  the  net  amounts.  The  impact  for 
the EU budget was close to zero due to this netting system.  

The  heading  "Contributions  and  refunds  in  connection  with  EU  agreements  and  programmes"  concerns 
mainly revenue from financial corrections (ESIF, EAGF and EAFRD), the participation of third countries in 
research programs, the clearance of accounts in agricultural funds and other contributions and refunds to 
EU programs/activities. A substantial part of this total is made up of earmarked revenue, which typically 
gives  rise  to  the  entering  of  additional  appropriations  on  the  expenditure  side.  In  2018,  these 
contributions totalled (EUR 12.8 billion). 

The revenue from fines relates mainly to fines in the field of competition. 

124 

 
 
 
 
Annual accounts of the European Union 2018 

2.2.  EXPENDITURE  

The  2018  budget  aimed  to  achieve  the  right  balance  between  the  implementation  of  ongoing 
programmes  and  addressing  newer  challenges.  It  therefore  built  on  commitments  made  in  previous 
years,  and  made  use  of  the  existing  room  for  flexibility  to  respond  to  challenges  in  line  with  the  2014-
2020 Multiannual Financial Framework (MFF). The mid-term revision of the 2014-2020 MFF increased the 
capacity of the EU budget to address challenges and meet future needs. 

In line with the annual evolution foreseen in the MFF, appropriations proposed in the draft budget were 
set  at  EUR  160.7  billion  (1.4  %  higher  when  compared  to  the  2017  budget)  in  commitments,  and 
EUR 144.7 billion  (8  %)  in  payments,  corresponding  to  1.02  %  and  0.92  %  of  EU  GNI,  respectively. 
Concerning payments, the abnormal payment backlog observed at the beginning of the MFF was resolved 
in  2016,  and  it  was  expected  that  many  programmes  will  reach  cruising  speed,  notably  in  'Economic, 
social and territorial cohesion' (heading 1b of the budget). 

In  2018,  the  Commission  did  not  present  any  significant  adjustments  via  amending  budgets.  The  only 
adjustments  were  proposed  in  Amending  Budget  No  6  where  the  level  of  payment  and  commitment 
appropriations was adjusted in order to align it more closely to the estimates of needs in conjunction with 
the Global Transfer.   

2018 Implementation of available appropriations 

The  2018  implementation  for  all  types  of  appropriations  (budget,  carry-overs  from  2017  and  assigned 
revenue) was 97 % for commitments and 94 % for payments. Appropriations from the budget were fully 
implemented in 2018 (99.9 % in commitments and 98.5 % in payments). The implementation rate rises 
to  99.8  %  of  commitment  appropriations  and  99.7  %  of  payment  appropriations  when  assuming  full 
consumption of the amounts carried over to 2019. 

All  headings  reached  high  levels  of  implementation.  As  regards  the  special  instruments,  full 
implementation is not an objective as they are only mobilised in crises or unforeseen circumstances. 

Outstanding Commitments 

Outstanding commitments (RAL, committed amounts not yet paid for) stood at EUR 281.2 billion at the 
end  of  2018.  The  increase  of  RAL  was  lower than  foreseen  reaching  EUR  13.5  billion,  as  a  result  of the 
combined effect of the additional commitment appropriations from Amending Budget No 3 (linked to the 
extension  of  the  Facility  for  Refugees  in  Turkey)  and  a  better  implementation  than  expected  of 
commitment  and  payment  appropriations  originating  from  all  types  of  sources,  i.e.  voted,  carried-over 
from 2017 and assigned revenue. 

A  more  detailed  analysis  of  budgetary  adjustments,  their  relevant  context,  justification  and  impact  is 
presented in  the  Commission's  Report  on  Budgetary  and  Financial  Management  2018,  Part  A  "Overview 
at budget level" and Part B dealing with each heading of the Multiannual Financial Framework. 

Budget result  

Compared to the budget result of 2017, which was a historical low of EUR 0.56 billion, the budget result 
of  2018  is  higher  and  amounts  to  EUR  1.8  billion;  it  arises  primarily  from  the  revenue  side,  where 
revenues  from  contributions  and  refunds  in  connection  with  Union  agreements  and  programmes  were 
material in 2018 (EUR 12.8 billion). Payment appropriations reached nearly full implementation (94 %), 
unspent amounts (5 %) were allowed for carry-over to 2019 and the amount not used is not significant. 

125 

 
 
3.

  IMPLEMENTATION OF EU BUDGET REVENUE  

Annual accounts of the European Union 2018 

3.1.  SUMMARY OF THE IMPLEMENTATION OF EU BUDGET REVENUE  

Title 

Income 
appropriations 
Final 
Initial 
adopted 
adopted 
budget 
budget 

Entitlements established 

Revenue 

Current 
year 

Carried 
over 

Total 

On 
entitlements 
of current year 

On 
entitlements 
carried over 

Total 

EUR million 

Receipts 
as % of 
budget 

Out- 
standing 

1 

2 

3 

4 

5=3+4 

6 

7 

8=6+7 

9=8/2 

10=5-8 

1  Own resources 

142 832 

142 364 

142 334 

 39 

142 373 

142 329 

 0 

142 330 

 100 % 

3  Surpluses, balances and adjustments 

– 

 556 

 581 

– 

 581 

 581 

– 

 581 

 105 % 

4 

5 

6 

Revenue accruing from persons working 
with the institutions and other union 
bodies 

Revenue accruing from the administrative 
operation  of the institutions 

Contributions and refunds in connection 
with Union agreements and programmes 

7 

Interests on late payments and fines 

8  Borrowing and lending operations 

9  Miscellaneous revenue 

1 547 

1 547 

1 541 

 11 

1 552 

1 531 

 11 

1 542 

 100 % 

 45 

 45 

 559 

 24 

 583 

 545 

 18 

 563 

1 250 % 

 110 

 115 

 6 

 25 

 110 

13 021 

 324 

13 346 

12 619 

 157 

12 777  11 615 % 

 569 

 115 

6 778 

7 814 

14 592 

 897 

 576 

1 473 

1 281 % 

13 119 

 6 

 25 

 24 

 17 

 15 

 6 

 39 

 24 

 24 

 12 

 15 

 1 

 39 

 631 % 

 13 

 53 % 

– 

 10 

 44 

– 

 10 

 20 

Total 

144 681  144 768  164 856 

8 234  173 090 

158 539 

 779  159 318 

110 % 

13 771 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.

  IMPLEMENTATION OF EU BUDGET EXPENDITURE  

Annual accounts of the European Union 2018 

4.1.  MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT APPROPRIATIONS 

Commitment appropriations 

Payment appropriations 

MFF Heading 

Budget appropriations 

Additional 
appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Budget appropriations 

Additional 
appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

Total 
approp. 
available 

6=3+ 
4+5 

EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

1  Smart and inclusive growth 

77 534 

 (2) 

77 532 

 123 

11 994 

89 649 

66 624 

 108 

66 733 

 120 

14 064 

80 917 

1a: Competitiveness for growth 
and jobs 

1b: Economic, social and 
territorial cohesion 

2 

Sustainable growth: natural 
resources 
of which: Market related 
expenditure and direct payments 

22 001 

 (2) 

22 000 

 4 

3 861 

25 864 

20 097 

 57 

20 155 

 108 

4 811 

25 073 

55 532 

– 

55 532 

 119 

8 133 

63 785 

46 527 

 51 

46 578 

 13 

9 253 

55 844 

59 285 

 (46) 

59 239 

 451 

2 729 

62 419 

56 084 

 157 

56 241 

 663 

2 744 

59 648 

43 235 

 (1) 

43 233 

 451 

1 601 

45 284 

43 189 

 (9) 

43 180 

 656 

1 601 

45 436 

3  Security and citizenship 

3 493 

 (1) 

3 492 

 247 

 276 

4 015 

2 981 

 32 

3 013 

 16 

 276 

3 305 

4  Global Europe 

5  Administration 

of which: Administrative 
expenditure of the institutions 

6  Compensations 

8 

Negative reserve and deficit 
carried over from the previous 
financial year  

9 569 

 810 

10 379 

9 666 

4 015 

– 

– 

– 

– 

– 

– 

9 666 

4 015 

– 

– 

9  Special Instruments 

 567 

 (179) 

 388 

 64 

 11 

 11 

– 

– 

– 

1 005 

11 448 

8 906 

 (93) 

8 813 

 315 

1 659 

10 788 

 832 

10 508 

9 666 

 0 

9 667 

 854 

 834 

11 355 

 439 

4 465 

4 015 

– 

– 

– 

– 

– 

– 

– 

– 

– 

4 015 

 507 

 441 

4 963 

– 

– 

– 

– 

– 

– 

– 

– 

 41 

 429 

 420 

 (118) 

 302 

 0 

 38 

 340 

  Total 

160 114 

 583  160 696 

 895 

16 876  178 468  144 681 

 87  144 768  1 970  19 616 

166 353 

127 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.2.  MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2018 

MFF Heading 

Total 
appropr.  
available 

from 
final 
adopted 
budget 

Commitments made 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over to 
2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1  Smart and inclusive growth 

89 649 

77 514 

 114 

9 729 

87 357 

 97 % 

2 265 

25 864 

21 988 

 4 

1 780 

23 773 

 92 % 

2 080 

 0 

 0 

2 265 

2 081 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

1a: Competitiveness for 
growth and jobs 

1b: Economic, social and 
territorial cohesion 

2 

Sustainable growth: natural 
resources 
of which: Market related 
expenditure and direct 
payments 

63 785 

55 525 

 110 

7 949 

63 585 

 100 % 

 184 

– 

 184 

62 419 

58 774 

 442 

1 344 

60 560 

 97 % 

1 385 

 460 

1 845 

45 284 

42 771 

 442 

1 152 

44 364 

 98 % 

 449 

 460 

 908 

3  Security and citizenship 

4 015 

3 491 

 247 

 118 

3 855 

 96 % 

 158 

4  Global Europe 

11 448 

10 377 

 64 

 621 

11 062 

 97 % 

 383 

 158 

 383 

5  Administration 

10 508 

9 545 

of which: Administrative 
expenditure of the 
institutions 

6  Compensations 

8 

Negative reserve and deficit 
carried over from the 
previous financial year  

4 465 

3 939 

– 

– 

– 

– 

9  Special Instruments 

 429 

 180 

 7 

 7 

– 

– 

– 

– 

– 

– 

 572 

10 124 

 96 % 

 259 

 334 

4 280 

 96 % 

 105 

– 

– 

– 

– 

– 

– 

 180 

 42 % 

 41 

 64 

 104 

 144 

Total 

178 468  159 881 

 873  12 385  173 139 

97 % 

4 491 

 525 

5 015 

 291 

 23 

 0 

128 

 18 

 11 

 7 

 6 

 3 

 2 

 2 

– 

– 

 1 

0 

– 

– 

 260 

 119 

 105 

 76 

– 

– 

– 

– 

Total 

13=10+ 
11+12 

 27 

 11 

 16 

 15 

 11 

 2 

 2 

 124 

 81 

– 

– 

 144 

 314 

 9 

 0 

 9 

 9 

 9 

– 

– 

 5 

 5 

– 

– 

– 

 0 

 0 

– 

– 

– 

 0 

 0 

 0 

0 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.3.  MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS 

Annual accounts of the European Union 2018 

EUR million 

Payments made 

Appropriations carried over to 2019 

Appropriations lapsing 

MFF Heading 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry-
overs 

carry-
overs by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

1 

Smart and inclusive 
growth 
1a: Competitiveness for 
growth and jobs 

1b: Economic, social 
and territorial cohesion 

2 

Sustainable growth: 
natural resources 
of which: Market 
related expenditure and 
direct payments 

80 917 

66 540 

 107 

9 230 

75 876 

 94 % 

 130 

25 073 

19 993 

 97 

1 318 

21 408 

 85 % 

 117 

 3 

 3 

4 833 

4 966 

 59 

 14 

3 492 

3 612 

 41 

 11 

55 844 

46 547 

 10 

7 912 

54 468 

 98 % 

 13 

– 

1 341 

1 354 

 18 

 3 

59 648 

55 576 

 643 

1 827 

58 046 

 97 % 

 193 

 460 

 918 

1 570 

 13 

 20 

45 436 

42 533 

 636 

1 142 

44 310 

 98 % 

 186 

 460 

 459 

1 104 

 2 

 20 

3  Security and citizenship 

3 305 

2 980 

 11 

 117 

3 108 

 94 % 

4  Global Europe 

10 788 

8 711 

 310 

 498 

9 519 

 88 % 

 9 

 65 

5  Administration 

11 355 

8 731 

 768 

 445 

9 944 

 88 % 

 818 

of which: 
Administrative 
expenditure of the 
institutions 

6  Compensations 

8 

Negative reserve and 
deficit carried over from 
the previous financial 
year  

4 963 

3 435 

 446 

 259 

4 140 

 83 % 

 508 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

0 

9  Special Instruments 

 340 

 157 

 0 

 22 

 180 

 53 % 

 0 

– 

– 

 2 

0 

– 

– 

– 

 159 

 167 

1 161 

1 226 

 25 

 37 

 5 

 5 

 389 

1 209 

 120 

 82 

 182 

 690 

 76 

 58 

– 

– 

– 

– 

– 

– 

– 

– 

 16 

 16 

 144 

 0 

  Total 

166 353  142 695 

1 840  12 138  156 673  94 % 

1 214 

 465 

7 475 

9 154 

 398 

 126 

 1 

 1 

– 

– 

– 

 0 

 0 

 1 

– 

– 

– 

– 

 2 

 74 

 53 

 21 

 33 

 22 

 29 

 42 

 203 

 133 

– 

– 

 144 

 526 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.4.  MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL) 

Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

MFF Heading 

Commitm. carried 
forward from 
previous year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

1 

2 

3 

4=1+2+3 

Commitm. 
made 
during the 
year 
5 

Payments 

6 

Cancellation of 
commitm. 
which cannot 
be carried over 
7 

Commitm. 
outstanding 
at year-end 

1  Smart and inclusive growth 

196 837 

(1 323) 

(67 640) 

127 874 

87 357 

(8 237) 

35 576 

 (932) 

(13 691) 

20 953 

23 773 

(7 717) 

161 260 

 (392) 

(53 948) 

106 920 

63 585 

 (520) 

 (0) 

63 064 

169 985 

37 883 

 (360) 

(13 466) 

24 058 

60 560 

(44 580) 

 (0) 

15 980 

40 037 

1a: Competitiveness for growth 
and jobs 

1b: Economic, social and 
territorial cohesion 

2 

Sustainable growth: natural 
resources 
of which: Market related 
expenditure and direct payments 

3  Security and citizenship 

4  Global Europe 

5  Administration 

of which: Administrative 
expenditure of the institutions 

6  Compensations 

8 

Negative reserve and deficit 
carried over from the previous 
financial year  

9  Special Instruments 

 309 

 (14) 

 (228) 

 67 

44 364 

(44 082) 

(1 781) 

3 306 

3 855 

(1 327) 

(6 746) 

19 064 

11 062 

(2 773) 

5 194 

26 478 

 867 

 507 

– 

– 

 0 

 (107) 

 (667) 

 (87) 

 (61) 

– 

– 

 (775) 

 (444) 

– 

– 

 (0) 

 (0) 

 6 

 2 

– 

– 

– 

10 124 

(9 169) 

4 280 

(3 695) 

– 

– 

– 

– 

 180 

 (180) 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

8=5+6+7 

9=4+8 

 (4) 

 (4) 

79 117 

206 991 

16 052 

37 006 

– 

– 

 (1) 

 (0) 

0 

– 

– 

– 

 282 

2 528 

8 288 

 955 

 584 

– 

– 

 0 

 349 

5 834 

27 352 

 961 

 587 

– 

– 

 0 

  Total 

267 258 

(2 544) 

(90 407) 

174 307 

173 139 

(66 265) 

 (5) 

106 868 

281 175 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.5.  MFF: COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN  

Annual accounts of the European Union 2018 

MFF Heading 

< 2012 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

Total 

1  Smart and inclusive growth 

1a: Competitiveness for growth and jobs 

1b: Economic, social and territorial cohesion 

2  Sustainable growth: natural resources 

of which: Market related expenditure and direct payments 

3  Security and citizenship 

4  Global Europe 

5  Administration 

of which: Administrative expenditure of the institutions 

9  Special Instruments 

Total 

1 355 

 554 

 801 

 186 

– 

 50 

 744 

 289 

 455 

 56 

– 

 67 

5 867 

3 807 

13 803 

37 234 

65 049 

79 131 

206 991 

1 645 

2 067 

2 880 

4 994 

8 521 

16 055 

37 006 

4 222 

1 739 

10 923 

32 240 

56 528 

63 076 

169 985 

 461 

 311 

2 138 

8 301 

12 411 

16 173 

40 037 

– 

 56 

 0 

 45 

 3 

 9 

 55 

 282 

 349 

 118 

 901 

2 069 

2 528 

5 834 

1 065 

 671 

1 526 

1 753 

2 920 

4 697 

6 385 

8 335 

27 352 

– 

0 

– 

– 

0 

– 

 0 

0 

– 

 0 

0 

– 

– 

0 

– 

 0 

0 

– 

 3 

0 

 (0) 

 957 

 587 

 0 

 961 

 587 

 0 

2 656 

1 538 

7 910 

5 916 

18 979 

51 133 

85 917  107 126 

281 175 

EUR million 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.6.  DETAILED MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 

APPROPRIATIONS 

Annual accounts of the European Union 2018 

Programme 

Commitment appropriations 

Payment appropriations 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Total 
approp. 
available 

6=3+ 
4+5 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

1 

European Fund  Strategic 
Investments (EFSI) 
European satellite navigation 
(EGNOS/Galileo) 
International Thermonuclear 
Reactor (ITER) 
European Earth Observation Progr 
(Copernicus) 

  European Solidarity Corps (ESC) 

Nuclear Safety and 
Decommissioning 

2 038 

 808 

 376 

 630 

 43 

 141 

– 

– 

– 

– 

– 

– 

2 038 

 808 

 376 

 630 

 43 

 141 

  Horizon 2020 

11 212 

 5 

11 217 

Euratom Research and Training 
Programme 
Competitiveness enterprises and 
SME's (COSME) 
Education, Training and Sport 
(Erasmus+) 
Employment and Social 
Innovation (EaSI) 

  Customs, Fiscalis and Anti-Fraud 

  CEF - Energy 

  CEF - Transport 

CEF - Information & 
Communications Technology (ICT) 
Energy projects for economic 
recovery (EERP) 

 356 

 354 

2 315 

 132 

 135 

 680 

1 898 

 (3) 

 353 

 0 

– 

– 

 4 

– 

 0 

 354 

2 315 

 132 

 139 

 680 

1 898 

 170 

 (1) 

 170 

 4 

– 

– 

– 

  Decentralised agencies 

 316 

 (5) 

 311 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 89 

2 127 

1 828 

 151 

1 979 

 169 

 977 

 718 

 192 

 910 

 50 

 15 

– 

– 

 426 

 501 

 148 

 649 

 645 

 608 

 (47) 

 561 

 43 

 33 

– 

 33 

 141 

 152 

 44 

 196 

– 

 2 

 1 

 2 

– 

– 

 89 

2 068 

 259 

1 171 

 50 

 15 

– 

– 

 699 

 577 

 33 

 196 

2 190 

13 407 

10 901 

 (332) 

10 570 

 67 

3 116 

13 753 

 123 

 475 

 315 

 (24) 

 291 

 20 

 151 

 49 

 403 

 253 

 2 

 255 

 427 

2 741 

2 146 

 103 

2 249 

 11 

 7 

 6 

 143 

 146 

 686 

 118 

 125 

 218 

 (1) 

 (1) 

 43 

 117 

 124 

 261 

 165 

2 063 

1 163 

 (103) 

1 060 

 178 

 142 

 (53) 

 89 

 53 

 336 

 210 

 318 

 (52) 

 158 

 (11) 

 307 

 5 

 53 

 25 

132 

 2 

 7 

 2 

 0 

 1 

 2 

 0 

– 

– 

 462 

 355 

 97 

 441 

2 697 

 10 

 7 

 6 

 90 

 4 

 48 

 25 

 129 

 132 

 267 

1 151 

 94 

 205 

 332 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitment appropriations 

Payment appropriations 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Total 
approp. 
available 

6=3+ 
4+5 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

 176 

 92 

 129 

 (2) 

 (0) 

 (0) 

 174 

 91 

 129 

– 

– 

– 

 473 

 647 

 153 

 19 

 172 

 1 

 400 

 1 

 4 

 93 

 78 

 (25) 

 52 

 133 

 117 

 5 

 122 

 1 

 4 

EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

 573 

 53 

 125 

27 012 

 (53) 

26 960 

 96 

4 223 

31 279 

23 388 

 749 

24 137 

Programme 

  Other actions and programmes 

Pilot projects and preparatory 
actions 
Specific competences of the 
Commission 
Regional convergence (Less 
developed regions) 

  Transition regions 

5 739 

 (10) 

5 729 

8 427 

 41 

8 468 

Competitiveness (More developed 
regions) 
Outermost and sparsely populated 
regions 

  Cohesion fund 

  European territorial cooperation 

  Technical assistance 

European Aid to the Most 
Deprived (FEAD) 

  Youth Employment initiative 

 226 

9 394 

1 934 

 230 

 557 

 350 

  Connecting Europe Facility (CEF) 

1 655 

Pilot projects and preparatory 
actions 

 8 

– 

– 

– 

 22 

– 

– 

– 

– 

– 

– 

– 

– 

 850 

6 579 

4 040 

 (605) 

3 435 

1 370 

9 837 

7 394 

 (21) 

7 373 

 32 

 258 

 169 

 88 

 257 

1 325 

10 719 

8 456 

 (272) 

8 184 

 226 

9 394 

1 934 

 23 

 248 

2 205 

1 235 

 (160) 

1 074 

 252 

 557 

 350 

1 655 

 8 

– 

– 

– 

– 

– 

 2 

 0 

 84 

– 

 0 

 253 

 557 

 434 

1 655 

 200 

 401 

 600 

 626 

 2 

 202 

 12 

 (40) 

 361 

 0 

 220 

 100 

 820 

 725 

 8 

 18 

 (10) 

 9 

– 

– 

– 

 206 

1 026 

 28 

 0 

 754 

 9 

  Total MFF Heading 1 

77 534 

 (2) 

77 532 

 123 

11 994 

89 649 

66 624 

 108 

66 733 

 120 

14 064 

80 917 

2 

European Agricultural Guarantee 
Fund (EAGF) 
Agricultural Fund Rural 
Development (EAFRD) 

European Maritime and Fisheries 
Fund (EMFF) 

Fisheries Partnership Agreements 
(SFPAs) and Fisheries 
Management Organisations 

43 235 

 (1) 

43 233 

 451 

1 601 

45 284 

43 189 

 (9) 

43 180 

 656 

1 601 

45 436 

14 381 

 (1) 

14 380 

 933 

– 

 933 

 141 

 (47) 

 95 

– 

– 

– 

 972 

15 352 

11 852 

 213 

12 066 

 2 

 862 

12 929 

 140 

1 073 

 515 

 (7) 

 507 

 1 

 268 

 776 

– 

 95 

 132 

 (34) 

 97 

– 

– 

 97 

133 

– 

– 

– 

– 

– 

– 

– 

– 

4 722 

28 858 

 939 

4 374 

1 907 

9 280 

 32 

 289 

1 264 

 148 

 2 

 6 

9 448 

1 222 

 215 

 368 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitment appropriations 

Payment appropriations 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Total 
approp. 
available 

6=3+ 
4+5 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

 523 

 57 

– 

 16 

– 

– 

 3 

– 

– 

– 

 523 

 60 

– 

 16 

– 

– 

– 

– 

– 

– 

 9 

 8 

– 

 0 

– 

 532 

 316 

 68 

– 

 16 

– 

 57 

 6 

 18 

– 

 1 

 3 

– 

 (9) 

– 

 317 

 4 

 60 

 6 

 8 

– 

– 

– 

– 

– 

 6 

 8 

– 

 0 

– 

 327 

 68 

 6 

 8 

– 

Programme 

(RFMOs) 

Environment and climate action 
(LIFE) 

  Decentralised agencies 

  Other actions and measures 

Pilot projects and preparatory 
actions 

  Specific Actions 

  Total MFF Heading 2 

59 285 

 (46) 

59 239 

 451 

2 729 

62 419 

56 084 

 157 

56 241 

 663 

2 744 

59 648 

3 

Asylum, Migration and Integration 
Fund (AMF) 

  Consumer 

  Creative Europe 

Emergency Support within the 
Union (IES) 

Internal Security Fund 

IT systems 

Justice 

  Rights, Equality and Citizenship 

  Union Civil protection Mechanism 

  Europe for Citizens 

  Food and feed 

  Health 

 719 

 28 

 230 

 200 

 720 

 26 

 47 

 63 

 33 

 28 

 280 

 66 

– 

– 

 (1) 

 10 

 (17) 

– 

– 

– 

– 

 (1) 

– 

  Decentralised agencies 

 940 

 (20) 

Pilot projects and preparatory 
actions 

 13 

 (1) 

 29 

 748 

 207 

 28 

 230 

 199 

– 

– 

– 

 38 

 1 

 13 

 0 

 730 

 40 

 132 

 10 

 47 

 63 

 33 

 28 

 279 

 66 

 920 

 11 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 3 

 1 

 2 

 2 

 1 

 5 

 2 

 76 

 0 

134 

 993 

 594 

 112 

 706 

 29 

 244 

 199 

 901 

 13 

 49 

 65 

 35 

 28 

 23 

 181 

 221 

 481 

 13 

 36 

 47 

 34 

 29 

 6 

 16 

 12 

 29 

 197 

 233 

 (48) 

 433 

 (3) 

 12 

 27 

– 

– 

 10 

 48 

 73 

 34 

 29 

 284 

 248 

 (4) 

 244 

 69 

 56 

 4 

 60 

 996 

 908 

 (98) 

 810 

 11 

 18 

 (5) 

 13 

 2 

 1 

 2 

 0 

 2 

– 

 1 

 0 

 5 

 0 

 1 

 1 

– 

– 

 38 

 1 

 16 

 0 

 129 

 3 

 1 

 2 

 2 

 1 

 6 

 2 

 76 

 0 

 746 

 31 

 214 

 233 

 565 

 13 

 50 

 75 

 41 

 29 

 252 

 63 

 886 

 13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

 94 

3 305 

1 747 

 10 

 248 

 13 

 16 

 0 

 276 

 475 

– 

 110 

 1 

– 

 6 

– 

– 

 2 

 0 

Annual accounts of the European Union 2018 

Programme 

Commitment appropriations 

Payment appropriations 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Total 
approp. 
available 

6=3+ 
4+5 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

  Specific Actions 

 99 

– 

 99 

– 

 1 

 99 

 92 

 2 

 93 

 1 

  Total MFF Heading 3 

3 493 

 (1) 

3 492 

 247 

 276 

4 015 

2 981 

 32 

3 013 

 16 

4  Pre-accession assistance (IPA II) 

1 649 

 393 

2 041 

 1 

 106 

2 149 

1 452 

 (186) 

1 266 

  Macro-financial Assistance (MFA) 

 42 

 (32) 

 11 

Guarantee Fund for External 
Actions 

  Union Civil Protection Mechanism 

EU Aid Volunteers initiative 
(EUAV) 
Fund for Sustainable Development 
(EFSD) 

European Neighbourhood 
Instrument (ENI) 

Development Cooperation 
Instrument (DCI) 

  Partnership Instrument (PI) 

Democracy and Human Rights 
(EIDHR) 

  Stability and Peace (IcSP) 

 138 

– 

 138 

 16 

 20 

 25 

 (10) 

 (0) 

– 

 6 

 20 

 25 

2 367 

 112 

2 478 

2 976 

 140 

 193 

 370 

 5 

 5 

 (5) 

 (1) 

2 981 

 145 

 188 

 370 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

  Humanitarian aid 

1 085 

 332 

1 417 

 62 

Common Foreign and Security 
Policy (CFSP) 
Nuclear Safety Cooperation 
(INSC) 

  Decentralised agencies 

  Other actions and programmes 

Pilot projects and preparatory 
actions 

  Specific Actions 

 328 

 20 

 348 

 33 

 20 

 83 

 9 

 74 

– 

– 

 (3) 

 (6) 

 1 

 33 

 20 

 80 

 3 

 75 

– 

– 

– 

– 

 1 

– 

– 

 11 

 42 

 (32) 

 10 

 110 

 248 

 138 

– 

 138 

 1 

– 

 7 

 20 

 401 

 426 

 15 

 17 

 25 

 (5) 

 (1) 

 11 

 16 

– 

 25 

 275 

 401 

 701 

 40 

2 518 

2 278 

 (167) 

2 111 

 5 

 51 

2 167 

 74 

3 055 

2 735 

 (78) 

2 657 

 14 

 110 

2 781 

 151 

 190 

 378 

 101 

 169 

 325 

 27 

 22 

 128 

 191 

 2 

 327 

1 537 

1 095 

 348 

1 443 

 387 

 292 

 (0) 

 292 

 45 

 20 

 75 

 14 

 68 

 (7) 

– 

 (5) 

 (5) 

 (6) 

 39 

 20 

 70 

 9 

 61 

 6 

 1 

 9 

 58 

 39 

 0 

 0 

 33 

 20 

 158 

 238 

 1 

 0 

 4 

 76 

135 

 0 

 3 

 3 

 5 

 0 

 1 

– 

 0 

– 

– 

 7 

 1 

 12 

 275 

 52 

 1 

 0 

 135 

 195 

 342 

1 723 

 345 

 40 

 20 

 162 

 232 

 1 

 0 

 10 

 62 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Commitment appropriations 

Payment appropriations 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

1 

2 

3=1+2 

4 

5 

Total 
approp. 
available 

6=3+ 
4+5 

Budget appropriations 

Initial 
adopted 
budget 

Amending 
budgets & 
transfers 

Final 
adopted 
budget 

Additional 
appropriations 

Carry-
overs 

Assigned 
revenue 

7 

8 

9=7+8 

10 

11 

EUR million 

Total 
approp. 
available 

12=9+ 
10+11 

  Total MFF Heading 4 

9 569 

 810 

10 379 

 64 

1 005 

11 448 

8 906 

 (93) 

8 813 

 315 

1 659 

10 788 

5  Pensions 

  European schools 

  Decentralised agencies 

Pilot projects and preparatory 
actions 

Commission administrative 
expenditure 

Administrative expenditure of 
Other Institutions 

  Total MFF Heading 5 

6  Compensations 

  Total MFF Heading 6 

8  Negative reserve 

  Deficit carried over 

  Total MFF Heading 8 

1 893 

 192 

– 

 4 

 (0) 

 (9) 

– 

– 

1 893 

 183 

– 

 4 

3 562 

 9 

3 571 

– 

– 

– 

– 

– 

 2 

 15 

– 

 0 

1 894 

1 893 

 (0) 

1 893 

 199 

 192 

 (9) 

 183 

– 

 4 

– 

 4 

– 

 (1) 

– 

 4 

– 

 0 

– 

 1 

 2 

 15 

– 

 0 

1 894 

 199 

– 

 4 

 376 

3 947 

3 562 

 10 

3 572 

 346 

 377 

4 294 

4 015 

 11 

 439 

4 465 

4 015 

9 666 

 11 

 832 

10 508 

9 666 

4 015 

 507 

 441 

4 963 

9 667 

 854 

 834 

11 355 

4 015 

9 666 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 41 

– 

 41 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

 38 

– 

 38 

– 

– 

– 

– 

– 

 120 

 44 

 177 

 340 

9  Emergency Aid Reserve (EAR) 

 345 

 (310) 

 34 

European Globalisation 
Adjustment Fund (EGF) 
European Union Solidarity Fund 
(EUSF) 

 172 

– 

 172 

 50 

 132 

 182 

 388 

  Total MFF Heading 9 

 567 

 (179) 

 34 

 345 

 (225) 

 120 

 213 

 182 

 429 

 25 

 50 

 (19) 

 6 

 127 

 177 

 420 

 (118) 

 302 

  Total 

160 114 

 583  160 696 

 895 

16 876  178 468  144 681 

 87  144 768  1 970 

19 616 

166 353 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.7.  DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2018 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

  EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

1 

European Fund  Strategic 
Investments (EFSI) 
European satellite navigation 
(EGNOS/Galileo) 

International Thermonuclear 
Reactor (ITER) 

European Earth Observation 
Progr (Copernicus) 

2 127 

2 038 

 977 

 808 

 426 

 376 

 645 

 630 

  European Solidarity Corps (ESC) 

 43 

 43 

Nuclear Safety and 
Decommissioning 

 141 

 141 

  Horizon 2020 

13 407 

11 214 

Euratom Research and Training 
Programme 

Competitiveness enterprises and 
SME's (COSME) 

Education, Training and Sport 
(Erasmus+) 

Employment and Social 
Innovation (EaSI) 

  Customs, Fiscalis and Anti-Fraud 

  CEF - Energy 

 475 

 353 

 403 

 354 

2 741 

2 315 

 143 

 146 

 686 

 129 

 138 

 680 

  CEF - Transport 

2 063 

1 898 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 59 

2 097 

 99 % 

 84 

 892 

 91 % 

 30 

 85 

 18 

 394 

 92 % 

 32 

 15 

 645 

 100 % 

– 

– 

 43 

 99 % 

 141 

 100 % 

 0 

– 

– 

– 

– 

– 

– 

 0 

– 

 30 

 85 

 32 

 0 

 0 

– 

1 040 

12 254 

 91 % 

1 149 

–  1 149 

 45 

 397 

 84 % 

 78 

 37 

 391 

 97 % 

 12 

– 

– 

 78 

 12 

 258 

2 573 

 94 % 

 168 

– 

 168 

 5 

 1 

 0 

 134 

 94 % 

 139 

 95 % 

 680 

 99 % 

 6 

 6 

 6 

 89 

1 986 

 96 % 

 76 

CEF - Information & 
Communications Technology 
(ICT) 
Energy projects for economic 
recovery (EERP) 

 178 

 170 

 4 

 53 

– 

– 

 5 

– 

 178 

 100 % 

 0 

– 

– 

 53 

137 

– 

– 

– 

– 

– 

– 

 6 

 6 

 6 

 76 

 0 

 53 

Total 

13=10+ 
11+12 

 0 

 0 

– 

– 

 (0) 

– 

 3 

 0 

 0 

– 

 2 

 1 

 0 

 0 

 0 

– 

 0 

 0 

– 

– 

 (0) 

– 

 3 

 0 

 0 

– 

 2 

 1 

 0 

 0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

  EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

  Decentralised agencies 

  Other actions and programmes 

Pilot projects and preparatory 
actions 

Specific competences of the 
Commission 

Regional convergence (Less 
developed regions) 

 336 

 647 

 311 

 174 

 93 

 91 

 133 

 125 

– 

– 

– 

– 

 15 

 326 

 97 % 

 10 

 107 

 281 

 43 % 

 366 

 1 

 3 

 92 

 99 % 

 128 

 96 % 

 0 

 1 

31 279 

26 960 

 87 

4 103 

31 150 

 100 % 

 120 

  Transition regions 

6 579 

5 729 

Competitiveness (More 
developed regions) 

Outermost and sparsely 
populated regions 

9 837 

8 467 

 258 

 226 

  Cohesion fund 

10 719 

9 394 

– 

– 

– 

– 

 850 

6 579 

 100 % 

– 

1 345 

9 811 

 100 % 

 25 

 32 

 258 

 100 % 

1 299 

10 693 

 100 % 

  European territorial cooperation 

2 205 

1 934 

 23 

 236 

2 193 

 99 % 

  Technical assistance 

European Aid to the Most 
Deprived (FEAD) 

  Youth Employment initiative 

 253 

 557 

 434 

 246 

 557 

 350 

  Connecting Europe Facility (CEF) 

1 655 

1 655 

Pilot projects and preparatory 
actions 

 8 

 8 

– 

– 

– 

– 

– 

 1 

– 

 247 

 97 % 

 557 

 100 % 

 84 

 434 

 100 % 

– 

 0 

1 655 

 100 % 

 8 

 100 % 

– 

 26 

 12 

 1 

 0 

– 

– 

 0 

  Total MFF Heading 1 

89 649 

77 514 

 114 

9 729 

87 357 

97 % 

2 265 

 0  2 265 

 18 

45 284 

42 771 

 442 

1 152 

44 364 

 98 % 

 449 

 460 

 908 

2 

European Agricultural Guarantee 
Fund (EAGF) 

Agricultural Fund Rural 
Development (EAFRD) 

15 352 

14 380 

European Maritime and Fisheries 
Fund (EMFF) 

1 073 

 931 

– 

– 

 47 

14 427 

 94 % 

 925 

– 

 925 

 139 

1 070 

 100 % 

 1 

– 

 1 

138 

Total 

13=10+ 
11+12 

 0 

 1 

 1 

 3 

 9 

– 

 1 

– 

– 

– 

 6 

 0 

– 

– 

 0 

 27 

 11 

 1 

 2 

– 

– 

– 

– 

 9 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 9 

 9 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 10 

 366 

 0 

 1 

 120 

– 

 25 

– 

 26 

 12 

 1 

 0 

– 

– 

 0 

 0 

 1 

 1 

 3 

– 

– 

 1 

– 

– 

– 

 6 

 0 

– 

– 

 0 

 3 

 1 

 2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

  EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

Fisheries Partnership 
Agreements (SFPAs) and 
Fisheries Management 
Organisations (RFMOs) 

Environment and climate action 
(LIFE) 

  Decentralised agencies 

  Other actions and measures 

Pilot projects and preparatory 
actions 

  Specific Actions 

 95 

 94 

 532 

 522 

 68 

– 

 16 

– 

 60 

– 

 16 

– 

– 

– 

– 

– 

– 

– 

– 

 94 

 100 % 

– 

 0 

 6 

– 

– 

– 

 522 

 98 % 

 66 

 97 % 

– 

– 

 16 

 100 % 

– 

– 

 9 

 2 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

 9 

 2 

– 

 0 

– 

  Total MFF Heading 2 

62 419 

58 774 

 442 

1 344 

60 560 

97 % 

1 385 

 460  1 845 

– 

 0 

3 

Asylum, Migration and 
Integration Fund (AMF) 

  Consumer 

  Creative Europe 

Emergency Support within the 
Union (IES) 

Internal Security Fund 

IT systems 

Justice 

  Rights, Equality and Citizenship 

Union Civil protection 
Mechanism 

  Europe for Citizens 

  Food and feed 

  Health 

 29 

 244 

 199 

 901 

 13 

 49 

 65 

 35 

 28 

 10 

 47 

 63 

 33 

 28 

 284 

 279 

 69 

 66 

  Decentralised agencies 

 996 

 920 

 993 

 747 

 207 

 33 

 986 

 99 % 

 28 

 230 

 199 

– 

– 

– 

 1 

 9 

– 

 29 

 100 % 

 239 

 98 % 

 199 

 100 % 

 729 

 40 

 30 

 799 

 89 % 

 102 

 6 

 0 

 5 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 1 

 1 

 1 

 0 

 2 

 2 

 12 

 93 % 

 48 

 99 % 

 64 

 98 % 

 35 

 98 % 

 28 

 99 % 

 281 

 99 % 

 68 

 99 % 

 1 

 0 

 1 

 1 

 0 

 3 

 1 

 36 

 956 

 96 % 

 39 

139 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 6 

 0 

 5 

 0 

 102 

 1 

 0 

 1 

 1 

 0 

 3 

 1 

 39 

Total 

13=10+ 
11+12 

 0 

 0 

– 

– 

 0 

– 

 15 

 1 

 0 

 0 

– 

 1 

 0 

 0 

 0 

 0 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

 9 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

 0 

– 

 6 

 1 

 0 

 0 

– 

 1 

 0 

 0 

 0 

 0 

 0 

– 

 0 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

  EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

Pilot projects and preparatory 
actions 

  Specific Actions 

 11 

 99 

 11 

 99 

– 

– 

– 

 1 

 11 

 100 % 

 99 

 100 % 

 0 

 0 

  Total MFF Heading 3 

4 015 

3 491 

 247 

 118 

3 855 

96 % 

 158 

2 149 

2 041 

 1 

 55 

2 097 

 98 % 

 52 

4 

Pre-accession assistance (IPA 
II) 
Macro-financial Assistance 
(MFA) 
Guarantee Fund for External 
Actions 
Union Civil Protection 
Mechanism 
EU Aid Volunteers initiative 
(EUAV) 
Fund for Sustainable 
Development (EFSD) 

European Neighbourhood 
Instrument (ENI) 

Development Cooperation 
Instrument (DCI) 

  Partnership Instrument (PI) 

Democracy and Human Rights 
(EIDHR) 

  Stability and Peace (IcSP) 

Common Foreign and Security 
Policy (CFSP) 
Nuclear Safety Cooperation 
(INSC) 

  Decentralised agencies 

 11 

 10 

 248 

 138 

 7 

 20 

 426 

 6 

 20 

 25 

2 518 

2 478 

3 055 

2 981 

 151 

 190 

 378 

 145 

 188 

 369 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 387 

 348 

 33 

 20 

 33 

 20 

 80 

– 

– 

– 

– 

– 

– 

 1 

– 

 10 

 97 % 

– 

 138 

 56 % 

 110 

 7 

 100 % 

 20 

 100 % 

 0 

– 

 300 

 325 

 76 % 

 101 

 23 

2 501 

 99 % 

 17 

 34 

3 015 

 99 % 

 40 

 1 

 1 

 3 

 54 

 23 

– 

 0 

 146 

 96 % 

 189 

 100 % 

 373 

 99 % 

1 533 

 100 % 

 5 

 1 

 5 

 5 

 371 

 96 % 

 16 

 33 

 100 % 

 20 

 100 % 

 0 

 0 

 31 

 1 

  Other actions and programmes 

 238 

 128 

 208 

 87 % 

Pilot projects and preparatory 
actions 

 4 

 3 

 1 

– 

 3 

 85 % 

140 

  Humanitarian aid 

1 537 

1 417 

 62 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 0 

 158 

 52 

– 

 110 

 0 

– 

 101 

 17 

 40 

 5 

 1 

 5 

 5 

 16 

 0 

 0 

 31 

 1 

 0 

 0 

 2 

 1 

 0 

– 

 0 

 0 

– 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Total 

13=10+ 
11+12 

 0 

 0 

 2 

 1 

 0 

– 

 0 

 0 

– 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

– 

 0 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2019 

assigned 
revenue 

carry-
overs by 
decision 

Total 

  EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

  Specific Actions 

 76 

 75 

– 

 0 

 76 

 100 % 

 0 

  Total MFF Heading 4 

11 448 

10 377 

 64 

 621 

11 062 

97 % 

 383 

5  Pensions 

  European schools 

  Decentralised agencies 

Pilot projects and preparatory 
actions 

Commission administrative 
expenditure 

Administrative expenditure of 
Other Institutions 

1 894 

1 877 

 199 

 178 

– 

 4 

– 

 3 

3 947 

3 548 

4 465 

3 939 

  Total MFF Heading 5 

10 508 

9 545 

6  Compensations 

  Total MFF Heading 6 

8  Negative reserve 

  Deficit carried over 

  Total MFF Heading 8 

9  Emergency Aid Reserve (EAR) 

European Globalisation 
Adjustment Fund (EGF) 
European Union Solidarity Fund 
(EUSF) 

  Total MFF Heading 9 

– 

– 

– 

– 

– 

 34 

 213 

 182 

 429 

– 

– 

– 

– 

– 

– 

 28 

 152 

 180 

– 

– 

– 

– 

– 

 7 

 7 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 13 

– 

 0 

1 879 

 99 % 

 190 

 96 % 

– 

– 

 4 

 100 % 

 0 

 3 

– 

 0 

– 

– 

– 

– 

– 

– 

 0 

 383 

 0 

 3 

– 

 0 

 0 

 2 

 15 

 6 

– 

 0 

 224 

3 772 

 96 % 

 151 

 1 

 152 

 22 

 334 

4 280 

 96 % 

 105 

0 

 105 

 76 

 572 

10 124 

96 % 

 259 

 1 

 260 

 119 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 34 

 34 

– 

– 

– 

– 

– 

– 

 28 

 13 % 

 41 

– 

 41 

 144 

 152 

 84 % 

– 

 30 

 30 

– 

 180 

42 % 

 41 

 64 

 104 

 144 

  Total 

178 468  159 881 

 873  12 385  173 139 

97 % 

4 491 

 525  5 015 

 291 

 23 

 0 

141 

Total 

13=10+ 
11+12 

 0 

 2 

 15 

 6 

– 

 0 

 22 

 81 

 124 

– 

– 

– 

– 

– 

– 

 144 

– 

 144 

 314 

– 

– 

– 

– 

– 

– 

– 

 5 

 5 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

– 

 0 

0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.8.  DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS 

Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

2 068 

1 979 

– 

 59 

2 038 

 99 % 

0 

– 

 30 

 30 

 0 

– 

1 171 

 908 

 2 

 54 

 964 

 82 % 

 2 

– 

 205 

 207 

 0 

 0 

  Horizon 2020 

13 753 

10 492 

 61 

 766 

11 319 

 82 % 

1 

European Fund  
Strategic Investments 
(EFSI) 

European satellite 
navigation 
(EGNOS/Galileo) 

International 
Thermonuclear Reactor 
(ITER) 

European Earth 
Observation Progr 
(Copernicus) 

European Solidarity 
Corps (ESC) 
Nuclear Safety and 
Decommissioning 

Euratom Research and 
Training Programme 

Competitiveness 
enterprises and SME's 
(COSME) 

Education, Training and 
Sport (Erasmus+) 

Employment and Social 
Innovation (EaSI) 

Customs, Fiscalis and 
Anti-Fraud 

  CEF - Energy 

 267 

 258 

 699 

 648 

 1 

 18 

 666 

 95 % 

 577 

 559 

 2 

 15 

 576 

 100 % 

 33 

 26 

 196 

 196 

– 

– 

– 

– 

 26 

 78 % 

 196 

 100 % 

 462 

 273 

 18 

 26 

 317 

 69 % 

 355 

 252 

 2 

 46 

 300 

 85 % 

2 697 

2 242 

 7 

 118 

2 366 

 88 % 

 129 

 115 

 132 

 118 

 1 

 0 

 1 

 4 

 1 

 6 

 120 

 93 % 

 120 

 91 % 

 264 

 99 % 

142 

 1 

 2 

 4 

– 

 75 

 19 

 3 

 7 

 1 

 0 

 1 

– 

– 

 3 

– 

– 

– 

– 

– 

– 

– 

– 

 32 

 33 

 0 

 0 

 0 

 2 

– 

– 

 7 

– 

2 349  2 424 

 125 

 143 

 51 

 54 

 0 

– 

 0 

 2 

 0 

 0 

 323 

 330 

 (0) 

 6 

 6 

 0 

 7 

 6 

 1 

 1 

 6 

 2 

 0 

– 

– 

 7 

 2 

 0 

 0 

 1 

 0 

 0 

– 

– 

– 

 0 

– 

– 

 1 

– 

– 

 0 

 0 

– 

– 

 0 

 0 

 0 

 0 

– 

 0 

 10 

 2 

 0 

 0 

 2 

 6 

 2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

  CEF - Transport 

1 151 

1 058 

CEF - Information & 
Communications 
Technology (ICT) 
Energy projects for 
economic recovery 
(EERP) 

 94 

 76 

 205 

 150 

  Decentralised agencies 

 332 

 307 

 2 

 0 

– 

– 

 573 

 169 

 1 

Other actions and 
programmes 

Pilot projects and 
preparatory actions 

Specific competences of 
the Commission 
Regional convergence 
(Less developed 
regions) 

 53 

 48 

 125 

 119 

28 858 

24 137 

  Transition regions 

4 374 

3 435 

Competitiveness (More 
developed regions) 
Outermost and sparsely 
populated regions 

9 280 

7 373 

 289 

 257 

  Cohesion fund 

9 448 

8 184 

European territorial 
cooperation 

1 222 

1 074 

  Technical assistance 

 215 

 185 

 10 

European Aid to the 
Most Deprived (FEAD) 
Youth Employment 
initiative 
Connecting Europe 
Facility (CEF) 

 368 

 347 

 0 

1 026 

 820 

 754 

 725 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 77 

1 137 

 99 % 

 3 

 80 

 85 % 

 9 

 159 

 77 % 

 15 

 98 

 1 

 2 

 322 

 97 % 

 269 

 47 % 

 49 

 92 % 

 121 

 97 % 

3 962 

28 099 

 97 % 

 787 

4 223 

 97 % 

1 742 

9 115 

 98 % 

 26 

 283 

 98 % 

1 045 

9 229 

 98 % 

 116 

1 190 

 97 % 

 1 

 0 

0 

0 

 1 

0 

0 

0 

0 

0 

0 

0 

0 

 1 

 6 

 196 

 91 % 

 13 

 354 

 96 % 

 200 

1 020 

 99 % 

 27 

 752 

 100 % 

143 

 0 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 12 

 13 

 1 

 0 

 1 

 13 

 39 

 39 

 10 

 10 

 302 

 303 

 0 

 1 

 0 

 1 

 760 

 760 

 151 

 151 

 165 

 165 

 6 

 6 

 219 

 219 

 32 

 32 

 1 

 0 

 6 

 1 

 13 

 0 

 6 

 1 

 7 

 0 

 2 

 4 

 3 

– 

– 

– 

– 

– 

– 

 4 

 14 

– 

 1 

 0 

 0 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

 3 

 0 

– 

– 

– 

 0 

– 

– 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 13 

 7 

 0 

 2 

 4 

 3 

 0 

 (0) 

 0 

 0 

 (0) 

 0 

 6 

 14 

– 

 1 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

Pilot projects and 
preparatory actions 

 9 

 9 

– 

 0 

 9 

 99 % 

0 

– 

– 

– 

 0 

  Total MFF Heading 1 

80 917 

66 540 

 107 

9 230 

75 876 

94 % 

 130 

 3 

4 833  4 966 

 59 

2 

European Agricultural 
Guarantee Fund (EAGF) 

Agricultural Fund Rural 
Development (EAFRD) 

European Maritime and 
Fisheries Fund (EMFF) 

Fisheries Partnership 
Agreements (SFPAs) 
and Fisheries 
Management 
Organisations (RFMOs) 

Environment and 
climate action (LIFE) 

45 436 

42 533 

 636 

1 142 

44 310 

 98 % 

 186 

 460 

 459  1 104 

12 929 

12 055 

 776 

 506 

 2 

 1 

 409 

12 467 

 96 % 

 267 

 774 

 100 % 

 2 

 1 

– 

– 

 453 

 455 

 1 

 2 

 2 

 8 

 0 

 97 

 97 

– 

– 

 97 

 100 % 

0 

– 

– 

– 

– 

– 

 327 

 311 

 4 

  Decentralised agencies 

 68 

 60 

Other actions and 
measures 
Pilot projects and 
preparatory actions 

  Specific Actions 

 6 

 8 

– 

 6 

 8 

– 

– 

– 

– 

– 

 2 

 6 

– 

– 

– 

 317 

 97 % 

 4 

 66 

 97 % 

 6 

 100 % 

 8 

 93 % 

– 

– 

0 

0 

0 

0 

– 

– 

– 

– 

– 

 4 

 2 

– 

 0 

– 

 8 

 2 

– 

 0 

– 

 2 

– 

– 

 1 

– 

 0 

– 

– 

– 

– 

  Total MFF Heading 2 

59 648 

55 576 

 643 

1 827 

58 046 

97 % 

 193 

 460 

 918  1 570 

 13 

 20 

3 

Asylum, Migration and 
Integration Fund (AMF) 

 746 

 704 

  Consumer 

 31 

 27 

  Creative Europe 

 214 

 196 

Emergency Support 
within the Union (IES) 

 233 

 226 

 2 

 0 

 2 

 0 

 32 

 738 

 99 % 

 1 

 9 

– 

 28 

 92 % 

 206 

 96 % 

 226 

 97 % 

 1 

 1 

 1 

 0 

– 

– 

– 

– 

 5 

 0 

 7 

 0 

 7 

 1 

 8 

 0 

 1 

 1 

 0 

 7 

 0 

 0 

 0 

 0 

144 

– 

 14 

 20 

 0 

 0 

– 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

 74 

 22 

 8 

 0 

– 

 2 

 (0) 

– 

 1 

– 

 33 

 1 

 2 

 0 

 7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

Internal Security Fund 

 565 

 424 

IT systems 

Justice 

Rights, Equality and 
Citizenship 
Union Civil protection 
Mechanism 

  Europe for Citizens 

 13 

 50 

 75 

 41 

 29 

 10 

 46 

 72 

 31 

 28 

  Food and feed 

 252 

 244 

  Health 

 63 

 59 

  Decentralised agencies 

 886 

 810 

Pilot projects and 
preparatory actions 

  Specific Actions 

 13 

 94 

 11 

 92 

 2 

– 

 0 

 0 

 2 

 0 

 1 

 1 

– 

– 

 0 

 29 

 454 

 80 % 

 3 

 1 

 1 

 1 

 0 

 3 

 1 

 13 

 98 % 

 47 

 94 % 

 73 

 97 % 

 34 

 83 % 

 29 

 98 % 

 247 

 98 % 

 61 

 98 % 

 36 

 846 

 96 % 

– 

 0 

 11 

 89 % 

 93 

 98 % 

  Total MFF Heading 3 

3 305 

2 980 

 11 

 117 

3 108 

94 % 

4 

Pre-accession 
assistance (IPA II) 
Macro-financial 
Assistance (MFA) 

Guarantee Fund for 
External Actions 

Union Civil Protection 
Mechanism 

EU Aid Volunteers 
initiative (EUAV) 

Fund for Sustainable 
Development (EFSD) 

1 747 

1 236 

 6 

 205 

1 446 

 83 % 

 10 

 5 

 248 

 138 

 13 

 16 

 6 

 16 

– 

– 

 2 

 0 

 701 

– 

 275 

– 

– 

 1 

– 

 0 

 5 

 50 % 

 138 

 56 % 

 9 

 64 % 

 16 

 99 % 

 1 

0 

 1 

 0 

0 

 0 

 1 

 1 

0 

0 

 1 

 9 

 6 

0 

– 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 100 

 102 

 0 

 0 

 1 

 1 

 0 

 3 

 1 

 0 

 1 

 1 

 1 

 0 

 4 

 1 

 39 

 39 

 0 

 0 

 0 

 1 

 159 

 167 

 270 

 276 

– 

– 

 110 

 110 

 0 

 0 

– 

– 

 401 

 426 

 8 

– 

 2 

 1 

 3 

 0 

 0 

 0 

 0 

 1 

 1 

 25 

 24 

 5 

– 

 4 

 0 

– 

 0 

– 

 0 

 0 

 3 

 0 

 0 

 0 

– 

– 

 0 

 5 

 1 

– 

– 

 0 

 0 

– 

– 

– 

 0 

 0 

– 

– 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

 0 

– 

– 

 8 

– 

 2 

 1 

 6 

 0 

 0 

 0 

 0 

 1 

 1 

 29 

 25 

 5 

– 

 5 

 0 

– 

 275 

 39 % 

 25 

145 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

European 
Neighbourhood 
Instrument (ENI) 

Development 
Cooperation Instrument 
(DCI) 

Partnership Instrument 
(PI) 

Democracy and Human 
Rights (EIDHR) 
Stability and Peace 
(IcSP) 

Common Foreign and 
Security Policy (CFSP) 
Nuclear Safety 
Cooperation (INSC) 

  Decentralised agencies 

Other actions and 
programmes 

Pilot projects and 
preparatory actions 

  Specific Actions 

2 167 

2 106 

 5 

 34 

2 145 

 99 % 

 5 

2 781 

2 641 

 12 

 31 

2 684 

 97 % 

 16 

 135 

 127 

 195 

 188 

 342 

 324 

 345 

 292 

 40 

 20 

 38 

 20 

 0 

 2 

 2 

 5 

 0 

 1 

– 

 3 

 1 

 8 

 130 

 96 % 

 191 

 98 % 

 334 

 98 % 

 63 

1 506 

 87 % 

 24 

 316 

 92 % 

 1 

 0 

 40 

 99 % 

 20 

 100 % 

 232 

 69 

 0 

 127 

 197 

 85 % 

 10 

 62 

 8 

 60 

– 

– 

 0 

 0 

 8 

 88 % 

 61 

 98 % 

 0 

 3 

 4 

 6 

 0 

 1 

0 

 0 

0 

0 

  Humanitarian aid 

1 723 

1 437 

  Total MFF Heading 4 

10 788 

8 711 

 310 

 498 

9 519 

88 % 

 65 

5  Pensions 

1 894 

1 877 

  European schools 

 199 

 178 

  Decentralised agencies 

– 

– 

– 

 0 

– 

 2 

1 879 

 99 % 

 10 

 188 

 94 % 

– 

– 

– 

– 

– 

– 

146 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 17 

 22 

 0 

 1 

 79 

 95 

 0 

 2 

 5 

 0 

 4 

 5 

 4 

 8 

 212 

 217 

 28 

 28 

– 

 0 

 1 

 0 

 35 

 35 

 1 

 0 

 1 

 0 

1 161  1 226 

 0 

 5 

– 

 0 

 5 

– 

 0 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 1 

 1 

 37 

 15 

 6 

– 

 0 

 1 

 0 

 0 

 0 

 0 

– 

 0 

– 

– 

 5 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

 1 

 2 

 0 

 1 

 1 

 0 

 0 

 0 

 0 

 0 

 1 

 1 

 42 

 15 

 6 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2019 

automat. 
carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

11 

12 

13 

Total 

14=11+ 
12+13 

Pilot projects and 
preparatory actions 

Commission 
administrative 
expenditure 
Administrative 
expenditure of Other 
Institutions 

 4 

 2 

 1 

– 

 3 

 57 % 

0 

 1 

 0 

 1 

 0 

 0 

4 294 

3 239 

 322 

 174 

3 734 

 87 % 

 310 

 1 

 202 

 513 

 22 

 24 

4 963 

3 435 

 446 

 259 

4 140 

 83 % 

 508 

0 

 182 

 690 

 76 

 58 

  Total MFF Heading 5 

11 355 

8 731 

 768 

 445 

9 944 

88 % 

 818 

 2 

 389  1 209 

 120 

 82 

6  Compensations 

  Total MFF Heading 6 

8  Negative reserve 

  Deficit carried over 

  Total MFF Heading 8 

– 

– 

– 

– 

– 

9 

Emergency Aid Reserve 
(EAR) 

 120 

– 

– 

– 

– 

– 

– 

European Globalisation 
Adjustment Fund (EGF) 

European Union 
Solidarity Fund (EUSF) 

 44 

 5 

 177 

 152 

  Total MFF Heading 9 

 340 

 157 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

- 

– 

– 

- 

– 

 22 

 28 

 64 % 

– 

 152 

 86 % 

 22 

 180 

53 % 

– 

– 

0 

0 

0 

0 

 0 

0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 120 

 16 

 16 

 0 

– 

– 

 25 

 16 

 16 

 144 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

 1 

– 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 47 

 133 

 203 

– 

– 

– 

– 

– 

 120 

 0 

 25 

 144 

  Total 

166 353  142 695  1 840  12 138  156 673 

94 % 

1 214 

 465 

7 475  9 154 

 398 

 126 

 2 

 526 

147 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.9.  DETAILED MFF: MOVEMENTS IN COMMITMENTS OUTSTANDING (RAL) 

Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

Programme 

Commitm. 
carried forward 
from previous 
year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

Commitm. 
made 
during the 
year 

Payments 

1 

2 

3 

4=1+2+3 

5 

6 

1 

European Fund  Strategic 
Investments (EFSI) 
European satellite navigation 
(EGNOS/Galileo) 
International Thermonuclear Reactor 
(ITER) 
European Earth Observation Progr 
(Copernicus) 

  European Solidarity Corps (ESC) 

  Nuclear Safety and Decommissioning 

2 654 

1 300 

1 727 

 174 

– 

 651 

 (0) 

(1 963) 

 691 

2 097 

 (75) 

 (4) 

 (573) 

 724 

 892 

 (391) 

 (0) 

 (594) 

1 133 

 394 

 (72) 

 (0) 

 (0) 

 (157) 

– 

– 

– 

 (194) 

 16 

– 

 457 

 645 

 (418) 

 43 

 141 

 (26) 

 (2) 

Cancellation 
of commitm. 
which cannot 
be carried 
over 
7 

– 

– 

  Horizon 2020 

19 921 

 (312) 

(7 515) 

12 094 

12 254 

(3 804) 

Euratom Research and Training 
Programme 

Competitiveness enterprises and 
SME's (COSME) 

Education, Training and Sport 
(Erasmus+) 

Employment and Social Innovation 
(EaSI) 

  Customs, Fiscalis and Anti-Fraud 

  CEF - Energy 

  CEF - Transport 

CEF - Information & Communications 
Technology (ICT) 

Energy projects for economic 
recovery (EERP) 

  Decentralised agencies 

  Other actions and programmes 

 198 

 908 

 (4) 

 (70) 

 124 

 397 

 (247) 

 (55) 

 (259) 

 593 

 391 

 (41) 

 704 

 (55) 

 (291) 

 359 

2 573 

(2 076) 

 222 

 159 

1 678 

3 673 

 360 

 545 

 49 

 412 

 (15) 

 (102) 

 (4) 

 (90) 

 (22) 

 (248) 

 (281) 

(1 085) 

 105 

 65 

1 407 

2 307 

 134 

 139 

 680 

1 986 

 (18) 

 (30) 

 (16) 

 (53) 

 (10) 

 (75) 

 275 

 178 

 (5) 

 (132) 

 (159) 

 (2) 

 (31) 

 (21) 

 (177) 

 254 

 17 

 215 

– 

– 

 326 

 281 

 (291) 

 (92) 

148 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

Commitm. 
outstanding 
at year-end 

8=5+6+7 

9=4+8 

2 022 

2 714 

 501 

 321 

 227 

 17 

 139 

8 447 

 150 

 350 

 497 

 116 

 109 

 664 

1 934 

 173 

– 

 35 

 189 

1 224 

1 454 

 243 

 17 

 596 

20 541 

 275 

 943 

 855 

 222 

 175 

2 072 

4 241 

 448 

 254 

 52 

 404 

– 

– 

– 

 (3) 

 (0) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

Programme 

Commitm. 
carried forward 
from previous 
year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

Commitm. 
made 
during the 
year 

Payments 

1 

2 

3 

4=1+2+3 

5 

6 

Cancellation 
of commitm. 
which cannot 
be carried 
over 
7 

Commitm. 
outstanding 
at year-end 

8=5+6+7 

9=4+8 

  Pilot projects and preparatory actions 

Specific competences of the 
Commission 

Regional convergence (Less 
developed regions) 

  Transition regions 

Competitiveness (More developed 
regions) 
Outermost and sparsely populated 
regions 

  Cohesion fund 

  European territorial cooperation 

  Technical assistance 

European Aid to the Most Deprived 
(FEAD) 

  Youth Employment initiative 

  Connecting Europe Facility (CEF) 

  Pilot projects and preparatory actions 

 66 

 174 

82 421 

16 151 

25 870 

 613 

24 398 

3 514 

 218 

1 101 

2 248 

4 704 

 22 

 (2) 

 (24) 

 (12) 

 (84) 

 39 

 78 

 92 

 (24) 

 128 

 (37) 

 (278) 

(27 946) 

54 197 

31 150 

 (153) 

 (6) 

(4 196) 

11 949 

6 579 

 (27) 

 (43) 

(8 944) 

16 883 

9 811 

 (171) 

– 

 (271) 

 343 

 258 

 (11) 

(9 214) 

15 173 

10 693 

 (15) 

(1 184) 

2 314 

2 193 

 (12) 

 (14) 

 (6) 

– 

– 

– 

– 

– 

– 

– 

– 

 (18) 

 (73) 

 (0) 

 (351) 

 (7) 

(1 016) 

 (13) 

 (745) 

 (1) 

 (6) 

 126 

 750 

1 224 

3 946 

 14 

 247 

 (123) 

 (0) 

 557 

 434 

1 655 

 8 

 (3) 

 (3) 

 (7) 

 (2) 

– 

– 

– 

– 

 68 

 91 

30 997 

6 553 

9 640 

 246 

10 678 

2 188 

 124 

 554 

 431 

1 648 

 6 

 107 

 169 

85 194 

18 502 

26 523 

 588 

25 851 

4 502 

 251 

1 304 

1 655 

5 595 

 20 

  Total MFF Heading 1 

196 837 

(1 323) 

(67 640) 

127 874 

87 357 

(8 237) 

 (4) 

79 117 

206 991 

2 

European Agricultural Guarantee 
Fund (EAGF) 
Agricultural Fund Rural Development 
(EAFRD) 

European Maritime and Fisheries 
Fund (EMFF) 

Fisheries Partnership Agreements 
(SFPAs) and Fisheries Management 
Organisations (RFMOs) 

Environment and climate action 
(LIFE) 

  Decentralised agencies 

  Other actions and measures 

 309 

 (14) 

 (228) 

 67 

44 364 

(44 082) 

32 742 

 (108) 

(12 174) 

20 460 

14 427 

 (292) 

– 

– 

 282 

 349 

14 134 

34 594 

3 218 

 (233) 

 (754) 

2 231 

1 070 

 (21) 

 (0) 

1 049 

3 280 

 21 

 (3) 

 (10) 

 8 

 94 

 (87) 

1 564 

 3 

 6 

 (2) 

 (0) 

– 

 (283) 

1 279 

 522 

 (3) 

 (6) 

– 

– 

 66 

– 

 (34) 

 (63) 

– 

– 

– 

– 

– 

 7 

 15 

 488 

1 768 

 3 

– 

 3 

– 

149 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

Programme 

Commitm. 
carried forward 
from previous 
year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

Commitm. 
made 
during the 
year 

Payments 

1 

2 

3 

4=1+2+3 

5 

6 

Cancellation 
of commitm. 
which cannot 
be carried 
over 
7 

Commitm. 
outstanding 
at year-end 

8=5+6+7 

9=4+8 

 (0) 

– 

 (7) 

– 

 12 

 0 

 16 

– 

 (0) 

– 

– 

– 

 15 

– 

 28 

 0 

 (360) 

(13 466) 

24 058 

60 560 

(44 580) 

 (0) 

15 980 

40 037 

 20 

 0 

37 883 

2 447 

 41 

 193 

 90 

 (34) 

 (721) 

1 692 

 986 

 (17) 

 (1) 

 (7) 

 (1) 

 (20) 

 (91) 

 (67) 

 21 

 94 

 22 

 29 

 (9) 

 239 

 (115) 

 199 

 (160) 

1 420 

 (19) 

 (433) 

 969 

 799 

  Pilot projects and preparatory actions 

  Specific Actions 

  Total MFF Heading 2 

3 

Asylum, Migration and Integration 
Fund (AMF) 

  Consumer 

  Creative Europe 

Emergency Support within the Union 
(IES) 
Internal Security Fund 

IT systems 

Justice 

  Rights, Equality and Citizenship 

  Union Civil protection Mechanism 

  Europe for Citizens 

  Food and feed 

  Health 

  Decentralised agencies 

  Pilot projects and preparatory actions 

  Specific Actions 

  Total MFF Heading 3 

4  Pre-accession assistance (IPA II) 

  Macro-financial Assistance (MFA) 

  Guarantee Fund for External Actions 

  Union Civil Protection Mechanism 

  EU Aid Volunteers initiative (EUAV) 

Fund for Sustainable Development 
(EFSD) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 12 

 48 

 64 

 35 

 28 

 281 

 68 

 (22) 

 (0) 

 (13) 

 (10) 

 (13) 

 (16) 

 (60) 

 (16) 

 956 

 (841) 

 11 

 99 

 (2) 

 (34) 

3 855 

(1 327) 

2 097 

 (221) 

 (0) 

 10 

 (5) 

 138 

 (138) 

 7 

 20 

 (3) 

 (14) 

 325 

 (0) 

– 

– 

– 

– 

– 

 47 

 90 

 115 

 44 

 22 

 316 

 133 

 132 

 24 

 77 

5 194 

6 899 

 40 

– 

 18 

 18 

 (1) 

 (1) 

 (1) 

 (2) 

 (0) 

 (13) 

 (34) 

 (63) 

 (21) 

 (13) 

 (31) 

 (187) 

 (6) 

 (1) 

 (1) 

 (1) 

 (46) 

 (5) 

 (9) 

 (59) 

 (107) 

(1 781) 

 (124) 

(1 225) 

 (0) 

– 

 (1) 

 (0) 

 (0) 

– 

 (6) 

 (2) 

 275 

– 

 (275) 

150 

 34 

 55 

 51 

 21 

 9 

 98 

 81 

 126 

 14 

 17 

3 306 

5 549 

 40 

– 

 12 

 16 

– 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

 969 

 20 

 124 

 40 

 777 

 12 

 35 

 54 

 21 

 12 

 221 

 52 

 115 

 9 

 65 

2 528 

1 875 

 5 

– 

 4 

 6 

2 662 

 40 

 219 

 62 

1 746 

 46 

 90 

 105 

 43 

 21 

 319 

 133 

 242 

 24 

 82 

5 834 

7 425 

 45 

– 

 15 

 22 

 325 

 325 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

Programme 

Commitm. 
carried forward 
from previous 
year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

Commitm. 
made 
during the 
year 

Payments 

1 

2 

3 

4=1+2+3 

5 

6 

Cancellation 
of commitm. 
which cannot 
be carried 
over 
7 

Commitm. 
outstanding 
at year-end 

8=5+6+7 

9=4+8 

European Neighbourhood Instrument 
(ENI) 
Development Cooperation Instrument 
(DCI) 

  Partnership Instrument (PI) 

Democracy and Human Rights 
(EIDHR) 

  Stability and Peace (IcSP) 

  Humanitarian aid 

Common Foreign and Security Policy 
(CFSP) 

  Nuclear Safety Cooperation (INSC) 

  Decentralised agencies 

  Other actions and programmes 

  Pilot projects and preparatory actions 

  Specific Actions 

  Total MFF Heading 4 

5  Pensions 

  European schools 

  Decentralised agencies 

  Pilot projects and preparatory actions 

Commission administrative 
expenditure 
Administrative expenditure of Other 
Institutions 

  Total MFF Heading 5 

6  Compensations 

  Total MFF Heading 6 

8  Negative reserve 

  Deficit carried over 

  Total MFF Heading 8 

7 662 

8 643 

 376 

 370 

 623 

 899 

 243 

 122 

– 

 154 

 22 

 113 

 (185) 

(1 724) 

5 753 

2 501 

 (421) 

 (218) 

(2 418) 

6 006 

3 015 

 (265) 

 (6) 

 (113) 

 (10) 

 (139) 

 (34) 

 (33) 

 (32) 

 (8) 

– 

 (13) 

 (1) 

 (2) 

 (220) 

 (429) 

 (80) 

 (39) 

– 

 (29) 

 (7) 

 (42) 

 257 

 222 

 369 

 437 

 132 

 75 

– 

 113 

 13 

 70 

 146 

 189 

 (17) 

 (52) 

 373 

 (114) 

1 533 

(1 077) 

 371 

 (236) 

 33 

 20 

 (1) 

 (20) 

 208 

 (168) 

 3 

 76 

 (1) 

 (19) 

 (0) 

– 

 (0) 

 (0) 

 (0) 

 (0) 

– 

– 

– 

– 

– 

– 

2 080 

2 749 

 129 

 137 

 258 

 456 

 134 

 32 

– 

 39 

 2 

 57 

7 833 

8 755 

 386 

 358 

 627 

 893 

 266 

 107 

– 

 152 

 16 

 126 

26 478 

 (667) 

(6 746) 

19 064 

11 062 

(2 773) 

 (1) 

8 288 

27 352 

– 

 0 

– 

 6 

 354 

 507 

 867 

– 

– 

– 

– 

– 

– 

 (0) 

– 

– 

– 

 (0) 

– 

 (2) 

 (26) 

 (328) 

 (61) 

 (444) 

 (87) 

 (775) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

151 

– 

– 

– 

 3 

 0 

 2 

 6 

– 

– 

– 

– 

– 

1 879 

(1 879) 

 190 

 (188) 

– 

 4 

– 

 (0) 

3 772 

(3 407) 

4 280 

(3 695) 

10 124 

(9 169) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 (0) 

0 

 (0) 

– 

– 

– 

– 

– 

– 

 2 

– 

 3 

 365 

 584 

 955 

– 

– 

– 

– 

– 

– 

 2 

– 

 6 

 366 

 587 

 961 

– 

– 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Commitments outstanding at the end of previous year 

Commitments of the current year 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

Programme 

Commitm. 
carried forward 
from previous 
year 

Decommitm./ 
Revaluations/ 
Cancellations 

Payments 

Commitm. 
outstanding 
at year-end 

Commitm. 
made 
during the 
year 

Payments 

1 

2 

3 

4=1+2+3 

5 

6 

Cancellation 
of commitm. 
which cannot 
be carried 
over 
7 

Commitm. 
outstanding 
at year-end 

8=5+6+7 

9=4+8 

9  Emergency Aid Reserve (EAR) 

European Globalisation Adjustment 
Fund (EGF) 
European Union Solidarity Fund 
(EUSF) 

  Total MFF Heading 9 

  Total 

– 

 0 

– 

 0 

– 

 (0) 

– 

 (0) 

– 

 (0) 

– 

 (0) 

– 

– 

– 

– 

– 

 28 

– 

 (28) 

 152 

 (152) 

 180 

 (180) 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

 0 

– 

 0 

267 258 

(2 544)  (90 407) 

174 307 

173 139  (66 265) 

 (5) 

106 868 

281 175 

152 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.10.   DETAILED MFF: COMMITMENTS OUTSTANDING BY YEAR OF ORIGIN 

Annual accounts of the European Union 2018 

Programme 

< 2012 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

Total 

EUR million 

1  European Fund  Strategic Investments (EFSI) 
European satellite navigation (EGNOS/Galileo) 
International Thermonuclear Reactor (ITER) 
European Earth Observation Progr (Copernicus) 
European Solidarity Corps (ESC) 
Nuclear Safety and Decommissioning 
Horizon 2020 
Euratom Research and Training Programme 
Competitiveness enterprises and SME's (COSME) 
Education, Training and Sport (Erasmus+) 
Employment and Social Innovation (EaSI) 
Customs, Fiscalis and Anti-Fraud 
CEF - Energy 
CEF - Transport 
CEF - Information & Communications Technology (ICT) 
Energy projects for economic recovery (EERP) 
Decentralised agencies 
Other actions and programmes 
Pilot projects and preparatory actions 
Specific competences of the Commission 
Regional convergence (Less developed regions) 
Transition regions 
Competitiveness (More developed regions) 
Outermost and sparsely populated regions 
Cohesion fund 
European territorial cooperation 
Technical assistance 
European Aid to the Most Deprived (FEAD) 
Youth Employment initiative 
Connecting Europe Facility (CEF) 
Pilot projects and preparatory actions 
Total MFF Heading 1 

2  European Agricultural Guarantee Fund (EAGF) 
Agricultural Fund Rural Development (EAFRD) 
European Maritime and Fisheries Fund (EMFF) 
Fisheries Partnership Agreements (SFPAs) and Fisheries 

– 
 0 
– 
– 
– 
– 
 246 
 8 
 2 
 0 
 2 
– 
 5 
 13 
– 
 254 
– 
 22 
 2 
 0 
 510 
 38 
 53 
– 
 159 
 40 
 1 
– 
– 
– 
 0 
1 355 
– 
 34 
 9 
– 

– 
 0 
– 
– 
– 
– 
 273 
 1 
 4 
 0 
 4 
 0 
 2 
– 
 0 
– 
– 
 4 
 1 
 0 
 445 
– 
– 
– 
– 
 9 
 1 
– 
– 
– 
– 
 744 
– 
– 
 3 
– 

153 

– 
– 
 546 
– 
– 
 97 
 784 
 2 
 181 
 1 
 6 
– 
 2 
 6 
– 
– 
– 
 14 
 2 
 4 
3 057 
– 
 626 
– 
 487 
 52 
 0 
– 
– 
– 
– 
5 867 
– 
 293 
 96 
– 

– 
– 
– 
 0 
– 
 72 
1 440 
 7 
 6 
 23 
 7 
 1 
 245 
 226 
 21 
– 
– 
 14 
 0 
 5 
 651 
 149 
 327 
 9 
 321 
– 
 2 
 0 
 0 
 279 
 1 
3 807 
 0 
 198 
 4 
– 

 0 
 47 
 15 
 0 
– 
 77 
2 120 
 24 
 46 
 43 
 13 
 4 
 235 
 192 
 34 
– 
 0 
 23 
 3 
 5 
5 465 
1 594 
1 766 
 38 
1 046 
 5 
 27 
 36 
 397 
 550 
 1 
13 803 
 3 
1 567 
 358 
– 

 4 
 112 
 306 
 3 
– 
 103 
2 908 
 35 
 113 
 93 
 14 
 15 
 387 
 705 
 135 
– 
 1 
 35 
 8 
 17 
16 652 
4 066 
5 071 
 74 
3 598 
 417 
 37 
 300 
 413 
1 608 
 4 
37 234 
 9 
7 296 
 760 
 3 

 687 
 564 
 267 
 12 
– 
 108 
4 320 
 48 
 242 
 199 
 60 
 44 
 532 
1 166 
 85 
– 
 15 
 103 
 23 
 46 
27 416 
6 102 
9 040 
 222 
9 561 
1 780 
 60 
 415 
 413 
1 510 
 9 
65 049 
 55 
11 072 
1 000 
 5 

2 022 
 501 
 321 
 227 
 17 
 139 
8 450 
 150 
 350 
 497 
 116 
 109 
 664 
1 934 
 173 
– 
 35 
 189 
 68 
 91 
30 997 
6 553 
9 640 
 246 
10 678 
2 199 
 124 
 554 
 431 
1 648 
 6 
79 131 
 282 
14 134 
1 049 
 7 

2 714 
1 224 
1 454 
 243 
 17 
 596 
20 541 
 275 
 943 
 855 
 222 
 175 
2 072 
4 241 
 448 
 254 
 52 
 404 
 107 
 169 
85 194 
18 502 
26 523 
 588 
25 851 
4 502 
 251 
1 304 
1 655 
5 595 
 20 
206 991 
 349 
34 594 
3 280 
 15 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

< 2012 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

Total 

EUR million 

Management Organisations (RFMOs) 

Environment and climate action (LIFE) 
Decentralised agencies 
Other actions and measures 
Pilot projects and preparatory actions 
Specific Actions 
Total MFF Heading 2 

3  Asylum, Migration and Integration Fund (AMF) 

Consumer 
Creative Europe 
Emergency Support within the Union (IES) 
Internal Security Fund 
IT systems 
Justice 
Rights, Equality and Citizenship 
Union Civil protection Mechanism 
Europe for Citizens 
Food and feed 
Health 
Decentralised agencies 
Pilot projects and preparatory actions 
Specific Actions 
Total MFF Heading 3 

4  Pre-accession assistance (IPA II) 
Macro-financial Assistance (MFA) 
Guarantee Fund for External Actions 
Union Civil Protection Mechanism 
EU Aid Volunteers initiative (EUAV) 
Fund for Sustainable Development (EFSD) 
European Neighbourhood Instrument (ENI) 
Development Cooperation Instrument (DCI) 
Partnership Instrument (PI) 
Democracy and Human Rights (EIDHR) 
Stability and Peace (IcSP) 
Humanitarian aid 
Common Foreign and Security Policy (CFSP) 
Nuclear Safety Cooperation (INSC) 
Decentralised agencies 
Other actions and programmes 
Pilot projects and preparatory actions 

 142 
– 
– 
 0 
– 
 186 
 20 
– 
– 
– 
 19 
 1 
 1 
 3 
– 
 0 
 1 
 4 
– 
 0 
 0 
 50 
 349 
– 
– 
– 
– 
– 
 426 
 250 
 0 
 5 
 7 
 9 
 4 
 7 
– 
 5 
 3 

 53 
– 
– 
 0 
– 
 56 
 17 
 0 
– 
– 
 42 
 0 
 1 
 4 
 0 
– 
 0 
 1 
– 
 1 
 0 
 67 
 94 
– 
– 
– 
– 
– 
 341 
 178 
 8 
 2 
 9 
 13 
 14 
 4 
– 
 4 
 1 

154 

 72 
– 
– 
 0 
– 
 461 
 29 
 0 
 1 
– 
 13 
 0 
 4 
 2 
– 
 0 
 2 
 2 
– 
 1 
 0 
 56 
 522 
– 
– 
– 
– 
– 
 485 
 453 
 13 
 9 
 20 
 14 
 2 
 7 
– 
 2 
 0 

 107 
– 
– 
 2 
 0 
 311 
 4 
 1 
 4 
– 
 12 
 1 
 4 
 4 
 1 
 0 
 6 
 5 
– 
 2 
 0 
 45 
 437 
– 
– 
 2 
 7 
– 
 594 
 564 
 37 
 20 
 36 
 8 
 24 
 10 
– 
 13 
 1 

 209 
– 
– 
 1 
 0 
2 138 
 37 
 2 
 6 
– 
 26 
 2 
 8 
 7 
 2 
 0 
 9 
 14 
 0 
 3 
 0 
 118 
 971 
– 
– 
 2 
 3 
– 
 783 
 938 
 42 
 35 
 67 
 11 
 23 
 12 
– 
 23 
 3 

 229 
– 
– 
 4 
– 
8 301 
 491 
 4 
 22 
 13 
 266 
 3 
 16 
 12 
 6 
 1 
 27 
 22 
 12 
 3 
 2 
 901 
1 475 
– 
– 
 2 
 2 
– 
1 367 
1 424 
 70 
 61 
 88 
 117 
 21 
 18 
– 
 31 
 0 

 273 
 0 
– 
 5 
– 
12 411 
1 094 
 14 
 61 
 9 
 589 
 25 
 21 
 19 
 12 
 7 
 52 
 33 
 114 
 4 
 15 
2 069 
1 702 
 40 
– 
 6 
 4 
– 
1 716 
2 198 
 82 
 90 
 141 
 267 
 43 
 18 
– 
 36 
 5 

 682 
 3 
– 
 15 
– 
16 173 
 969 
 20 
 124 
 40 
 777 
 12 
 35 
 54 
 21 
 12 
 221 
 52 
 115 
 9 
 65 
2 528 
1 875 
 5 
– 
 4 
 6 
 325 
2 120 
2 751 
 133 
 137 
 258 
 456 
 134 
 32 
– 
 39 
 2 

1 768 
 3 
– 
 28 
 0 
40 037 
2 662 
 40 
 219 
 62 
1 746 
 46 
 90 
 105 
 43 
 21 
 319 
 133 
 242 
 24 
 82 
5 834 
7 425 
 45 
– 
 15 
 22 
 325 
7 833 
8 755 
 386 
 358 
 627 
 893 
 266 
 107 
– 
 152 
 16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

Programme 

< 2012 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

Total 

EUR million 

Specific Actions 
Total MFF Heading 4 

5  Pensions 

European schools 
Decentralised agencies 
Pilot projects and preparatory actions 
Commission administrative expenditure 
Administrative expenditure of Other Institutions 
Total MFF Heading 5 

6  Compensations 

Total MFF Heading 6 

8  Negative reserve 

Deficit carried over 
Total MFF Heading 8 

9  Emergency Aid Reserve (EAR) 

European Globalisation Adjustment Fund (EGF) 
European Union Solidarity Fund (EUSF) 
Total MFF Heading 9 
Total 

 1 
1 065 
– 
– 
– 
– 
– 
0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
2 656 

 2 
 671 
– 
– 
– 
– 
– 
0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
1 538 

 1 
1 526 
– 
– 
– 
– 
 0 
0 
 0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
7 910 

 2 
1 753 
– 
– 
– 
– 
 0 
0 
 0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
5 916 

 7 
2 920 
– 
– 
– 
– 
– 
0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
18 979 

 20 
4 697 
– 
– 
– 
 0 
 0 
0 
 0 
– 
– 
– 
– 
– 
– 
– 
– 
– 
51 133 

 37 
6 385 
– 
 0 
– 
 3 
 0 
0 
 3 
– 
– 
– 
– 
– 
– 
 0 
– 
 0 

 57 
8 335 
– 
 2 
– 
 3 
 365 
 587 
 957 
– 
– 
– 
– 
– 
– 
 0 
– 
 0 
85 917  107 126 

 126 
27 352 
– 
 2 
– 
 6 
 366 
 587 
 961 
– 
– 
– 
– 
– 
– 
 0 
– 
 0 
281 175 

155 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.

  IMPLEMENTATION OF THE BUDGET BY INSTITUTION 

Annual accounts of the European Union 2018 

5.1.  IMPLEMENTATION OF BUDGET REVENUE  

Institution 

Income 
appropriations 

Initial 
adopted 
budget 

Final 
adopted 
budget 

Entitlements established 

Current 
year 

Carried 
over 

Total 

1 

2 

3 

4 

5=3+4 

On 
entitlem. of 
current 
year 
6 

Revenue 

On 
entitlem. 
carried 
over 
7 

Receipts as 
% of 
budget 

Out- 
standing 

Total 

8=6+7 

9=8/2 

10=5-8 

EUR million 

European Parliament 

European Council and Council 

 164 

 53 

 164 

 53 

 197 

 79 

 19 

 2 

 217 

 81 

 191 

 79 

 3 

 1 

 194 

 118 % 

 80 

 151 % 

 23 

 1 

Commission 

Court of Justice 

Court of Auditors 

Economic and Social Committee 

Committee of the Regions 

Ombudsman 

European Data Protection Supervisor 

European External Action Service 

144 315 

144 401 

164 179 

8 210 

172 389 

157 870 

 773 

158 643 

 110 % 

13 747 

 56 

 21 

 12 

 9 

 1 

 1 

 49 

 56 

 21 

 12 

 9 

 1 

 1 

 53 

 21 

 16 

 11 

 1 

 1 

 49 

 296 

 0 

 0 

 0 

 0 

 0 

 0 

 2 

 53 

 21 

 16 

 11 

 1 

 1 

 53 

 21 

 16 

 11 

 1 

 1 

 297 

 295 

 0 

– 

 0 

 0 

 0 

 0 

 2 

 53 

 21 

 16 

 11 

 1 

 1 

 96 % 

 101 % 

 136 % 

 124 % 

 86 % 

 78 % 

 297 

 607 % 

 0 

 0 

– 

 0 

 0 

– 

 1 

Total 

144 681 

144 768 

164 856 

8 234 

173 090 

158 539 

 779 

159 318 

110 % 

13 771 

The  consolidated  reports  on  the  implementation  of  the  general  budget  of  the  EU  include,  as  in  previous  years,  the  budget  implementation  of  all  Institutions 
since within the EU budget a separate budget for each Institution is established.  

The budget and implementation of Agencies is not consolidated within the EU budget. The Commission subsidy is part of the EU budget. 

Concerning the EEAS, it should be noted that, in addition to its own budget, it also receives contributions from the  Commission of EUR 141.7 million (2017: 
EUR  144  million)  and  the  EDF  and  the  Trust  Funds  of  EUR  70.1  million  (2017:  EUR  72  million)  covering  the  costs  of  Commission's  staff  in  the  delegations 
financed under the EDF and the Trust Funds including assigned revenue generated in the year from these contributions. These budget credits are put at the 
disposal  of  the  EEAS  (as  assigned  revenue)  so  as  to  cover  primarily  the  costs  of  Commission  staff  working  in  the  EU  delegations,  these  delegations  being 
administratively managed by the EEAS.   

156 

 
 
 
 
 
 
 
 
 
 
 
 
 
5.2.  IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2018 

Institution 

Total 
appropriat. 
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over 
to 2019 
carry-
overs by 
decision 

from 
assigned 
revenue 

Total 

Appropriations lapsing 

EUR million 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3+
4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

European Parliament 

2 031 

1 934 

European Council and 
Council 

 629 

 527 

 3 

 4 

 56 

1 993 

 98 % 

 24 

 555 

 88 % 

 22 

 23 

0 

0 

 22 

 23 

 16 

 46 

– 

 5 

Commission 

174 003 

155 941 

 866 

12 051  168 859 

 97 % 

4 386 

 525 

4 911 

 215 

 18 

Court of Justice 

Court of Auditors 

Economic and Social 
Committee 

Committee of Regions 

Ombudsman 

European Data-
protection Supervisor 
European External 
Action Service 

 411 

 146 

 140 

 98 

 11 

 14 

 407 

 140 

 134 

 95 

 10 

 14 

 984 

 678 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 4 

 2 

0 

0 

 407 

 99 % 

 141 

 96 % 

 138 

 99 % 

 97 

 10 

 99 % 

 95 % 

 14 

 94 % 

 1 

 0 

 0 

 0 

0 

0 

 247 

 925 

 94 % 

 59 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 0 

 0 

0 

0 

 59 

 3 

 6 

 2 

 1 

 1 

 1 

 1 

0 

0 

0 

0 

0 

0 

0 

Total 

178 468 

159 881 

 873 

12 385  173 139 

97 % 

4 491 

 525 

5 015 

 291 

 23 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

157 

Total 

13=10+ 
11+12 

 16 

 51 

 233 

 3 

 6 

 2 

 1 

 1 

 1 

 1 

 314 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       
5.3.  IMPLEMENTATION OF PAYMENT APPROPRIATIONS  

Annual accounts of the European Union 2018 

EUR million 

Payments made 

Appropriations carried over to 2019 

Appropriations lapsing 

Institution 

Total 
approp. 
available 

from 
final 
adopted 
budget 

from 
carry- 
overs 

from 
assigned 
revenue 

Total 

% 

automatic 
carry-
overs 

carry- 
overs 
by 
decision 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+3+4  6=5/1 

7 

8 

9 

from 
final 
adopted 
budget 

from 
carry- 
overs 

from 
assigned 
revenue 

Total 

11 

12 

13 

14 

Total 

10=7+8
+9 

European Parliament 

2 321 

1 637 

 268 

European Council and 
Council 

 681 

 470 

 43 

 28 

 23 

1 933   83 % 

 298 

 536   79 % 

 61 

0 

0 

 50 

 24 

 347 

 16 

 24 

 84 

 46 

 14 

Commission 

161 390 

139 260 

1 394 

11 879 

152 533   95 % 

 706 

 465 

7 294 

8 465 

 322 

 68 

Court of Justice 

Court of Auditors 

Economic and Social 
Committee 

Committee of Regions 

Ombudsman 

European Data-
protection Supervisor 

European External 
Action Service 

 432 

 154 

 150 

 108 

 12 

 16 

 386 

 18 

 133 

 126 

 87 

 10 

 11 

 7 

 8 

 8 

 1 

 1 

 1 

 0 

 3 

 1 

0 

0 

 404   94 % 

 21 

 140   91 % 

 137   91 % 

 96   90 % 

 11   91 % 

 12   75 % 

 7 

 8 

 8 

 0 

 2 

1 090 

 575 

 93 

 202 

 870   80 % 

 102 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 1 

 1 

0 

0 

 22 

 8 

 9 

 9 

 0 

 2 

 105 

 208 

 3 

 6 

 2 

 1 

 1 

 1 

 1 

 3 

 1 

 2 

 1 

 0 

 1 

 11 

Total 

166 353  142 695  1 840  12 138  156 673  94 % 

1 214 

 465 

7 475 

9 154 

 398 

 126 

 0 

 0 

 2 

 0 

 0 

 0 

 0 

 0 

 0 

– 

 2 

 41 

 60 

 392 

 6 

 6 

 4 

 2 

 1 

 2 

 12 

 526 

158 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

6.

  IMPLEMENTATION OF THE AGENCIES' BUDGET 

The reports below show the revenue and expenditure of the Agencies, both decentralised (also known as 
traditional agencies) and executive agencies. 

The  agencies’  revenue  and  expenditure  are  not  consolidated  within  the  EU  budget.  The  Commission 
subsidy is part of the EU budget. 

Other  sources  of  revenue  and  expenditure  made  thereof  by  the  agencies  are  not  added  into  the  EU 
budget accounts. Each agency presents its own accounts. The information presented in the tables below 
provides the global financial picture of these EU bodies. 

6.1.  BUDGET REVENUE  

Agency 

Agency for the Cooperation of Energy Regulators - ACER 

Body of European Regulators for Electronic Communications - BEREC 

Community Plant Variety Office - CPVO 

Consumers, Health, Agriculture and Food Executive Agency - CHAFEA 

Education, Audiovisual and Culture Executive Agency - EACEA 

European Agency for Safety and Health at Work - EU-OSHA 

European Agency for the Operational Management of Large-Scale IT Systems 
in the Area of Freedom, Security and Justice - eu-LISA 

European Asylum Support Office - EASO 

European Aviation Safety Agency - EASA 

European Banking Authority - EBA 

European Border and Coast Guard Agency - Frontex 

European Centre for Disease Prevention and Control - ECDC 

European Centre for the Development of Vocational Training - CEDEFOP 

European Chemicals Agency - ECHA 

European Environment Agency - EEA 

European Fisheries Control Agency - EFCA 

European Food Safety Authority - EFSA  

European Foundation for the Improvement of Living and Working Conditions - 
Eurofound 

European Global Navigation Satellite Systems (GNSS) Agency 

European Institute for Gender Equality - EIGE 

European Institute of Innovation and Technology - EIT 

European Insurance and Occupational Pensions Authority - EIOPA 

European Maritime Safety Agency - EMSA 

European Medicines Agency - EMA 

European Monitoring Centre for Drugs and Drug Addiction - EMCDDA 

European Police Office 

European Research Council Executive Agency - ERCEA 

European Securities and Markets Authority - ESMA 

159 

Funding 
Commission 
Policy Area 

Final 
adopted 
budget 

EUR million 

Amounts 
received 

6 

9 

17 

17 

15 

4 

18 

18 

6 

12 

18 

17 

15 

2 

7 

11 

17 

4 

6 

4 

15 

12 

6 

2 

18 

18 

8 

12 

 14 

 4 

 17 

 11 

 50 

 15 

 94 

 98 

 198 

 43 

 289 

 58 

 18 

 14 

 4 

 18 

 11 

 50 

 15 

 97 

 98 

 155 

 44 

 306 

 58 

 18 

 119 

 121 

 66 

 17 

 80 

 21 

 33 

 8 

 370 

 25 

 77 

 338 

 16 

 137 

 49 

 44 

 66 

 17 

 80 

 21 

 746 

 8 

 345 

 25 

 103 

 317 

 16 

 137 

 49 

 44 

 
 
 
 
Annual accounts of the European Union 2018 

Agency 

European Training Foundation - ETF 

European Union Agency for Fundamental Rights - FRA 

European Union Agency for Law Enforcement Training - CEPOL 

European Union Agency for Network and Information Security - ENISA 

European Union Agency for Railways 

European Union Intellectual Property Office - EUIPO 

European Union's Judicial Cooperation Unit - EUROJUST 

Executive Agency for Small and Medium-sized Enterprises - EASME 

Fusion for Energy - F4E 

Innovation and Networks Executive Agency - INEA 

Research Executive Agency - REA 

Translation Centre for the Bodies of the European Union 

Total 

Funding 
Commission 
Policy Area 

Final 
adopted 
budget 

EUR million 

Amounts 
received 

15 

18 

18 

9 

6 

12 

33 

6 

8 

6 

8 

15 

 20 

 23 

 9 

 11 

 29 

 20 

 23 

 14 

 12 

 29 

 403 

 245 

 38 

 44 

 38 

 44 

 795 

 831 

 27 

 70 

 47 

 27 

 70 

 41 

3 822 

4 377 

Type of revenue 

Commission subsidy 

Fee income 

Other income 

Total 

EUR million 

Amounts 
received 

Final 
adopted 
budget 

1 424 

1 425 

 746 

 726 

1 652 

2 226 

3 822 

4 377 

160 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

6.2.  COMMITMENT AND PAYMENT APPROPRIATIONS BY 

AGENCY  

EUR million 

Commitment 
appropriations 
Total 
appropr. 
available 

Commit. 
made 

Payment 
appropriations 
Total 
appropr. 
available 

Payments 
made 

Agency 

Agency for the Cooperation of Energy Regulators - ACER 

Body of European Regulators for Electronic Communications - 
BEREC 

Community Plant Variety Office - CPVO 

Consumers, Health, Agriculture and Food Executive Agency - 
CHAFEA 

Education, Audiovisual and Culture Executive Agency - EACEA 

European Agency for Safety and Health at Work - EU-OSHA 

European Agency for the Operational Management of Large-Scale 
IT Systems in the Area of Freedom, Security and Justice - eu-LISA 

European Asylum Support Office - EASO 

European Aviation Safety Agency - EASA 

European Banking Authority - EBA 

European Border and Coast Guard Agency - Frontex 

European Centre for Disease Prevention and Control - ECDC 

European Centre for the Development of Vocational Training - 
CEDEFOP 

 14 

 4 

 19 

 11 

 50 

 16 

 211 

 103 

 237 

 44 

 318 

 59 

 18 

 13 

 4 

 17 

 10 

 49 

 16 

 154 

 94 

 179 

 44 

 306 

 58 

 18 

European Chemicals Agency - ECHA 

 121 

 117 

European Environment Agency - EEA 

European Fisheries Control Agency - EFCA 

European Food Safety Authority - EFSA  

European Foundation for the Improvement of Living and Working 
Conditions - Eurofound 

 97 

 18 

 80 

 21 

 78 

 17 

 80 

 21 

 17 

 5 

 18 

 13 

 56 

 20 

 107 

 106 

 244 

 47 

 406 

 69 

 19 

 133 

 102 

 22 

 87 

 25 

 14 

 4 

 16 

 10 

 48 

 14 

 94 

 86 

 151 

 41 

 293 

 57 

 18 

 114 

 61 

 19 

 80 

 21 

European Global Navigation Satellite Systems (GNSS) Agency 

3 522 

2 428 

1 270 

 828 

European Institute for Gender Equality - EIGE 

European Institute of Innovation and Technology - EIT 

European Insurance and Occupational Pensions Authority - EIOPA 

European Maritime Safety Agency - EMSA 

European Medicines Agency - EMA 

European Monitoring Centre for Drugs and Drug Addiction - 
EMCDDA 

 8 

 459 

 25 

 126 

 344 

 16 

 8 

 395 

 25 

 114 

 312 

 16 

 9 

 380 

 28 

 122 

 392 

 17 

 8 

 340 

 24 

 91 

 302 

 17 

European Police Office 

 143 

 132 

 156 

 129 

European Research Council Executive Agency - ERCEA 

European Securities and Markets Authority - ESMA 

European Training Foundation - ETF 

European Union Agency for Fundamental Rights - FRA 

European Union Agency for Law Enforcement Training - CEPOL 

European Union Agency for Network and Information Security - 
ENISA 

European Union Agency for Railways 

 49 

 46 

 20 

 23 

 14 

 12 

 30 

 49 

 46 

 20 

 23 

 13 

 12 

 30 

 51 

 51 

 21 

 30 

 15 

 13 

 34 

 48 

 44 

 20 

 23 

 11 

 11 

 30 

European Union Intellectual Property Office - EUIPO 

 422 

 245 

 445 

 235 

161 

 
 
 
 
 
 
Annual accounts of the European Union 2018 

Agency 

European Union's Judicial Cooperation Unit - EUROJUST 

Executive Agency for Small and Medium-sized Enterprises - EASME 

EUR million 

Commitment 
appropriations 
Total 
appropr. 
available 

Commit. 
made 

Payment 
appropriations 
Total 
appropr. 
available 

Payments 
made 

 40 

 44 

 40 

 44 

 47 

 49 

 41 

 45 

Fusion for Energy - F4E 

1 019 

1 008 

 847 

 814 

Innovation and Networks Executive Agency - INEA 

Research Executive Agency - REA 

Translation Centre for the Bodies of the European Union 

Total 

 27 

 70 

 47 

 27 

 70 

 45 

 28 

 73 

 51 

 26 

 67 

 45 

7 946 

6 376 

5 625 

4 342 

Type of expenditure 

EUR million 

Commitment 
appropriations 

Payment 
appropriations 

Total 
appropr. 
available 

Commit. 
made 

Total 
appropr. 
available 

Payments 
made 

Administrative expenses 

 368 

 352 

 445 

Staff 

1 220 

1 188 

1 236 

Operational expenses 

6 358 

4 836 

3 944 

 334 

1 181 

2 826 

Total 

7 946 

6 376 

5 625 

4 342 

162 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2018 

GLOSSARY  

Actuarial assumptions 

Assumptions used to calculate the costs of future events that affect the pension liability. 

Actuarial gains and losses 

For  a  defined  benefit  scheme,  the  changes  in  actuarial  deficits  or  surpluses.  They  arise  as  a  result  of 
differences between the previous actuarial assumptions and what has actually occurred and due to effects 
of changes in actuarial assumptions. 

Administrative appropriations 

Administrative  appropriations  cover  the  running  costs  of  the  Institutions  and  entities  (staff,  buildings, 
office equipment). 

Adopted budget 

Draft budget becomes the adopted budget as soon as it is approved by the Budgetary Authority. 

Amending budget 

Decision adopted during the budget year to amend (increase, decrease, transfer) aspects of the adopted 
budget of that year. 

Amounts to be called from Member States 

These  represent  expenses  incurred  during  the  reporting  period  that  will  need  to  be  funded  by  future 
budgets,  i.e.  by  the  EU  Member  States.  This  is  a  consequence  of  the  co-existence  of  accruals  based 
financial statements and a cash based budget. 

Annual Activity Report (AAR) 

Annual Activity Reports indicate the results of operations by reference to objectives set, associated risks 
and  the  internal  control  structure,  inter  alia.  Since  the  2001  budget  exercise  for  the  Commission  and 
since 2003 for all European Union institutions, the ‘authorising officer by delegation’ must submit an AAR 
to  his/her  institution  on  the  performance  of  his/her  duties,  together  with  financial  and  management 
information. 

Appropriations 

Budget  funding.  The  budget  forecasts  both  commitments  and  payments  (cash  or  bank  transfers  to  the 
beneficiaries). Appropriations for commitments and payments often differ (differentiated appropriations) 
because multi annual programmes and projects are usually fully committed in the year they are decided 
and  are  paid  over  the  years  as  the  implementation  of  the  programme  and  project  progresses.  Non-
differentiated  appropriations  apply  to  administrative  expenditure,  for  agricultural  market  support  and 
direct payments and commitment appropriations equal payment appropriations. 

Assigned revenue 

Dedicated  revenue  received  to  finance  specific  items  of  expenditure.  The  main  source  of  external 
assigned  revenue  is  financial  contributions  from  third  countries  to  programmes  financed  by  the  Union. 
The main source of internal assigned revenue is revenue from third parties in respect of goods, services 
or  work  supplied  at  their  request;  revenue  arising  from  the  repayment  of  amounts  wrongly  paid  and 
revenue from the sale of publications and films. 

163 

 
  
 
Available for sale financial assets 

Annual accounts of the European Union 2018 

All  financial  assets  (except  derivatives)  that  are  according  to  International  Public  Sector  Accounting 
Standards  measured  at  fair  value  and  for  which  the  changes  in  fair  value  are  to  be  recognised  in  a 
reserve in net assets until derecognition (or impairment). 

Budget line 

As  far  as  the  budget  structure  is  concerned,  revenue  and  expenditure  are  shown  in  the  budget  in 
accordance with a binding nomenclature which reflects the nature and purpose of each item, as imposed 
by  the  budgetary  authority.  The  individual  headings  (title,  chapter,  article  or  line)  provide  a  formal 
description of the nomenclature. 

Cancellation of appropriations 

Unused appropriations that may no longer be used. 

Carryover of appropriations 

Exception to the principle of annuality in so far as appropriations that could not be used in a given budget 
year may, under strict conditions, be exceptionally carried over for use during the following year. 

Commitment 

Legal  pledge  to  provide  finance  subject  to  certain  conditions.  The  EU  commits  itself  to  reimbursing  its 
share  of  the  costs  of  an  EU  funded  project.  Today’s  commitments  are  tomorrow’s  payments.  Today’s 
payments are yesterday’s commitments. 

Commitment appropriation 

Commitment  appropriations 
cover 
agreements/decisions) that could be signed in the current financial year. 

cost  of 

total 

the 

legal  obligations 

(contracts,  grant 

Current service cost 

The increase in scheme liabilities arising from service in the current financial year. 

Decommitment 

An act whereby a previous commitment (or part of it) is cancelled. 

Defined benefit scheme 

A pension or other retirement benefit scheme where the scheme rules define the benefits independently 
of the contributions payable, and the benefits are not directly related to the investments of the scheme. 
The scheme may be funded or unfunded. 

Derivatives 

Financial  instruments  whose  value  is  linked  to  changes  in  the  value  of  another  financial  instrument,  an 
indicator or a commodity. In contrast to the holder of a primary financial instrument (e.g. a government 
bond), who has an unqualified right to receive cash (or some other economic benefit) in the future, the 
holder of  a  derivative  has  only  a  qualified  right  to  receive  such  a  benefit.  An example of  a  derivative is 
currency forward contract. 

Direct management 

Mode  of  budget  implementation.  Under  direct  management  the  budget  is  implemented  directly  by 
Commission services, Executive Agencies or Trust Funds. 

Discount rate 

The  rate  used  to  adjust  for  the time  value  of  money.  Discounting is  a technique  used  to  compare  costs 
and benefits that occur in different time periods. 

164 

 
Effective interest rate 

Annual accounts of the European Union 2018 

The rate that discounts estimated future cash receipts or payments over the expected life of the financial 
asset or financial liability to the net carrying amount of the asset or liability.  

Financial assets or liabilities at fair value through surplus or deficit 

All  financial  assets  or  liabilities  that  are  according  to  International  Public  Sector  Accounting  Standards 
measured at fair value and for which the changes in fair value are to be recognised in surplus or deficit of 
the period (i.e. derivatives). 

Financial correction 

The purpose of financial corrections is to protect the EU budget from the burden of erroneous or irregular 
expenditure.  For  expenditure  under  shared  management,  the  task  of  recovering  incorrect  payments  is 
primarily the responsibility of the Member State. 

A 'confirmed' financial correction has been accepted by the Member State concerned. A 'decided' financial 
correction has been adopted by a Commission decision and is always a net correction, where the Member 
State is required to reimburse irregular funds to the EU budget, thus leading to a definitive reduction of 
the  allocated  envelope  to the  Member  State  concerned.  Confirmed  and decided  financial  corrections  are 
reported in this publication as one category. 

An 'implemented' financial correction has corrected the observed irregularity. 

Indirect management 

Mode  of  budget  implementation.  Under  indirect  management  the  Commission  confers  tasks  of  budget 
implementation to bodies of EU law or national law. 

Interruptions and suspensions 

If  the  Commission  finds,  based on  its  own  work or the  information  reported by  audit  authorities,  that a 
Member State has failed to remedy serious shortcomings in the management and control systems and/or 
to  correct  irregular  expenditure  which  had  been  declared  and  certified,  it  may  interrupt  or  suspend 
payments. 

Irregularity 

An irregularity is an act which does not comply with EU rules and which has a potentially negative impact 
on EU financial interests, but which may be the result of genuine errors committed either by beneficiaries 
claiming  funds  or  by  the  authorities  responsible  for  making  payments.  If  an  irregularity  is  committed 
deliberately, it constitutes fraud. 

Lapsing appropriations 

Unused appropriations to be cancelled at the end of the financial year. Lapsing means the cancellation of 
all  or  part  of  the  authorisation  to  make  expenditures  and/or  incur  liabilities  which  is  represented  by  an 
appropriation.  Only  for  Joint  Undertakings,  as  specified  in  their  Financial  Rules,  any  unused 
appropriations  may  be  entered  in  the  estimate  of  revenue  and  expenditure  of  up  to  the  following  three 
financial years (the so-called "N+3" rule). Hence, lapsing appropriations for JUs could be reactivated until 
financial year "N+3" 

Own resources 

Represent  the  main  funding  for  the  EU  institutions  and  bodies  and  are  defined  in  the  own  resources 
regulation 609/2014. Own resources comprise GNI-based resources, VAT-based resources and traditional 
own resources. 

Payment appropriations 

Payment  appropriations  cover  expenditure  due  in  the  current  year,  arising  from  legal  commitments 
entered in the current year and/or earlier years. 

165 

 
Pre-financing 

Annual accounts of the European Union 2018 

A payment intended to provide the beneficiary with a float. It may be split into a number of payments in 
accordance with the provisions of the underlying contract, decision, agreement or the basic legal act. The 
float or advance is either used for the purpose for which it was provided during the period defined in the 
agreement or it is repaid. 

Preventive measure 

Preventive measures, which are at the Commission’s disposal to protect the EU budget when it is aware 
of  potential  deficiencies,  include  suspensions  and  interruptions  of  payments  from  the  EU  budget  to  the 
operational programme. 

Reste à Liquider (RAL) 

Represents the amount where a budgetary commitment has been made but the subsequent payment is 
not yet done. They represent payment obligations for the EU for future years and stem directly from the 
existence  of  multi  annual  programmes  and  the  dissociation  between  commitment  and  payment 
appropriations. 

Shared management 

Mode of budget implementation. Under shared management budget implementation tasks are delegated 
to Member States. About 80 % of the EU expenditure falls under this implementation mode. 

Traditional own resources 

These represent revenue for the EU and are part of  the 'own resources'  which fund the activities of the 
EU.  Traditional  own  resources  are  defined  in  the  own  resource  regulation  609/2014  and  comprise 
customs duties and sugar levies. 

Transfers (between budget lines) 

Transfers between budget lines imply the relocation of appropriations from one budget line to another, in 
the  course  of  the  financial  year,  and  thereby  they  constitute  an  exception  to  the  budgetary  principle  of 
specification. They are, however, expressly authorised by the Treaty on the Functioning of the European 
Union under the conditions laid down in the Financial Regulation (FR). The FR identifies different types of 
transfers depending on whether they are between or within budget titles, chapters, articles or headings 
and require different levels of authorisation. 

166 

 
 
Annual accounts of the European Union 2018 

LIST OF ABBREVIATIONS  

AAR 

ABB 

ABM 

Annual Activity Report 

Activity Based Budgeting 

Activity Based Management 

ACER  

Agency for the Cooperation of Energy Regulators   

AMIF  

Asylum, Migration and Integration Fund 

AOD  

Authorising Officers by Delegation 

ARTEMIS  

Advanced Research & Technology for EMbedded Intelligent Systems 

ATM 

BBI 

Air Traffic Management 

Bio-Based Industries Joint Undertaking 

BEREC  

Body of European Regulators for Electronic Communications   

BIC 

BIS 

BOP 

Bio-based Industries Consortium 

Bank for International Settlements 

Balance of Payments 

BUFI Fund 

Budget Fines Fund 

CAP 

Common Agricultural Policy 

CCS LGF 

Cultural and Creative Sector Guarantee Facility 

CEDEFOP 

European Centre for the Development of Vocational Training   

CEF 

Connecting Europe Facility 

CEF DI 

Connecting Europe Facility Debt Instrument 

CEPOL  

European Union Agency for Law Enforcement Training 

CF 

Cohesion Fund 

CHAFEA 

Consumers, Health, Agriculture and Food Executive Agency   

CIP 

COM 

Competitiveness and Innovation Framework Programme 

Commission 

COSME 

Competitiveness of Enterprises and Small and Medium-sized Enterprises 

COSO 

Committee of Sponsoring Organizations of the Treadway Commission 

CPR 

Common Provisions Regulation 

CPVO  

Community Plant Variety Office 

167 

 
 
 
 
 
Annual accounts of the European Union 2018 

D&WM 

Decommissioning and Waste Management 

EACEA 

Education, Audiovisual and Culture Executive Agency 

EAFRD 

European Agricultural Fund for Rural Development 

EAGF  

European Agricultural Guarantee Fund 

EAGGF 

European Agricultural Guidance and Guarantee Fund 

EASA 

EaSI 

European Aviation Safety Agency   

Employment and Social Innovation 

EASME  

Executive Agency for Small and Medium-sized Enterprises   

EASO 

European Asylum Support Office 

EBA 

European Banking Authority 

EBRD 

European Bank for Reconstruction and Development 

ECA 

ECB  

ECDC 

ECHA 

European Court of Auditors 

European Central Bank 

European Centre for Disease Prevention and Control   

European Chemicals Agency 

ECOFIN 

Economic and Financial Affairs Council 

ECSC  

European Coal and Steel Community 

ECSEL 

Electronic Components and Systems for European Leadership Joint Undertaking 

EDF 

EDIF 

EEA 

EEA 

EEAS 

EFCA 

EFF 

European Development Fund 

Guarantee Facility under the Western Balkan 

European Economic Area 

European Environment Agency   

European External Action Service 

European Fisheries Control Agency   

European Fisheries Fund 

EFSA  

European Food Safety Authority   

EFSD 

EFSE  

EFSF  

EFSI 

EFSM 

European Fund for Sustainable Development 

European Fund for Southeast Europe 

European Financial Stability Facility 

European Fund for Strategic Investments 

European Financial Stabilisation Mechanism 

168 

 
 
 
 
Annual accounts of the European Union 2018 

EFTA  

European Free Trade Association 

EGNOS  

European Geostationary Navigation Overlay System 

EIB  

EIF  

European Investment Bank 

European Investment Fund 

EIGE  

European Institute for Gender Equality   

EIOPA  

European Insurance and Occupational Pensions Authority   

EIT  

European Institute of Innovation and Technology   

ElectriFI 

Electrification Financing Initiative  

EMA  

European Medicines Agency 

EMCDDA  

European Monitoring Centre for Drugs and Drug Addiction   

EMFF  

European Maritime and Fisheries Fund 

EMSA  

European Maritime Safety Agency   

EMU  

Economic and Monetary Union 

ENEF  

Enterprise Expansion Fund 

ENIAC  

European Nanoelectronics Initiative Advisory Council 

ENIF  

Enterprise Innovation Fund 

ENISA  

European Union Agency for Network and Information Security   

ENPI  

European Neighbourhood and Partnership Instrument 

EP  

European Parliament 

ERCEA  

European Research Council Executive Agency   

ERDF  

European Regional Development Fund 

ESA  

ESF  

ESIF  

ESM  

European Space Agency 

European Social Fund 

European Structural and Investment Funds 

European Stability Mechanism 

ESMA  

European Securities and Markets Authority 

ETF  

ETF  

EU  

European Technology Start up Facility 1998 

European Training Foundation 

European Union 

EUIPO  

European Union Intellectual Property Office   

169 

 
 
 
Annual accounts of the European Union 2018 

EU-LISA 

European  Agency  for  the  Operational  Management  of  Large-Scale  IT  Systems  in  the   
Area of Freedom, Security and Justice 

EUMETSAT  

European Organisation for the Exploitation of Meteorological Satellites 

EU-OSHA  

European Agency for Safety and Health at Work   

Euratom 

European Atomic Energy Community 

Eurofound  

European Foundation for the Improvement of Living and Working Conditions  

EUROJUST  

European Union's Judicial Cooperation Unit   

EUROPOL  

European Police Office  

F4E  

FCH  

FIFG 

FIFO 

FP7  

FR  

FRA 

Fusion for Energy 

Fuel Cells Hydrogen Joint Undertaking 

Financial Instrument for Fisheries Guidance 

First-in, First-out 

7th Research Framework Programme for Research and Technological Development 

Financial Regulation 

European Union Agency for Fundamental Rights 

Frontex  

European Border and Coast Guard Agency 

FSDA  

Financial Statement Discussion and Analysis 

GDP 

Gross Domestic Product 

GMES  

Global Monitoring for Environment and Security 

GNI  

Gross National Income 

GNSS  

Global Navigation Satellite Systems 

H2020  

Horizon 2020 

ICSLT  

International Civil Servants Life Table 

IFRP  

Integrated Financial Reporting Package 

IIW  

IMF  

IMI  

Infrastructure and Innovation Window 

International Monetary Fund 

Innovative Medicines Initiative Joint Undertaking 

INEA 

Innovation and Networks Executive Agency 

IPA II 

Instrument for Pre-accession Assistance 

IPSAS 

International Public Sector Accounting Standards 

ISF 

Internal Security Fund 

170 

 
 
 
 
Annual accounts of the European Union 2018 

IT  

Information Technology 

ITER  

International Thermonuclear Experimental Reactor 

JAP  

JRC  

JU  

Joint Action Plan 

Joint Research Centre 

Joint Undertaking 

LGTT  

Loan Guarantee Instrument for TEN-T projects 

MAP  

MEP  

MFA  

MFF  

Multi Annual Program - Medium Enterprise Financial Inclusion Programme 

Member of the European Parliament 

Macro Financial Assistance 

Multiannual Financial Framework 

MSME 

Micro, Small and Medium Enterprise 

NEETs  

Not in Education, Employment or Training 

ORD  

PBI  

Own Resources Decision 

Project Bond Initiative 

PF4EE  

Private Finance for Energy Efficiency Instrument 

PGF  

PMF   

PPP  

Participants Guarantee Fund 

European Progress Microfinance Facility 

Public-Private Partnership 

PSEO  

Pension Scheme of European Officials  

R&I  

RAL 

REA  

Research and Innovation 

"Reste à Liquider" (Outstanding Commitments) 

Research Executive Agency   

RSFF  

Risk Sharing Finance Facility 

RTD  

S&P  

Research, Technological Development and Demonstration 

Standard & Poor's Financial Services LLC 

SANAD  

MENA Fund for Micro-, Small and Medium Enterprises 

SAPARD  

Special Accession Programme for Agriculture and Rural Development  

SEMED  

Southern and Eastern Mediterranean Micro, Small and Middle sized Entreprises Financial 
Inclusion Programme 

SESAR  

Single European Sky ATM Research Joint Undertaking 

SIUGI  

SME Initiative Uncapped Guarantee Instrument 

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Annual accounts of the European Union 2018 

SME 

Small and Medium-sized Enterprise(s) 

SMEW  

SME Window (Small and Medium-sized Enterprises Window) 

TFEU  

Treaty on the Functioning of the European Union 

TOR  

Traditional Own Resources 

TRDI  

Temporary Rural Development Instrument 

VAT  

YEI  

Value Added Tax 

Youth Employment Initiative 

172